EXECUTION VERSION
 
INTRODUCER AGREEMENT

THIS AGREEMENT, dated as of April 13, 2011, by and between deltathree, Inc., a
Delaware corporation ("Inc."), DME Solutions, Inc., a New York corporation
(“DME”), and Delta Three Israel, Ltd., an Israeli corporation (“Delta Three
Israel”) (Inc., DME and Delta Three Israel are collectively referred to herein
as “deltathree”), and ACN Europe B.V., having its registered office at Thomas R.
Malthusstraat 1-3, 1066 JR Amsterdam, The Netherlands (“ACN Europe”),
represented by its Chief Executive Officer, Michael Tribolet.

EXPLANATORY STATEMENT

deltathree is a company that markets and sells telecommunications services
throughout the world. ACN Europe has over the years marketed and sold
telecommunications services in various geographic areas, both under its own
brand and as a sales agent.

Inc. and ACN Europe wish to deploy ACN Europe’s sales and marketing experience
and expertise in order to build Inc.’s business, and to that end, have agreed
that they will enter into a definitive agreement for ACN Europe to act as a
master promoter, and for ACN Europe’s network of independent sales
representatives (the "Representatives") to act as promoters of Inc.’s  mobile
application services (the "Mobile Applications") to retail residential and
commercial consumers in the European countries in which ACN Europe and its
subsidiaries and affiliates currently operate and may operate in the future.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
for other good and valuable consideration set forth herein, the sufficiency of
which is hereby acknowledged, and intending to be legally bound, the parties
hereto agree as follows:

1. Defined Terms. The following terms used herein shall have the meaning
ascribed to them below:

“ACN Europe Commission” shall have the meaning ascribed to such term in Section
6(a).

“ACN Europe Costs” shall mean the total of the (i) Commissions to be paid by ACN
Europe, estimated to be equal to 9.5% of Revenues and subject to adjustment as
set forth in Section 6(b) below, and (ii) reasonable costs incurred by ACN
Europe in providing the call center and services to be provided under Section
4(b) below, estimated to be equal to 6.0% of Revenues and subject to adjustment
as set forth in Section 6(b) below.

"ACN Europe Indemnified Person" shall have the meaning ascribed to such term in
Section 10(b).

“ACN Website” shall mean www.acnmobileworld.eu.

 
 

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“Business” shall have the meaning given to it in Section 2(a), below.

"Customers" shall mean customers of deltathree who have been introduced to the
Mobile Applications by the Representatives and whose orders are entered into the
Online Portal and accepted by Inc. For the avoidance of doubt, Customers shall
be customers of deltathree and not of ACN Europe or the Representatives.

“deltathree Costs” shall mean the total of the (i) network costs, estimated to
be equal to 2.5% of Revenues and subject to adjustment as set forth in Section
6(b) below, (ii) termination costs, as calculated by deltathree on a monthly
basis, (iii) credit card service and credit card vendor costs incurred by
deltathree in providing the service hereunder to the  Customers, estimated to be
equal to 4.5% of Revenues and subject to adjustment as set forth in Section 6(b)
below, (iv) all reasonable direct and indirect costs of deltathree for obtaining
and maintaining any electronic communications services registrations,
authorizations, or licenses that are required to provide the Mobile
Applications; and (v) all reasonable direct and indirect costs of deltathree for
registering with tax authorities in respect of the collection and  remittance of
value-added taxes for the Mobile Applications. Should deltathree, during the
Initial Term, offer the Mobile Applications or any other service covered by the
telecommunications or value-added tax registrations through a third party, to
Customers in any country in which ACN Europe operates, such costs shall not be
included in the deltathree Costs and deltathree shall pay to ACN Europe the full
amounts that ACN Europe would have received if these items had not been included
in the deltathree Costs. For the avoidance of doubt, any costs incurred by
deltathree in connection with fraudulent or other improper usage of the Mobile
Applications and for which Revenues are not received shall not be considered
deltathree Costs for purposes of calculating Gross Margin or the ACN Europe
Commission.

“deltathree Website” shall mean the Order Portal and any other website areas
owned, controlled, or maintained by deltathree in connection with the provision
of the Mobile Applications.
 
“Gross Margin” shall mean the difference between Revenue minus (i) the
deltathree Costs and (ii) the ACN Europe Costs.

"Inc. Indemnified Person" shall have the meaning ascribed to such term in
Section 10(a).

"Initial Term” shall have the meaning ascribed to such term in Section 3(a).

“Insolvency Event” shall mean that Inc., DME or Delta Three Israel:

(a) files any petition or action for relief under any bankruptcy,
reorganization, insolvency or moratorium law, or any other law for the relief
of, or relating to, debtors, now or hereafter in effect;

 
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(b)  applies for or consents to the appointment of a custodian, receiver,
trustee, sequestrator, conservator or similar official for Inc., DME or Delta
Three Israel or for a substantial part of their assets;

(c) makes a general assignment for the benefit of creditors;

(d) becomes unable to, or admits in writing its inability to, pay its debts
generally as they come due;

(e) takes any action in furtherance of any of the foregoing; or

(f) has filed against them an involuntary petition, which petition is not
dismissed or discharged within 60 days of its filing, under any bankruptcy
statute now or hereafter in effect, of custodian, receiver, trustee,
sequestrator, conservator, assignee for the benefit of creditors or other
similar official is appointed to take possession, custody or control of the
property of Inc., DME or Delta Three Israel.

“Mobile Applications" shall have the meaning ascribed to such term in the
Explanatory Statement

“Online Portal” shall mean the web-based order entry portal created and
maintained by Inc. pursuant to Section 5(i).

"Representative Commission" shall mean the compensation that ACN Europe pays to
the Representatives for producing Customers.

"Representatives" shall have the meaning ascribed to such term in the
Explanatory Statement.

“Revenues” shall mean the total revenue from Customers in connection with
deltathree providing the services hereunder, including any processing,
administrative, or other fees, recognized by deltathree for financial reporting
purposes under generally accepted accounting principles.

"Standards" shall have the meaning ascribed to such term in Section 2(a).

"Term" shall have the meaning ascribed to such term in Section 3(a).

“Termination Date” shall have the meaning given to it in Section 3(b).

 
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2. Sales Promotion.

(a) During the Term, ACN Europe shall provide, or cause to be provided, to Inc.
ACN Europe’s network of Representatives to act as promoters for Inc. to sell
Mobile Applications on behalf of and for the benefit of Inc. ACN Europe shall
use its commercially reasonable efforts to cause the Representatives: (i) to
promote Mobile Applications and  Inc.’s mobile application business (the
“Business”), and (ii) to act as promoters for the sale of Mobile Applications,
for and on behalf of Inc. Inc. shall have the right to cause ACN Europe to
direct the Representatives with respect to promotion of Mobile Applications,
customer service and regulatory matters in accordance with Inc.'s licenses or
certificates, the statutes, rules, regulations, or policies of the applicable
jurisdictions in which Inc. has authorized ACN Europe and the Representatives to
conduct customer acquisition activities (the "Standards"), but in no event shall
it have the right to cause ACN Europe to take any actions (or inaction) with
respect to management and oversight of the Representative Commissions or other
fees paid or payable to the Representatives.

(b) ACN Europe shall be responsible for directing the Representatives to adhere
to the Standards in promoting the Mobile Applications and otherwise in
connection with the performance of any obligations of ACN Europe under this
Agreement. Neither ACN Europe nor the Representatives shall have the power or
authority to act as attorney-in-fact of Inc. or bind Inc. in any way without the
prior written consent of Inc. All customers acquired by the Representatives
shall be subject to acceptance by Inc. and shall become customers of Inc. and
not of ACN Europe or the Representatives.

(c) ACN Europe's and the Representatives’ promotion on behalf of Inc. shall be
limited to the following acts: (i) solicitation of customers, (ii) the offering
of Inc.'s Mobile Applications as set forth in Inc.’s marketing materials,
applications, and sales agreements, and/or (iii) recommending Inc.'s Mobile
Applications to retail residential and commercial customers.

(d) ACN Europe's and the Representatives' promotion shall not include (i) the
negotiation of prices or rates, terms or conditions of service for Inc.'s Mobile
Applications, (ii) taking title to Mobile Applications, (iii) arranging for the
purchase, transportation, scheduling or delivery of Mobile Applications, or (iv)
execution of contracts or agreements on behalf of Inc.

(e) Inc. shall have the right to cause ACN Europe to take appropriate actions
with respect to the conduct of a Representative in order to comply with a notice
or inquiry of any applicable Governmental Authority by providing at least 5
days' prior written notice (or such lesser period of notice as may be required
by such Governmental Authority) to ACN Europe specifying the applicable remedial
or corrective actions required by the Governmental Authority.
 
(f) ACN Europe shall provide Inc. with true and complete copies of independent
representative agreements and updates thereto from time to time, upon Inc.’s
request for same.
 
(g) In performing this Agreement, ACN Europe agrees to (i)(A) not take any
actions that it knows would be harmful in any material respect to the Business
of Inc., (B) use its commercially reasonable efforts to promote the Business,
and (C) comply with all applicable laws, the Standards, and Inc.'s policies and
procedures established in accordance with Section 5(a) hereof as in effect from
time to time, and (ii) recognizing that ACN Europe’s legal relationship with the
Representatives is that of independent contractor, use its commercially
reasonable efforts to cause the Representatives to do (or not to do, as
applicable) the same.

 
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3. Term and Termination; Wind Down Phase.

(a) This Agreement is effective as of the date hereof and shall continue for a
period of two (2) years (the "Initial Term") or until earlier terminated as
provided herein. Upon the expiration of the Initial Term, this Agreement shall
automatically renew on a year-to-year basis (each a “Renewal Term”) unless
terminated by either Inc. or ACN Europe by the giving of written notice of
termination to the other party hereto at least three (3) months prior to the
expiration of the Initial Term or Renewal Term, as the case may be. The Initial
Term and any Renewal Term(s) shall be together referred to herein as the "Term."

(b) This Agreement may be terminated at any time prior to the expiration of the
Term by any of the following:

(i)       by mutual written agreement of the parties;

(ii)      by either party upon the occurrence of a material breach by the other
party that remains uncured for a period of thirty (30) days after the breaching
party receives written notice describing the breach in reasonable detail from
the non-breaching party; or

(iii)     by the giving of proper notice as set forth in Section 3(a), above.

In all cases of notice given to terminate under this Section 3(b), the party
giving notice shall specify the date on which this Agreement shall terminate
(the “Termination Date”).

(c) In the case of termination other than as provided in Section 3(b)(ii),
notwithstanding any other provision of this Agreement, any such termination
shall be without liability to either party, and shall be managed in compliance
with the provisions of Section 3(d), below. Any termination as provided in
Section 3(b)(ii) shall be without prejudice to the non-breaching party's right
to seek damages for such breach.

 
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(d) Upon termination of this Agreement, this Agreement will enter a wind down
phase in which the parties will cooperate to achieve an orderly and gradual
cessation (in whatever Term remains) of the Representatives’ marketing and
making sales of the Mobile Applications, including the joint and mutually
agreeable development of the messaging of such event to the Representatives, and
the management of their expectations regarding receiving the Representative
Commissions, which will remain ACN Europe’s obligation to remit. ACN Europe will
cause the Representatives to cease marketing and selling the Mobile Applications
on the Termination Date, but Inc. agrees that it will continue to accept,
process, provision and make ACN Europe Commission payments to ACN Europe, and
continue customary .xml file reporting, on all orders entered through the Online
Portal up through and including the Termination Date.  After the Termination
Date, Inc. will continue to pay the ACN Europe Commission payments under Section
6 of this Agreement, and provide the customary .xml file required by Section
5(e), below, for as long as Customers continue to purchase the Mobile
Applications, and this Agreement will continue in effect as to the remaining
‘tail’ of these Customers’ usage, until there remain no Customers using Mobile
Applications.

(e) Inc. agrees that during the time this Agreement remains in effect, including
the time during any wind down period and/or after the Termination Date while
there remain active  Customers, regardless of what Mobile Application they
consume, regardless of who sold such Mobile Application to them, Inc. will pay
to the ACN Europe Commission payments and, if applicable by circumstances, the
Commissions ramp down on their aggregate usage, and will continue to provide the
customary .xml file required by Section 5(e).  Inc. will not actively seek to
cause  Customers to change the Mobile Applications they purchase (with
‘upselling’ to additional Mobile Applications being permitted, but ACN Europe
Commission and Commission ramp down payments, if applicable by circumstances,
being due thereon), will not change the account numbers or other unique
identifier developed inside of Inc.’s systems to identify customers
as  Customers, or otherwise attempt to disguise or cull out of the ranks
of  Customers any faster than they would otherwise out of normal
customer-initiated attrition.

4. Duties of ACN Europe. ACN Europe will use its commercially reasonable efforts
to cause the Representatives to promote standard offer contracts of the Business
as approved by Inc. to potential retail customers; and will perform the
following functions:

(a) ACN Europe will process, reconcile, and make payments of Representative
Commissions out of ACN Europe’s Commission.

(b) ACN Europe will maintain, for the benefit of Inc. and in accordance with its
customary operating procedures, a call center facility with an adequate number
of trained customer service representatives to respond to enquiries (i) from
Representatives relating to Representative Commissions and other Representative
issues and (ii) from Customers for Tier 1 and Tier 2 support relating to the
Mobile Applications.

(c) ACN Europe will give Inc. access to ACN Europe's Representative training
events and gatherings at which ACN Europe's other training and product/service
familiarization is scheduled to occur, as Inc. and ACN Europe may mutually
agree, so that Inc. may assist ACN Europe in training the Representatives about
the Mobile Applications, on Inc.’s processes and procedures to sell the Mobile
Applications, and in showcasing the Mobile Applications to the Representatives.

 
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(d) ACN Europe and Inc. will from time to time develop together, and Inc. will
provide to the Representatives, material for presentation through ANC Europe’s
website areas serving the Representatives, including potential links to Inc.’s
website area(s), designed to inform and educate the Representatives about the
Mobile Applications available for Representatives to sell. Such materials will
be made available to Representatives through the ACN Website, other ACN website
areas, and one or more deltathree Websites.

(e) ACN Europe shall translate Inc.’s training and promotional materials
provided to ACN Europe into one or more European languages to be determined by
ACN and shall make such translations available to Inc. ACN Europe shall also be
responsible for translating the deltathree Website and providing the
translations to Inc. In the event of changes to the Inc. materials or the
deltathree Website, ACN Europe shall translate the changes promptly upon
receipt.

(f) ACN Europe will use its commercially reasonable efforts to promote the
relationship created hereunder to the Representatives.

(g) ACN Europe will designate an individual to be the primary interface between
ACN Europe and Inc. on all issues relating to this Agreement, including
understanding the Mobile Applications, answering mobile applications sales
questions and generally assisting with the relationship between the two
organizations (ACN Europe and Inc.) with respect to activities under this
Agreement.

(h) ACN Europe and Inc. will together prepare a training package suitable for
ACN Europe to use in educating the Representatives on the Mobile Applications so
as to enable them to represent Inc. well.

(i) ACN Europe will obtain and maintain any licenses or certificates required to
perform its obligations under this Agreement.

(j) ACN Europe shall establish and maintain the ACN Website in good working
order, in English and other languages as ACN Europe may determine. Upon
accessing the ACN Website and entering the Representative’s Team ID, a Customer
shall be directed to the deltathree Website to complete the ordering process.

5. Duties of Inc. Inc. shall provide Mobile Applications for the Representatives
to sell in accordance with the following terms:

(a) Inc. shall determine all Mobile Applications, their terms of service, as
well as establish the policies and procedures for the Representatives to sell
the Mobile Applications, with all of the foregoing being subject to ACN Europe’s
input and suggestions.

 
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(b) Inc. shall price the Mobile Applications for retail sale competitively and
keep same current in all markets in which ACN Europe operates. Inc. shall
consult with ACN Europe regarding pricing but shall have final authority over
pricing decisions, provided, however, that Inc. shall price the Mobile
Applications in the local currencies of all countries in which ACN Europe and
the Representatives are entitled to promote the Mobile Applications. Inc. shall
ensure that the prices offered to ACN Europe and Customers under this agreement
are no higher than the prices offered to customers directly by deltathree or
through other resellers of the Mobile Applications.

(c) Inc. shall be contractually and legally responsible for the provision of the
Mobile Applications to Customers and Customers shall not be considered customers
of ACN Europe or the Representatives. Inc. shall undertake, be solely
responsible for, and bear all risk on, all business functions relating to
Customers, including, but not limited to, order entry, provisioning, quality of
service, billing (including imposition, collection, and payment of any
applicable taxes), fraud detection and management, collections, supply,
scheduling and balancing and customer tracking.

(d) Inc. shall assist ACN Europe in preparing (i) English-language training and
promotional materials suitable for ACN Europe to use in informing and educating
the Representatives on the Mobile Applications so as to enable them to represent
Inc. well and (ii) English-language versions of all product literature,
contractual forms, and any other materials (including web-based information)
needed for the Representatives to market and sell the Mobile Applications.

(e) Inc. shall provide ACN Europe with an .xml electronic file of ACN  Customer
activity and status, including disconnects, no less frequently than once daily,
in a format reasonably satisfactory to ACN Europe and designed by Inc. and ACN
Europe together to allow ACN Europe access to the information it needs to
calculate and verify properly the Commissions, and administer its programs with
the Representative, which file will remain extant and accessible even after
an  Customer’s contract termination and for as long as there remain active
Customers.

(f) Inc. shall be entitled to provide training for Representatives at such times
as may be reasonably acceptable to ACN Europe at ACN Europe's Representative
training events and gatherings at which ACN Europe's other training and
product/service familiarization is scheduled to occur.

(g) Inc. will designate an individual to be the primary interface between ACN
Europe and Inc. on all issues relating to this Agreement, including
understanding the Mobile Applications, answering mobile application questions
and generally assisting with the relationship between the two organizations (ACN
Europe and Inc.) with respect to activities under this Agreement.

 
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(h) Inc. will design, provide and host a mutually agreeable co-branded online
order entry portal that Customers will use to place orders for acceptance by
Inc., which orders shall bear some unique identifier inside of Inc.’s systems as
ACN Europe-sourced as well as the unique identifier or team identification
number inside ACN Europe’s systems of the Representative submitting or
responsible for such order. The deltathree Website shall be accessed via the ACN
Website. The deltathree Website shall be available in English and such other
languages as the parties agree. Inc. shall be solely responsible for the
accuracy, completeness, and legal and regulatory compliance of all information
and documents presented on or accessed through the deltathree Website.

(i) Inc. will design, to the mutual satisfaction of Inc. and ACN Europe, a
‘Commission Report’ that details the information called for by Section 6(a),
below.

(j) Inc. will maintain an adequate number of trained Network Operation Center
representatives for the purpose of providing Tier 3 and Tier 4 support to ACN
Europe’s CSRs to call to obtain answers to technical and/or billing questions
relating to the Mobile Applications.

(k) Inc. will use its best efforts to promptly provision the Mobile Applications
to Customers.

(l) Inc. will use its best efforts to cause its Mobile Applications to be
available for sale to potential Customers by June 15 in English and other
languages as agreed by the parties. Additional languages shall be added after
June 15 as agreed by the parties. The parties will jointly determine the
delivery schedule for all languages.

(m) Inc. shall be responsible for compliance with all applicable laws in the
countries where the Mobile Applications are offered and sold, including, but not
limited to distance selling rules, data protection, telecommunications, and tax
laws (including value-added, corporate income, and other taxes that may apply to
the provision of the Mobile Applications by deltathree).

(n) Inc. will not block the phone number (the “Number”) entered by a Customer
when signing up for the Mobile Applications as the phone number for the mobile
phone (the “Phone”) on which such Customer will download and utilize the Mobile
Applications from appearing to a recipient of a call from the Phone as the phone
number for such Phone, until such time as deltathree receives written
notification from ACN Europe requesting that deltathree so block the Number or
deactivate an account.

(o) Inc. shall use its best efforts to assist ACN Europe with resolving customer
service issues, provided that deltathree reasonably determines that such
resolutions requested by ACN Europe are not unreasonable or unduly burdensome
(either financially or in regards to the amount of time and effort that would be
required) for Inc.  To the extent that the cost, expense and/or other burden
that deltathree would incur for a resolution is what Inc. deems to be unduly
burdensome, Inc. shall notify ACN Europe of the cost, expense and/or other
burden and allow ACN Europe the opportunity to elect to compensate Inc. for such
cost, expense and/or other burden.

 
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6. ACN Europe’s Commission.

(a)  Inc., in consultation with ACN Europe, shall agree upon the retail prices
at which Mobile Applications will be offered by ACN Europe to potential
Customers (the “Retail Price”).  For purposes of this agreement, the Retail
Price shall not include any value-added tax that may be applicable to
deltathree’s sale of Mobile Applications to Customers. The parties shall meet on
a regular basis to determine whether the Retail Price of any particular Mobile
Application(s) is/are appropriate for market conditions and deltathree may
decide (in consultation with ACN Europe) to increase or decrease (i) the Retail
Price for any product(s) and/or (ii) the ACN Europe Commission set forth below.
All retail prices shall be set in the local currency of the country in which the
Mobile Applications are offered.

Inc. shall pay to ACN Europe as consideration for ACN Europe’s performance of
its duties and obligations under this Agreement an amount of money in Euros
equal to fifty percent (50%) of the Gross Margin (the “ACN Europe Commission”).
At the conclusion of each calendar month, Inc. shall calculate the ACN Europe
Commission and pay to ACN Europe by wire transfer, on or before the 15th day of
the end of such month, an amount of money equal to the ACN Europe
Commission.  For the purpose of calculating the ACN Europe Commission, Inc.
shall convert to Euros all ACN Costs, deltathree Costs and Revenues incurred or
received or paid in currencies other than Euros on the last day of such month
using the then-current currency conversion rates as posted
on http://www.oanda.com/currency/converter or other such source as the Parties
shall agree.

(b) Within thirty (30) days following the completion of each six-month period,
ACN Europe shall calculate the ACN Europe Costs and deltathree shall calculate
the deltathree Costs for the preceding six-month period and each of the parties
shall forward to the other party a report setting forth in reasonable detail
such calculation. In the event that any adjustment to the ACN Europe Costs
and/or the deltathree Costs and, accordingly, the aggregate amount paid by
deltathree to ACN Europe for such six-month period is required, deltathree shall
include such adjustment in the calculation of the monthly payment (or, if
necessary, payments) it is required to make to ACN Europe immediately following
the completion of such calculation.  Such revised calculation of the ACN Europe
Costs and/or the deltathree Costs (as applicable) shall serve as the estimate of
the ACN Europe Costs and/or the deltathree Costs (as applicable) for the
following six-month period.

(c) All ACN Europe Commission payments shall be made by Inc. directly to ACN
Europe. ACN Europe shall be solely liable for the payment of any and all
compensation of whatever kind to the Representatives.

 
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(d) If a Customer disputes the validity of a contract, Inc. shall continue to
pay ACN Europe Commission payments while that Customer continues to pay for the
Mobile services; provided, however, if the basis of the dispute relates to or is
connected with the conduct of ACN Europe or its representatives in securing that
Customer contract, then Inc. shall withhold any ACN Europe Commission payments
until such time as it is determined that that Customer contract is valid.

7.   Audit Rights.

ACN Europe shall have the right, at any time upon reasonable advance notice to
Inc., and during customary business hours, to audit Inc.’s customer and sales
revenue accounting records and applicable transaction documents in order: (i) to
verify any report provided to ACN Europe by Inc. in connection with this
Agreement or (ii) to verify any calculation, payment of, or proposed payment of,
ACN Europe Commission to ACN Europe, and Inc. shall have the right, at any time
upon reasonable advance notice to ACN Europe, and during customary business
hours, to audit ACN Europe’s Commission and call center accounting records and
applicable transaction documents in order to verify any report provided to Inc.
by ACN Europe in connection with this Agreement.  Subject to any restrictions
imposed by applicable law, ACN Europe shall also have the right to request
customer detail records, and Inc. shall promptly provide the same to ACN
Europe.  Neither party shall delay unduly or otherwise attempt to frustrate the
other party’s verification efforts.  All information provided to a party by the
other party, whether under this Section 7 or otherwise under this Agreement,
shall be prepared with full transparency by the providing party, and shall be
full, complete, truthful and not misleading when delivered to the receiving
party.  Each of the party’s rights under this section shall continue and remain
in effect until there are no longer any active ACN Europe Customers.

ACN Europe acknowledges that certain of the information that Inc. may provide in
respect of ACN Europe’s audit rights may contain personal information of the ACN
Europe Customers and ACN Europe agrees to use its reasonable commercial efforts
to protect and maintain the confidentiality of such information, not to disclose
the information to any third parties and use such information for the sole and
limited purpose of the verifications set out in (i) through (iii) above; and in
any event, ACN Europe agrees to treat such confidential information with the
same care that it treats the information of its own, non-Inc. related customers
similar information.

8.  Representations and Warranties.

Each of the parties hereto represents and warrants to the other that:

(a) it is duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and has the requisite power and authority
to execute, deliver, and perform this Agreement;

(b) this Agreement, once executed, will constitute a valid and binding agreement
of each party, enforceable in accordance with its terms, subject to bankruptcy,
insolvency and other similar laws affecting the enforcement of creditors’ rights
in general, and subject to general principles of equity;

 
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(c) this Agreement has been duly authorized by all necessary action on the part
of each party;

(d) it possesses all licenses, certificates, permits or other similar
permissions necessary to perform its obligations under this Agreement; and

(e) neither the execution and delivery of this Agreement, nor each of the
parties’ performance hereunder, will violate any injunction, judgment, order,
decree, ruling charge, government restriction, rule or law, nor will they
conflict with, result in a material breach of, constitute a default under, or
cause or create any acceleration, cancellation, or modification of any other
agreement or arrangement to which each party is a party.

9. Confidential Information.

The parties agree that the provisions of the Nondisclosure Agreement between LKN
Communications Inc. and deltathree dated as of September 2, 2010 shall apply to
them and shall be deemed incorporated herein.

10. Indemnification.

(a) ACN Europe hereby agrees to indemnify and hold Inc. and its directors,
officers, employees, stockholders, affiliates and agents (each, an “Inc.
Indemnified Person”) harmless from and against all damages which any Inc.
Indemnified Person may sustain, incur or assume as a result of any allegation,
claim, civil or criminal action, proceeding, charge or prosecution which may be
alleged, made, instituted or maintained against any Inc. Indemnified Person
arising out of, resulting from or based upon (i) any breach by ACN Europe of any
of its representations, warranties, covenants or agreements contained in this
Agreement, or (ii) any claim asserted or threatened to be asserted by any third
party in connection with ACN Europe, its affiliates or the Representatives,
promoting the Mobile Applications or serving or having served pursuant to this
Agreement; provided, however, ACN Europe shall not be liable to indemnify and
hold any Inc. Indemnified Person harmless from any such damages to the extent it
is the result of the gross negligence, bad faith, willful misconduct or criminal
conduct of, or the breach of this Agreement by, the party seeking
indemnification hereunder.

(b) Inc. hereby agrees to indemnify and hold ACN Europe and its directors,
officers, employees, stockholders, affiliates and agents (each, an "ACN Europe
Indemnified Person" and collectively, the "ACN Europe Indemnified Persons")
harmless from and against all damages which any ACN Europe Indemnified Person
may sustain, incur or assume as a result of any allegation, claim, civil or
criminal action, proceeding, charge or prosecution which may be alleged, made,
instituted or maintained against any ACN Europe arising out of, resulting from
or based upon (i) any breach by Inc. of any of its representations, warranties,
covenants or agreements contained in this Agreement, (ii) any claim asserted or
threatened to be asserted by any third party in connection with Inc.'s
obligations pursuant to this Agreement, in each case solely to the extent that
any such damages is the direct result of the gross negligence, bad faith,
willful misconduct or criminal conduct with respect to any training, sales
materials, literature, forms or documents provided by Inc. for use by the
Representatives of, or the breach of this Agreement by, any of the Inc.
Indemnified Persons; or (iii) claims by any tax or other governmental authority
in any of the European countries in which the Mobile Applications are offered
that ACN Europe is responsible for the imposition, payment, or collection of
value-added tax with respect to the provision of the Mobile Applications to
Customers.

 
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(c) Inc. acknowledges that the Representatives are third party beneficiaries of
this Agreement, and that ACN Europe is permitted to bring any claim under this
Agreement that may arise on their behalf.

(d) ACN Europe hereby agrees to indemnify and hold harmless each Inc.
Indemnified Person from and against all liability and damages which any Inc.
Indemnified Person may sustain, incur or assume as a result of any allegation,
claim, civil or criminal action, proceeding, charge or prosecution which may be
alleged, made, instituted or maintained against any Inc. Indemnified Person
arising out of, resulting from or based upon deltathree not blocking the Numbers
from appearing to a recipient of a call from a Phone as the phone number for
such Phone, except where such allegation, claim, action, proceeding, charge or
prosecution is the result of deltathree’s gross negligence, including but not
limited to deltathree’s failure to comply with Section 5(n) above.

11. Independent Contractors. The parties acknowledge that they are entering into
this Agreement as independent contractors and that this Agreement shall not
create nor be construed to create a relationship of joint venturers,
co-partners, employer and employee, master and servant or any similar
relationship among the parties.

12. Expenses. Except as otherwise provided for herein, each party will pay its
own expenses in connection with this Agreement and the completion of the
transactions contemplated hereby.

13. Expenses Related to Audit Rights. Wherever either party has an audit right,
the party exercising its audit right shall be entitled to reimbursement of its
reasonable and customary expenses associated with such audit from the other
party in the event such audit results in a determination that there was a
material inaccuracy adverse to the party conducting the audit. Further, the
party being audited shall be entitled to reimbursement of its reasonable and
customary expenses associated with supporting such audit from the party
conducting the audit in the event such audit results in a determination that the
subject matter audited was materially accurate. Any inaccuracies determined by
any such audit shall be corrected in the favor of the party to whom the
inaccuracy was adverse.

 
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14. Force Majeure. In the event that war, fire, explosion, flood, accident,
strike, riot, act of governmental authority, act of terrorism, act of God or
other contingency beyond the reasonable control of either party causes cessation
or interruption of that party’s or the Representatives' performance hereunder,
performance shall be temporarily excused for the period of the disability,
without liability, provided that the party seeking excuse shall promptly, after
it has actual knowledge of the beginning of any excusable delay, notify the
other party of such delay, the reason therefore, and the probable duration and
consequence thereof.  The party seeking excuse shall use its reasonable
commercial efforts to resume performance of its obligations hereunder with the
least possible delay.

15. Contractual Nature of Obligations.  ACN Europe acknowledges that its rights
to ACN Europe Commission payments are contractual in nature, are not traditional
security interests and do not specifically attach to or encumber any assets of
Inc., DME or Delta Three Israel, including, without limitation, to the Customer
contracts. ACN Europe agrees that it will not assert or attempt to assert these
rights via any UCC-1 or similar filings.

16.  Insolvency of Inc.  In the event that an Insolvency Event occurs, Inc.
acknowledges that ACN Europe is a general unsecured creditor of Inc., and agrees
that, in consideration for ACN Europe having acknowledged herein that its rights
to ACN Europe Commission payments is unsecured and not attached to any specific
assets, Inc. will use its best efforts to protect ACN Europe’s twin rights to
the fullest extent possible in both the case where the Insolvency Event is
instigated by Inc. or is suffered by Inc. at the hands of any third
party.  Examples of the best efforts that Inc. could use in this instance would
include, but not be limited to, obtaining protection for payments to ACN Europe
in any negotiations with other or secured creditors or debtor-in-possession or
other post-filing lenders, placing this Agreement high upon the list of
contracts to be assumed in any reorganization proceeding offering that option,
or otherwise acting to preserve both the relationship created by this Agreement,
the payments to ACN Europe hereunder and the ability for ACN Europe to realize
the value and equity that its efforts hereunder have created.  Inc. specifically
agrees that ACN Europe shall have the right to intervene in any Insolvency Event
proceeding to that same end.

17.           Intellectual Property.

(a)           ACN Europe and deltathree agree that all right, title, and
interest in any trademarks, trade names, copyrighted material, patents, and
other intellectual property (the “IP”) in existence before the date of this
agreement shall remain owned by that party and that this agreement shall not
cause the transfer of any IP rights held by either party.
  
(b)           For the avoidance of doubt, ACN Europe shall be the owner of all
IP in the ACN Website and the www.acnmobileworld.eu domain name. Inc. shall be
the owner of the Online Portal and all content contained on the deltathree
Website except for translated material provided by ACN Europe, which shall
remain the property of ACN Europe.
 
(c)           ACN Europe hereby grants to Inc., subject to the terms of this
Agreement, a limited non-exclusive, non-transferable, non-sublicensable, license
to use and display the  IP identified by ACN Europe in connection with the
promotion and provision of the Mobile Services, provided such use is necessary
to perform as contemplated by this Agreement. The license granted by ACN does
not include the right to modify or alter in any way any of the IP. Any benefits
accruing from use of the IP shall automatically vest with ACN Europe. Subject to
Sections 3(d) and 3(e) above, this limited license shall terminate immediately
in the event this Agreement is terminated, and use of any IP must cease
immediately upon termination of this agreement.

 
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18.  Miscellaneous.

(a) Entire Agreement; Amendment; Waiver. This Agreement contains the entire
understanding of the parties as to the subject matter hereof and fully
supersedes all prior agreements and understandings between the parties as to
such subject matter. This Agreement may not be amended, supplemented, canceled
or discharged, except by a written instrument executed by the party as to whom
enforcement is sought. No failure to exercise, and no delay in exercising, any
right, power or privilege hereunder shall operate as a waiver thereof. No waiver
of any breach of this Agreement shall be deemed to be a waiver of any preceding
or succeeding breach of this Agreement.

(b) Severability. The parties acknowledge that the terms of this Agreement are
fair and reasonable at the date signed by them. However, in light of the
possibility of a change of conditions or differing interpretations by a court of
what is fair and reasonable, the parties stipulate as follows: if any one or
more of the terms, provisions, covenants or restrictions of this Agreement shall
be determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; further, if any one or more of
the terms, provisions, covenants, and restrictions contained in this Agreement
shall for any reason be determined by a court of competent jurisdiction to be
excessively broad as to duration, geographical scope, activity or subject, it
shall be construed, by limiting or reducing it, so as to be enforceable to the
maximum extent compatible with then applicable law.

(c) Notices. All notices, requests, demands and other communications provided
for by this Agreement shall be in writing and delivered by confirmed email and
overnight courier service to the addresses of the respective parties as set
forth below, or to such changed addresses as the parties may fix by notice in
accordance therewith:

To Inc.:
  
deltathree, Inc.
Jerusalem Technology Park – Bldg. #9
P.O. Box 48265, Jerusalem 91481, Israel
Attn:  Chief Executive Officer
Attn:  General Counsel
 
Email:
effi.baruch@deltathree.com;
peter.friedman@deltathree.com

 
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To ACN Europe:

ACN Europe BV
Thomas R. Malthusstraat 1-3
1066 JR Amsterdam, Netherlands
Attn:  Chief Executive Officer
Attn:  General Counsel
 
Email:
mtribole@acneuro.com

 
Email:
amslegal@acneuro.com

(d) Successors and Assigns. Neither party may assign this Agreement without the
prior written consent of the other party; however, either party may assign this
Agreement to any affiliate without such consent.  Any attempt to assign this
Agreement not in conformance with the foregoing sentence shall be void.  This
Agreement shall be binding upon and inure to the benefit of Inc. and its
successors and assigns and upon and to the benefit of ACN Europe and its
successors and assigns.

(e) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of The Netherlands, without giving effect to principles
of conflict of laws.  In the event that any dispute shall have issues needing
resolution that arise out of the formation of an ACN Customer Contract, then the
laws of the province in which the ACN  Customer resides may be applied by a
court of competent jurisdiction, in its sole discretion, solely to answer
questions regarding the validity of that  Customer Contract, but all other
issues shall be governed by and construed in accordance with the laws of The
Netherlands, without giving effect to principles of conflict of laws.

(f) Arbitration. Any claim, controversy or dispute between the parties shall be
resolved by binding arbitration of the issue in accordance with the following
procedures:

(i)         Either party may request arbitration by giving the other involved
party written notice, which notice shall describe, in reasonable detail, the
nature of the dispute, controversy or claim. The arbitration shall be governed
by the rules of the American Arbitration Association ("AAA") and held in
Amsterdam, The Netherlands or other mutually agreed upon location.

(ii)        If both parties agree to an arbitrator within 30 days after a
request for arbitration is made hereunder, that arbitrator shall be selected to
hear the dispute in accordance with AAA rules. If the parties are not able to
agree upon an arbitrator within such 30 day period, then that party who
requested arbitration may request that the AAA select an arbitrator who has
business experience in the sales industry and the selected arbitrator shall hear
the dispute in accordance with AAA rules.

 
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(iii)      Each of the parties shall bear its own fees, costs and expenses of
the arbitration and its own legal expenses, attorneys' fees and costs of all
experts and witnesses; provided, however, that if the claim of either party is
upheld by the arbitrator in all material respects, the arbitrator may apportion
between the parties as the arbitrator may deem equitable the costs incurred by
the prevailing party. The fees and expenses of the arbitration procedures,
including the fees of the arbitrator, will be shared equally by the parties.

(iv)      Any award rendered pursuant to an arbitration proceeding shall be
final, conclusive, non-appealable and binding upon the parties, and any judgment
thereon may be entered and enforced in any court of competent jurisdiction

(g) Headings. The headings in this Agreement are for convenience of reference
only and shall not control or affect the meaning or construction of this
Agreement.

(h) Further Assurances. Each party agrees at any time, and from time to time, to
execute, acknowledge, deliver and perform, and/or cause to be executed,
acknowledged, delivered and performed, all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and/or assurances as may
be necessary, and/or proper to carry out the provisions and/or intent of this
Agreement.

(i) Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all such counterparts shall
constitute one and the same instrument.

(j) Survival.  The provisions of Sections 3(d), 3(e), 4(b), 4(h), 5(c)-(e),
5(k), 5(n), 7, 9, 10, 17 and 18 shall survive the termination of this Agreement
for as long as there are active Customers.

(k) Trademark License.  ACN Europe, on behalf of ACN, Inc., hereby grants to
Inc., subject to the terms of this Agreement, a limited, non-exclusive,
non-transferable, non-sublicensable, license to use and display ACN Europe
trademarks and tradenames (together, the “Marks”), as identified by ACN Europe,
in or on promotional material and the on-line branded web site, provided such
use is reasonably necessary to perform as contemplated by this Agreement and has
been approved by ACN Europe.
 
Title to and ownership of the Marks shall not be affected by this
Agreement.  The license granted by ACN Europe does not include any ownership
interest in the Marks and does not include the right to modify or alter in any
way any of the Marks.  Any benefits accruing from use of the Marks shall
automatically vest with ACN Europe or ACN Inc. This limited license shall
terminate immediately in the event this Agreement is terminated and use of any
Marks must cease immediately upon termination, subject to Section 3(d) above.

 
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
on the day and year first above written.

DELTATHREE, INC.
 
By:
/s/ Effi Baruch
 
Name:
Effi Baruch
Title:
CEO and President
   
DME SOLUTIONS, INC.
 
By:
/s/ Effi Baruch
 
Name:
Effi Baruch
Title:
CEO and President
 
DELTA THREE ISRAEL, LTD.
 
By:
/s/ Effi Baruch
 
Name:
Effi Baruch
Title:
CEO and President
 
ACN EUROPE B.V.
 
By:
/s/ Michael Tribolet
 
Name:
Michael Tribolet
Title:
CEO

 
 
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