Document:

Exhibit 10.13

 

LICENSE , MAINTENANCE AND UPDATE SERVICES AGREEMENT

 

THIS LICENSE, MAINTENANCE AND UPDATE SERVICES AGREEMENT (“Agreement”) is
entered into this 31st day of March, 2008 between Aequus (as defined in Exhibit X
hereto) and WorldGate (as defined in Exhibit X hereto).

 

WHEREAS, Aequus and WorldGate have entered into a certain
Master Agreement dated the Effective Date pursuant to which the Parties agreed
to enter into certain Related Documents, as that term is defined in the Master
Agreement, including this Agreement.

 

NOW THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the Parties, the Parties agree as follows:

 

1.                                      Definitions.

 

Unless otherwise defined herein, capitalized terms used in
this Agreement shall have the meaning ascribed to those terms set forth in Exhibit X
attached hereto.  The following
capitalized terms shall have the following corresponding meanings:

 

1.1.                  “Aequus Data” shall have the meaning set forth in Section 5.2.

 

1.2.                  “Authorized Sub-Licensee” shall mean a third
party to whom Aequus grants a sub-license in accordance with Section 2.2; provided,
however  that in no event may a
Competitor be an Authorized Sub-Licensee.

 

1.3.                  “Confidential Information” shall have the meaning ascribed to
that term in the Mutual Confidentiality Agreement.

 

1.4.                  “Contract
Year” shall mean (a) the period commencing on the Effective
Date and ending on April 1, 2009 and (b) the twelve-month period
ending on April 1 of each calendar year during the Term.

 

1.5.                  “License Fee” shall mean one quarter percent (0.25%) of the
VRS Reimbursement Revenue; provided, however, that in no event
shall the License Fee be less than five thousand dollars ($5,000), or more than
fifty thousand dollars ($50,000), in any Contract Year when due.

 

 

1.6.                  “Licensed IP” means all Intellectual
Property owned or held under license by WorldGate which has been used by
WorldGate (i) immediately prior to the Effective Date or at any time
thereafter during the term of the Reseller Agreement in connection with the use
and operation of Purchased Phones purchased by Aequus thereunder, or (ii) in
the performance of Support Services hereunder, including in each case
Intellectual Property developed or acquired by WorldGate pursuant to an SOW.

 

1.7.                  “Maintenance and Update Services Fee”  shall
mean one and three quarters percent (1.75%) of the VRS Reimbursement Revenue; provided,
however, that in no event shall the Maintenance and Update Services Fee
exceed three hundred fifty thousand dollars ($350,000) in any Contract Year.

 

1.8.                  “Mutual Confidentiality Agreement” shall mean that certain
Mutual Confidentiality Agreement which is a Related Document.

 

1.9.                  “Service Month” shall have the meaning ascribed to such term
in Section 2.7 hereof.

 

1.10.            “Software Support Services” shall mean the services specified
on Exhibit A hereto.

 

1.11.            “Support Services”  shall  mean the Software Support Services and Tier 2 Support
Services.

 

1.12.            “Term” shall mean the period from the Effective Date until
the termination of this Agreement in accordance with Section 13.

 

1.13.            “Tier 2 Support Fee” shall mean $1.00 per calendar month for
each Aequus Customer that has generated VRS Reimbursement Revenue during such
month.

 

1.14.            “Tier 2 Support Services” shall mean the services specified
on Exhibit B hereto.

 

1.15.            “Workaround” shall mean a procedure for minimizing the effect
of an error in the Software so that such error does not materially interfere
with Aequus’ use of the Software.

 

2.                          Scope of License

 

2.1                                             License.  WorldGate hereby grants to Aequus, the
following licenses to use the Licensed IP:

 

(a)                                  an exclusive
(except as set forth in the proviso to this clause (a)) transferable (only
pursuant to an authorized sub-license or assignment as set forth herein) and 

 

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perpetual and irrevocable
(except as otherwise specified herein) license, under the Licensed IP, to use,
support and operate Purchased Phones solely in providing the Services in the
Territory to Customers (the “Services Support License”) and; provided, however,
that the Services Support License shall become non-exclusive in the event that
either (i) Aequus’s rights under the Reseller Agreement which is a Related
Document become non-exclusive or (ii) such Reseller Agreement terminates;
and

 

(b)                                 a non-exclusive
transferable (only pursuant to an authorized sub-license or assignment as set
forth herein) and perpetual and irrevocable (except as otherwise specified herein)
license, under the Licensed IP, to manufacture or to have manufactured for
Aequus and on its behalf any Purchased Phone (and, in connection therewith to
create derivative works) (the “Manufacturing License”); provided, however,
that Aequus agrees that it shall not use or otherwise exploit the Manufacturing
License unless and until a Release Event has occurred and provided, further,
that if WorldGate has exercised its right to terminate the Reseller Agreement
which is a Related Document in accordance with the terms thereof effective
prior to the occurrence of a Release Event, then the Manufacturing License
shall simultaneously terminate.

 

2.2                                             Sub-licenses.                         Aequus may
grant to Authorized Sub-Licensees one or more sub-licenses of all or any part
of the licensed rights exercisable by it hereunder solely for purposes of and
as reasonably necessary to effectuate Aequus’s rights to use the Licensed IP in
a manner consistent with the terms of this Agreement.

 

2.3                                             Escrow Deposit.

 

(a)                                  To ensure
Aequus’s ability to exercise the licenses described in this Section 2
without material interruption which may result from a Release Event, WorldGate
shall deliver into escrow, in accordance with the Software Escrow Agreement
included as a Related Document, (i) copies of all Source Code and Object
Code for all Programs or other Software relating to the operation and
manufacture of each Purchased Phone, (ii) all processes necessary for
assembling such Object Code into executable form in order to permit Full
Usability Testing as provided in the agreement with the escrow agent and (iii) all
Manufacturing Documentation.  As further set forth in the Software Escrow
Agreement, unless otherwise agreed by the Parties, such escrowed copies (the “Escrow
Materials”) shall be released from escrow and delivered to Aequus only upon
written notice by Aequus to WorldGate and the Escrow Agent that one or 

 

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more Release Events has
occurred.  The Software Escrow Agreement sets forth in greater detail
Aequus’s rights and obligations with respect to the use and disclosure of
Escrow Materials following a Release Event.

 

(b)                                 Aequus hereby
agrees that the delivery to it of the Escrow Materials in accordance with the
Escrow Agreement shall be deemed a disclosure by WorldGate of its Confidential
Information and that further disclosure and use of such Escrow Materials shall
be subject in all respects to the provisions of the Mutual Confidentiality
Agreement, except where otherwise expressly agreed by the Parties in writing,
including in another Related Document. 
Furthermore, notwithstanding anything to the contrary contained in any
other Related Document, Aequus’s rights to utilize the Escrow Materials in
connection with the design, configuration, manufacture, operation or
maintenance of Purchased Phones shall be limited as follows:

 

                                                                                                                                                (i)                                     If the Release
Event is an SOW Disruption, then Aequus’s rights shall be limited to using
relevant Escrow Materials for the sole purpose of accomplishing the technical
and operational goals which gave rise to the need for a particular Mandated
SOW.

 

                                                                                                                                                (ii)                                  If the Release
Event is a Foreclosure Disruption or an Insolvency Disruption, then Aequus
shall have all rights, subject to the restrictions in this Agreement, to use
the Escrow Materials to design, configure, manufacture, operate and maintain
Purchased Phones (as well as other video phones based on or derived from
Purchased Phones) (as the same may be modified by new developments).

 

                                                                                                                                                (iii)                               If the Release
Event is a Nine-Month Disruption, the Aequus’s rights shall be limited to using
relevant Escrow Materials for the sole purpose of manufacturing, operating and
maintaining any model of Purchased Phone which is the subject of the Nine-Month
Disruption.

 

                                                                                                (c)                                  The delivery of the Escrow Materials to Aequus shall not
imply the grant of any right or license to use the Escrow Materials except as
set forth above and such uses shall be authorized only to the extent necessary
to permit Aequus to continue providing Services in the Territory to Customers.

 

2.4                                             No Conflicting Grants. 
WorldGate will not knowingly (i) grant, transfer or assign to any
person any right or interest in any Licensed IP or related Documentation or (ii) grant
to any third party any right to use or exploit any Licensed IP or related
Documentation, which in either 

 

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case would conflict with Aequus’s exclusive rights under Section 2.1(a) and
its non-exclusive rights under Section 2.1(b) to use such Licensed IP
and related Documentation in connection with the exercise of such rights in
accordance with the terms hereof.

 

2.5                                             Limitations and Exclusions on
License.  The Parties acknowledge and
agree that, among other things, nothing contained in this Agreement, in the
Master Agreement or in any Related Document shall imply that Aequus or any
other person or entity has any license, right or interest in the Licensed IP
except as expressly provided herein or therein and, except as expressly set
forth in this Agreement or otherwise expressly agreed by WorldGate in writing,
WorldGate expressly reserves all rights to its intellectual property, and shall
not be restricted from developing, manufacturing, selling and/or distributing
any product or service, whether alone or jointly with others, or from licensing
any technology or intellectual property to any third party.   In particular, except as may be expressly
agreed by the Parties in another Related Document or  as otherwise expressly agreed in writing,
Aequus shall have no right to use, reproduce or modify the Licensed IP (or to
sublicense any third party to do so) in order (i) to manufacture, provide
or facilitate the use of Purchased Phones other than as expressly permitted
under this Agreement or to manufacture, provide or facilitate the use of video
phone products other than Purchased Phones, or (ii) to facilitate or
control the access by and/or operation of Purchased Phones with other products
and services, including without limitation other video phone services and/or
VoIP services.  Aequus shall not, either
directly or through any third party, (x) decompile, disassemble or
otherwise reverse engineer any Licensed Proprietary Materials, (y) remove
any proprietary legends and/or copyright legends or restrictions which are in
the Licensed Proprietary Materials as originally supplied to Aequus hereunder,
or (z) except as expressly authorized under the Master Agreement and in
connection with a release of Escrowed Materials to Aequus pursuant to the
Software Escrow Agreement which is one of the Related Documents, make any
copies of, alterations to, or other derivatives of the Licensed IP

 

2.6                                             Treatment of the License Under Section 365(n) of
the Bankruptcy Code.  The Licensed IP
licensed under this Agreement consists of, and shall be deemed for all purposes
to be, “intellectual property” within the meaning of Section 101(35A) of
title 11, United States Code (the “Bankruptcy Code”).  Upon commencement of a case under the
Bankruptcy Code by or against WorldGate, the license of the Licensed IP granted
under or pursuant to this Agreement shall be 

 

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governed by Section 365(n) of the Bankruptcy Code,
and Aequus shall be entitled to the protections of Section 365(n).  If the Agreement is rejected under Section 365
of the Bankruptcy Code in a case commenced by or against WorldGate, then
Aequus, as the licensee of the Licensed IP under this Agreement, shall retain
and may fully exercise, in its sole discretion, all of the rights and entitlements
granted or afforded under Section 365(n) of the Bankruptcy Code,
including any election which it is entitled to make thereunder.

 

2.7                                             License Fee. 
Commencing with the Second Contract Year, Aequus shall pay the License
Fee to WorldGate
in accordance with Section 3.3 no later than three (3) days after
receipt by Aequus of the VRS Reimbursement Revenue for any month in which
Customers utilize video relay services (each a “Service Month”); provided,
however, that the amount of the License Fee which shall be paid with
respect to any Contract Year of the Term shall not exceed fifty thousand
dollars ($50,000).

 

3.                          Software Support Services

 

                                                3.1                                 During the first Contract Year, and thereafter so long as
Aequus pays the Maintenance and Update Services Fee, WorldGate shall provide to
Aequus all Software Support Services.  In
consideration of all Software Support Services provided hereunder, commencing
with the second Contract Year, Aequus shall pay the Maintenance and Update
Services Fee to WorldGate in accordance with Section 3.3 no later than three (3) days after receipt of
the VRS Reimbursement Revenue for any Service Month; provided, however,
that the amount of the Maintenance and Update Services Fee which shall be paid
with respect to any Contract Year shall not exceed three hundred fifty thousand
dollars ($350,000).

 

3.2                                 During the
Term, so long as Aequus pays the Tier 2 Support Services Fee, WorldGate shall
provide the Tier 2 Support Services.  In
consideration of the Tier 2 Support Services, commencing after the Effective
Date, Aequus shall pay the Tier 2 Support Fee to WorldGate in accordance with Section 3.3
no later than thirty (30) days after the
last day of each Service Month.

 

3.3                                 In
order to account and pay for the License Fee, the Maintenance and Update
Services Fee and the Tier 2 Support Fee, Aequus shall:

 

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(i)                                     following the close of each calendar month during the Term, commencing
with the Second Contract Year, notify WorldGate either (A) when Aequus has
submitted an invoice to the National Exchange Carrier Association (NECA) for
VRS Reimbursement Revenue earned during such month if such month is a Service
Month, including in such notice a copy of such invoice or (B) that no
Customers utilized video relay services for such month;

 

(ii)                                  within thirty (30) days after the last day of each Service Month during
the term of this Agreement and within thirty (30) days after the date of
termination hereof, deliver to WorldGate a written statement setting forth the
Tier 2 Support Fee due and payable to WorldGate, together with payment of the
amount of the Tier 2 Support Fee shown to be due and payable to WorldGate; and

 

(iii)                               not later than three (3) days after receipt of any VRS
Reimbursement Revenue, send a statement reflecting the amount of VRS
Reimbursement Revenue received, together with payment of the License Fee and
the Maintenance and Update Services Fee due in connection with such VRS
Reimbursement Revenue.

 

(B)                                All payments to WorldGate under this Agreement shall be made in United
States dollars and shall be transmitted by wire transfer directly to the bank
or place designated in writing by WorldGate.

 

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(C)                                Aequus shall keep and maintain accurate books and records
with respect to all VRS Reimbursement Revenues License Fees, and Tier 2 Support
Fees.  Said books and records shall be
available for inspection and copying by an independent auditor specified by
WorldGate and reasonably acceptable to Aequus, not more frequently than once
each Contract Year during the Term and once during the one year period
following the termination of this Agreement, during ordinary business hours
upon a minimum of thirty (30) days prior written notice from WorldGate to Aequus.  In the event that any such review reveals an
underpayment, Aequus shall immediately remit payment to WorldGate in the amount
of such underpayment plus interest calculated at the rate of one percent (1%)
per month, accruing from the date such payment(s) was actually due until
the date when such payment(s) is actually made. 
Should any review establish an underpayment in an amount greater than or
equal to five percent (5%) of the amount properly due, Aequus shall pay all
reasonable costs, expenses and fees incurred by WorldGate in connection with
the audit.  Aequus shall keep such
accounts and records for at least three (3) years after termination of
this Agreement or four (4) years after the end of the Contract Year to
which they relate, whichever is earlier. 
The individual or entity conducting
any audits hereunder shall be bound by reasonable obligations of
confidentiality in respect of any information disclosed by such audits.  Notwithstanding the foregoing, WorldGate shall
not have any audit rights with respect to VRS Reimbursement Revenue and related
fees based on such revenue with respect to any Contract Year during the Term
for which Aequus has paid both the maximum License Fee of fifty thousand
dollars ($50,000), and the maximum Maintenance and Update Services Fee of three
hundred fifty thousand dollars ($350,000).

 

(D)                                           Amounts properly due and owing but not timely paid to WorldGate pursuant
to this Agreement shall bear interest calculated at the rate of one percent
(1%) per month accruing from the date the relevant payment(s) were
actually due until the date when such payment(s), including interest thereon,
are actually made.

 

4.                          Service Coordinator

 

WorldGate
and Aequus will each designate a service coordinator (each a “Service
Coordinator”), who will have primary responsibility for communicating with
respect to that 

 

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Party’s
performance hereunder.  Each Party may
replace its Service Coordinator with a comparable replacement by giving the
other Party as much advance written notice as practicable of such
replacement.  Each Party shall be
entitled to rely on all decisions and approvals of the other Party communicated
by the other Party’s Service Coordinator. 
The general responsibilities of the Service Coordinator shall be to: (a) establish
a formal communication forum between WorldGate and Aequus with respect to the
work hereunder; and (b) monitor the general progress of the performance of
such work.

 

5.                          Work Product.

 

5.1       Ownership of Work Product. 
Unless otherwise specifically
agreed in an SOW, each Party will retain all right, title and interest in its
own Work Product; provided that such ownership rights will not extend to
any Confidential Information of the other party that may have been incorporated
into the Work Product; and provided further, that WorldGate’s ownership
of its Work Product shall be subject to its obligations under this Agreement to
license such Work Product to Aequus and under a certain Software Escrow
Agreement (the “Escrow Agreement”) to deposit relevant Source Code, Object Code
and related Software Documentation into escrow, as more specifically set forth
and to the extent permitted in such agreements.

 

5.2       Customer Data.  As between the Parties, Aequus will be the
sole and exclusive owner of all databases, information and metadata (including
without limitation information identifying or otherwise relating to its
Customers), provided to WorldGate by Aequus or otherwise accessed by WorldGate
in the course of providing the Support Services (collectively, the “Aequus Data”). 
WorldGate shall utilize Aequus Data solely for purposes of this
Agreement and shall not sell, transfer, lease, or otherwise commercially
exploit Aequus Data.  Aequus Data will be
deemed Aequus’s Confidential Information. 
WorldGate is not responsible for the accuracy, completeness, or currency
of data provided by Aequus.

 

6.                          Aequus’s Responsibilities

 

Aequus shall, in connection with
this Agreement, be responsible for designating its Service Coordinator, as
provided in Section 3 hereof, and for performing such other duties and
tasks as may 

 

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be reasonably required to permit WorldGate to perform its
duties, tasks, and obligations hereunder. 
During the term of that Related Document constituting the Transition
Services Agreement, responsibility for hardware and software shall be allocated
in accordance with such Transition Services Agreement.  Upon termination of such Transition Services
Agreement, unless otherwise agreed by the Parties in writing, Aequus shall have
sole responsibility for any hardware or third party software acquired,
installed or used by Aequus in connection with the maintenance or operation of
any Data Center Network.

 

7.                          Relationship of Parties

 

The Parties acknowledge and agree that WorldGate is
an independent contractor, and that the personnel used by WorldGate in
connection with any Support Services performed by WorldGate pursuant to this
Agreement are not employees of Aequus and shall not be entitled to any benefits
provided to, or rights afforded by, Aequus or its Affiliates to its employees,
whether by operation of law or otherwise. 
Aequus shall make no deductions for fees paid to WorldGate for any state,
federal, or local taxes including, but not limited to, deductions for income
tax withholdings and social security taxes. 
WorldGate shall be responsible for the income tax withholdings and other
payments related to its own personnel.

 

8.                          Subcontractors

 

Aequus
acknowledges and agrees that WorldGate may retain the services of independent
consultants reasonably acceptable to Aequus (“Subcontractors”)
from time to time to perform, or assist WorldGate in performing, Support
Services under this Agreement.  All
Subcontractors shall perform such Support Services under WorldGate’s direction
and control.

 

9.                          WorldGate Personnel

 

WorldGate
shall have exclusive authority to make staffing decisions with respect to its
personnel and the provision of Support Services under this Agreement.  WorldGate reserves the right to reassign any
of its personnel; provided, however, that in the event of any
such reassignment, the Support Services shall continue to be provided in
accordance with the terms of 

 

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this
Agreement.  Notwithstanding the above, in
the event any personnel of WorldGate or any Subcontractors are afforded access
to Aequus Data or any Data Center Network, WorldGate shall be responsible for
any action or omission of such personnel which fails to comply with any
security or confidentiality provisions of this Agreement or the standard
policies of Aequus governing security or personal conduct in the office place
of which WorldGate has been advised in writing. 
In the event of such failure to comply with such provisions or policies
regardless of whether WorldGate has been advised thereof, WorldGate shall,
immediately upon the request of Aequus, replace such personnel with other
comparably qualified personnel.  Aequus
acknowledges and agrees that any required replacement of personnel may delay
WorldGate’s performance hereunder.

 

10.                   Representations and Warranties

 

10.1.            Warranties
of WorldGate.  WorldGate covenants and warrants that:  (i) each of its personnel who performs
Support Services shall have the proper skill, training, and background
necessary to accomplish the Support Services assigned to them, (ii) all
Support Services shall be performed in a competent, professional and
workmanlike manner, by qualified personnel, and (iii) WorldGate shall use
due care, but in any event at least the same degree of care as is customary in
the software development industry, to ensure that (except as expressly
authorized by Aequus in writing) any Software provided to Aequus pursuant to
this Agreement, and all media used to distribute such Software, do not contain
any instructions, codes, programs, data or other material (A) as to which
WorldGate has received written notice of any claim of infringement or (B) which
is used by or at the direction of WorldGate to disrupt, damage or interfere
with Aequus’s lawful use of the Data Center Network or Purchased Phones
(including without limitation protective, encryption, security or lock-out
devices, viruses, trojan horses, trap or back-doors, computer instructions,
circuitry or other technological means).

 

10.2.            Representations
and Warranties of the Parties.  Each Party warrants to the other Party
that:  (a) it has the requisite
power, authority, and resources to enter into this Agreement, and to perform
its obligations hereunder, and (b) this Agreement is a valid and binding
obligation of such Party, enforceable against such Party in accordance with the
terms and conditions hereof and thereof, and does not conflict with any other
obligation of such Party.

 

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10.3.            DISCLAIMER.  THIS SECTION 10
SETS FORTH THE ONLY WARRANTIES PROVIDED BY EITHER PARTY CONCERNING THIS
AGREEMENT, THE SERVICES TO BE RENDERED, AND WORK PRODUCT TO BE PROVIDED, IF
ANY.  THESE WARRANTIES ARE MADE IN LIEU
OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY
IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY,
NON-INFRINGEMENT, TITLE, OR OTHERWISE. 
WORLDGATE MAKES NO REPRESENTATION OR WARRANTY REGARDING THE LICENSED IP
OTHER THAN THOSE REPRESENTATIONS AND WARRATIES SET FORTH IN THE MASTER
AGREEMENT OR OTHER RELATED DOCUMENT, EACH OF WHICH SHALL BE SUBJECT TO THE
LIMITATIONS SPECIFIED IN CONNECTION THEREWITH.

 

11.                   Limitation of Liability

 

11.1.            No
Liability for Certain Damages.  IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
ANY PUNITIVE, EXEMPLARY, INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR OTHER
SIMILAR DAMAGES OR COSTS, INCLUDING LOST PROFITS, ARISING OUT OF OR BASED UPON
THIS AGREEMENT, EVEN IF EITHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGE AND NOTWITHSTANDING THE FAILURE OF THE ESSENTIAL PURPOSE OF ANY
REMEDY SET FORTH HEREIN.

 

11.2.            Exclusions.  The limitations set
forth in this Section 11 shall not apply to: (a) damages resulting
from the breach by a Party of the Mutual Confidentiality Agreement; or (b) the
gross negligence or willful misconduct of a Party.

 

12.                   Employee Solicitation /Hiring

 

During
the period beginning with the Effective Date hereof and ending nine (9) months
after the end of the Term, neither Party will knowingly solicit for employment,
directly or indirectly, any employee of the other Party or its Affiliates
(which shall include any employee of 

 

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the
other Party or its Affiliates who was an employee within the six (6) month
period prior to the date hereof).

 

13.                   Termination

 

13.1.            Term.  Unless earlier
terminated in accordance with this Section 13, this Agreement shall remain
in full force and effect until the twentieth (20th) anniversary of the Effective
Date, except that this Agreement shall automatically renew with respect to the
Licensed IP for subsequent consecutive five (5) year periods
(collectively, the “Term”) unless and until Aequus notifies WorldGate of its
election not to renew not less than three (3) months prior to the
expiration of the then-current period of the Term.

 

13.2.            Breach.

 

(a)                                                          Either Party may at its sole option terminate this Agreement
upon written notice effective thirty (30) days after delivery of such notice if
the other Party breaches a material obligation under this Agreement or the
Master Agreement, and, to the extent cureable, fails to cure such breach within
such period or such lesser period as may be set forth in the Master Agreement; provided,
however, that unless terminated pursuant to Section 5 of the Master
Agreement, if Aequus is otherwise not in breach of this Agreement, (i) WorldGate
may only terminate the licenses granted hereunder in accordance with this Section 13.2
if Aequus’s breach is its failure to pay the License Fee when due; (ii) WorldGate
may only terminate its obligations to provide Software Support Services in
accordance with this Section 13.2 if Aequus’s breach is its failure to pay
the Maintenance and Update Services Fee when due, and (iii) WorldGate may
only terminate its obligation to provide Tier 2 Support Services in
accordance with this Section 13.2 if Aequus’s breach is its failure to pay
the Tier 2 Service Fee when due. 
Notwithstanding the foregoing, WorldGate acknowledges and agrees that,
in the event that WorldGate violates or fails or refuses to perform any
covenant or agreement made by it herein, Aequus may be without an adequate
remedy at law.  WorldGate agrees,
therefore, that in the event that WorldGate violates or fails or refuses to
perform any covenant or agreement made by WorldGate herein, Aequus may, subject
to the terms of this Agreement and in addition to any remedies at law for
damages or other relief, institute and prosecute an action in any court of
competent jurisdiction to enforce specific performance of such covenant or
agreement or seek any other equitable relief.  If Aequus is the prevailing
party in any 

 

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such proceeding, Aequus shall be entitled to
reimbursement from WorldGate for all of Aequus’s costs and expenses (including
reasonable attorneys’ fees) relating to such proceeding.

 

                                                                        (b)                                                         Notwithstanding the foregoing, either Party may terminate
this Agreement upon five (5) days notice in the event of a breach by the other
party related to such other Party’s obligations under the Mutual
Confidentiality Agreement.

 

13.3.            Effect of
Termination.  Upon termination or expiration of this
Agreement or of the licenses granted hereunder in accordance with Section 13.2,
without prejudice to any other rights that WorldGate may have, the following
shall occur:

 

(a)                                                          Aequus shall
immediately cease all use of the Licensed IP and any WorldGate Confidential
Information.

 

(b)                                                         Aequus shall
promptly return to or destroy (upon WorldGate’s written request), all copies of
the Licensed IP.

 

(c)                                                          Each Party
shall promptly return to or destroy (upon the Discloser’s written request) the
Discloser’s Confidential Information in the Recipient’s possession or
control.  Upon the Discloser’s written request, the Recipient will
promptly provide the Discloser with a written certification of the Recipient’s
compliance with the foregoing.

 

(d)                                                         Notwithstanding
anything to the contrary set forth herein, regardless of any expiration or
termination of this Agreement, all licenses granted in connection with
Purchased Phones or Work Product already purchased and paid for by Aequus prior
to such expiration or termination shall remain in full force and effect.

 

(e)                                                          If termination
is a result of Aequus’s breach, all of Aequus’s  unpaid
payment obligations under this Agreement shall immediately become due and
payable.

 

13.4.            No
Liability on Termination.  To the extent either Party properly
terminates this Agreement prior to the end of the Term or if Aequus properly notifies
WorldGate of its determination not to renew, the other Party acknowledges that
the terminating or non-terminating Party will incur no liability whatsoever for
any damage, loss or expenses of any kind the other Party incurs or suffers
arising from or incident to any such termination or non-renewal of this
Agreement by that Party which complies with the terms of this Agreement,
whether or not the terminating or non-renewing Party was aware of any such
damage, loss or expenses.

 

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14.                   Confidentiality

 

The
Parties acknowledge and agree that it will be necessary for each Party to
disclose or make available to the other Party and its employees Confidential
Information in the course of the performance of the Support Services.  All such disclosures shall be governed by the
Mutual Confidentiality Agreement.

 

15.                   Notice

 

All
notices, requests, demands, consents or waivers and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given immediately upon delivery by hand or by electronic transmission
(e.g., email or facsimile with immediate confirmation), one (1) business
day after being sent if by nationally recognized overnight courier or, if
mailed, then four (4) days after being sent by certified or registered
mail, return receipt requested with postage prepaid:

 

(i)             If to WorldGate, to:

 

WorldGate
Communications, Inc.

3190
Tremont Avenue

Trevose,
PA 19355

 

Attention:  Hal Krisbergh, CEO and President

Telecopy:  215-354-1049

Email:
hkrisbergh@wgate.com

 

with
a copy to:

 

Randall
Gort, CLO at the same address and telecopy number

Email:
rgort@wgate.com

 

 (ii)                               If to AEQUUS, to:

 

Snap
Telecommunications Inc.

1
Blue Hill Plaza, 14th Floor

PO Box 1626

Pearl River, NY 
10965

 

Attention:
Richard Schatzberg, President

Telecopy:
(973) 227-5400

Email:
rschatzberg@aequustechnologies.com

 

15

 

with
a copy to:

 

Pryor
Cashman LLP

410
Park Avenue

New
York, New York 10022

 

Attention:
Eric M. Hellige, Esq.

Telecopy:
(212) 326-0806

Email:
ehellige@pryorcashman.com

 

or,
in each case, to such other person or address as any party shall furnish to the
other parties in writing.

 

16.                   Entire Agreement; Amendments

 

This
Agreement constitutes the entire agreement between the Parties with respect to
the subject matter hereof and supersedes all prior proposals, understandings,
and agreements, whether oral or written between the Parties with respect to the
subject matter hereof.  No modification, amendment
or supplement to this Agreement shall be effective for any purpose unless
agreed to in writing and signed by authorized representatives of the Parties.

 

17.                   Waiver

 

No
failure to exercise, and no delay in exercising, on the part of either Party, any
right, power or privilege hereunder will operate as a waiver thereof, nor will
any Party’s exercise of any right, power or privilege hereunder preclude
further exercise of the same right or the exercise of any other right
hereunder.

 

18.                   Binding

 

This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of the Parties hereto and their respective successors and permitted
assigns.

 

16

 

19.                   Severability

 

If
any part of this Agreement shall be adjudged by any court of competent
jurisdiction to be invalid, illegal, or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not be affected or
impaired thereby and shall be enforced to the maximum extent permitted by
applicable law.  If any remedy set forth
in this Agreement is determined to have failed of its essential purpose, then
all other provisions of this Agreement, including the limitations of liability
and exclusion of damages, shall remain in full force and effect.

 

20.                   Force Majeure

 

Either
Party shall be excused from performance and shall not be liable for any delay,
in whole or in part, caused by the occurrence of any contingency beyond the
reasonable control either of the excused Party or its subcontractors or
suppliers.  These contingencies include,
but are not limited to, war, sabotage, insurrection, riot or other act of civil
disobedience, act of public enemy, failure or delay in transportation, act of
any government or any agency or subdivision thereof affecting the terms hereof,
accident, fire, explosion, flood, severe weather or other act of God, or
shortage of labor or fuel or raw materials.

 

21.                   Governing Law and Venue

 

The
Parties acknowledge and agree that this Agreement shall be governed by the laws
of the Commonwealth of Pennsylvania as to all matters including, but not
limited to, matters of validity, construction, effect, performance and
liability, without consideration of conflicts of laws provisions contained
therein.  In the event of any dispute
between the Parties, (a) if suit shall be brought by Aequus, it shall be
brought either in the United States District Court for the Eastern District of
Pennsylvania or any state court of the Commonwealth of Pennsylvania and (b) if
suit shall be brought by WorldGate, it shall be brought in the either in the
United States District Court for the Southern District of New York or any state
court of the State of New York.  Each of
the Parties waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such
a court has been brought in an inconvenient forum.

 

17

 

22.                   Counterparts

 

This
Agreement may be executed simultaneously in two or more original or facsimile
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

23.                   No Cross Default

 

A
breach or other default under this Agreement by either Party shall not
constitute a breach or default under any other agreement between the Parties.

 

24.                   Third Parties

 

Except
as specifically set forth or referred to herein, nothing herein expressed or
implied is intended or shall be construed to confer upon or give to any person
or corporation other than the Parties hereto and their respective successors or
assigns any rights or remedies under or by reason of this Agreement.

 

25.                   Assignment

 

Unless
otherwise expressly provided in this Agreement, neither Party may assign its
rights (other than the right to receive payments) or delegate its duties and
obligations under this Agreement without the prior written consent of the other
Party, which will not be unreasonably withheld or delayed; provided, however,
that either Party may assign this Agreement, without the need to obtain consent
of the other Party, to an affiliate of such Party or to a successor-in-interest
to substantially all of the business of that Party to which this Agreement
relates by providing written notice to the other Party of such assignee’s
agreement to be bound by the terms of this Agreement and to assume all of the
rights and obligations of the assigning Party set forth in this Agreement; provided,
however, that in no event shall either Party assign this Agreement to an
affiliate or successor who is a competitor of the other Party.  Any assignment made in violation of the
foregoing provisions shall be deemed null and void and of no force or effect.

 

26.                   No Presumption

 

WorldGate
and Aequus have all participated in the negotiation and drafting of this
Agreement and have each been represented throughout to their satisfaction by
legal counsel of their choosing.  In the
event any ambiguity or question of intent or interpretation arises, this 

 

18

 

Agreement
shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.

 

27.                   Headings and Subsections

 

Section headings
are provided for convenience of reference and do not constitute part of this
Agreement.  Any references to a
particular section of this Agreement shall be deemed to include reference to
any and all subsections thereof

 

28.                   Specific Assistance

 

If
Aequus gives WorldGate written notice that WorldGate’s actions or failure to
act may trigger a Release Event, then WorldGate may, in its discretion, provide
Aequus with all information, materials, and assistance required to permit
Aequus or its third party designee to perform the disputed actions instead of
WorldGate.  If Aequus believes that it
has not received all  such information
and materials within 48 hours after it has delivered such notice to WorldGate,
Aequus will deliver to WorldGate a further written notice of such belief and
will not deliver written notice of the Release Event to the Escrow Agent for 48
hours after delivery to WorldGate of such second notice.

 

29.                   Survival of Obligations

 

The
provisions of Sections that, by their nature or as explicitly stated, are to
survive termination of this Agreement shall survive termination hereof.

 

30.                   Gender; Tense, Etc

 

Where
the context or construction requires, all words applied in the plural shall be
deemed to have been used in the singular, and vice versa; the masculine shall
include the feminine and neuter, and vice versa; and the present tense shall
include the past and future tense, and vice versa.

 

19

 

31.                   Reference to Days

 

All
references to days in this Agreement shall be deemed to refer to calendar days,
unless otherwise specified.

 

[Remainder
of Page Intentionally left blank]

 

20

 

IN WITNESS WHEREOF, the parties hereto have caused this
License, Maintenance and Update Services Agreement to be executed by their duly
authorized representatives as of the date first written.

 

 

	
  WorldGate Communications, Inc.

  	
   

  	
  Aequus Technologies Corp.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
					

 

	
  By:

  	
   

  	
   

  	
  By:

  	
   

  

 

	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  

 

	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  

 

	
  Ojo Service, LLC

  	
   

  	
  Snap Telecommunications Inc.

  

 

	
  By:

  	
   

  	
   

  	
  By:

  	
   

  

 

	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  

 

	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  

 

 

Exhibits

 

	
  A

  	
   

  	
  -

  	
  Software Support
  Services

  
	
  B

  	
   

  	
  -

  	
  Tier 2 Support Services

  
	
  X

  	
   

  	
  -

  	
  Certain Definitions

  

 

 

21

 

EXHIBIT A

 

DATA CENTER NETWORK SOFTWARE SUPPORT SERVICES

 

1.               Software Support
Services

 

a.               WorldGate will,
in the course of development, develop software updates, for the WorldGate  data center network.  In order to help maintain a synchronous state
between the WorldGate data center network and the Aequus Data Center Network,
and keep the centers at the same functional level (as the same may be allowed
given the system, hardware and environmental constraints of such centers,)
WorldGate will make such software updates available to Aequus for installation
on the Aequus Data Center Network.

 

b.              WorldGate will
correct failures of the WorldGate code in the Data Center Network systems or as
commercially reasonable, assist Aequus staff with their rebuilding or
correction of errors in the systems to restore function in accordance with
WorldGate specifications and historic customer service levels.  Such corrections shall be provided within the
industry accepted time frames.  WorldGate
will use commercially reasonable effort to replace Workarounds with a final
resolution, in the form of applicable Updates and Upgrades, within industry
standard timeframes from when the relevant failure is first reported and
reproduced.  In no event shall WorldGate
be responsible hereunder for failures caused by (i) any actions or
omissions of Aequus, its agents, or its invitees, (ii) the center
environment or any hardware components of the center, (iii) any changes
made to the WorldGate code by other than WorldGate or its agents, (iv) any
failures in other than the most current or the immediate prior release of the
WorldGate code.  To the extent WorldGate
renders assistance that is not due to a WorldGate code failure such assistance
is outside the scope hereof and is separately and independently compensable.

 

c.               Whether
WorldGate develops the code release primarily for the Aequus Data Center
Network or WorldGate data center network, software changes will be bundled into
common upgrade releases, tested, released and applied to both centers unless
not applicable.  WorldGate will provide
documentation to describe the code release features and application, and will
deliver software packages as applicable to update the original RPMs and build
media for the changes.

 

d.              WorldGate will
use commercially reasonable effort to assist Aequus in the upgrade process for
the Aequus Data Center Network.

 

 

e.               WorldGate will assist in coordinating
the upgrades to minimize any disruption of service, including working with
Aequus to apply such upgrades to the respective Data Center Networks at
mutually agreed to times where possible.

 

f.                 Prior to the
upgrade, a QA test report will be provided to Aequus for review and their
records.  WorldGate will provide guidance
for Aequus test planning for the release.

 

g.              WorldGate will
provide to Aequus Technical Services on call support (30 minute response) 24
hours a day, 7 days a week, 366 days a year for Network system Class 1
Errors (as defined below).

 

h.              For all other
ODC failures, Data Center Network Support Services shall be accessible via
phone and email. The WorldGate support team shall be available during normal
business hours.  After contacting the
support team to report an issue, WorldGate shall commence using commercially
reasonable efforts to provide a Workaround or final fix reasonably acceptable
to Aequus.  Aequus will also receive
notification of resolution of the issue from the WorldGate support team.  The WorldGate support team shall assist
Aequus in the installation or implementation of, each such resolution.

 

For
purposes hereof, Class 1 Error means a problem with the Software that
renders any Data Center Network “substantially unusable” or materially impairs
Aequus or its End User’s ability to use the Software in the ordinary course of
its business.  That is, the Software
cannot, substantially perform the basic and necessary functions that such
Software has historically achieved.

 

 

EXHIBIT B

 

TIER 2 SUPPORT SERVICES

 

After the Effective Date, Aequus will have
access to the Tier 2 Support for the Term. 
The Support Services will consist of the following:

 

1.                                       Support (i) to
SNAP TSR/CSR Tier 1 teams for end user installations and problems that cannot
be reasonably resolved by such teams with respect to Customer support, and for
RMA processes as set forth in the Reseller Agreement.

 

2.                                       Tier 2 Support
Services are to be provided 5 days a week during the hours of 8:00 AM to 5:00
PM Monday – Friday, Eastern Time.

 

3.                                       Support beyond
these hours will only be provided pursuant to a separate SOW.

 

4.                                       Aequus and
WorldGate personnel will document all problems and customer
contacts/escalations in the Aequus ticketing system currently RightNow (SNAP to
Provide user ID’s.)

 

5.                                       WorldGate will
provide commercially reasonable support, at its election, directly to End Users
only in conjunction with the support being provided by the SNAP TSR/CSR Tier 1
teams, and only in the event that such teams have not been able to resolve the
problems after a reasonable effort on their part.

 

6.                                       Aequus will
document and WorldGate will evaluate the operating environments in which the
WorldGate Phones will be used and recommend unique solutions to enable
WorldGate Phones to fully function in such environments using the Snap!VRS
Services.  WorldGate will have no
responsibility or liability in connection with the cost and provisioning of
equipment solutions.

 

 

EXHIBIT X

 

CERTAIN DEFINITIONSExhibit 10.14

 

REVISED AND RESTATED

AMENDMENT AND MASTER
CONTRACT

 

THIS REVISED AND RESTATED AMENDMENT AND MASTER
CONTRACT (“Revised Amendment”) is made and effective this March 31st,
2008, by and between Aequus (as defined in Exhibit X hereto) and
WorldGate (as defined in Exhibit X hereto).

 

1.                                       This Revised
Amendment is entered into pursuant to a Master Agreement, dated the date
hereof, between the Parties (the “Master Agreement”). This Revised Amendment (a) revises
and supplements certain terms of the Reseller Agreement between the Parties
dated March 22, 2006 (the “Reseller Agreement”) and the Professional
Services Agreement between the Parties dated August 14, 2006 (the “Professional
Services Agreement”) (collectively, the “Amended Contracts”) (b) terminates
the Video Service Provider Agreement between the Parties dated May 16,
2006 (the “Service Provider Agreement”) and (c) supersedes and replaces in
its entirety the Amendment and Master Contract between the Parties, dated June 20,
2007 (the “Prior Amendment”), which Prior Amendment shall hereafter be deemed
null and void and of no further force or effect. In the event of conflict
between the provisions of this Revised Amendment and that of any Amended
Contract or the Prior Amendment, the terms of this Revised Amendment shall
control. Except as amended by this Revised Amendment, the terms and conditions
of each Amended Contract shall remain in full force and effect and are hereby
reaffirmed and considered delivered hereunder.

 

2.                                       Unless
otherwise defined herein, capitalized terms used in this Agreement shall have
the meaning ascribed to those terms set forth in Exhibit X attached hereto.
Except as otherwise defined herein or in said Exhibit X, all capitalized
terms used with reference to the Reseller Agreement and the Professional
Services Agreement shall have the meanings ascribed to such terms in the
relevant Amended Contract.

 

3.                                       The Reseller
Agreement is hereby amended and restated as follows:

 

3.1                                 The parties acknowledge and
agree that all references to “OJO” in the Professional Services Agreement (as
revised by this Revised Amendment) shall be deemed to mean “WorldGate” as
defined in Exhibit X hereto and all references to “Reseller” shall
be deemed to mean “Aequus” as defined in Exhibit X hereto.

 

3.2                                 Section 1, APPOINTMENT,
is hereby amended to read in its entirety as follows:

 

1.                                       APPOINTMENT;
SCOPE OF RIGHTS

 

a.                                       Subject to the
terms and conditions hereof, OJO hereby grants Reseller, and Reseller accepts,
rights (the “Marketing Rights”) to use, market, distribute and sell, in the
provision of the Services (as defined in Schedule A) in 

 

 

the Territory (as defined in Schedule C) to
Customers (as defined in Schedule B), any OJO Phone (as defined in Schedule A)
offered for commercial sale by OJO other than Third Party Phones (as defined in
Schedule A). The Marketing Rights shall be exclusive (the “Exclusive Marketing
Rights”) unless and until an event occurs which gives OJO the right to notify
Reseller (in accordance with and as permitted under this Agreement) that
Reseller’s Marketing Rights have become non-exclusive (the “Non-Exclusive
Marketing Rights”). Subject to the terms and conditions hereof,  so long as its Marketing Rights are Exclusive
Marketing Rights, Reseller agrees to purchase all of its requirements for video
phones for use in providing the Services in the Territory to Customers
exclusively from Ojo.  Reseller agrees that, except as otherwise agreed by
OJO in writing, it will comply with the policies and programs described in the
attached Schedule D (“Policies and Programs”) and the covenants and conditions
specified in Schedule E (“Pertinent Conditions”) and the Standard Terms and
Conditions for the Purchase of Products attached as Schedule G to this Reseller
Agreement.

 

b.                                      Reseller
acknowledges that OJO may from time to time enter into other agreements with
third parties (each, a “Third Party”) granting rights in the Territory to
resell or distribute one or more models of OJO Phones, including Third Party
Phones (each such agreement, an “Other Distribution Agreement”).  In
connection with such Other Distribution Agreement and so long as Reseller
enjoys Exclusive Marketing Rights as provided herein, OJO agrees to the
following:

 

(i)                                     the end-user
license for each OJO Phone to be sold or distributed pursuant to such Other
Distribution Agreement (“Other Phones”) shall prohibit the end-user from using
such OJO Phone in connection with the Services in the Territory and WorldGate
will cause such end-user license to be incorporated in such Other Distribution
Agreement as an attachment or exhibit thereto;

 

(ii)                                  prior to the
execution by OJO of such Other Distribution Agreement, it will use commercially
reasonable efforts to include in such Other Distribution Agreement (A) an
acknowledgement by such Third Party that OJO has granted to Reseller the
exclusive right to market, distribute, use and sell video phones incorporating
OJO technology in connection with providing the Services in the Territory to
Customers and (B) a covenant that such Third Party will not market,
distribute, use or sell any Third Party Phone in connection with providing the
Services in the Territory to Customers and (C) an acknowledgment by such
Third Party that Reseller is a third party beneficiary of such restriction.

 

c.                                       Ojo may, at its
sole election, by written notice either (i) unilaterally cause the
Exclusive Marketing Rights to become Non-Exclusive Marketing Rights or (ii) terminate
this Agreement, in either case only if Reseller’s cumulative purchases of
Products through the end of the most recently concluded quarter included under
Schedule F – Anticipated Sales Levels (the 

 

2

 

“Benchmark Quarter”), total
less than seventy percent (70%) of the cumulative Anticipated Sales Levels for
all quarters included under said Schedule F to and including the Benchmark
Quarter.

 

d.                                      Ojo shall keep
Reseller reasonably informed of its development plans regarding Ojo Phones (as
defined below), including but not limited to providing Reseller no less often
than twice per year with a two-year projection for development of new features
and functions for existing or new models of 
Ojo Phones (the “Development Plan”). Reseller shall keep Ojo reasonably
informed of developments in video phone technology which could be reasonably
likely to have a substantial effect on competition in the Services marketplace
(“Technology Advances”) and Ojo shall consult with Reseller regarding potential
modifications of its Development Plan to address such Technology Advances. Each
party shall also keep the other party reasonably informed if another
manufacturer or distributor makes a new video phone commercially available
which includes one or more Technology Advances (a “New Technology Phone”). Upon
request by Reseller, Ojo shall either (i) provide Reseller with a
Development Plan (the “New Technology Development Plan”) demonstrating that,
within a reasonable time, Ojo will be able to make commercially available a
video phone offering substantially the same or superior Technology Advances (an
“Advanced Ojo Phone”) or (ii) advise Aequus that it does not intend to
make such Advanced Ojo Phone commercially available within a reasonable time. If
Ojo advises Reseller that it will make an Advanced Ojo Phone commercially
available within a reasonable time thereafter, Reseller’s exclusivity
obligations under Section 1(a) shall continue and any purchase by
Reseller of New Technology Phones will be a breach thereof. If Ojo advises
otherwise or does not provide a New Technology Development Plan within a
reasonable time, Reseller shall have the right to purchase New Technology
Phones, and such purchases shall not be a breach of its exclusivity obligations
under Section 1(a).

 

e.                                       Notwithstanding
the foregoing, if Reseller commences purchasing New Technology Phones pursuant
to the foregoing paragraph (d), (i) Ojo may, by written notice to Aequus,
cause Reseller’s Exclusive Marketing Rights to be amended so that they
thereafter become Non-Exclusive Marketing Rights, if in any period of three (3) consecutive
calendar quarters (each, a “Three-Quarter Period”), Reseller’s purchases of Ojo
Phones constitutes less than forty percent (40%) of the total number of video
phones purchased by and shipped to or on behalf of Aequus during such
Three-Quarter Period, and (ii) Ojo may, by written notice to Aequus,
terminate this Agreement, if in any Three-Quarter Period Reseller’s purchases
of Ojo Phones constitutes less than twenty percent (20%) of the total number of
video phones purchased and shipped to or on behalf of Aequus during such
Three-Quarter Period.

 

f.                                         At any time
after Reseller commences purchases of New Technology Phones, Ojo may give
Reseller notice that Ojo is making an Advanced Ojo Phone commercially available
(the “New Ojo Model”). Within thirty (30) days after receiving such Advanced
Ojo Phone, Reseller shall advise Ojo whether Reseller intends to commence
purchasing the New Ojo Model and cease purchasing New Technology Phones upon
expiration of any then-current binding purchase commitment of Reseller to such
other manufacturer or distributor (a “Resumption Notice”). If Reseller timely
delivers a Resumption Notice, then within ninety (90) days after delivery to
Ojo of such Resumption Notice, Reseller will provide Ojo with a binding
purchase order to purchase New Ojo Phones. If Reseller fails to timely deliver
a Resumption Notice, Ojo shall thereafter be

 

3

 

entitled
to sell the New Ojo Model to any market and territory without restriction
(including for use in providing Services in the Territory to Customers) without
breach of its exclusivity obligations under Section 1(a).

 

3.3                                 Section 2, Term, is
hereby amended to read in its entirety as follows:

 

This Agreement shall commence on the date first set
forth above and shall continue until terminated in accordance with Section 4.

 

3.4                                 Paragraph B of Section 3,
Conduct of Operations, is hereby amended to read in its entirety as follows:

 

B. Reseller shall use diligent, good faith efforts
to promote, offer for sale and sell the Products to Customers for use in
connection with the Services in the Territory and to seek to achieve the
anticipated sales levels set forth in the attached Schedule F (the “Anticipated
Sales Levels”). In so doing, Reseller shall take no action which could
reasonably be anticipated to diminish the reputation and goodwill of the
Products. The parties shall consult and reasonably cooperate in advertising the
Products and in offering and fulfilling incentive or other promotional programs
with respect to the Products.

 

3.5                                 Paragraph H of Section 3,
Conduct of Operations, is hereby amended by adding at the end thereof the
following sentence:

 

Except as otherwise provided in a certain Master
Agreement between the parties or as otherwise provided herein, payment terms
for all Products shall be net thirty (30) days from the date of invoice for
such Products.

 

3.6                                 Paragraphs A and B of Section 4,
Termination of Agreement, are hereby amended to read in their entirety as
follows:

 

A.                                   Either party
may terminate this Agreement for convenience upon one year’s notice. Either
Party may terminate this Agreement for cause upon thirty (30) days’ written
notice for a material breach of a material term of this Agreement if such
breach is not cured within such thirty-day period.

 

B.                                     Either party
(the “Terminating Party”) may terminate this Agreement by written notice to the
other party, effective immediately, upon the occurrence of any of the following
events: (i) upon the occurrence of any change in the financial condition
or management of the other party which is materially adverse to the other party’s
ability to perform under this Agreement; (ii) the other party defaults in
any agreement providing financing to such party for purposes associated with
this Agreement; (iii) the other party engages in a course of conduct which
results in such party’s conviction of a felony or which otherwise substantially
and adversely affects the Terminating Party’s reputation or its interests in
the promotion, marketing or distribution of its products and/or services. In
addition,

 

4

 

OJO shall also have the right to terminate this
Agreement if Reseller fails to purchase at least seventy percent (70%) of the
cumulative Anticipated Sales Levels for all quarters through a particular
Benchmark Quarter or if Aequus’s purchases of Ojo Phones for any Three-Quarter
Period constitutes less than twenty percent (20%) of the total number of video
phones purchased by and shipped to or on behalf of Aequus during such
Three-Quarter Period.

 

3.7                                 The last two sentences of
Paragraph C of Section 4, TERMINATION OF AGREEMENT, are hereby deleted.

 

3.8                                 The first sentence of
Paragraph D of Section 4, TERMINATION OF AGREEMENT, is hereby amended to
read in its entirety as follows:

 

A Party who properly terminates this Agreement prior
to the end of the Term in accordance with its terms or who refuses to extend or
renew this Agreement beyond its stated expiration date shall not be liable to
the other Party for any damage, loss or expenses of any kind which the other
Party may incur or suffer arising from or incident to any such termination or
non-renewal of this Agreement, whether or not the terminating or non-renewing
Party was aware of any such damage, loss or expenses.

 

3.9                                 There shall be added to Section 4,
TERMINATION OF AGREEMENT, the following Paragraph E:

 

E.                                      The rights and
remedies of each party with respect to any breach by the other of this
Agreement shall survive any termination of this Agreement and be cumulative
with any other rights and remedies of such party with respect to such breach
provided by law or in equity; provided, however, that termination of this
Reseller Agreement shall not be used as a basis to terminate any other
agreement between OJO and Reseller. No waiver of any default will affect any
other or subsequent default.

 

3.10                           In Section 6,
MISCELLANEOUS, the following paragraphs are hereby amended and restated as set
forth below: Paragraph A (ENTIRE AGREEMENT; MODIFICATIONS; WAIVERS), Paragraph
B (GOVERNING LAW), Paragraph C (Severability), Paragraph F (NOTICE), Paragraph
G (ASSIGNMENT) and Paragraph I (CERTAIN REFERENCES; LANGUAGE).

 

A.  ENTIRE AGREEMENT;
MODIFICATIONS; WAIVERS.  This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof and supersedes
all prior proposals, understandings, and agreements, whether oral or written
between the Parties with respect to the subject matter hereof.  No
modification, amendment or supplement to this Agreement shall be effective for
any purpose unless agreed to in writing and signed by authorized
representatives of the Parties.  No failure to exercise, and no delay in
exercising, on the part of either Party, any right, power or privilege hereunder
will

 

5

 

operate as a waiver thereof, nor will any Party’s
exercise of any right, power or privilege hereunder preclude further exercise
of the same right or the exercise of any other right hereunder.

 

B.  GOVERNING LAW;
VENUE.  The Parties acknowledge and agree that this Agreement shall be
governed by the laws of the Commonwealth of Pennsylvania as to all matters
including, but not limited to, matters of validity, construction, effect,
performance and liability, without consideration of conflicts of laws
provisions contained therein or the United Nations Convention on Contracts for
the International Sale of Goods. In the event of any dispute between the
Parties, (a) if suit shall be brought by Aequus, it shall be brought
either in the United States District Court for the Eastern District of
Pennsylvania or any state court of the Commonwealth of Pennsylvania and (b) if
suit shall be brought by WorldGate, it shall be brought in the either in the
United States District Court for the Southern District of New York or any state
court of the state of New York. Each of the Parties waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to
the laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.

 

C.  SEVERABILITY. 
If any part of this Agreement shall be adjudged by any court of competent
jurisdiction to be invalid, illegal, or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not be affected or
impaired thereby and shall be enforced to the maximum extent permitted by
applicable law.  If any remedy set forth in this Agreement is determined
to have failed of its essential purpose, then all other provisions of this
Agreement, including the limitations of liability and exclusion of damages,
shall remain in full force and effect.

 

F.  NOTICES.  All
notices, requests, demands, consents or waivers and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given immediately upon delivery by hand or by electronic transmission
(e.g., email or facsimile with immediate confirmation), one (1) business
day after being sent if by nationally recognized overnight courier or, if
mailed, then four (4) days after being sent by certified or registered
mail, return receipt requested with postage prepaid:

 

(i)        
If to WorldGate, to:

 

WorldGate Communications, Inc.

3190 Tremont Avenue

Trevose, PA 19355

 

Attention:  Hal Krisbergh, CEO and President

Telecopy:  215-354-1049

Email: hkrisbergh@wgate.com

 

6

 

with a copy to:

 

Randall Gort, CLO at the same address and telecopy
number

Email: rgort@wgate.com

 

(ii)       If to
AEQUUS, to:

 

Snap Telecommunications Inc.

1 Blue Hill Plaza, 14th Floor

PO Box 1626

Pearl River, NY  10965

 

Attention: Richard Schatzberg, President

Telecopy: (973) 227-5400

Email: rschatzberg@aequustechnologies.com

 

with a copy to:

 

Pryor Cashman LLP

410 Park Avenue

New York, New York 10022

 

Attention: Eric M. Hellige, Esq.

Telecopy: (212) 326-0806

Email: ehellige@pryorcashman.com

 

or, in each case, to such other person or address as
any party shall furnish to the other parties in writing.

 

G.  ASSIGNMENT. 
Unless otherwise expressly provided in this Agreement, neither Party may assign
its rights (other than the right to receive payments) or delegate its duties
and obligations under this Agreement without the prior written consent of the
other Party, which will not be unreasonably withheld or delayed; provided,
however, that either Party may assign this Agreement, without the need
to obtain consent of the other Party, to an Affiliate of such Party or to a
successor-in-interest to substantially all of the business of that Party to
which this Agreement relates by providing written notice to the other Party of
such permitted assignee’s agreement to be bound by the terms of this Agreement and
to assume all of the rights and obligations of the assigning Party set forth in
this Agreement; provided, however, that in no event shall either
Party assign this Agreement to an Affiliate or successor who the Parties have
agreed in writing is a Competitor of the other Party.  Any assignment made
in violation of the foregoing provisions shall be deemed null and void and of
no force or effect.

 

I.  CERTAIN REFERENCES;
LANGUAGE.  Section headings are provided for convenience of reference
and do not constitute part of this Agreement.  Any references to a
particular section of this Agreement shall be

 

7

 

deemed to include reference to any and all
subsections thereof.  The terms “purchase” and “sell” are used herein for
convenience to include the transfer by non-exclusive license of certain
specified rights in and to Programs included herein as part of the
Products.  Title to such Programs is reserved to OJO and its affiliated
companies.  The term “end-user” as used herein means an end user customer
that has acquired the Product for such end-user’s personal use and not for
resale or distribution to others.  This contract is in the English
language.  Any translated version of it is purely for the convenience of
the Parties and the English version is controlling.  Each of the Parties
has participated in the negotiation and drafting of this Agreement and has been
represented throughout to its satisfaction by legal counsel of its
choosing.  In the event any ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties hereto and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the provisions
of this Agreement.  This Agreement may be executed simultaneously in two
or more original or facsimile counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

 

3.11                           The last sentence of
Paragraph D, Audits, of Section 6, Miscellaneous, is hereby amended to
read in its entirety as follows:

 

Any such audit or inspection shall occur during
regular business hours, but not more than once in any twelve-month period, and
shall not unreasonably interfere with Reseller’s business activities.

 

3.12                           There shall be added
following Section 6, MISCELLANEOUS, Paragraph I, CERTAIN REFERENCES;
LANGUAGE, the following provisions:

 

J.  BINDING.  This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and permitted assigns.

 

K.  FORCE MAJEURE.  Either Party shall be
excused from performance and shall not be liable for any delay, in whole or in
part, caused by the occurrence of any contingency beyond the reasonable control
either of the excused Party or its subcontractors or suppliers.  These
contingencies include, but are not limited to, war, sabotage, insurrection,
riot or other act of civil disobedience, act of public enemy, failure or delay
in transportation, act of any government or any agency or subdivision thereof
affecting the terms hereof, accident, fire, explosion, flood, severe weather or
other act of God, or shortage of labor or fuel or raw materials.

 

L.  NO CROSS DEFAULT.  A breach or other
default under this Agreement by either Party shall not constitute a breach or
default under any other agreement between the Parties.

 

M.  THIRD PARTIES.  Except as specifically
set forth or referred to herein, nothing herein expressed or implied is
intended or shall be construed to confer

 

8

 

upon or give to any person or corporation other than
the Parties hereto and their respective successors or assigns any rights or
remedies under or by reason of this Agreement.

 

N.  SURVIVAL OF OBLIGATIONS.  The
provisions of Sections that, by their nature or as explicitly stated, are to
survive termination of this Agreement shall survive termination hereof.

 

O.  GENDER; TENSE, ETC  Where the context
or construction requires, all words applied in the plural shall be deemed to
have been used in the singular, and vice versa; the masculine shall include the
feminine and neuter, and vice versa; and the present tense shall include the past
and future tense, and vice versa.

 

P.  REFERENCE TO DAYS.  All references to
days in this Agreement shall be deemed to refer to calendar days, unless
otherwise specified.

 

3.13                           The blank in
the first line of the introductory paragraph to the Schedules to the Reseller
Agreement is hereby amended to insert the date “March 22, 2006”.

 

3.14                           SCHEDULE A, Products, is
hereby amended to read in its entirety as follows:

 

SCHEDULE A – Products and Services

 

“Product” shall mean any video phone which uses or
incorporates any OJO intellectual property (herein sometimes referred to as an “Ojo
Phone” or a “WorldGate Phone”) and which OJO is purchasing or has purchased
from WorldGate for commercial distribution (a “Purchased Phone”); provided,
however, that the term “Products” shall not include any WorldGate Phone
as to which WorldGate has entered into an exclusive distribution agreement or
marketing arrangement with a Third Party prior to such WorldGate Phone becoming
a Purchased Phone (each, a “Third Party Phone”). “Services” shall mean Video
Relay Services (VRS) and Video Remote Interpreting (VRI) services.

 

3.15                           SCHEDULE B, Customers, is
hereby amended to read in its entirety as follows:

 

1.                                       Inclusion – Any
end-user or potential end-user of a Purchased Phone who has a speech and/or
hearing impairment and whose ability to engage in telephonic communication
requires access to and use of the Services.

 

2.                                       Exclusion – All
other customers.

 

3.16                           SCHEDULE C, Territory, is
hereby amended to read in its entirety as follows:

 

9

 

North America (including the United States, its
territories, protectorates and possessions, Canada and Mexico), provided that
Reseller’s authorization in each country in the Territory shall be subject to
the prior receipt by Reseller from the relevant authorities in such country of
all approvals necessary to offer VRS/VRI services in such country.

 

3.17                           SCHEDULE E, Pertinent
Conditions, is hereby amended to read in its entirety as follows:

 

1.                                       Subject to the
limitations set forth in Section 1 of this Reseller Agreement, Ojo
expressly reserves the right to itself sell, and to use other distributors,
VARs and resellers to sell Products in the Territory to customers other than
Customers and to sell Products outside of the Territory to all customers,
including Customers. In no event shall Ojo be prohibited from selling and/or
otherwise distributing to any customer, including Customers, any products or
services other than Products in any country within the Territory.

 

2.                                       No later than
the fifteenth day of each month, Reseller agrees to provide OJO with a forecast
for the six-month period beginning with the next following month indicating
Reseller’s intended purchases of Products during such six-month period, detailed
by individual Product and calendar month of forecasted purchase. Binding
purchase orders shall be submitted by Reseller for its required Products in
accordance with the terms of Schedule G. The price for such Products
shall be WorldGate’s landed cost (currently $280 for the standard Ojo PVP 900R)
plus fifteen percent (15%) mark-up. Aequus shall also pay the actual costs of
handling (which currently averages about $8 per unit) and shipping such phones
to Customers (which currently averages approximately $10 per unit) . Reconciliation
will be made within 30 days of its receipt of an invoice therefor.

 

3.                                       Products
purchased after the effective date of this Revised Amendment between the
Parties will be warehoused by OJO and drop shipped directly to Customers.

 

4.                                       The Parties
acknowledge that friends and family of end user Customers hereunder may be
motivated to purchase Products as a result of sales of Products which are
resold or otherwise transferred by Aequus to Customers, and such friends and
family may contact Aequus with inquiries to purchase Products for their own use
in communicating with Customers. Aequus will refer all such friends and family
inquiries to OJO and will otherwise reasonably cooperate with OJO to facilitate
Product marketing and sales to such friends and family, and OJO will directly
provide the video phone service for such friends and family.

 

3.18                           SCHEDULE F, Anticipated Sales Levels,
shall be amended to read in its entirety as follows:

 

10

 

Ongoing per calendar quarter (units):

 

	
  Quarter 3 –
  2007

  3000

  	
   

  	
  Quarter 4 -
  2007

  1250

  	
   

  	
  Quarter 1 –
  2008

  2500

  	
   

  	
  Quarter 2 -
  2008

  3250

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Quarter 3 -
  2008

  3000

  	
   

  	
  Quarter 4 –
  2008

  3000

  	
   

  	
  Quarter 1 –
  2009

  3000

  	
   

  	
  Quarter 2 –
  2009

  3000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Quarter 3 –
  2009

  3500

  	
   

  	
  Quarter 4 –
  2009

  3500

  	
   

  	
  Quarter 1 –
  2010

  3500

  	
   

  	
  Quarter 2 –
  2010

  3500

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Quarter 3 –
  2010

  4000

  	
   

  	
  Quarter 4 –
  2010  

  4000

  	
   

  	
  Quarter 1 –
  2011

  4000

  	
   

  	
  Quarter 2 –
  2011

  4000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Quarter 3 –
  2011

  4250

  	
   

  	
  Quarter 4 –
  2011

  4250

  	
   

  	
  Quarter 1 –
  2012

  4250

  	
   

  	
  Quarter 2 –
  2012

  4250

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Quarter 3 –
  2012

  4500

  	
   

  	
  Quarter 4 –
  2012

  4500

  	
   

  	
  Quarter 1 –
  2013

  4500

  	
   

  	
  Quarter 2 –
  2013

  4500

  

 

The parties agree to propose and implement
Anticipated Sales Levels for periods after Quarter 2 – 2013 at appropriate
times. Unless and until agreement is reached on Anticipated Sales Levels for
any such period, the Anticipated Sales Level for each quarter during such
period shall be the Anticipated Sales Level for the most recent quarter which
was agreed to.

 

3.19                           The first sentence of the
first paragraph of SCHEDULE G, Standard Terms and Conditions for the Purchase
of Products, is hereby amended to read in its entirety as follows:

 

These Standard Terms and Conditions for the Purchase
of Products (“Standard Terms”) are intended by the parties to govern the
purchase of Products (as defined in the Reseller Agreement to which these
Standard Terms are attached) from OJO Service, LLC and WorldGate Communications, Inc.
as parent and owner of all of the equity of Ojo Service, LLC (collectively, “Ojo”)
as SUPPLIER hereunder and to supersede any terms and conditions set forth in
any purchase order which are contrary hereto, notwithstanding any statement
providing otherwise within any such purchase order.

 

3.20                           The second sentence of
Paragraph A, Section 1, PURCHASE, PRICE AND PAYMENT, is hereby amended to
delete the words “if PURCHASER is in default under any agreement with SUPPLIER
or”.

 

3.21                           The last sentence of
Paragraph B, Section 1, PURCHASE, PRICE AND PAYMENT, is hereby amended by
inserting at the end of the sentence, the words, “provided, however,
that such modification or substitution complies with all requirements of
regulatory authorities in the Territory applicable to the Products.”

 

11

 

3.22                           Paragraph A of Section 6,
CONFIDENTIAL INFORMATION AND OTHER PROPRIETARY RIGHTS, is hereby amended to
read in its entirety as follows:

 

A.  The Parties have entered into a
Mutual Confidentiality Agreement which shall govern the disclosure and use of the
Confidential Information (as defined in such agreement) of each of the Parties.

 

3.23                           The first sentence of
Paragraph D, Section 6, CONFIDENTIAL INFORMATION AND OTHER PROPRIETARY
RIGHTS, is hereby amended by inserting at the beginning of the sentence the
words, “Except as provided in the License Agreement Terms and Conditions
annexed to this Schedule G as Exhibit 1 or as otherwise agreed in writing
by SUPPLIER and PURCHASER,”.

 

3.24                           In Section 7,
MISCELLANEOUS, the following paragraphs are hereby deleted:  Paragraph A
(GOVERNING LAW AND VENUE); Paragraph B (SEVERABILITY); Paragraph D (CERTAIN
REFERENCES; LANGUAGE); and Paragraph F (FORCE MAJEURE).

 

3.25                           The first sentence of
Paragraph B, Section 3, ACCEPTANCE AND WARRANTY, is hereby amended by
deleting the phrase “as delivered to PURCHASER and for a period of thirteen
(13) months from receipt by PURCHASER”, and inserting the phrase, “as delivered
to PURCHASER’s end-user customer and for a period of twelve (12) months from
receipt by PURCHASER’s end-user customer.”

 

3.26                           In Exhibit 1, LICENSE
AGREEMENT TERMS AND CONDITIONS, (a) all references to “Licensor” shall be
deemed to refer to both OJO Service, LLC and WorldGate Communications, Inc.,
as parent and owner of all of the equity of Ojo Service, LLC, (b) all
references to “Licensee” shall be deemed to refer to both Snap
Telecommunications Inc., d/b/a Snap!VRS, and Aequus Technologies Corp., as
parent and owner of all of the equity of Snap Telecommunications Inc. and (c) all
references to “the OjoTM video phone” shall be deemed to refer to “Products” (as
defined in Schedule A of the Reseller Agreement of which Exhibit 1 is a
part).

 

4.                                       Video Service
Provider Agreement

 

The parties hereby agree that the Video Service
Provider Agreement is hereby terminated and shall hereafter be of no further
force and effect, with the understanding that the subject matter of such
agreement has been subsumed in the Related Documents executed pursuant to the
Master Agreement.

 

5.                                       Professional
Services Agreement

 

5.1                                 The parties acknowledge and
agree that all references to “OJO” in the Professional Services Agreement shall
mean and include both Ojo Service, LLC and WorldGate Communications, Inc.,
as parent and owner of all of the equity of Ojo Service, LLC and all

 

12

 

references
to “AEQUUS” shall mean and include Snap Telecommunications Inc., d/b/a Snap!VRS
and Aequus Technologies Corp., as parent and owner of all of the equity of Snap
Telecommunications Inc.

 

5.2                                 The reference to “Exhibit 1
– Statement of Work” in the second WHEREAS clause is hereby amended to read “Exhibit 1
– Statement of Work - Software Enhancements for Interoperability, June 6,
2006 (the “Statement of Work”).

 

5.3                                 Section 1, SERVICES, is
hereby amended by designating the first sentence thereof as paragraph “(a)” and
adding at the end thereof the following:

 

(b)                                 From time to
time during the term of this Agreement, OJO will provide to Aequus such
additional services as are set forth in additional mutually agreed written
statements of work (each, an “SOW”) which, for purposes of this Agreement,
shall be considered additional “Services.” 
The parties agree that “Services” shall include, to the extent specified
in an SOW, non-recurring engineering services (“NRE Services”) for Data Center
Network (including the ODC) and WorldGate Phones (as such terms are defined in
the Exhibit X to this Revised Agreement). 
No NRE services shall be performed or compensated except in accordance
with mutually agreed SOWs.  Each such SOW
shall contain provisions addressing the substance of the Model of Statement of
Work annexed as Exhibit 2 to this Agreement, shall be executed by
the Parties and upon such execution be deemed part of this Agreement.  If changes are required to be made in the
ODC  or other Data Center Network, any
Purchased Phone or the Services (as defined in Exhibit X) as a
result of any requirement adopted or published by the United States Federal
Communications Commission or the equivalent regulatory authority of any other
jurisdiction in the Territory (“Mandated Changes”), WorldGate shall be
obligated to promptly provide an SOW Proposal for the necessary NRE services
which shall be negotiated and agreed upon by the parties in accordance with the
following:

 

i.                                          Aequus shall notify
WorldGate in writing of any Mandated Change. 
Within thirty (30) days after receiving such notice, WorldGate shall
provide Aequus with a proposed Statement of Work (“SOW”) setting forth in
reasonable detail the work required to be done to implement the Mandated
Change, a timetable for performing such work, the deliverables to result from
such work and the costs related thereto (an “SOW Proposal”).  Upon delivery to Aequus of an SOW Proposal
for a Mandated Change (a “Mandated SOW”), the parties shall promptly commence
diligent and good faith negotiations to agree on the terms and conditions of
the Mandated SOW, including (if necessary) the costs of engaging a third party
subcontractor by WorldGate to perform services in connection with such Mandated
SOW.  If the parties cannot agree on the
terms and conditions of the Mandated SOW within seven (7) days following
delivery of WorldGate’s initial written proposal, then the parties shall, upon
demand by either party, submit the Mandated SOW for determination by an
arbitrator in accordance with the following clause (ii).

 

13

 

ii.                                       If either party demands that
the Mandated SOW be submitted for determination by an arbitrator, each party
shall submit its most recent proposal (in a form suitable for execution as an
SOW, together with recommended amendments to each other Related Document) and
any other materials deemed relevant by such party, to the American Arbitration
Association or such other independent expert or organization with expertise in
the design and development of systems for delivery of video phone services as
the parties may agree, such agreement not to be unreasonably withheld,
conditioned or delayed.  If such expert
determines that WorldGate’s financial terms are commercially reasonable, then
Aequus shall be obligated to accept the financial terms of the last proposal
made by WorldGate. If such expert determines that WorldGate’s terms are not
commercially reasonable, and that Aequus’s terms are commercially reasonable,
then WorldGate shall be obligated to accept the financial terms of the last
proposal made by Aequus.  The decision of
the expert shall be final and binding on the parties, and the proposal determined
to be commercially reasonable, together with the amendments to each Related
Document submitted by the prevailing party, shall be immediately executed and
delivered by the parties and each party shall become bound thereby.  All work to be performed pursuant to a
Mandated SOW shall be given priority by WorldGate over any and all other work
for which WorldGate may then be obligated.

 

iii.                                    For purposes of this
Agreement, the procedures set forth in clauses (i), (ii) and (iii) are
referred to as the “SOW Procedure”.

 

(c)                                  Provided that
Aequus has paid the Initial Payment and remains current in its payments of the
Monthly Rights Fee, in accordance with the terms and conditions of the Master
Agreement between the Parties, WorldGate will provide Aequus with NRE Services
having a value of $75,000 dollars per month (based on the Fully Loaded Cost, as
defined below), for a period of twelve months, commencing with the month
following the Closing.  Thereafter,
Aequus shall pay for all NRE Services at the Fully Loaded Cost.  If Aequus requires less than $75,000 in NRE
services during any month of the initial twelve-month period, or in the
aggregate less than $900,000 in NRE Services for the entire twelve-month
period, WorldGate shall credit such unused amount against future NRE invoices
payable by Aequus hereunder, but in no event shall any unused amounts be
payable in cash to Aequus.  All SOWs
shall provide that NRE services shall be invoiced at Fully Loaded Cost.  “Fully Loaded Cost” as used herein means the
direct compensation charges (including fringe benefits) for actual time devoted
to performance of services, multiplied by a factor of 1.2 for overhead or such
other overhead factor reasonably determined by OJO’s internal accounting in
accordance with GAAP.  Aequus shall also
pay actual out-of-pocket expenses of WorldGate budgeted for and agreed to in
each SOW, including, without limitation, costs of equipment, license fees,
software, tools and materials consumed or actually used in providing such
services.

 

14

 

5.4                                  Section 3,
OJO TECHNOLOGY, is hereby deleted in its entirety.

 

5.5                                 The third sentence of Section 4,
CHARGES AND PAYMENTS, is hereby amended to read in its entirety as follows: “AEQUUS
will be invoiced at such times as are specified in the relevant SOW.”

 

5.6                                 The fifth sentence of Section 4,
CHARGES AND PAYMENTS, is hereby amended to read in its entirety as follows:

 

Disputes with respect to invoiced amounts under any SOW shall be deemed
waived if not raised in writing within thirty (30) days following completion of
all Services under such SOW except to the extent reserved as part of the NRE
claim (as described in the Master Agreement).

 

5.7                                 The first sentence of Section 5,
TERMINATION, is hereby amended to read in its entirety as follows:

 

This entire Agreement and/or any individual SOW hereunder may be
terminated under the following conditions and in the manner specified: (i) ten
(10) days following notice by OJO of non-payment of any amount due
hereunder or thirty (30) days following notice of any other material breach
from the injured party, if such breach has not been cured within the applicable
time period, (ii) immediately upon written notice, in the event that
either party files for bankruptcy or for some similar process of protection
against creditors or (iii) as may be mutually agreed in writing.

 

5.8                                 Section 8,
SEVERABILITY, Section 9, FORCE MAJEURE; Section 10, NOTICES; and Section 11,
GOVERNING LAW AND VENUE are hereby amended in their entirety as follows:

 

8.  SEVERABILITY.  If any part of this Agreement shall be
adjudged by any court of competent jurisdiction to be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not be affected or impaired thereby and shall be enforced to
the maximum extent permitted by applicable law.  If any remedy set forth
in this Agreement is determined to have failed of its essential purpose, then
all other provisions of this Agreement, including the limitations of liability
and exclusion of damages, shall remain in full force and effect.

 

9.  FORCE MAJEURE.  Either Party shall be excused from
performance and shall not be liable for any delay, in whole or in part, caused
by the occurrence of any contingency beyond the reasonable control either of
the excused Party or its subcontractors or suppliers.  These contingencies
include, but are not limited to, war, sabotage, insurrection, riot or other act
of civil disobedience, act of public enemy, failure or delay in transportation,
act of any government or any agency or subdivision thereof affecting the terms
hereof, accident, fire, explosion, flood, severe weather or other act of God,
or shortage of labor or fuel or raw materials.

 

15

 

10.  NOTICES.  All notices, requests, demands, consents or
waivers and other communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given immediately upon delivery
by hand or by electronic transmission (e.g., email or facsimile with immediate
confirmation), one (1) business day after being sent if by nationally
recognized overnight courier or, if mailed, then four (4) days after being
sent by certified or registered mail, return receipt requested with postage
prepaid:

 

(i)                                     If to WorldGate, to:

 

WorldGate Communications, Inc.

3190 Tremont Avenue

Trevose, PA 19355

 

Attention:  Hal Krisbergh, CEO and President

Telecopy:  215-354-1049

Email: hkrisbergh@wgate.com

 

with a copy to:

 

Randall Gort, CLO at the same address and telecopy
number

Email: rgort@wgate.com

 

(ii)           If
to AEQUUS, to:

 

Snap Telecommunications Inc.

1 Blue Hill Plaza, 14th Floor

PO Box 1626

Pearl River, NY  10965

 

Attention: Richard Schatzberg, President

Telecopy: (973) 227-5400

Email: rschatzberg@aequustechnologies.com

 

with a copy to:

 

Pryor Cashman LLP

410 Park Avenue

New York, New York 10022

 

Attention: Eric M. Hellige, Esq.

Telecopy: (212) 326-0806

Email: ehellige@pryorcashman.com

 

or, in each case, to such other person or address as any Party shall
furnish to the other Parties in writing.

 

16

 

11.  GOVERNING LAW.  The Parties acknowledge and agree that
this Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania as to all matters including, but not limited to, matters of
validity, construction, effect, performance and liability, without
consideration of conflicts of laws provisions contained therein.  In the event of any dispute between the
Parties, (a) if suit shall be brought by Aequus, it shall be brought either
in the United States District Court for the Eastern District of Pennsylvania or
any state court of the Commonwealth of Pennsylvania and (b) if suit shall
be brought by WorldGate, it shall be brought in the either in the United States
District Court for the Southern District of New York or any state court of the
state of New York.  Each of the Parties
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.

 

5.9                                 There shall be added
following Section 11, GOVERNING LAW, the following provisions:

 

12.  ENTIRE
AGREEMENT; AMENDMENTS.  This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof and supersedes
all prior proposals, understandings, and agreements, whether oral or written
between the Parties with respect to the subject matter hereof.  No
modification, amendment or supplement to this Agreement shall be effective for
any purpose unless agreed to in writing and signed by authorized
representatives of the Parties.

 

13.  WAIVER. 
No failure to exercise, and no delay in exercising, on the part of either
Party, any right, power or privilege hereunder will operate as a waiver
thereof, nor will any Party’s exercise of any right, power or privilege
hereunder preclude further exercise of the same right or the exercise of any
other right hereunder.

 

14.  BINDING.  This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the Parties hereto and
their respective successors and permitted assigns.

 

15.  COUNTERPARTS. 
This Agreement may be executed simultaneously in two or more original or
facsimile counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

 

16.  NO CROSS
DEFAULT.  A breach or other default under this Agreement by either Party shall
not constitute a breach or default under any other agreement between the
Parties.

 

17

 

17.  THIRD
PARTIES.  Except as specifically set forth or referred to herein, nothing
herein expressed or implied is intended or shall be construed to confer upon or
give to any person or corporation other than the Parties hereto and their
respective successors or assigns any rights or remedies under or by reason of
this Agreement.

 

18.  ASSIGNMENT. 
Unless otherwise expressly provided in this Agreement, neither Party may assign
its rights (other than the right to receive payments) or delegate its duties
and obligations under this Agreement without the prior written consent of the
other Party, which will not be unreasonably withheld or delayed; provided,
however, that either Party may assign this Agreement, without the need to
obtain consent of the other Party, to an Affiliate of such Party or to a
successor-in-interest to substantially all of the business of that Party to
which this Agreement relates by providing written notice to the other Party of
such permitted assignee’s agreement to be bound by the terms of this Agreement
and to assume all of the rights and obligations of the assigning Party set
forth in this Agreement; provided, however, that in no event
shall either Party assign this Agreement to an Affiliate or Successor who the
Parties agree in writing is a Competitor of the other Party.  Any
assignment made in violation of the foregoing provisions shall be deemed null
and void and of no force or effect.

 

19.  NO
PRESUMPTION.  Each of the Parties have all participated in the negotiation
and drafting of this Agreement and each has been represented throughout to
their satisfaction by legal counsel of their choosing.  In the event any
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the Parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship
of any of the provisions of this Agreement.

 

20.  HEADINGS AND
SUBSECTIONS.  Section headings are provided for convenience of
reference and do not constitute part of this Agreement.  Any references to
a particular section of this Agreement shall be deemed to include reference to
any and all subsections thereof Survival of Obligations.  The
provisions of Sections that, by their nature or as explicitly stated, are to
survive termination of this Agreement shall survive termination hereof.

 

21.  GENDER; TENSE,
ETC  Where the context or construction requires, all words applied in the
plural shall be deemed to have been used in the singular, and vice versa; the
masculine shall include the feminine and neuter, and vice versa; and the
present tense shall include the past and future tense, and vice versa.

 

22.  REFERENCE TO
DAYS.  All references to days in this Agreement shall be deemed to refer
to calendar days, unless otherwise specified.

 

5.10                           The Statement of Work -
Software Enhancements for Interoperability dated June 6, 2006, which has
been closed as the result of the completion of all required 

 

18

 

activities
was previously amended to (i) waive payments C and D under the section
entitled Required NRE Payments, and (ii) elimination of requirements of
section entitled POTENTIAL RECOVERY OF PORTION OF NRE PAYMENTS and (iii) provide
that OJO, will, to the extent reasonably feasible, work with Aequus to allow
the OJO video phone to take advantage of WorldGate proprietary compression
schemes with the Snap!VRS ACD.  It is
understood, however, that there will be no disclosure, directly or indirectly,
of this proprietary technology to Aupix.

 

5.11                           There shall be added after
EXHIBIT 1 – STATEMENT OF WORK – SOFTWARE ENHANCEMENTS FOR INTEROPERABILITY,
JUNE 6, 2006, which is incorporated by reference into the Professional Services
Agreement, EXHIBIT 2, FORM OF STATEMENT OF WORK in the form annexed to
this Revised Amendment as Appendix 1.

 

6.                                       Miscellaneous
Provisions

 

(a)        Notices.
 All notices, requests, demands, consents or waivers and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given immediately upon delivery by hand or by
electronic transmission (e.g., email or facsimile with immediate confirmation),
one (1) business day after being sent if by nationally recognized
overnight courier or, if mailed, then four (4) days after being sent by
certified or registered mail, return receipt requested with postage prepaid:

 

(i)   If to
WorldGate, to:

 

WorldGate Communications, Inc.

3190 Tremont Avenue

Trevose, PA 19355

 

Attention:  Hal Krisbergh, CEO and President

Telecopy:  215-354-1049

Email: hkrisbergh@wgate.com

 

with a copy to:

 

Randall Gort, CLO at the same address and telecopy
number

Email: rgort@wgate.com

 

(ii)                                  If to AEQUUS,
to:

 

Snap Telecommunications Inc.

1 Blue Hill Plaza, 14th Floor

PO Box 1626

Pearl River, NY  10965

 

Attention: Richard Schatzberg, President

Telecopy: (973) 227-5400

Email: rschatzberg@aequustechnologies.com

 

19

 

with a copy to:

 

Pryor Cashman LLP

410 Park Avenue

New York, New York 10022

 

Attention: Eric M. Hellige, Esq.

Telecopy: (212) 326-0806

Email: ehellige@pryorcashman.com

 

or,
in each case, to such other person or address as any party shall furnish to the
other parties in writing.

 

(b)        Binding. 
This Agreement and all of the provisions hereof shall be binding upon and inure
to the benefit of the Parties hereto and their respective successors and
permitted assigns.

 

(c)        Assignment. 
Unless otherwise expressly provided in this Agreement, neither Party may assign
its rights (other than the right to receive payments) or delegate its duties
and obligations under this Agreement without the prior written consent of the
other Party, which will not be unreasonably withheld or delayed; provided,
however, that either Party may assign this Agreement, without the need to
obtain consent of the other Party, to an Affiliate of such Party or to a
successor-in-interest to substantially all of the business of that Party to
which this Agreement relates by providing written notice to the other Party of
such permitted assignee’s agreement to be bound by the terms of this Agreement
and to assume all of the rights and obligations of the assigning Party set
forth in this Agreement; provided, however, that in no event
shall either Party assign this Agreement to an Affiliate or Successor who is a
Competitor of the other Party.  Any assignment made in violation of the
foregoing provisions shall be deemed null and void and of no force or effect.

 

(d)        Severability. 
If any part of this Agreement shall be adjudged by any court of competent
jurisdiction to be invalid, illegal, or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not be affected or
impaired thereby and shall be enforced to the maximum extent permitted by
applicable law.  If any remedy set forth in this Agreement is determined
to have failed of its essential purpose, then all other provisions of this
Agreement, including the limitations of liability and exclusion of damages,
shall remain in full force and effect.

 

(e)        Governing
Law.  The Parties acknowledge and agree that this Agreement shall be
governed by the laws of the Commonwealth of Pennsylvania as to all matters
including, but not limited to, matters of validity, construction, effect,
performance and liability, without consideration of conflicts of laws
provisions contained therein.  In the event of any dispute between the
Parties, (a) if suit shall be brought by Aequus, it shall be brought
either in the United States District Court for the Eastern District of
Pennsylvania or any state court of the Commonwealth of Pennsylvania and (b) if
suit shall be brought by WorldGate, it shall be 

 

20

 

brought
in the either in the United States District Court for the Southern District of
New York or any state court of the state of New York.  Each of the Parties waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to
the laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.

 

(f)         Counterparts. 
This Agreement may be executed simultaneously in two or more original or
facsimile counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

 

(g)        Entire
Agreement; Amendments.  This Agreement constitutes the entire
agreement between the Parties with respect to the subject matter hereof and
supersedes all prior proposals, understandings, and agreements, whether oral or
written between the Parties with respect to the subject matter hereof.  No
modification, amendment or supplement to this Agreement shall be effective for
any purpose unless agreed to in writing and signed by authorized
representatives of the Parties.

 

(h)        Waiver. 
No failure to exercise, and no delay in exercising, on the part of either
Party, any right, power or privilege hereunder will operate as a waiver
thereof, nor will any Party’s exercise of any right, power or privilege
hereunder preclude further exercise of the same right or the exercise of any
other right hereunder.

 

(i)         Third
Parties.  Except as specifically set forth or referred to herein,
nothing herein expressed or implied is intended or shall be construed to confer
upon or give to any person or corporation other than the Parties hereto and
their respective successors or assigns any rights or remedies under or by
reason of this Agreement.

 

(j)         No
Presumption.  The Sellers and the Purchaser have all participated in
the negotiation and drafting of this Agreement and have each been represented
throughout to their satisfaction by legal counsel of their choosing.  In
the event any ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.

 

(k)        Force
Majeure.  Either Party shall be excused from performance and shall not
be liable for any delay, in whole or in part, caused by the occurrence of any
contingency beyond the reasonable control either of the excused Party or its
subcontractors or suppliers.  These contingencies include, but are not
limited to, war, sabotage, insurrection, riot or other act of civil
disobedience, act of public enemy, failure or delay in transportation, act of
any government or any agency or subdivision thereof affecting the terms hereof,
accident, fire, explosion, flood, severe weather or other act of God, or
shortage of labor or fuel or raw materials.

 

(l)         No
Cross Default.  A breach or other default under this Agreement by
either Party shall not constitute a breach or default under any other agreement
between the Parties.

 

21

 

(m)       Headings
and Subsections.  Section headings are provided for convenience
of reference and do not constitute part of this Agreement.  Any references
to a particular section of this Agreement shall be deemed to include reference
to any and all subsections thereof

 

(n)        Survival
of Obligations.  The provisions of Sections that, by their nature or
as explicitly stated, are to survive termination of this Agreement shall
survive termination hereof.

 

(o)        Gender;
Tense, Etc  Where the context or construction requires, all words
applied in the plural shall be deemed to have been used in the singular, and
vice versa; the masculine shall include the feminine and neuter, and vice
versa; and the present tense shall include the past and future tense, and vice
versa.

 

(p)        Reference
to Days.  All references to days in this Agreement shall be deemed to
refer to calendar days, unless otherwise specified.

 

[Signatures on following page.]

 

22

 

IN WITNESS WHEREOF, the authorized representatives
of the parties hereto have duly executed this Revised Amendment on behalf of
the parties on the date first written above.

 

 

	
  Aequus
  Technologies, Corp.

  	
   

  	
  OJO Service LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name:

  	
  Richard
  Schatzberg

  	
   

  	
  Name:

  	
  Hal Krisbergh

  
	
  Address:

  	
  1 Blue Hill
  Plaza, 14th Floor

  	
   

  	
  Address:

  	
  3190 Tremont
  Avenue

  
	
   

  	
  PO Box 1626

  	
   

  	
   

  	
  Suite 100

  
	
   

  	
  Pearl River,
  NY  10965

  	
   

  	
   

  	
  Trevose, PA  19020

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Chief Executive
  Officer

  	
   

  	
  Title:

  	
  Chief Executive
  Officer

  
	
  Tel.:

  	
  845-652-7101

  	
   

  	
  Tel.:

  	
  215-354-5100

  
	
  Fax::

  	
  845-652-7109

  	
   

  	
  Fax::

  	
  215-354-1049

  
	
  E-mail:

  	
  rschatzberg@aequustechnologies.com

  	
   

  	
  E-Mail:

  	
  hkrisbergh@wgate.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Snap
  Telecommunication Inc.

  	
   

  	
  WorldGate
  Communications, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   Name:

  	
  Richard
  Schatzberg

  	
   

  	
  Name:

  	
  Hal Krisbergh

  
	
   Address:

  	
  1 Blue Hill
  Plaza, 14th Floor

  	
   

  	
  Address:

  	
  3190 Tremont
  Avenue

  
	
   

  	
  PO Box 1626

  	
   

  	
   

  	
  Suite 100

  
	
   

  	
  Pearl River,
  NY  10965

  	
   

  	
   

  	
  Trevose, PA  19020

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Chief Executive
  Officer

  	
   

  	
  Title:

  	
  Chief Executive
  Officer

  
	
  Tel.:

  	
  845-652-7101

  	
   

  	
  Tel.:

  	
  215-354-5100

  
	
  Fax::

  	
  845-652-7109

  	
   

  	
  Fax::

  	
  215-354-1049

  
	
  E-mail:

  	
  rschatzberg@aequustechnologies.com

  	
   

  	
  E-Mail:

  	
  hkrisbergh@wgate.com

  

 

23

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