Unassociated Document


    
      Exhibit
10.1

       

      EXECUTION
VERSION

       

      MASTER
SERVICE AGREEMENT

       

      This
Master Service Agreement (this “Agreement”), dated as
of October 9, 2009 (the “Effective Date”), is
by and between deltathree, Inc., a Delaware corporation (“D3”), and Ojo Service
LLC, a Pennsylvania limited liability company (“OJO”; and together
with D3, the “Parties”).

       

      Recitals:

       

      WHEREAS,
D3 is a provider of Voice over Internet Protocol (“VoIP”) telephony and
video services;

       

      WHEREAS,
OJO is interested in purchasing the VoIP telephony and video services from D3;
and

       

      WHEREAS,
the Parties wish to enter into this Agreement to provide the terms and
conditions pursuant to which D3 shall provide to OJO, and OJO shall purchase
from D3, the VoIP telephony and video services.

       

      NOW,
THEREFORE, in consideration of the foregoing recitals and the conditions set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties, intending to be
legally bound, hereby agree as follows:

       

      1.    Scope of
Agreement. Subject to the terms and conditions of this Agreement, D3
shall provide the Services as described and in conformance with the Statement of
Work attached as Appendix A to this Agreement and any additional Statements of
Work that may be attached to and incorporated into this Agreement by the Parties
from time to time during the Term (each, a “Statement of
Work”).  In the event of any inconsistency or conflict between
a term contained in this Agreement and a term contained in any Statement of
Work, the term contained in such Statement of Work shall govern as to such
Statement of Work.  The Parties acknowledge that each Statement of
Work may be subject to revision as mutually agreed by the Parties in order to
better reflect the intent of this Agreement and to address any issues or
concerns that arise during the course of the implementation and launch of the
Solution, or otherwise during the Term.  Either Party may request
changes or additions to the terms and conditions of this Agreement or any
Statement of Work, by submitting such request to the other Party in
writing.  Following the submission of any such request, the Parties
shall, in good faith, attempt to negotiate an appropriate amendment to this
Agreement or the applicable Statement of Work.  Requested changes or
additions shall be incorporated into this Agreement or the applicable Statement
of Work only upon the express written agreement of the Parties as to the terms
and conditions thereof.

       

      2.     Definitions.
As used in this Agreement, the Appendices hereto or any Statement of Work, the
following words and phrases shall have the following meanings:


      
        
           


        

        
          
          

          
            

          

        

        
           


        

      


      “Affiliate” means,
with respect to either Party, any other person, entity or enterprise that,
directly or indirectly, through one or more intermediaries, Controls, is
Controlled by, or is under common Control with such person, entity or
enterprise; provided that, (a) with
respect to D3, the following entities shall not be considered Affiliates:
WorldGate Communications, Inc. and its direct or indirect subsidiaries
(including OJO) and (b) with respect to OJO, the following entities shall not be
considered Affiliates: D3 and its direct or indirect subsidiaries.

       

      “Bankruptcy Code”
means Chapter 7 or Chapter 11 of the United States bankruptcy code (Title 11 of
the United States Code).

       

      “Claim” means any
actions, suits, claims, demands, debts, complaints, sums of money, reckonings,
covenants, contracts (whether oral or written, express or implied from any
source), agreements, warranties, controversies, promises, judgments, extents,
executions, variances, trespasses, liabilities or obligations of any kind
whatsoever, in Law or equity, and causes of action of every kind and nature, or
otherwise (including claims for damages, costs, expenses, and attorneys’,
brokers’ and accountants’ fees and expenses) asserted, commenced or threatened
against a Party or any of its Representatives.

       

      “Confidential
Information” means (a) any and all information concerning either Party or
its Representatives which has been or is, in the future, furnished by such Party
(the “Provider”) or any of
its Representatives to the other Party (the “Recipient”) or any of
its Representatives, orally or in writing (whatever the form or storage medium),
including, without
limitation, information concerning its subsidiaries, Representatives,
businesses, operations, markets, products, product specifications, designs,
documentation (including internal control and process documentation) technical
data, trade secrets, processes, computer programs (in object or source code
form), know-how, research and development, financial condition, results of
operations, projections, strategies, marketing information, contracts,
customers, employees and prospects, including, with respect to OJO, any OJO
Property, and (b) any and all notes, analyses, compilations, studies or other
documents prepared by the Recipient or any of its Representatives containing or
reflecting any Confidential Information described in clause (a). The term
“Confidential Information” does not include information which the Recipient
demonstrates: (i) was or becomes generally available to or known by the public
(other than as a result of a disclosure directly or indirectly by the Recipient
or any of its Representatives who received such information pursuant to this
Agreement or any Statement of Work); or (ii) was or becomes available to the
Recipient or any of its Representatives on a non-confidential basis, prior to
its disclosure to the Recipient by the Provider or its Representatives; provided that the source of
such information is not otherwise known by the Recipient after reasonable
investigation to be bound by a confidentiality agreement with the Provider or
any of its Representatives, or to be under a contractual, legal, fiduciary or
other obligation to the Provider or any of its Representatives not to transmit
the information to the Recipient.


      
        
           


        

        
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      “Control” (including
the correlative terms “Controls”,
“Controlled
by”, and “under
common Control
with”) means, with respect to any person, entity or enterprise, the
power, directly or indirectly, either to (i) vote a majority of the voting
shares or other voting interests in such person, entity or enterprise for the
election of directors or other governing body of such person, entity or
enterprise or (ii) direct or cause the direction of the management and policies
of such person, entity or enterprise, whether through the ownership of voting
securities, by contract or otherwise.

       

      “CPE” means a hardware
device to be used in connection with the Services contemplated by the Solution,
whether via traditional audio-only telephony or via video communication (i.e.,
videophone technology).

       

      “D3 Certified CPE”
means (a) the Linksys PAP2T and Linksys SPA2102 and (b) any other CPE certified
by D3 during the Term.

       

      “Data Security Breach”
means the unintentional loss of Personal Data, the inadvertent disclosure of
Personal Data, or the unauthorized access to or unlawful or unauthorized
processing or transfer of Personal Data or any other type of information
security breach, loss or corruption involving Personal Data.

       

      “Documentation” means
any operation instructions, technical manuals, user manuals,
system-administrator manuals, training materials, installation instructions,
installation software, specifications and all other written materials in hard
copy or electronic format, that are provided by D3 to OJO and that describe the
functionality and proper installation and use of the Solution.

       

      “FCC” means the United
States Federal Communications Commission.

       

      “Governmental
Authority” means any federal, state, county, municipal, district or local
government or government body, or any public administrative or regulatory
agency, political subdivision, commission, court, board or body, or
representative of any of the foregoing, foreign or domestic, of, or established
by, any such government or government body that has authority in respect to a
particular matter.

       

      “Intellectual
Property” means all of the following in any jurisdiction throughout the
world: (a) all inventions (whether patentable or unpatentable and whether or not
reduced to practice), all improvements thereto, and all patents, patent
applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof, (b) Marks and rights in telephone numbers, including all goodwill
associated therewith, (c) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith, (d) all mask
works and all applications, registrations, and renewals in connection therewith,
(e) all trade secrets and Confidential Information, (f) all computer software
(including source code, executable code, data, databases, and related
documentation), (g) all advertising and promotional materials and (h) all copies
and tangible embodiments of any of the foregoing (in whatever form or
medium).

       

      “Launch Date” means
the date when OJO first makes the Solution commercially available to its
Subscribers.


      
        
           


        

        
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      “Law” means any
statute, law (including common law), constitution, treaty, charter, ordinance,
code, rule, award, injunction, judgment, decree, order, ruling, subpoena or
verdict, regulation and any other binding requirement or determination of any
Governmental Authority.

       

      “Liability” means all
losses, injuries, damages, liabilities, indebtedness, obligations, deficiencies,
demands, fines, penalties, judgments, liens and claims, and all related
expenses, costs, charges and fees, including reasonable attorneys’ fees and
disbursements, reasonable and necessary consultants’, computer forensic
examination and other professional fees and disbursements, costs of
investigation, litigation, collection, settlement, and judgment, and any taxes,
interest and penalties with respect to any of the foregoing.

       

      “Marks” means all
trade names, trademarks, service names, service marks, logos, trade dress,
slogans, insignia, corporate names, symbols, tags, legends and Internet domain
names, together with all translations, adaptations, derivations, and
combinations thereof, and all applications, registrations, and renewals in
connection therewith.

       

      “New Release” means a
release of the Solution which consists of a new version with substantial
enhancements, added functionality, or new features typically denoted by a change
to the number to the left of the first decimal point (e.g., a change from 2.x to
3.x).

       

      “Personal Data” means
any information supplied by OJO or a Subscriber that identifies, relates to,
describes, or is capable of being associated with, a particular individual,
including his or her name, signature, social security number, other
identification number, physical characteristics or description, home or business
address or location, email address, telephone number, passport number, driver's
license or state identification card number, insurance policy number, education,
employment, employment history, bank account number, credit card number, debit
card number, union or trade association status, supervisor name, medical or
health information, or any other sensitive information related
thereto.

       

      “Pricing Schedule”
means the pricing schedule attached as Appendix B to this Agreement, which
reflects D3’s charges to OJO for each aspect of the Solution and the
professional fees and other amounts that may be charged to OJO (provided that
all such charges, fees and other amounts may be revised as set forth in a
Statement of Work).

       

      “Processing” means any
operation or set of operations which is performed upon Personal Data, whether or
not by automatic means, such as collection, recording, organization, storage,
adaptation or alteration, retrieval, use, disclosure by transmission,
dissemination or otherwise making available, alignment or combination, blocking,
erasure, or destruction.

       

      “Representative”
means, with respect to either Party, such Party’s Affiliates and its and their
officers, directors, majority stockholders, members, partners, employees,
partners, attorneys, accountants, consultants, contractors, agents, financial
and other advisors, heirs, successors and assigns.


      
        
           


        

        
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      “Retail Subscribers”
means persons who have been registered for the provision of the Services
contemplated by the Solution and have an active account capable of utilizing the
Services contemplated by the Solution in accordance with the terms of this
Agreement or any Statement of Work.

       

      “Services” means VoIP
telephony and video services.

       

      “SIP” means Session
Initiation Protocol, a protocol that is used to manage telephony over internet
protocol networks.

       

      “Software” means the
computer programs provided by D3 in connection with the Service, including all
third party computer programs.

       

      “Solution” means all
Software, Documentation, Updates, CPEs, training, technology and materials used
to provide D3’s Services to OJO under this Agreement or any Statement of Work,
whether owned by D3 or a third party, that will enable OJO to deploy SIP-based
Services, including providing (i) Services to Wholesale Subscribers (with the
ability to white label any and all sign-up and member-center user interfaces for
such Wholesale Subscribers and track (both individually and on an aggregate
basis) the Retail Subscribers obtained by such Wholesale Subscriber) and (ii)
Services to Retail Subscribers.

       

      “Source Code” means
the human readable form of the Software and any related materials, including
flow charts, logic diagrams and listings, whether in machine or human readable
form.

       

      “Subscriber” means any
Wholesale Subscriber or any Retail Subscriber.

       

      “Technical and Organizational
Security Measures” means measures aimed at protecting Personal Data
against accidental or unlawful destruction or accidental loss, alteration,
unauthorized disclosure or access, in particular where the Processing involves
the transmission of data over a network, and against all other unlawful forms of
Processing.

       

      “Tier 1” means agents
that assist with all order entry, fulfillment, provisioning, billing, account
maintenance, adjustments, cancellations and general isolation of issues to a
CPE, the ISP or the network.

       

      “Tier 2” means
technicians that isolate issues to a CPE, the ISP or the network, but has a
greater focus/experience level in resolving quality of service issues; in
addition, Tier 2 technicians generally has tenure and experience, handles
escalated situations, performs remote diagnostics, provides troubleshooting
assistance and approves RMAs.


      
        
           


        

        
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      “Tier 3” means
technicians in the network operations center which addresses network issues,
such as patterns of call failures to a certain geographical area, patterns of
call quality issues, patterns of customer inability to access network features,
patterns of customer inability to access the member center, the call center’s
inability to access the CSI, etc.  As a general rule, individual phone
issues would not be handled by Tier 3.

       

      “Transition Breach”
means D3’s material breach of its transition obligations under this Agreement
and any Statement of Work.

       

      “Triggering Event”
means, with respect to a Party or any of its direct or indirect subsidiaries,
any of the following:

       

      a.    the
cessation of normal business operations or the cessation of providing the
Solution to OJO in breach of this Agreement or any Statement of
Work;

       

      b.    the
making of a general assignment for the benefit of creditors;

       

      c.    institution
of a proceeding under any state corporation or similar law for the purposes of
dissolution;

       

      d.    institution
of a proceeding under any state insolvency or similar law for the purpose of its
bankruptcy or liquidation;

       

      e.    a
voluntary filing of a petition for relief under the Bankruptcy
Code;

       

      f.    the
filing of an involuntary petition in bankruptcy that is not dismissed within 60
calendar days after its filing;

       

      g.    the
admission in writing of a failure to generally pay its debts as such debts
become due; or

       

      h.    the
occurrence of a Force Majeure event with respect to which D3 has failed to
provide reasonably equivalent back-up or disaster recovery within ten (10)
days.

       

      “Updates” means any
(i) New Releases, (ii) new versions or material, or (iii) updates, changes,
enhancements or modifications to the Solution, in each case at such time as they
are capable of being deployed by D3 without a service or functionality
degradation or loss.

       

      “Wholesale Subscriber”
means any customer of OJO to which OJO sells the Solution on a wholesale basis
to enable such customer to resell the Services contemplated by the Solution to
Retail Subscribers.


      
        
           


        

        
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      3.    Licenses for
Solution.

       

      a.    License of Solution to
OJO.  D3 hereby grants to OJO (i) a non-exclusive, worldwide,
royalty free, fully paid-up license to use, copy, modify, distribute, display
and sublicense with respect to all Documentation, CPEs, training and materials
used to provide D3’s Services to OJO under this Agreement or any Statement of
Work, whether owned by D3 or a third party, and (ii) a non-exclusive, worldwide,
royalty free, fully paid-up license to use, distribute, display and sublicense
with respect to Software, Updates or Technology, in each case, in order to
provide the Solution to Subscribers (including for their use in connection with
their use or resale of the Solution) and to administer, support, market and
provide any services related to the Solution.  Notwithstanding the
foregoing, OJO shall not be provided access to the Source Code and D3 does not
grant any license to OJO with respect to copying or modifying the Software,
Updates or Technology.

       

      b.    Updates.  Upon
prior written notice to OJO, D3 shall deliver to OJO and Subscribers any
Updates.

       

      c.    Features and Functionality
Review.  At OJO’s request, but not more frequently than once
every three months and simultaneously with the Pricing Review described in
Section 6(e) below, D3 will meet telephonically with OJO to review the features
and functionality of the Solution.  At such meetings, the Parties will
evaluate the revisions or modifications to the Solution that may be necessary to
maintain OJO’s competitive position within the market for the provision of the
Services contemplated by the Solution.  Neither Party shall be
obligated to implement or pay for any such revision or modification in the
absence of a written amendment to this Agreement or the applicable Statement of
Work setting forth the terms and conditions thereof.

       

      4.    Rate
Plans.  As specified in the applicable Statement of Work, the
Parties will agree on the rate plans, with specific rates and other elements to
be agreed upon by the Parties, that may be offered to
Subscribers.  OJO shall identify to D3 in writing which rate
plans it has selected no later than the date specified in the applicable
Statement of Work.  Upon receipt of such notice from OJO, D3 shall implement the
designated rate plans in accordance with the applicable Statement of
Work.  Any delay in the delivery of such notice shall result in a
delay of a like period in D3’s implementation of the designated rate
plan.

       

      5.    CPE.

       

      a.    Supply of
CPEs.  D3 has certified the D3 Certified CPEs and the Iris
3000-AU Video Phone on the D3 network.  D3 shall promptly provide OJO
with any updates to the list of CPEs certified in connection with the Services
contemplated by the Solution.  D3 will supply D3 Certified CPEs that
have been purchased by OJO from D3 for sale to Subscribers according to the
terms set forth in the applicable Statement of Work.  OJO may purchase
D3 Certified CPEs from D3 or any other source.  OJO will be required
to prepare, and D3 will be required to provide reasonable assistance in
preparing, any user manuals, quick start guides and any necessary installation
software that OJO wants to be provided to the Subscribers.  D3 agrees
to use commercially reasonable efforts to work with OJO to ensure that the Iris
3000-US is available and integrated into the Solution within 30 days following
the Effective Date.  D3 agrees to use commercially reasonable efforts
to work with OJO to ensure that the Iris 4000 and other CPEs reasonably
requested by OJO are available and integrated into the Solution within 90 days
of a written request by OJO to D3.


      
        
           


        

        
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      b.    Fulfillment.  As
more particularly defined in the applicable Statement of Work, D3 may be
responsible for arranging for shipping certain CPEs to Subscribers and inserting
any user manuals, quick start guides and installation software provided by
OJO.  Unless otherwise specified, all such shipments shall be of new
non-returned, non-refurbished CPEs made by a shipping method to be agreed to by
the Parties, and shall be invoiced to OJO in accordance with the amounts set
forth in the Pricing Schedule.

       

      6.    Pricing.

       

      a.    D3 Service Charges to
OJO.  D3’s charges to OJO for the Solution are set forth in the
Pricing Schedule.  D3 shall provide OJO with (i) at least 90 days’
prior written notice of any proposed price increases to any One-time Activation
Fees, Monthly Per Subscriber Fees or Professional Fees included on the Pricing
Schedule, (ii) at least 7 days’ prior written notice of any proposed price
increases for national and international usage rates included on the Pricing
Schedule and (iii) at least 45 days’ prior written notice of any price increases
to any other item included on the Pricing Schedule.  Notwithstanding
the foregoing, (A) D3 shall not increase any One-time Activation Fees, Monthly
Per Subscriber Fees or Professional Fees on the Pricing Schedule without the
prior written consent of OJO, (B) if D3 provided OJO with at least 7 days’ prior
written notice of any proposed price increases for national and international
usage rates, D3 shall be permitted to increase national and international usage
rates on the Pricing Schedule following such 7 day notice period to an amount
equal to 120% multiplied by the direct costs incurred by D3 with respect to such
national and international usage rates and (C) if D3 provided OJO with at least
45 days’ prior written notice of any proposed price increases for any fees on
the Pricing Schedule, other than One-time Activation Fees, Monthly Per
Subscriber Fees, Professional Fees, national and international usage rates, D3
shall be permitted to increase such other fees on the Pricing Schedule following
such 45 day notice period to an amount equal to 120% multiplied by the direct
costs incurred by D3 with respect to the service underlying such
fee.

       

      b.    OJO Service Charges to
Retail Subscribers.  As may be set forth and as more
particularly defined in the applicable Statement of Work,

       

      (i)    D3
may be required to bill Retail Subscribers on behalf of OJO for such Retail
Subscriber’s service charges as follows:  (A) monthly subscription
fees shall be billed and collected (through a merchant account established and
maintained by OJO in connection with the Solution) for the 30 days following the
billing date and (B) non-recurring charges shall be billed and collected
(through a merchant account established and maintained by OJO in connection with
the Solution) (whether by actual charges to the Retail Subscriber or by debit
against the credit balance of the Retail Subscriber maintained by OJO or D3, as
applicable) at the time of purchase by the Retail Subscriber;

       

      (ii)    D3
may be required to notify OJO, pursuant to the reports contemplated by this
Agreement and provided in the Solution, of the amounts that D3 will be charging
OJO per month for each Retail Subscriber’s account (which will include a
deduction for the pro-rated amounts to reflect the number of days within such
month in which a Retail Subscriber’s account was not active for the entire
month);


      
        
           


        

        
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      (iii)    
within five (5) days of the end of a Retail Subscriber’s billing cycle, D3 shall
make available to such Retail Subscriber a detailed summary of charges incurred
by the Retail Subscriber for such billing cycle; and

       

      (iv)    
D3 may be required to facilitate the payment of all fees owed to OJO by Retail
Subscribers as reasonably requested by OJO, with the resulting amounts being
processed through a merchant account established and maintained by OJO in
connection with the Solution.

       

      c.    OJO Service Charges to
Wholesale Subscribers.  As more particularly defined in the
applicable Statement of Work, within seven (7) days after the end of each month,
D3 shall provide OJO any information agreed to by the Parties with respect to
the usage of services by each Wholesale Subscriber during the prior calendar
month.

       

      d.    Invoices.

       

      (i)    D3
will invoice OJO on a monthly basis in U.S. dollars for all amounts due
hereunder.  All payments hereunder shall be paid in U.S.
dollars.  OJO shall pay D3 those fees and expenses set forth on such
invoice in full (subject to paragraph (d)(ii) below) via wire transfer directly
to a bank account or accounts designated by D3 or in such other manner mutually
agreed upon by the parties within forty five (45) days of the date of the
receipt of the invoice (the “Due Date”).  Any payments not received by
the Due Date (other than with respect to any disputed amounts set forth in a
disputed invoiced contemplated by Section 6(d)(ii)) may (at D3’s sole
discretion) bear interest at a rate of one and one half percent (1.5%) per month
(or the pro-rata portion thereof) or the maximum rate permitted by Law,
whichever is less, until paid in full.  OJO shall reimburse D3 for all
reasonable out-of-pocket costs (including reasonable attorneys’ fees) incurred
by D3 in collecting unpaid amounts from OJO after a Due Date. This provision
will survive termination or expiration of this Agreement.

       

      (ii)    Notwithstanding
the foregoing, amounts equal to charges set forth on an invoice may be withheld
by OJO if OJO provides D3 with written notice that an invoiced charge (whether
or not previously paid) is the subject of a bona fide dispute (which such notice
shall set forth the disputed charge and the reasons (in reasonable detail) why
OJO disputes any such charge) within ninety (90) days of receipt of the invoice
containing the disputed item; provided that, OJO shall remit the undisputed
portion of the invoice pursuant to paragraph (d)(i) above; provided further
that, OJO shall not be limited in disputing errors or inaccuracies in invoices
that have been caused by D3’s negligence or willful misconduct.  D3,
in its reasonable discretion, may request additional supporting documentation
from OJO regarding such disputed invoice.  D3 and OJO will promptly
address and attempt to resolve such dispute in good faith within thirty (30)
days.

       

      e.    Pricing
Reviews.  D3 shall use commercially reasonable efforts to
structure and provision the Services contemplated by the Solution so as to offer
wholesale pricing generally equivalent to market standards.  At either
Party’s request, each Party agrees to meet telephonically periodically with the
other Party, but not more than once every three months, to review and compare
D3’s pricing with market prices for services substantially similar to the
Services contemplated by the Solution. The Parties shall negotiate any
appropriate price reductions or increases in good faith.


      
        
           


        

        
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      7.    Branding.  Except
as otherwise expressly set forth herein, the Solution will be identified solely
by such brands, logos and other names as are designated in writing by OJO, as
provided below.

       

      a.    Designation by
OJO.  OJO shall designate, pursuant to a written notice
delivered to D3 by the date specified therefor in the applicable Statement of Work, the
manner in which it requests D3 to implement the brand name designated by OJO in
connection with the Solution.  Such written notification shall specify
in reasonable detail the placement, application and usage guidelines related to
such branding designations (e.g., OJO shall specify the manner in which it
requests its branding designations to be applied to the graphic user interface,
telephony user interface, manuals and other documentation, technical support
line, Subscriber invoices, applicable websites and other individual components
of the Solution), and shall include, where practical, electronic versions of
such brand designations.

       

      b.    Implementation by
D3.  Upon receipt of such information as is reasonably
necessary to implement OJO’s branding designations, D3 shall use its reasonable
efforts using D3’s then-current style configurations to configure the Solution
to satisfy OJO’s branding requirements provided in the written notification set
forth in Section 7(a).  Any delay by OJO in the delivery of its
branding designations to D3 shall result in a like extension of the date by
which D3 is required to effect the implementation thereof, as set forth in the
applicable Statement of Work.

       

      8.    Technical
Support.  D3 shall be responsible for all Tier 3 technical
support for the Services contemplated by the Solution.  To facilitate
such technical support, D3 shall maintain an on-line trouble ticket system from
which Tier 2 support can refer non-critical support questions.  In
addition, D3 shall maintain a toll-free number from which Tier 2 support can
refer critical support questions.  D3 acknowledges and agrees that all
costs incurred by D3 in providing technical support contemplated by this
Agreement or any Statement of Work are included in the per subscriber charges
contemplated by the Pricing Schedule and, therefore, D3 will not separately
charge OJO or any Subscriber any amounts for technical support contemplated by
this Agreement or any Statement of Work.  OJO shall have the right at
any time, upon the delivery of thirty (30) days’ prior written notice, to assume
responsibility for the provision of such technical support at its sole
cost.

       

      9.    D3
Operational Responsibilities.

       

      a.    Operational Matters;
Deliverables.  As more particularly defined in the applicable
Statement of Work, (i) D3 will be responsible for configuring, implementing and
hosting the Solution, and for creating certain related deliverables and (ii) D3
agrees to provide the following: the Order Sign-up Portal, Members Center
Portal, provisioning, billing and collection, and any other services set forth
in this Agreement or any Statement of Work.  In providing such
services to OJO, D3 shall be solely responsible for procuring such support
services and technology as it deems necessary or desirable in connection with
its responsibilities under this Agreement and any Statement of
Work.  As requested by OJO, D3 shall use its best efforts to promptly
deliver (with automatic installation), to all applicable CPEs used by
Subscribers, any new versions, updates, changes, enhancements or modifications
to the Software contained on such CPE.


      
        
           


        

        
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      b.    Disaster
Recovery.  As promptly as practicable following the Effective
Date, D3 shall (to the extent it has not already done so) ensure that a remote,
redundant facility with the capacity to provide disaster recovery in connection
with the Solution has become operational in North America.

       

      c.    Service
Levels.  In connection with the Solution, D3 will provide the
Service to OJO in accordance with the service levels and the terms and
conditions set forth in the Service Level Agreement (“SLA”) attached as
Appendix C to this Agreement and incorporated herein by reference.  If
D3 fails to attain a specified service level, it shall issue OJO a service
credit in connection therewith, as set forth in the SLA.  The Solution
shall track all service levels set forth in the SLA.

       

      10.  Legal
& Regulatory Compliance.

       

      a.    Compliance with
Laws.

       

      (i)    
General.  Each
Party shall comply with all applicable Laws in connection with the exercise of
its rights and performance of its obligations under this Agreement and any
Statement of Work.

       

      (ii) 
  OJO’s
Compliance Responsibilities.  OJO shall be responsible for
complying with all applicable Laws related to its offering of the Solution to
Subscribers under this Agreement and any Statement of Work, including but not
limited to the procurement of permits or certificates and the Laws regarding
E-911 emergency services and enhanced E-911 emergency services (“E-911 services”),
provided that, D3 agrees that the Solution shall include all functionality
required by Law to enable OJO to provide E-911 services to Subscribers required
by Law.

       

      (iii)   D3 Compliance
Responsibilities.  D3 shall procure all permits or certificates
and make all filings with or reports to any applicable Government Authorities
necessary to perform D3’s obligations under this Agreement and any Statement of
Work.  D3 shall provide (to the extent relating to D3’s network or
within D3’s possession or control, and not otherwise capable of being
independently produced by OJO without under expense or effort) to OJO as part of
the Solution the necessary services and, as reasonably requested and specified
by OJO, certifications, documentation, information, data, reporting or tools to
enable OJO to comply with all applicable Laws related to its offering of the
Solution to Subscribers under this Agreement and any Statement of Work,
including

       

      
        
          	
                	
                  (1) 

                	
                  the
      Laws regarding E-911 emergency services and enhanced E-911 emergency
      services;

                


        

      


      
        
           


        

        
          11

          
            

          

        

        
           


        

      

       

      
        
          	
                	
                  (2) 

                	
                  that
      D3’s network complies with requirements to facilitate electronic
      intercepts and/or monitor and record/store voice conversation under
      applicable Law, including the Communications Assistance for Law
      Enforcement Act (CALEA);

                


        

      

       

      
        
          	
                	
                  (3) 

                	
                  the
      VoIP Disability Access Report and Order promulgated by the FCC requiring
      VoIP service providers to adhere to the FCC’s existing disability access
      rules;

                


        

      

       

      
        
          	
                	
                  (4) 

                	
                  the
      maintenance of records (which D3 shall provide to OJO on demand) of the
      accessibility efforts to comply with Section 265 of the Telecommunications
      Act of 1996 that can be presented to the FCC in the event that consumers
      with disabilities file
complaints;

                


        

      

       

      
        
          	
                	
                  (5) 

                	
                  offering
      the use of the 711 dialing code for access to telecommunications relay
      services to permit persons with a hearing or speech disability to use the
      telephone system via a text telephone (TTY) or other device to call
      persons with or without such
disabilities;

                


        

      

       

      
        
          	
                	
                  (6) 

                	
                  complying
      with local number portability requirements under applicable
      Law;

                


        

      

       

      
        
          	
                	
                  (7) 

                	
                  to
      the extent required by applicable Law, complying with the Red Flag Rules
      promulgated by the Federal Trade Commission to implement section 114 of
      the Fair and Accurate Credit Transactions Act, including the adoption of
      an identity theft prevention program;
and

                


        

      

       

      
        
          	
                	
                  (8)

                	
                  the
      data necessary for the preparation of all filings or reports to be made by
      OJO to any Governmental Authority, including Form 477 and Form 499
      required by the FCC.

                


        

      

       

      Following
the Effective Date, D3 shall promptly provide to OJO the CALEA plan filed by D3
with the required U.S. Governmental Authority, and, as they are developed in the
future, any revisions or updates to that plan.

       

      b.    Processing of Personal
Data.

       

      (i)    Standard.  D3
shall process Personal Data only in accordance with applicable Law and solely
under the direction and control of, and pursuant to the instructions of, OJO
pursuant to this Agreement, any Statement of Work and any model contracts
executed pursuant to Section 10(b)(v).

       

      (ii)    Ownership and
Control.   OJO retains all right, title, and interest in
and to any Personal Data transferred to D3.  OJO grants D3 a limited,
revocable and non-exclusive license to use Personal Data for those purposes
necessary for D3 to perform its obligations under this Agreement or any
Statement of Work and for no other purpose, and provided that D3 will have no
right to create or maintain data which is a derivative of such
data.


      
        
           


        

        
          12

          
            

          

        

        
           


        

      

       

      (iii)  D3
Requirements.  D3 agrees that at any and all times during which
it is Processing Personal Data, or otherwise having access to such Personal
Data, it will:

       

      
        
          	
                	
                  (1) 

                	
                  have
      in place appropriate and commercially reasonable Technical and
      Organizational Security Measures, including physical, electronic, and
      procedural safeguards, to protect the Personal Data against unauthorized
      or unlawful Processing of Personal Data and against a Data Security
      Breach;

                


        

      

       

      
        
          	
                	
                  (2) 

                	
                  comply
      with all applicable privacy and data protection laws to which it is
      subject;

                


        

      

       

      
        
          	
                	
                  (3) 

                	
                  not
      sell, share, or otherwise transfer or disclose any Personal Data to any
      other party without prior written consent from
  OJO;

                


        

      

       

      
        
          	
                	
                  (4) 

                	
                  take
      all reasonable steps to return, destroy, or arrange for the destruction
      of, Personal Data at the termination of this Agreement or any applicable
      Statement of Work or when there is no longer any legitimate business need
      to retain such Personal Data;

                


        

      

       

      
        
          	
                	
                  (5) 

                	
                  make
      the Personal Data available only to its Representatives who have a
      legitimate D3 business need to access the Personal Data, who are bound by
      legally enforceable confidentiality obligations, and who have received
      training in the appropriate Processing of Personal Data;
    and

                


        

      

       

      
        
          	
                	
                  (6) 

                	
                  assist
      and cooperate with OJO with any necessary or appropriate disclosures or
      other remedial measures as a result of any Data Security
      Breach.

                


        

      

       

      (iv) D3 Reporting
Obligations.  D3 shall immediately and without unreasonable
delay inform OJO, in writing:

       

      
        
          	
                	
                  (1)

                	
                  if
      it cannot comply with any provision of this Section 10(b) or any Statement
      of Work related to Personal Data.  If this occurs, OJO shall be
      entitled to suspend the Processing of Personal Data and to terminate any
      of D3’s further Processing of Personal Data, with D3 to cover OJO’s
      reasonable cost of obtaining comparable replacement services for those
      terminated services covered by this Agreement and any Statement of
      Work;

                


        

      

       

      
        
          	
                	
                  (2) 

                	
                  of
      any request for access to any Personal Data received by D3 from any
      government official (including any data protection agency or law
      enforcement agency);

                


        

      

       

      
        
          	
                	
                  (3) 

                	
                  of
      any Data Security Breach involving Personal Data, including all relevant
      facts with respect to the Data Security
Breach;

                


        

      

       

      
        
          	
                	
                  (4) 

                	
                  in
      advance of any disclosure of Personal Data to a third party;
      and

                


        

      


      
        
           


        

        
          13

          
            

          

        

        
           


        

      

       

      
        
          	
                	
                  (5) 

                	
                  of
      any and all requests, complaints or other communications with respect to
      the Processing of Personal Data received from any individual whose
      Personal Data is or may be included among the Personal Data.  D3
      understands that it is not authorized to respond to these requests, unless
      explicitly authorized by OJO, except for the request received from a
      governmental agency with a subpoena or similar legal document compelling
      disclosure by D3.

                


        

      

       

      (v)   European Union
Compliance.  D3 represents and warrants that (a) the Order
Sign-up Portal for the Solution shall only permit Subscribers that provide a
service address located in the United States of America to purchase the Services
contemplated by the Solution and (b) no Processing of Personal Data by D3 will
be subject to any data protection laws of the European Union.

       

      (vi)  Risk Assessment. Upon
OJO’s request, D3 will provide reasonable evidence that it has established and
maintains Technical and Organizational Security Measures governing the
Processing of Personal Data appropriate to the risks represented by the
Processing and the nature of the data to be protected.  OJO shall have
the right to request from D3, and D3 agrees to provide OJO with, reasonable
copies of and information concerning D3’s information security
protocols.

       

      (vii) Internal
Controls.  Upon the reasonable request of OJO, with respect to
each calendar year in which the Solution is provided to OJO, D3 shall provide,
from time to time, all internal control and process documentation related to the
Solution and, if any internal control and process documentation reasonably
satisfactory to OJO is not available, D3 shall promptly create, at D3’s sole
cost and expense, such documentation of the internal controls and processes
related to the Solution.  D3 shall permit OJO and OJO’s auditors to
rely on all of D3’s internal control and process documentation in evaluating,
preparing and auditing OJO’s internal controls over financial reporting and
OJO’s disclosure controls and procedures.  D3 agrees to use its
commercially reasonable efforts to promptly correct any deficiencies or
weaknesses identified by OJO in D3’s internal controls and
processes.

       

      c.    Data
Security.  D3 represents and warrants that it has adequate
controls necessary to protect the confidentiality, integrity, and availability
of Confidential Information and Personal Data, including the
following:

       

      (i)    D3
represents and warrants that its information technology practices conform to and
meet PCI DSS standards as defined by major credit card vendors.  D3 will
monitor these PCI DSS standards and its information technology practices and D3
will notify OJO within one (1) week, if its practices should not conform to such
standards.  D3 will provide a letter of certification to attest to meeting
this requirement on an annual basis.

       

      (ii)    D3
certifies, to the extent required by applicable Law, that it will, by the
required effective date as specified by applicable Law, have an Identity Theft
Prevention Program that complies fully with the US Federal Trade Commission’s
Red Flag Rules to adequately protect OJO’s confidential consumer account
information, including Personal Data, which may be susceptible to identity
theft.


      
        
           


        

        
          14

          
            

          

        

        
           


        

      

       

      (iii)    D3
also agrees that no Personal Data or OJO Confidential Information at any time
will be processed on or transferred to any portable or laptop computing device
or any portable storage medium, unless approved by OJO or that such storage
medium is in use as part of the D3’s designated backup and recovery
processes.

       

      11.  Deliverables.  D3
shall submit to OJO any deliverable, or that portion of any joint deliverable,
for which D3 has responsibility in the manner and upon the schedule set forth in
the applicable Statement of Work.  Acceptance of deliverables (or, in
the case of joint deliverables, any portion thereof) by OJO shall not be
unreasonably withheld.  In order to reject a deliverable, OJO shall so
notify D3 in writing within seven (7) days of the date of receipt of any such
deliverable.  Such notice shall specify in reasonable detail the
reasons such deliverable has been rejected.  D3 will use its
reasonable commercial efforts to make revisions to such deliverable as soon as
reasonably practicable.

       

      12. Ownership
of Subscriber

       

      a.    Service
Data.  Any and all data collected in the offering of the
Solution (“Service
Data”), including customer data and all reports related to the delivery,
performance, and usage of the Solution, shall be owned by OJO. Solely for the
purpose of performing its obligations under this Agreement or any Statement of
Work, D3 may collect, use and access the Service Data during the Term, but shall
not acquire any ownership interest therein.  In connection with its
use of the Service Data, each Party shall comply with the terms of the current
version of the privacy policy applicable to the Solution.  From time
to time and as may be reasonably requested by the other Party, each Party shall
provide the other with such data and reports as are in its possession, custody
or control.

       

      b.    Management of Subscriber
Relationship.  OJO will own the Subscriber relationship, which
D3 will provide those services in connection therewith on OJO’s behalf that are
set forth in this Agreement and any Statement of Work.  The Parties
shall cooperate as reasonably required with respect to, among other things, (i)
managing all matters relating to Subscriber communications, marketing, service,
credit card transactions, names and passwords and (ii) diligent monitoring of
Subscriber use of the Solution, including the immediate removal of obscene,
pornographic, and illegal materials, and the prohibition of
spam.  Unless and only to the extent otherwise set forth in this
Agreement or in a Statement of Work, OJO shall be responsible for providing all
Subscriber support.

       

      c.    Status of
Subscribers.  The Parties acknowledge that the Subscribers are
customers of OJO, and not of D3.

       

      d.    Continuity of
Service.  Notwithstanding anything to the contrary in this
Agreement or any Statement of Work, the following provisions will apply as of
the Effective Date:


      
        
           


        

        
          15

          
            

          

        

        
           


        

      

       

      (i)    Access.  Immediately
upon D3 ceasing, or threatening to cease, to provide the Solution to OJO (except
following termination or expiration of this Agreement or applicable Statement of
Work in accordance with this Agreement or such applicable Statement of Work and
following any Transition Period as contemplated by Section 15(a)), D3 shall
permit OJO reasonable access to its facilities, whether owned or leased, and to
its personnel in order to facilitate the orderly transition of the Subscribers
in the manner contemplated by this Agreement or any applicable Statement of
Work.  In addition, D3 hereby grants to OJO, to the extent it is
legally permitted to do so and at no charge to OJO, the right to use all of the
assets whether tangible or intangible and whether owned, licensed or leased by
D3, that are reasonably necessary to provide the Solution for the purpose of
transitioning any and all of the Subscribers from the Solution to a third party
vendor or to OJO, as determined by OJO in its sole discretion, and to provide
the Solution to the Subscribers until such time as is reasonably necessary to
ensure that all of the Subscribers have been transitioned but in no event longer
than the Transition Period.  OJO shall have the right to access such
assets immediately upon D3 so ceasing to provide the Solution to
OJO.  D3 shall be responsible, at its expense, for taking all
commercially reasonable steps required to obtain any consents, licenses,
sublicenses or approvals necessary to allow OJO to use such assets to provide
the Solution and transition all of the Subscribers as provided
herein.  D3 will retain all liability and expenses incidental to
ownership of such assets, including depreciation, taxes and insurance
expenses.  OJO shall defend, indemnify and hold harmless D3 and its
Representatives from and against any Claims and all Liabilities arising from, in
connection with, or otherwise with respect to any and all actions taken by OJO
pursuant to this Section 12(d)(i) that (a) are not reasonably related to or in
connection with transitioning Subscribers to a Replacement Service and (b) are
not reasonably related to the standard process and procedures utilized by D3 in
operating the Solution or transitioning the Service to a Replacement
Service.

       

      (ii)    Subscriber
Information. D3 will make Subscriber data files available to OJO via FTP
server or other electronic means (as mutually agreed to by the Parties) and will
update such data files every calendar day.  Within seven (7) days
after the end of each calendar month, D3 shall provide OJO an electronic data
file containing the configuration files (such configuration files shall first be
made available to OJO following a reasonable time after the Effective Date) and
passwords for each CPE used by all Subscribers in connection with the Solution
and any other relevant information requested by OJO that would facilitate the
transition of Subscribers to a Replacement Service (as such term is defined in
Section 15(a)).


      
        
           


        

        
          16

          
            

          

        

        
           


        

      


      (iii)    
Bankruptcy.  Notwithstanding
anything to the contrary in this Agreement or any Statement of Work, (I) all
rights and licenses granted under this Agreement and each Statement of Work
(including with respect to the Solution) are intended to be, and shall be deemed
to be, for purposes of Section 365(n) of the Bankruptcy Code (“Section 365(n)”)
licenses of rights to “intellectual property” as defined under Section 101(35A)
of the Bankruptcy Code; and (II) the Software is, and shall be deemed to be,
“embodiment[s]” of “intellectual property.”  All of the rights of OJO
under this Agreement and each Statement of Work, including the right to use the
Solution, the Source Code and the assets described in Section 12(d)(ii), shall
be deemed to exist immediately before the occurrence of any bankruptcy case in
which D3 is a debtor.  OJO shall retain and may fully exercise all of
its rights and elections under the Bankruptcy Code or equivalent legislation in
any other jurisdiction.  Without limiting the generality of the
foregoing, D3 acknowledges that, to the maximum extent permitted by Law, the
rights and licenses granted to OJO pursuant to this Agreement or any Statement
of Work shall not be affected by the rejection of this Agreement or such
Statement of Work in bankruptcy, and shall continue subject to the terms and
conditions of this Agreement or such Statement of Work.  In the event
that this Agreement or any Statement of Work is rejected or deemed rejected in a
bankruptcy proceeding (a “Rejection”), D3 shall
provide written notice thereof to OJO.  In the event that OJO makes no
specific election under Section 365(n) within 60 days of written notice of such
Rejection to either treat this Agreement or such Statement of Work as
terminated, or to retain its rights, except as otherwise required by Law, OJO
shall be deemed to have made a formal election (1) to retain its rights under
Section 365(n)(1)(B), (2) to demand that the trustee in such bankruptcy provide
to OJO any intellectual property held by such trustee that is subject to this
Agreement or such Statement of Work (including any embodiment of such
intellectual property to the extent protected by applicable non-bankruptcy law),
and to not interfere with the rights of OJO as provided in this Agreement and
such Statement of Work, under Section 365(n)(3)(A) and (3) to the extent any
rights of OJO under this Agreement or any Statement of Work are determined by a
bankruptcy court not to be “intellectual property rights” for purposes of
Section 365(n), all of such rights arising from such Rejection shall remain
vested in and fully retained by OJO after any such Rejection.  OJO
shall under no circumstances be required to terminate this Agreement or any
Statement of Work after a Rejection in order to enjoy or acquire any of its
rights under this Agreement or any Statement of Work.  In the event
that this Agreement or any Statement of Work is subject to a Rejection and
election by OJO to retain its rights under Section 365(n)(l)(B), any continuing
payments required by OJO hereunder shall be as set forth in Section
365(n)(2).  In the event that D3 pursuant to the bankruptcy process or
a trustee in bankruptcy attempts to assign this Agreement, OJO shall be entitled
to prevent such assignment unless it receives adequate assurances of future
performance regarding such proposed assignee, which adequate assurances shall
include whether the proposed assignee has the equivalent or greater financial,
personnel, technical and capital resources at the time of the proposed
assignment as those possessed by D3 on the Effective Date.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

    

    
      

        13.   Term.
The initial term of this Agreement (the “Initial Term”) shall
commence on the Effective Date and shall continue for a period of five (5) years
from the Launch Date unless terminated earlier in accordance with this
Agreement.  Following the expiration of the Initial Term (unless the
expiration of the Initial Term was due to a termination prior to the date five
(5) years after the Launch Date), this Agreement shall automatically renew for
successive terms of one (1) year each unless either Party provides the other
Party written notice of termination at least 180 days prior to the expiration of
the then-current term.  References in this Agreement to the “Term” shall include
the Initial Term and any extensions thereof.

         

        14.   Termination.  This
Agreement and any Statement of Work may be terminated by either Party as
follows:

         

        a.   
 Termination for
Breach.  Either Party may immediately terminate this Agreement
at any time in the event of a material breach of this Agreement or any Statement
of Work by the other Party (including the failure to pay any amounts due under
this Agreement or any Statement of Work within 30 days after written notice
thereof); provided that, if the breach is capable of being cured, the breaching
Party shall have thirty (30) days following written notice thereof to cure such
breach.  If the breach that is capable of being cured is not cured
within such 30-day period, such termination shall be effective immediately and
automatically upon the expiration of the 30-day period without further notice or
action by either Party.

         

        b.    
Termination for
Material Adverse Changes.

         

                             
(i)    Termination for Triggering
Event.  Either Party may terminate this Agreement immediately
following delivery of written notice to the non-terminating Party if a
Triggering Event occurs with respect to the non-terminating Party.

         

                             
(ii)   Termination for a Force
Majeure Event.  As contemplated by Section 24(d), the Party
receiving notice of a Force Majeure Event may terminate this Agreement or any
Statement of Work that is affected by the Force Majeure Event in whole or in
part if the delay caused by the Force Majeure Event is not cured within thirty
(30) days of receipt of such notice.

         

                              (iii)  
Termination for
Convenience.  Either Party may terminate this Agreement for
convenience upon delivery of one hundred eighty (180) days prior written notice
delivered to the other Party.

         

        c.   
 No Extension of
the Term.  Except as set forth in Section 13 above, no promise
or expressed intention to renew or extend the Term for any particular period
shall be binding upon either Party unless stated in a written document signed by
each Party.

         

        
          
            
            

          

          
            18

            
              

            

          

          
            
            

          

        

         

        15.   Effect of
Termination.

         

        a.   
 Transition.  Notice
of termination or expiration by either Party pursuant to Sections 13 or 14 will
commence a period (the “Transition Period”)
during which the Parties will cooperate in transitioning all Subscribers to
replacement services provided by OJO or OJO’s designee (the “Replacement
Service”).  During the Transition Period, D3 will promptly
create a configuration file for each model of CPE then in use by Subscribers,
which configuration file will direct such CPE to the Replacement Service and
grant the Replacement Service full access to and control over such CPE, and will
deploy such configuration files remotely to Subscribers over the course of the
Transition Period in accordance with the schedule established by the
Parties.  During the Transition Period OJO will promptly arrange for a
Replacement Service, arrange to port Subscriber phone numbers to the Replacement
Service and otherwise transition the Subscribers to the Replacement
Service.  The Transition Period shall continue until the earlier of
the date on which all Subscribers have been removed from the applicable Solution
and the date six (6) months following the notice of termination.  This
Agreement, including OJO’s obligation to pay fees and charges pursuant to this
Agreement, will remain in effect throughout the Transition
Period.  Notwithstanding anything in this Agreement to the contrary,
if termination is by D3 under Section 14(a) all services required to transition
Subscribers to the Replacement Services shall be deemed “professional services”
and OJO shall be responsible for fees for any such professional services in
accordance with the rates set forth in the Pricing Schedule attached hereto and
any Statements of Work.

         

        b. 
   Liabilities.  Neither
the expiration nor termination of this Agreement shall excuse either Party from
any Liabilities incurred prior to the effective date of such expiration or
termination, and all such Liabilities shall be due and payable in the manner and
within the time periods established by this Agreement.

         

        c.    
End of
Term.  Upon the expiration or termination of this Agreement and
following any Transition Period or as otherwise contemplated by Section 12(d),
all licenses granted hereunder will automatically terminate and deltathree will
discontinue the provision of Services.

         

        d.    
Survival of
Obligations. Obligations and rights in connection with this Agreement or
any Statement of Work, which by their nature would continue beyond the
termination or expiration of this Agreement (including those in Sections 10
(Legal and Regulatory Compliance), 12 (Ownership of Subscriber), 14
(Termination), 15 (Effect of Termination), 16 (Representations and Warranties),
17 (Taxes and Applicable Fees), 18 (Licenses Regarding Intellectual Property),
19 (Indemnification), 20 (Publicity), 22 (Records and Audits), 23
(Confidentiality), 24 (No Warranties), 26 (General)) will survive the
termination or expiration of this Agreement.

         

        16.   Representations
and Warranties.

         

        a. 
   Each Party represents and warrants to the other Party
that:

         

        (i)  
 it is validly existing and in good standing under the Laws of the
jurisdiction of its incorporation;

         

        (ii)   it
has the full right, power and authority to execute, deliver and perform its
obligations under this Agreement and all Statements of Work;

         

        
          
            
            

          

          
            19

            
              

            

          

          
            
            

          

        

         

        (iii)   
its execution of, and performance under, this Agreement and any Statement of
Work does not and will not (1) violate any applicable Law or (2) violate or
cause a conflict with or default under any other contract or agreement to which
it is subject;

         

        (iv)   when
executed and delivered by it and by the other Party, this Agreement and each
Statement of Work will constitute the legal, valid and binding obligation of it,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy and other Laws that affect the rights of creditors
generally;

         

        (v)   it
has obtained, or will obtain, all necessary consents and approvals required from
any entity, including any Governmental Authority with respect to the entering
into this Agreement and all Statements of Work;

         

        (vi)   
to the best of its knowledge, there are no third party Claims that will prevent
it from fulfilling its obligations under this Agreement or any Statement of
Work; and

         

        (vii)   (1)
it will not directly or indirectly use any Confidential Information of the other
Party to engage in or facilitate the trading of any securities, in either case,
in violation of any prevailing laws and regulations in any applicable
jurisdiction and (2) it is aware that applicable securities laws prohibit any
person who has material, non-public information concerning the other Party or
its Representatives from purchasing or selling any securities of the other Party
or its Representatives, or from communicating such information to any other
person or entity under circumstances in which it is reasonably foreseeable that
such person is likely to purchase or sell such securities.

         

        b.   D3
represents and warrants to OJO that

         

        (i)   the
Solution and any other services provided hereunder (i) will be performed in a
professional manner and with corresponding diligence, expertise and skill and,
subject to the quality and reliability of the Subscriber’s underlying Internet
service, in accordance with then-current consumer VoIP service provider industry
standards, (ii) will conform with this Agreement, the SLA, any applicable
Statement of Work and with all Documentation, and (iii) will comply with all
applicable Laws, including relating to the collection and use of personally
identifiable information, export control, privacy, and marketing to children
less than 13 years of age;

         

        (ii)   no
gratuities have been or will be offered or given by D3 or, to D3’s knowledge,
any of D3’s Representatives to OJO or any of its Representatives, or, to the
extent violative of any applicable Law, including the U.S. Foreign Corrupt
Practices Act, to any representative of any government or political party, for
the purpose of securing favorable treatment with respect to the awarding,
performance or amendment of any contract or agreement;

         

        (iii) 
D3 owns, or is a licensee with the right to sublicense, all of the Intellectual
Property rights necessary to make available to OJO the Solution in accordance
with the terms of this Agreement and each Statement of Work; and

         

        
          
            
            

          

          
            20

            
              

            

          

          
            
            

          

        

         

        (iv)   the
Solution does not and will not infringe any third party Intellectual Property
rights anywhere in the world.

         

        c.   OJO
represents and warrants to D3 that all of its membership interests are directly
owned by WorldGate Communications, Inc.

         

        d.
   The warranties under Sections 16(a) and 16(b) will survive any
acceptance or payment by OJO and shall survive the Term
indefinitely.

         

        17.   Taxes and
Applicable Fees.

         

        a.    
The prices and expenses set forth in this Agreement and any Statement of Work do
not include any taxes, fees, levies, imposts, duties, charges or withholdings of
any nature (collectively, “Taxes”) imposed on D3 by any Governmental Authority
or third party in connection with D3 providing the Services to
OJO.  D3 shall be responsible for the calculating, collecting and
remitting to the applicable Governmental Authorities of all Taxes required by
the applicable Governmental Authorities in connection with D3’s offering of the
Solution to OJO (which does not include Taxes with respect to OJO’s offering of
the Solution to OJO’s Subscribers).  Subject to D3’s performance of
its obligations under this Agreement, OJO shall be responsible for the
calculating, collecting and remitting to the applicable Governmental Authorities
of all Taxes required by the applicable Governmental Authorities in connection
with OJO’s offering of the Solution to its Subscribers, including but not
limited to the calculating, collecting and remitting of any and all applicable
Universal Service Fund (including Telecommunications Relay Services) and E-911
service fees

         

        b.   
All payments required to be made by OJO to D3 under this Agreement shall be made
by OJO without any deduction or withholding for or on account of any Taxes of
any nature imposed by any Governmental Authority on any payment due hereunder,
including withholding or property taxes.

         

        c.   
 If either Party is audited by a Governmental Authority, the other Party
agrees to reasonably cooperate with the Party being audited, at the audited
Party’s reasonable expense, in order to respond to any audit inquiries in an
appropriate and timely manner, so that the audit and any resulting controversy
may be resolved expeditiously.

         

        18.   Licenses
Regarding Intellectual Property.

         

        a.    
Except as expressly provided in this Agreement (including the license to use the
Marks as granted herein) or any Statement of Work, no licenses, expressed or
implied, under any Intellectual Property are granted by either Party to the
other Party under this Agreement or any Statement of Work and nothing contained
herein or therein shall be construed as conferring to either Party by
implication, estoppel, or otherwise, any ownership, title, right, or other
interest in any Intellectual Property of the other Party.

         

        b.   
License to
Confidential Information.  Each Party hereby grants to the
other Party a non-exclusive, non-transferable, worldwide, royalty free, fully
paid-up license during the Term to use, copy and modify the Confidential
Information delivered by such Party to the other Party provided such use,
copying or modification is solely for purposes of such Party complying with its
obligations under this Agreement and any Statement of Work.

         

        
          
            
            

          

          
            21

            
              

            

          

          
            
            

          

        

         

        c.    
License to
Marks.  Each Party hereby grants to the other Party a
non-exclusive, non-transferable, non-sublicensable, worldwide, royalty free,
fully paid-up license to use the granting Party’s Marks as is reasonably
necessary to perform its obligations under this Agreement or any Statement of
Work. Prior to any
use of the other Party’s Marks, each Party shall submit a sample of such
proposed use to the other Party’s designated representative for its prior
written approval, and the submitting Party shall not use the other Party’s Marks
without such prior written approval.  Each Party will comply with the
other Party’s instructions as to the form or use of the other Party’s Marks and
will avoid any action that diminishes the value of such Marks, including
modifying, altering or obfuscating the other Party’s Marks.  A Party’s
unauthorized use of the other Party’s Marks is strictly
prohibited.  Each Party may update or change its Marks usable by the
other Party hereunder at any time by written notice.  From time to
time during the Term, OJO may advertise the availability of the Solution
purchased from D3.  Solely in connection therewith, D3 grants OJO a
nonexclusive, fully-paid, worldwide, royalty-free license to use D3’s Marks in
such advertising, provided that OJO displays the symbol “Ô” adjacent to each
unregistered Trademark and “®” adjacent to each registered Trademark (as shall
be indicated by D3 to OJO upon request by OJO).  Notwithstanding
anything to the contrary in this Agreement or any Statement of Work, OJO shall
not be required to retain D3’s Marks on any Documentation or promotional
literature relating thereto.

         

        d.  
  Ownership
of Marks.  Each Party agrees that it will not dispute the other
Party's title to its own Marks.  Each Party agrees that it will not
register or attempt to register any of the other Party’s Marks or any Marks that
the other Party reasonably deems to be confusingly similar to any of its
Marks.

         

        e.   
 Ownership of
Intellectual Property.

         

        (i)   
The Parties agree that ownership of Intellectual Property developed by OJO will
be owned by OJO (“OJO
Property”).  To the extent the results of D3’s performance
pursuant to the terms of this Agreement, any Statement of Work or otherwise may
constitute “work made for hire” for OJO under the United States Copyright
Revision Act of 1976, then such work shall be considered “work made for hire” by
the Parties.  To the extent that any OJO Property is not the property
of OJO by operation of Law, D3 irrevocably assigns transfers and conveys to OJO,
without further consideration, all of its right, title and interest (including
all right, title and interest to Intellectual Property) in and to such OJO
Property.  In addition, D3 will execute any necessary documents and
will take such other actions and otherwise assist OJO, as reasonably requested,
to perfect OJO’s ownership of the OJO Property.  D3 shall ensure that
all of its Representatives, involved with the creation of OJO Property execute
an assignment in favor of D3 assigning any and all right, title and interest,
including any right, title and interest to Intellectual Property, that they may
have in any OJO Property.  D3 appoints OJO its true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for D3 and in D3’s name, place, and stead, in any and all capacities, to sign
any and all documents and certificates to perfect OJO’s ownership of the OJO
Property, granting unto said attorney-in-fact and agent, or its substitute, full
power and authority to do and perform each and every act and thing requisite or
necessary to be done in connection therewith, as fully to all intents and
purposes as it might or could do in person, ratifying and confirming all that
said attorneys-in-fact and agent, or its substitute, may lawfully do or cause to
be done by virtue of this Agreement or any Statement of Work.

         

        
          
            
            

          

          
            22

            
              

            

          

          
            
            

          

        

         

        (ii)   Any
Intellectual Property jointly developed under this Agreement or any Statement of
Work shall be jointly owned by the Parties (“Joint Intellectual
Property”).  Notwithstanding anything to the contrary in this
Agreement or any Statement of Work, during the Term and following the expiration
or termination of this Agreement, neither Party shall be permitted to make any
Claim for Liability related to the use by the other Party or otherwise attempt
to restrict the use by the other Party of any Joint Intellectual Property or any
Intellectual Property developed by D3 under this Agreement or any Statement of
Work.

         

        f.    
License to Use OJO
Property.  OJO grants to D3 a worldwide, non-exclusive,
non-assignable, non-sublicensable, non-transferrable, royalty-free license
during the Term to use the OJO Property for the sole purpose of providing the
Solution to OJO under this Agreement and any Statement of Work.  D3
agrees that all OJO Property shall (a) be used only in providing services to OJO
and Subscribers; (b) be kept free of Encumbrances; and (c) not be modified in
any manner by D3 without prior written permission from OJO.  The OJO
Property is the Confidential Information of OJO.  D3 will maintain
accurate records of the receipt and location of all OJO Property.

         

        19.   Indemnification.

         

        a.    
Each Party shall defend, indemnify and hold harmless the other Party and its
Representatives from and against any Claims and all Liabilities arising from, in
connection with, or otherwise with respect to (i) the bad faith, gross
negligence, fraud or willful acts or omissions of the indemnifying Party or its
Representatives; (ii) any inaccuracy or breach of any representation or warranty
made by the indemnifying Party in this Agreement or any Statement of Work; or
(iii) any breach by the indemnifying Party of any covenant or agreement
contained in this Agreement or any Statement of Work.

        
           

          
            
              
              

            

            
              23

              
                

              

            

            
              
              

            

          

        

         

        b.   
 D3 agrees to defend, indemnify and hold OJO and its Representatives
harmless from and against any Claim and all Liabilities arising from, in
connection with, or otherwise with respect to any (i) violation or infringement
of any Intellectual Property or contract right of a third party; (ii) tort or
product liability related to the Solution; or (iii) Data Security Breach
involving Personal Data while such Personal Data is in the possession, custody
or control of D3.  Notwithstanding the foregoing, D3 shall not be
obligated or liable to defend, indemnify or hold OJO harmless and shall not be
responsible for any Liabilities related thereto under this paragraph to the
extent that any such Claim arises from (A) OJO’s or a third party’s modification
of the Solution without the consent of D3; (B) combination of the Solution with
services, products, processes or materials not furnished, specified or approved
by D3 or (C) D3’s use of or adherence to specifications or instructions
furnished in writing to D3 by OJO.  In the event of any circumstances
described in the preceding sentence, OJO shall defend, indemnify and hold D3 and
its Representatives harmless from and against any Claim and all Liabilities
arising from, in connection with, or otherwise with respect
thereto.  In the event any part of the Solution is held (including
pursuant to a settlement) to infringe any Intellectual Property right of a third
party and the exercise of any license or right provided pursuant to this
Agreement or any Statement of Work is enjoined, D3 shall promptly, at its own
expense, but without limiting the scope and requirements of this indemnification
(y) procure for OJO and the Subscribers the right to continue to exercise such
licenses and other rights granted or made available to it pursuant to this
Agreement or any Statement of Work, or (z) modify or replace the Solution
without a material degradation in performance or functionality to make them
non-violative and non-infringing.  D3 shall not settle or compromise
any third party Claim subject to indemnification under this Agreement or any
Statement of Work or consent to the entry of any judgment with respect thereto
(i) as to any non-monetary Liabilities, restrictions or limitations on OJO’s
business or operations, without an unconditional release of all Liability,
restrictions or limitations of OJO, each Subscriber and its and their
Representatives to each claimant or plaintiff and (ii) as to any monetary
Liabilities, without D3 providing prior written notice to OJO that it is
responsible for and shall pay all of such monetary Liabilities.

         

        c.   
 Any and all indemnified Liabilities based on a third-party Claim shall
bear interest from the date of entry of judgment of such Liability until paid at
an interest rate of one and one-half percent (1.5%) per month (or the pro-rata
portion thereof) or the maximum rate permitted by Law, whichever is
less.  Any and all indemnified Liabilities based on a non-third-party
Claim shall bear interest from the date the indemnified Party notifies the
indemnifying Party of the Claim until paid at an interest rate of one and
one-half percent (1.5%) per month (or the pro-rata portion thereof) or the
maximum rate permitted by Law, whichever is less.

         

        d.    
The indemnified Party shall promptly notify the indemnifying Party in writing of
any Claim for which the indemnifying Party is responsible under this Section 19;
provided that, the failure or
delay in notifying the indemnifying Party of such Claim will not relieve the
indemnifying Party of any Liability it may have to the indemnified Party, except
and only to the extent that such failure or delay causes prejudice to the
indemnifying Party with respect to such Claim.

         

        e.   
 The indemnifying Party may assume, at its sole expense, the sole defense
of the Claim through counsel selected by the indemnifying Party and shall keep
the indemnified Party fully informed as to the progress of such
defense.  If the indemnifying Party does not assume the defense of a
Claim within five (5) business days of notice thereof, the indemnified Party
shall have the right to assume the defense with counsel of its choice at the
expense of the indemnifying Party.  If the indemnifying Party assumes
the defense in accordance herewith, (i) the indemnifying Party shall be
conclusively deemed to have acknowledged that the Claim is within the scope of
its indemnity obligation under this Agreement; and (ii) the indemnifying
Party shall conduct the defense actively and diligently and provide copies of
all correspondence and related documentation in connection with the defense to
the indemnified Party.

         

        
          
            
            

          

          
            24

            
              

            

          

          
            
            

          

        

         

        f.    
Upon reasonable request of the indemnifying Party and at the indemnifying
Party’s expense, the indemnified Party shall cooperate in the defense of the
claim.  At its option and expense, the indemnified Party may retain or
use separate counsel to represent it; provided that, the indemnifying Party
shall maintain control of the defense.

         

        g.   
Notwithstanding anything to the contrary in this Agreement, the indemnifying
Party will not be entitled to assume the defense of any Claim and the
indemnified Party shall be free to conduct the defense of any Claim at the sole
reasonable cost and expense of the indemnifying Party if (i) such Claim seeks,
in addition to or in lieu of monetary damages, any injunctive or other equitable
relief; (ii) such Claim relates to or arises in connection with any criminal
action, indictment or allegation; (iii) counsel for the indemnified Party
reasonably determines that there is a conflict between the positions of the
indemnifying Party and the indemnified Party in conducting the defense of such
Claim or that there are legal defenses available to such indemnified Party
different from or in addition to those available to the indemnifying Party; (iv)
such Claim involves a supplier of the indemnified Party or involves a customer
of the indemnified Party, other than a Claim that is solely with respect to an
indemnification claim made by such customer against the indemnified Party; (v)
in the reasonable discretion of the indemnified Party and upon fifteen (15) days
prior written notice to the indemnifying Party, the indemnifying Party has
failed or is failing to vigorously prosecute or defend such Claim; or (vi) the
indemnified Party fails to provide reasonable assurance to the indemnifying
Party of its financial capacity to prosecute the defense or pay the maximum
foreseeable damages, in each case as mutually agreed to by the indemnified Party
and the indemnifying Party, each in their reasonable discretion; provided,
however, that the indemnifying Party shall have no indemnification obligations
hereunder with respect to any monetary settlement effected by the indemnified
Party without the prior written consent of the indemnifying Party, which shall
not be unreasonably withheld or delayed.

         

        20.   Limitation
of Liability.

         

        a.    
Neither Party will be liable for indirect, consequential, incidental, special or
punitive damages, or for loss of revenue or profit in connection with the
performance or failure to perform this Agreement, regardless of whether such
Liability arises from breach of contract, tort or any other theory, and all such
damages are hereby expressly disclaimed.

         

        b.   
 Except as specifically provided herein or due to a Party’s fraud, gross
negligence or willful misconduct, the aggregate Liability of a Party to the
other Party for all claims arising out of its indemnification obligations or
otherwise in connection with this Agreement, regardless of whether such
liability arises from breach of contract, tort or any other theory, shall not
exceed the total amounts paid by OJO to D3 under this Agreement in respect of
the six (6) month period immediately preceding the date of an event giving rise
to Liability, except that a Party’s Liability shall be unlimited with respect to
its indemnification obligation arising under Section 19 above.

         

        
          
            
            

          

          
            25

            
              

            

          

          
            
            

          

        

         

        c.   
 The limitations in this Section 20 apply even if the other Party has been
advised of the possibility of such damages and notwithstanding the failure of
the essential purpose of any limited remedy.  Notwithstanding anything
to the contrary in this Agreement or any Statement of Work, the limitations in
this Section 20 shall not apply with respect to the failure of D3 or its
subsidiaries to comply with all applicable Laws.

         

        d.   
 OJO acknowledges that the E-911 services (i) are not being provided by D3
hereunder and (ii) may not be available in all geographical
markets.  The Parties acknowledge and agree that D3 shall have no
liability to OJO or any Subscribers or its or their Representatives or any third
party in the event of: (i) any Subscriber attempting an E-911 call from a
location different from the primary service address provided to OJO, including
the relocation of the Subscriber’s D3 Certified CPE or terminal adapter without
such Subscriber providing a new service address; (ii) outage, degradation or
other disruption of power at such Subscriber’s location; (iii) outage,
degradation or other disruption of such Subscriber’s broadband Internet
connection; (iv) any other outage degradation or other disruption of power as a
result of a Force Majeure event; and/or (v) such Subscriber’s failure or delay
in maintaining and updating its subscriber information as needed to offer the
E-911 Service or providing an incorrect or invalid service address
location.

         

        e.  
  Other than with respect to its indemnification obligation arising
under Section 19 above, no Claim by either Party hereto for damages with respect
to this Agreement may be made more than two (2) years after the date that the
event giving rise to such claim is known or reasonably should have been known to
have occurred.

         

        21.   Publicity.  Promptly
following the execution of this Agreement by both Parties, the Parties shall
issue a joint press release mutually agreed to by the Parties.  Each
of the Parties shall have the right to file any and all reports or other filings
such Party reasonably believes are required or advisable under the U.S. federal
securities laws (including Current Reports on Form 8-K) and applicable state and
other governing securities laws.

         

        
          22.   Records
and Audits. D3 agrees that it will:

        

         

        a.   
 Maintain complete and accurate records related to the Solution (the “Records”), including
records of all amounts billed and billable to and payments made by OJO and
Subscribers in accordance with generally accepted accounting principles in the
United States, uniformly and consistently applied in a format that will permit
audit;

         

        b.   
 Provide or make available the Records (in electronic or other formats
agreed to by the Parties) to OJO for each month that the Solution is provided by
D3 to OJO prior to the seventh (7th) day following the end of such
month;

         

        c.    
Retain the Records and reasonable billing detail for a period of at least six
(6) years;

         

        d.   
 Permit OJO upon reasonable prior written notice to D3, to audit during
normal business hours the amounts invoiced to OJO relating to the Solution, such
audit to occur no more frequently than two times per fiscal year (provided that
D3 shall have the right to exclude from such inspection any information that is
confidential or proprietary to a third party); and

         

        
          
            
            

          

          
            26

            
              

            

          

          
            
            

          

        

         

        e.   
 Report minute usage and other relevant information, which shall be
provided by D3 to OJO, as more particularly described in the applicable
Statement of Work.

         

        
          23.  Confidentiality.

        

         

        a.    
Use of Confidential
Information.

         

        (i)   
Any Confidential Information provided to the Recipient hereunder will be used by
such Party and its Representatives solely for the purpose of complying with its
obligations under this Agreement and any Statement of Work and shall not be used
by such Party for any other purpose, including, without limitation, use in any
way detrimental to the other Party. The Recipient shall maintain the strict
confidentiality of any Confidential Information provided to it or any of its
Representatives by the other Party or any of its Representatives and shall not
disclose any part of it to any other person; provided that (i) it may disclose
any such Confidential Information or portions thereof to its Representatives
subject at all times to Section 23(b), and (ii) it may disclose any such
Confidential Information in accordance with Section 23(c).  The
Recipient shall treat the Confidential Information with the same degree of care
as it would its own, but in no event with less than reasonable
care.

         

        (ii)   The
Provider shall retain the entire right, interest and title to its Confidential
Information.  Unless and only to the extent otherwise set forth in
this Agreement or in a Statement of Work, no license under any Intellectual
Property is hereby granted or implied by the provision of Confidential
Information to the Recipient.  Unless and only to the extent otherwise
set forth in this Agreement or in a Statement of Work, the Recipient shall not
alter or obliterate any Mark of the Provider on any copy of the Confidential
Information, and shall reproduce any such mark or notice on all copies of the
Confidential Information.  In the event product samples are furnished
hereunder, such samples shall only be used as reasonably required in accordance
with this Agreement, and the Recipient shall not de-compile, disassemble or
otherwise attempt to reverse engineer the samples.

         

        b.  
 Representatives.  Each
Party may disclose Confidential Information to those of its Representatives who
have a reasonable need to know such information in order to assist the Recipient
in complying with its obligations under this Agreement and any Statement of
Work; provided that, prior to any such disclosure, (a) the Recipient informs any
such Representative of the confidentiality terms of this Agreement and (b) such
Representative agrees to preserve the confidentiality of the Confidential
Information.  Each Party shall take all such actions as will ensure
that its Representatives comply with the terms of the confidentiality terms of
this Agreement.  Each Party will be responsible for any breach of the
confidentiality terms of this Agreement by any of its
Representatives.

         

        
          
            
            

          

          
            27

            
              

            

          

          
            
            

          

        

         

        c.    
Subpoenas,
etc.  If the Recipient or, to Recipient’s knowledge, any of its
Representatives becomes required by law or applicable legal process to disclose
any Confidential Information furnished by the Provider, the Recipient shall
provide the Provider with prompt prior written notice of such requirement and
the terms of and circumstances surrounding such requirement so that such
Provider may seek an appropriate protective order or other remedy, or waive
compliance with the confidentiality terms of this Agreement, and the Recipient
shall provide such cooperation with respect to obtaining a protective order or
other remedy as the Provider shall reasonably request.  If, in the
absence of protective order or other remedy or the receipt of a waiver by the
Provider, the Recipient or any of its Representatives are nonetheless, in the
written opinion of its counsel, reasonably acceptable to the Provider, legally
compelled to disclose Confidential Information to any Governmental Authority or
else stand liable for contempt or suffer other censure or penalty, the Recipient
or its Representatives may, without liability hereunder, disclose to such
Governmental Authority only that portion of the Confidential Information which
such counsel advises the Recipient is legally required to be disclosed; provided
that the Recipient exercises, at Provider’s sole cost and expense, its
commercially reasonable efforts to obtain an appropriate protective order or
other reasonable assurance that confidential treatment will be accorded such
Confidential Information by such Governmental Authority.

         

        d.  
 Customer
Proprietary Network Information. D3 shall provide to OJO the necessary
services and, as reasonably requested and specified by OJO, certifications,
documentation, information, data, reporting or tools to enable OJO to
automatically provide the notifications required to comply with all applicable
Law (including 47 U.S.C. § 222 and 47 C.F.R. §§ 64.2001 et seq.) regarding the
protection of the customer proprietary network information of the Subscribers
(the “CPNI”, as
such term is defined in 42 U.S.C. § 222(h)).  Other than as provided
in the prior sentence, each of the Parties shall comply with all applicable Laws
(including 47 U.S.C. § 222 and 47 C.F.R. §§ 64.2001 et seq.) regarding the
protection of CPNI. Without limiting the foregoing, in no event may D3 use,
distribute or access the Subscribers’ CPNI except as required by D3 to perform
its obligations hereunder.

         

        e.  
  Termination of this
Agreement.  In the event of a termination or expiration of this
Agreement and subject to the other provisions of this Agreement and any
Statement of Work, the Recipient shall immediately following the Transition
Period (i) cease using the Confidential Information, (ii) return to the Provider
any equipment or Confidential Information furnished by the Provider or any of
its Representatives and (iii) destroy any and all copies of such Confidential
Information and any and all notes, analyses, compilations, studies or other
documents prepared by the Recipient or any of its Representatives containing or
reflecting any Confidential Information.  Any destruction required
pursuant to this Section 23(d) shall, upon request of the Provider, be certified
in writing to the Provider by an authorized officer supervising such
destruction.  Notwithstanding the return or destruction of the
Confidential Information, each Party and its Representatives will continue to be
bound by its obligations of confidentiality and other obligations
hereunder.

         

        
          
            
            

          

          
            28

            
              

            

          

          
            
            

          

        

         

        f.    
Non-Disclosure.  Without
the prior written consent of the other Party, each Party will not, and will
cause its Representatives not to, disclose to any person any information
regarding this Agreement, any Statement of Work, the transactions contemplated
by this Agreement or any Statement of Work, or that any Party has requested or
received Confidential Information from the other Party; provided that either
Party may make such disclosure if required by applicable Law, accounting rule or
the rules of any securities exchange or market, in which case in such Party
shall use its reasonable efforts to consult with the other Party to agree on the
timing and text of such release or announcement. The term “person” as used in
this Agreement shall be broadly interpreted to include, without limitation, the
media and any corporation, partnership, group, individual or other
entity.

         

        g.  
 Remedies.  Each
Party acknowledges that money damages are an inadequate remedy for breach of the
confidentiality provisions of this Agreement because of the difficulty of
ascertaining the amount of damage that will be suffered in the event that any of
the confidentiality provisions of this Agreement is
breached.  Therefore, each Party shall be entitled to equitable
relief, including an injunction and specific performance, in the event of any
breach of the provisions of the confidentiality provisions of this Agreement by
the other Party or any of its Representatives, in addition to all other remedies
available to such Party under this Agreement or any Statement of Work, at law or
in equity.

         

        24.   No
Warranties. THE REPRESENTATIONS AND WARRANTIES OF EACH PARTY SET FORTH IN
THIS AGREEMENT AND ANY STATEMENT OF WORK ARE THE SOLE AND EXCLUSIVE
REPRESENTATIONS AND WARRANTIES PROVIDED TO THE OTHER PARTY UNDER THIS AGREEMENT
AND THE STATEMENTS OF WORK.  EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT OR ANY STATEMENT OF WORK, EACH PARTY HEREBY DISCLAIMS AND EXPRESSLY
EXCLUDES ALL WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING THE
IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR
MERCHANTABILITY.

         

        25.   No
Solicitation. During the Term and for
a period of twelve (12) months thereafter, neither Party will, directly or
indirectly, (a) solicit to employ or hire any employee of the other party or (b)
divert, entice, knowingly call upon, sell, solicit, take away or move any person
or entity that is a customer, agent or representative of OJO, in each case
without the prior written consent of the other Party.  The term
“solicit to employ” shall not be deemed to include generalized searches or
hiring by either Party for employees through media advertisements, employment
firms or otherwise.  The Parties acknowledge that the restrictions
contained in this Section 25 are reasonable and necessary to protect the
legitimate interests of the Parties and constitute a material inducement to the
Parties to enter into this Agreement and consummate the transactions
contemplated by this Agreement.  The Parties acknowledge that any
violation of this Section 25 will result in irreparable injury to the
non-breaching Party and agree that the non-breaching Party shall be entitled to
injunctive relief, without the necessity of proving actual damages, which rights
shall be cumulative and in addition to any other rights or remedies to which the
non-breaching Party may be entitled.  Without limiting the generality
of the foregoing, the restricted period shall be extended against the breaching
Party for an additional period equal to any period during which the breaching
Party is in breach of its obligations under this Section 25.

         

        
          
            
            

          

          
            29

            
              

            

          

          
            
            

          

        

         

        
          26.   General.

        

         

        a.    
Notices.  All
notices to either Party required or permitted hereunder shall be in writing and
shall be sent to the mailing address, email address or facsimile number set
forth for such Party as follows:

         

        (i)           If to OJO,
to:

        3190
Tremont Avenue

        Trevose,
Pennsylvania 19053   

        Attn:
Lori T. Sofianek

        e-mail:
lsofianek@wgate.com

        Fax:   (215)
354-1049

              

        With a
copy (which shall not constitute notice) to:

        


        General
Counsel

        e-mail:
cvitale@wgate.com

        Fax:   (215)
354-1049

         

        (ii)          If
to D3, to:

        Jerusalem
Technology Park – Bldg. #9

        P.O. Box
48265, Jerusalem 91481, Israel

        Attn:
   Effi Baruch

        e-mail:   effi.baruch@deltathree.com

        Fax:     011.972.2.649.1200

         

        With a
copy (which shall not constitute notice) to:

        


        General
Counsel

        e-mail:
peter.friedman@deltathree.com

        Fax:   011.972.2.649.1200

         

        Any such
notice shall be deemed effectively given (i) upon personal delivery to the Party
to be notified; (ii) when sent by confirmed e-mail or facsimile if sent during
normal business hours of the recipient, if not, then on the next business day;
(iii) three days after having been sent by registered or certified mail, return
receipt requested, postage prepaid; or (iv) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery with
written verification of receipt.

         

        b.  
  Independent
Contractors. This is an agreement between separate legal entities and
neither Party shall be deemed to be the agent or employee of the other Party for
any purpose whatsoever.  The Parties do not intend to create a
partnership or joint venture between themselves pursuant to this Agreement or
any Statement of Work.  Neither Party shall have the right to bind the
other to any agreement with any third party or to create or incur any obligation
or liability on behalf of the other Party.

         

        
          
            
            

          

          
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        c.   
 No Third Party
Beneficiaries. The Parties intend that this Agreement or any Statement of
Work shall not benefit or create any right or cause of action in, or on behalf
of, any person or entity, other than the Parties to this Agreement and no person
or entity, other than the Parties to this Agreement, shall be entitled to rely
on the provisions of this Agreement or any Statement of Work in any action,
suit, proceeding, hearing or other forum.

         

        d.   
 Force
Majeure. Neither Party shall be liable to the other for its failure to
perform any of its obligations under this Agreement during any period in which
such performance is delayed or rendered impracticable or impossible due to
circumstances beyond its reasonable control, including strikes, lockouts, labor
disputes or shortages, threat of imminent war or other acts of war, threats of
imminent terror or acts of terror, acts or failures to act of any governmental
or regulatory body, Laws superimposed after the fact, power failures, utility
curtailments, shortages of equipment or supplies, unavailability of
transportation, fires, explosions, floods, accidents, earthquakes or other
natural or man-made disasters, civil disturbances, acts or omissions of third
parties or any other cause beyond either Party’s reasonable control (each, a
“Force Majeure
Event”); provided that the Party experiencing the delay promptly notifies
the other of the delay.  Dates or times by which a Party is required
to perform its duties under this Agreement or a Statement of Work shall be
reasonably extended to the extent that such Party is prevented from performing
as a result of any such Force Majeure Event, provided, however, that the
Party receiving notice of the Force Majeure Event may terminate this Agreement
or any Statement of Work that is affected by the Force Majeure Event in whole or
in part if the delay caused by the Force Majeure Event is not cured within
thirty (30) days of receipt of such notice.

         

        e.    
Assignment; Binding
Effect. Neither Party may assign, delegate, subcontract or otherwise
transfer its rights or obligations under this Agreement or any Statement of
Work, except with the prior written consent of the other Party, which shall not
be unreasonably withheld or delayed; provided, however, that either Party shall
have the right to assign this Agreement or any Statement of Work to any of its
Affiliates or a successor entity, without obtaining the prior written consent of
the other Party. Any attempted assignment or transfer in violation of this
paragraph shall be void.  This Agreement and any Statement of Work
shall inure to the benefit of and be binding upon the Parties and their
respective successors and permitted assigns.

         

        f.    
 Construction and
Interpretation.

         

        (i)   The
language of this Agreement and any Statement of Work shall in all cases be
construed simply, as a whole and in accordance with its fair meaning and not
strictly for or against any Party.  The Parties agree that this
Agreement and any Statement of Work has been prepared jointly and has been the
subject of arm’s length and careful negotiation.  Each Party has been
given the opportunity to independently review this Agreement with legal counsel
and other consultants, and each Party has the requisite experience and
sophistication to understand, interpret and agree to the particular language of
the provisions.

         

        
          
            
            

          

          
            31

            
              

            

          

          
            
            

          

        

         

        (ii)   Article,
Section and paragraph headings contained in this Agreement and any Statement of
Work are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement or any Statement of Work.  References
to specific Articles, Sections and paragraphs shall be deemed to be references
to Articles, Sections and paragraphs of the Agreement or Statement of Work in
which they appear.  Unless the context requires otherwise, in the
Agreement and each Statement of Work, (a) “include” (and any of its derivative
forms) means “includes, but is not limited to”, (b) “may” means has the right,
but not the obligation to do something and “may not” means does not have the
right to do something, (c) “will” and “shall” are expressions of command and not
merely expressions of future intent or expectation, (d) “written” or “in
writing” is used for emphasis in certain circumstances, but that will not
derogate from the general application of the notice requirements set forth in
Section 26(a) in those and other circumstances, (e) singular use of words shall
include the plural and vice versa, (f) use of a specific gender imports the
other gender(s); (g) all monies payable or to be paid are expressed in United
States dollars; and (h) a reference to any Law means such Law as amended,
modified, codified, replaced or reenacted.  All obligations and rights
of the Parties are subject to modification as the Parties may specifically
provide in a Statement of Work.  “Services”, “Solution” and “Software”
shall be treated as “goods” for purposes of applying the provisions of the
Uniform Commercial Code.

         

        g.    
Governing Law;
Venue. The Agreement and any Statement of Work shall be governed by and
construed in accordance with the Laws of the State of New York, without regard
to the conflict of Laws provisions thereof.  The Parties consent to
the exclusive jurisdiction of any federal or state court located within the City
of New York, New York and that all Claims related to the subject matter hereof
may be heard and determined in such courts.  Each Party irrevocably
and unconditionally waives any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or any Statement of Work, in
any federal or state court located within the City of New York, New York and
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.

         

        h.   
 Entire
Agreement; Amendments. This Agreement and all Statements of Work,
including all exhibits, appendices and other documents attached to or referenced
herein or therein, constitutes the entire understanding of the Parties and
supersedes all prior agreements, understandings and undertakings, whether
written or oral, between the Parties with respect to the subject matter
hereof.  This Agreement and any Statement of Work may be amended or
modified only through a subsequent written instrument signed by the
Parties.

         

        i.     
Waiver.  Neither
the failure of either Party to insist at any time upon strict compliance with
this Agreement or any Statement of Work or any of their respective terms nor any
continued course of such conduct on the part of such Party shall constitute or
be considered a waiver by such Party of any of its rights or privileges under
this Agreement or any Statement of Work.  No prior waiver by a Party
of any right shall constitute a future waiver by such Party of such right or any
other obligation of the other Party contained herein.

         

        
          
            
            

          

          
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        j.    
 Severability. To the
extent that any provision of this Agreement is found to be invalid, illegal or
unenforceable, the Parties will negotiate in good faith to substitute for such
provision, to the extent possible, a new provision that most nearly effects the
original intent in entering into this Agreement or any Statement of Work or to
provide equitable adjustment in the event no such provision can be
added.  The other provisions of this Agreement and any Statement of
Work will remain in full force and effect.  The illegality, invalidity
or unenforceability of any provision of this Agreement or any Statement of Work
shall not affect the legality, validity or enforceability of any other provision
of this Agreement or any Statement of Work.

         

        k.    
Translation.
This Agreement and all Statements of Work, including all exhibits, appendices
and other documents attached to or referenced herein or therein, along with any
amendments hereto or thereto, are drafted in the English language.

         

        l.    
 Non-Exclusive.
Nothing in this Agreement or any Statement of Work will be deemed to restrict
(i) OJO’s right to provide the Services internally or purchase the Services from
third parties or enter into a similar agreement with any third party or (ii)
D3’s right to provide the Services to third parties or enter into a similar
agreement with any third party.

         

        m.   
Counterparts.  This
Agreement and any Statement of Work may be executed in multiple counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.  This Agreement and all
Statements of Work, including all exhibits, appendices and other documents
attached to or referenced herein or therein, along with any amendments hereto or
thereto, to the extent signed and delivered by means of email, a facsimile
machine or other means of electronic transmission, shall be treated in all
manner and respects and for all purposes as an original signature, agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person.

         

        [SIGNATURE
PAGE TO FOLLOW]

         

        
          
            
            

          

          
            33

            
              

            

          

          
            
            

          

        


        IN WITNESS WHEREOF, the
Parties have caused this Agreement to be executed as of the Effective
Date.

         

        
          
            
              
                	
                        DELTATHREE,
      INC.

                      
	 
      
	
                        By:

                      	
                        /s/ Effi Baruch

                      
	
                        Name:
      Effi Baruch

                      
	
                        Title:  
      CEO

                      
	 
      
	
                        OJO
      SERVICE LLC

                      
	 
      
	
                        By:

                      	
                        WorldGate
      Communications, Inc., its sole

                        member

                      
	 
      
	
                        By:

                      	
                        /s/ George Daddis

                      
	
                        Name:

                      	
                        George
      Daddis

                      
	
                        Title:

                      	
                        CEO
      and President