Document:

EXECUTION
VERSION

    

    MASTER
SERVICE AGREEMENT

     

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

     

    Recitals:

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

    
      
         

      

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

     

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

     

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

     

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

     

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

     

    “FCC” means the United
States Federal Communications Commission.

     

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

     

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

     

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

    
      
         

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

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

     

    “Services” means VoIP
telephony and video services.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
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    3.     Licenses for
Solution.

     

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

     

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

     

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

     

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

     

    5.     CPE.

     

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

    
      
         

      

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

     

    6.     Pricing.

     

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

     

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

     

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

     

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

    
      
         

      

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

     

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

     

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

     

    d.     Invoices.

     

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

     

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

     

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

    
      
         

      

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

     

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

     

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

     

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

     

    9.     D3
Operational Responsibilities.

     

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

    
      
         

      

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

     

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

     

    10.   Legal
& Regulatory Compliance.

     

    a.     Compliance with
Laws.

     

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

     

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

     

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

     

    
      	
               
      

            	
              (1)

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

            

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (2)

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

            

    

     

    
      	
               
      

            	
              (3)

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

            

    

     

    
      	
               
      

            	
              (4)

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

            

    

     

    
      	
               
      

            	
              (5)

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

            

    

     

    
      	
               
      

            	
              (6)

            	
              complying
      with local number portability requirements under applicable
      Law;

            

    

     

    
      	
               
      

            	
              (7)

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

            

    

     

    
      	
               
      

            	
              (8)

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

            

    

     

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

     

    b.     Processing of Personal
Data.

     

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

     

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

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

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

     

    
      	
               
      

            	
              (1)

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

            

    

     

    
      	
               
      

            	
              (2)

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

            

    

     

    
      	
               
      

            	
              (3)

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

            

    

     

    
      	
               
      

            	
              (4)

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

            

    

     

    
      	
               
      

            	
              (5)

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

            

    

     

    
      	
               
      

            	
              (6)

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

            

    

     

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

     

    
      	
               
      

            	
              (1)

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

            

    

     

    
      	
               
      

            	
              (2)

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

            

    

     

    
      	
               
      

            	
              (3)

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

            

    

     

    
      	
               
      

            	
              (4)

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

            

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (5)

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

            

    

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

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

     

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

     

    12.   Ownership
of Subscriber

     

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

     

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

     

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

     

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

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

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

     

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

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

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

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

    b.     Termination for Material
Adverse Changes.

     

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

     

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

     

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

     

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

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    15.   Effect of
Termination.

     

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

     

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

     

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

     

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

     

    16.   Representations
and Warranties.

     

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

     

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

     

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

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

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

     

    b.     D3
represents and warrants to OJO that

     

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

     

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

     

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

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

    17.   Taxes and
Applicable Fees.

     

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

     

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

     

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

     

    18.   Licenses
Regarding Intellectual Property.

     

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

     

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

    
      
         

      

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

     

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

     

    e.     Ownership of Intellectual
Property.

     

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

    
      
         

      

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

     

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

     

    19.   Indemnification.

     

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

    
      
         

      

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

     

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

     

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

     

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

    
      
         

      

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

     

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

     

    20.   Limitation
of Liability.

     

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

     

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

    
      
         

      

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

     

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

     

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

     

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

     

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

    

     

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

     

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

     

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

    
      
         

      

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

     

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

     

    
      23.
  Confidentiality.

    

     

    a.     Use of Confidential
Information.

     

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

     

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

     

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

    
      
         

      

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

     

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

     

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

    
      
         

      

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

     

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

     

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

     

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

    
      
         

      

      
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      26. 
General.

    

     

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

     

    (i)           If
to OJO, to:

    3190
Tremont Avenue

    Trevose,
Pennsylvania 19053

    Attn:
Lori T. Sofianek

    e-mail:
lsofianek@wgate.com

    Fax:      (215)
354-1049

    

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

    

    General
Counsel

    e-mail:
cvitale@wgate.com

    Fax:      (215)
354-1049

     

    (ii)          If
to D3, to:

    Jerusalem
Technology Park – Bldg. #9

    P.O. Box
48265, Jerusalem 91481, Israel

    Attn:    
Effi Baruch

    e-mail:  effi.baruch@deltathree.com

    Fax:      011.972.2.649.1200

     

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

    

    General
Counsel

    e-mail: 
peter.friedman@deltathree.com

    Fax
:     011.972.2.649.1200

     

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

    
      
         

      

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

     

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

     

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

     

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

     

    f.      Construction and
Interpretation.

     

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

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

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

     

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

     

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

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

     

    [SIGNATURE
PAGE TO FOLLOW]

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

     

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

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            DELTATHREE,
      INC.

                                          
	 
      	 
      	 
      
	      
                                            By:

                                          	
                                            /s/ Effi Baruch

                                          
	 
      	Name:  Effi
      Baruch
	 
      	Title:
      Chief Executive Officer
	 
      	 
      	 
      	 
      
	
                                            OJO
      SERVICE LLC

                                          
	 
      	 
      
	By:
      WorldGate Communications, Inc., its sole member
	 
      	 
      	 
      	 
      
	 
      	      
                                            By:

                                          	/s/ George E. Daddis
	 
      	 
      	Name:
      George E. Daddis
	 
      	 
      	Title:
      Chief Executive Officer and
PresidentUnassociated Document

    

      EXECUTION
VERSION

    

     

    SERVICES
AGREEMENT

     

    This
Services Agreement (this “Agreement”), dated as of
October 12, 2009, is entered into by and between ACN, Inc., a Michigan
corporation (“ACN”), and
WorldGate Communications, Inc., a Delaware corporation (“WorldGate”). Each of ACN and
WorldGate are sometimes hereinafter referred to as a “Party” and collectively as the
“Parties.”

     

    WITNESSETH:

     

    WHEREAS,
in connection with certain commercial and other relationships between WorldGate
and ACN, ACN desires to provide, and WorldGate desires to receive,
and  WorldGate desires to provide, and ACN desires to receive, certain
products and services, that each may provide or receive from the other from time
to time, on such terms and conditions as set forth herein.

     

    NOW
THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:

     

    ARTICLE
I

     

    AGREEMENT TO PROVIDE
PRODUCTS AND SERVICES

     

    1.1          Definitions.  When
used in this Agreement, the following terms shall have the meanings assigned to
them in this Section 1.1.

     

    (a)           “ACN Entities” means ACN and
its direct or indirect subsidiaries.

     

    (b)           “Loss” means any and all
liabilities, damages, claims, losses, charges, fines, actions, suits,
proceedings, deficiencies, taxes, interest, penalties and reasonable costs and
expenses (including without limitation reasonable attorney’s fees and
disbursements).

     

    (c)           “Provider” means a WorldGate
Entity or an ACN Entity, as the case may be, when such party is providing
Services (as defined below) pursuant to the terms of this
Agreement.

     

    (d)           “Recipient” means a WorldGate
Entity or an ACN Entity, as the case may be, when such party is receiving
Services pursuant to the terms of this Agreement.

     

    (e)           “Related Persons” mean
directors, officers, employees, representatives, members, shareholders,
partners, attorneys, accountants, agents, heirs, successors and
assigns.

     

    (f) 
          “WorldGate Entities” means
WorldGate and its direct or indirect subsidiaries.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    1.2           The
ACN Entities shall provide to the applicable WorldGate Entity the products and
services set forth on Annex A hereto (the “ACN
Services”).  Annex A may be amended from time to time to add
any additional products or services reasonably requested by WorldGate (in which
event such products or services shall be added as ACN Services subject to the
terms and conditions of this Agreement) or to modify or delete ACN
Services.  Product and service upgrades and improvements that the ACN
Entities provide to its own internal organization shall be made available to the
WorldGate Entities to the extent that the Parties mutually agree upon the price
of any such upgrade or improvement.

     

    1.3           The
WorldGate Entities shall provide to the applicable ACN Entities the products and
services set forth on Annex B hereto (the “WorldGate Services” and
together with the ACN Services, the “Services”). Annex B may be
amended from time to time to add any additional products or services reasonably
requested by ACN (in which event such products or services shall be added as
WorldGate Services subject to the terms and conditions of this Agreement) or to
modify or delete WorldGate Services.  Product and service upgrades and
improvements that the WorldGate Entities provide to its own internal
organization shall be made available to the ACN Entities to the extent that the
Parties mutually agree upon the price of any such upgrade or
improvement.

     

    1.4           The
Parties have set forth on Annex A and Annex B the time period during which the
Services will be provided (if different from the term of the Agreement as set
forth in Section 3.1), a description of the Service to be provided, the fee, if
any, for such Service (the “Applicable Fee”), which shall
not be greater than the good faith estimate of fair market value for such
Service as determined by the mutual consent of the Parties, and any other terms
applicable thereto.

     

    1.5           Each
Provider shall provide the Services with the same degree of skill, attention and
care as it exercises in performing the same or similar services for itself.
Except as set forth in this Section 1.5 and as explicitly provided in any Annex
to this Agreement, no Provider makes any warranties, express or implied, with
respect to the Services to be provided by such Provider pursuant to this
Agreement.

     

    1.6           Except
as set forth in any Annex to this Agreement, all employees and representatives
of the Provider shall be deemed for purposes of all compensation and employee
benefits matters to be employees or representatives of such Provider and not
employees or representatives of the Recipient.  Except as set forth in
any Annex to this Agreement, in performing the Services, such employees and
representatives shall be under the direction, control and supervision of the
Provider (and not the Recipient) and the Provider shall have the sole right to
exercise all authority with respect to the employment (including termination of
employment), assignment and compensation of such employees and
representatives.

     

    1.7           Nothing
in this Agreement shall preclude a Recipient from obtaining, in whole or in
part, services of any nature that may be obtainable from the Provider, from its
own employees or from providers other than the Provider.

     

    1.8           In
providing the Services, the Provider, as it deems necessary or appropriate in
its reasonable judgment, may (a) use the personnel of the Provider and (b)
employ the services of third parties to the extent such third party services are
routinely utilized to provide similar services to other businesses of the
Provider or are reasonably necessary for the efficient performance of any of
such Services. The Provider will only employ the services of third parties who
have entered into non-disclosure agreements that obligate such third parties to
maintain the confidentiality of the Recipient’s confidential information and
that prohibit the third party from using such confidential information for any
purpose other than in connection with providing the Services. The Recipient may
retain at its own expense its own consultants and other professional
advisers.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    1.9           If
there is an unavoidable conflict between the immediate needs of the Provider and
those of the Recipient as to the use of or access to a particular Service to be
provided by the Provider, the Provider shall have the right, in its sole
discretion, to establish reasonable priorities, at particular times and under
particular circumstances, as between the Provider and the Recipient. In any such
situation, the Provider shall provide notice to the Recipient of the
establishment of such priorities at the earliest practicable time.

     

    1.10         The
Recipient shall, in a timely manner, take all such actions as may be reasonably
necessary or desirable in order to enable or assist the Provider in the
Provider’s provision of Services, including providing necessary information and
specific written authorizations and consents, and the Provider shall be relieved
of its obligations hereunder to the extent that the Recipient’s failure to take
any such action renders performance by the Provider of such obligations unlawful
or impracticable.

     

    ARTICLE
II

     

    Compensation;
Payment.

     

    2.1           As
consideration for the provision of the Services, the Recipient shall, for each
Service performed, pay the Provider the Applicable Fee for such Service set
forth in Annex A or Annex B, as the case may be. In addition to the Applicable
Fee, the Provider shall also be entitled to reimbursement from the Recipient
upon receipt of reasonable supporting documentation for all reasonable and
necessary out-of-pocket expenses incurred in connection with the Provider’s
provision of the Services that are not included as part of the Applicable Fee
(“Expenses”).  In the
event the Service is terminated, the Applicable Fee will be prorated for the
number of days of Service received in the calendar month (based on a thirty day
month) in which the Service is terminated.

     

    2.2           Annex
A or Annex B, as the case may be, will set forth the timing for the submission
of invoices for the Applicable Fee and Expense for any Services and the payment
terms applicable to each such invoice.  Each invoice shall include a
summary list of the previously agreed upon Services for which there is an
Applicable Fee together with such documentation as may reasonably be required by
the Recipient to verify the amount of any Expenses and that such Expenses were
incurred in connection with providing the Services.  Payment of all
invoices in respect of Services and Expenses shall be made by check or
electronic funds transmission in U.S. Dollars. All payments shall be made to the
account designated in the invoice by the Provider to the
Recipient.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    ARTICLE
III

     

    Term;
Termination.

     

    3.1           Subject
to the further provisions of this Article III and except as expressly provided
with respect to a specific Service in Annex A or Annex B, this Agreement shall
commence on the date first set forth above and terminate, unless renewed
pursuant to the following sentence, one (1) year thereafter.  This
Agreement will automatically renew for successive one-year terms, unless one
party delivers to the other party a notice of its intention to terminate this
Agreement not less than sixty (60) days prior to the end of the then-current
term.

     

    3.2           Notwithstanding
anything to the contrary contained herein or in Annex A or Annex B, the
Recipient may terminate any individual Service on a Service-by-Service basis
(and/or location-by-location basis where an individual Service is provided at
multiple locations of Recipient) upon prior written notice to the Provider
identifying the particular Service (or location) to be terminated and the
effective date of termination, which date shall be not less than thirty (30)
days after receipt of such notice.

     

    3.3           This
Agreement may be terminated as to all of the Services prior to the expiration of
the term of this Agreement as set forth in Section 3.1, upon written notice as
set forth below:

     

    (a)           by
the Provider, if the Recipient fails to pay any invoice within ninety (90) days
following the date when payment of such invoice is due unless the Recipient is
disputing such invoice in good faith; or

     

    (b)           by
either Party, if the other Party commits a material breach of any provision of
this Agreement and such material breach continues for a period of thirty (30)
days following a written request to cure such breach.

     

    3.4           Following
any termination of this Agreement, each Provider shall cooperate in good faith
with the Recipient to transfer records and take all other actions reasonably
requested by the Recipient to enable the Recipient to make alternative
arrangements for the provision of products or services substantially consistent
with the Services provided pursuant to this Agreement.

     

    3.5           Each
Recipient specifically agrees and acknowledges that all obligations of the
Provider to provide each Service for which the Provider is responsible hereunder
shall immediately cease upon the termination of this Agreement. Upon the
cessation of the Provider’s obligation to provide any Service, the Recipient
shall immediately cease using, directly or indirectly, such Service (including
any and all software of the Provider or third party software provided through
the Provider, telecommunications services or equipment, or computer systems or
equipment).

     

    3.6           Upon
termination of a Service with respect to which the Provider holds books, records
or files, including current or archived copies of computer files, owned by the
Recipient and used by the Provider in connection with the provision of a Service
to the Recipient, the Provider will return all of such books, records or files
as soon as reasonably practicable; provided, however, that the
Provider may make a copy, at its expense, of such books, records or files for
archival purposes only.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    ARTICLE
IV

     

    Liability and
Indemnity.

     

    4.1           Each
Provider’s maximum liability to, and the sole remedy of, the Recipient for
breach of this Agreement or otherwise with respect to Services is a refund of
the price paid for the particular Service or, at the option of the Recipient, a
redelivery (or delivery) of the Service, unless the breach arises out of the bad
faith, gross negligence, fraud or willful misconduct of the
Provider.

     

    4.2           The
Provider hereby agrees to indemnify, defend and hold the Recipient and its
Related Persons harmless from and against Losses incurred by the Recipient,
resulting from any demand, claim, lawsuit, action or proceeding for a breach by
Provider of any representation, warranty, covenant or agreement contained in
this Agreement (including any Annex to this Agreement) or for bad faith, gross
negligence, fraud or willful misconduct of the Provider.  The
Provider’s liability under this Section 4.2 shall be subject to the provisions
of Section 4.4.

     

    4.3           The
Recipient hereby agrees to indemnify, defend and hold the Provider and its
Related Persons harmless from and against Losses incurred by the Provider,
resulting from any demand, claim, lawsuit, action or proceeding relating to any
such person’s conduct in connection with the Provider’s provision of Services to
the Recipient under this Agreement, provided that such conduct was expressly
required by this Agreement or by the Recipient’s direction and did not
constitute bad faith, gross negligence, fraud or willful misconduct or breach of
this Agreement by the Provider.  The Recipient’s liability under this
Section 4.3 shall be subject to the provisions of Section 4.4.

     

    4.4           Notwithstanding
anything in this Agreement or any Annex to the contrary, neither the Provider
nor the Recipient shall be liable for any special, incidental or consequential
damages of any kind whatsoever, including but not limited to loss of profits,
business interruptions and claims of customers.

     

    4.5           Notice Of
Claims.

     

    (a)           ACN
agrees to notify WorldGate promptly in writing upon the receipt by any ACN
Entity of notice of any pending or threatened claim or proceeding, including
without limitation any audit or assessment with respect to taxes, which arise
out of, in connection with or result from the activities contemplated hereby for
which any WorldGate Entity has agreed to indemnify any ACN Entity or their
respective Related Persons.  ACN further agrees to reasonably
cooperate and assist and to instruct its employees, counsel and advisors to
reasonably assist the WorldGate Entities in the defense of such claims or
proceedings to the extent permitted by applicable law.  The WorldGate
Entities shall be entitled to participate, at its expense, in the defense of its
interest in any such claim or proceeding.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (b)           WorldGate
agrees to notify ACN promptly in writing upon the receipt by any WorldGate
Entity of notice of any pending or threatened claim or proceeding, including
without limitation any audit or assessment with respect to taxes, which arise
out of, in connection with or result from the activities contemplated hereby for
which any ACN Entity has agreed to indemnify any WorldGate Entity or their
respective Related Persons.  WorldGate further agrees to reasonably
cooperate and assist and to instruct its employees, counsel and advisors to
reasonably assist the ACN Entities in the defense of such claims or proceedings
to the extent permitted by applicable law.  The ACN Entities shall be
entitled to participate, at its expense, in the defense of its interest in any
such claim or proceeding.

    

    ARTICLE
V

     

    Miscellaneous.

     

    5.1           Proprietary
Information. Each Party agrees to maintain, and shall cause its direct
and indirect subsidiaries and its and their Related Persons to maintain, the
confidentiality of all non-public information relating to the other Party, its
direct and indirect subsidiaries, its affiliates or any third party that may be
disclosed by a Party, its direct and indirect subsidiaries, its affiliates or
any third party to the other Party or its direct and indirect subsidiaries in
connection with the performance of the Services hereunder and to use such
information solely for the purposes of providing or receiving the Services
hereunder; provided that, either Party or
its direct and indirect subsidiaries and its and their Related Persons may make
such disclosure if required by law or the rules of any securities exchange or
market.  Each Party and its direct and indirect subsidiaries shall
retain the entire right, interest and title to its proprietary
information.  No license under any patent, copyright, trademark, other
intellectual property right or any application therefor, is hereby granted or
implied by the provision of Services to the Recipient.

     

    5.2           Amendments and
Waivers.  Any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and is signed, in
the case of an amendment, by each Party to this Agreement, or in the case of a
waiver, by the Party against whom the waiver is to be effective. No failure or
delay by any Party in exercising any right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. To the maximum extent permitted by Law, (a) no waiver that may be
given by a Party shall be applicable except in the specific instance for which
it was given and (b) no notice to or demand on one Party shall be deemed to be a
waiver of any obligation of such Party or the right of the Party giving such
notice or demand to take further action without notice or demand.

     

    5.3           Assignment.  Neither
this Agreement nor any of the rights and obligations of the Parties hereunder
may be assigned by either of the Parties hereto without the prior written
consent of the other Party hereto, except that an assignment by operation of law
in connection with a merger or consolidation shall not require the consent of
the other Party hereto. Notwithstanding the foregoing, each of the Parties shall
remain liable for all of their respective obligations under this Agreement.
Subject to the first sentence of this Section 5.3, this Agreement shall be
binding upon and inure to the benefit of the Parties hereto and their respective
successors and permitted assigns and no other person shall have any right,
obligation or benefit hereunder. Any attempted assignment or transfer in
violation of this Section 5.3 shall be void.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    5.4           Entire Agreement.
This Agreement, the Annexes and the documents, instruments and other agreements
specifically referred to herein or delivered pursuant hereto, set forth the
entire understanding of the Parties hereto with respect to the subject matter
hereof.  Any and all previous agreements and understandings between or
among the Parties regarding the subject matter hereof, whether written or oral,
are superseded by this Agreement.

     

    5.5           Notices.  Any
notice, request, demand, waiver, consent, approval or other communication which
is required or permitted hereunder shall be in writing and shall be deemed given
(a) on the date established by the sender as having been delivered personally,
(b) on the date delivered by a private courier as established by the sender by
evidence obtained from the courier, (c) on the date sent by facsimile, with
confirmation of transmission, if sent during normal business hours of the
recipient, if not, then on the next business day, or (d) on the fifth day after
the date mailed, by certified or registered mail, return receipt requested,
postage prepaid. Such communications, to be valid, must be addressed as
follows:

     

    
      	
               
      

            	
              If
      to WorldGate:

            

    

     

    
      	
               
      

            	
              WorldGate
      Communications, Inc.

            

    

    
      	
               
      

            	
              3190
      Tremont Avenue

            

    

    
      	
               
      

            	
              Trevose,
      Pennsylvania 19053

            

    

    
      	
               
      

            	
              Telephone:
      (215) 354-5106

            

    

    
      	
               
      

            	
              Facsimile:
      (215) 354-1049

            

    

    
      	
               
      

            	
              Attn:
      General Counsel

            

    

     

    
      	
               
      

            	
              If
      to ACN:

            

    

     

    
      	
               
      

            	
              ACN,
      Inc.

            

    

    
      	
               
      

            	
              1000
      Progress Place

            

    

    
      	
               
      

            	
              Concord,
      North Carolina 28025

            

    

    
      	
               
      

            	
              Telephone:
      (704) 260-3434

            

    

    
      	
               
      

            	
              Facsimile:
      (704) 260-3304

            

    

    
      	
               
      

            	
              Attn:  General
      Counsel – North America

            

    

     

    or to
such other address or to the attention of such person or persons as the
recipient Party has specified by prior written notice to the sending
Party.  If more than one method for sending notice as set forth above
is used, the earliest notice date established as set forth above shall
control.

     

    5.6           No Third Party
Beneficiaries. No provision of this Agreement is intended to confer upon
any person other than the Parties hereto any rights or remedies hereunder; and
nothing herein expressed or implied shall give or be construed to give any
person or entity (including, without limitation, any Seconded Employee
contemplated by Annex A-1), other than the Parties hereto and the other
indemnified persons (as contemplated by Sections 4.2 and 4.3), and each of their
respective heirs, executors, administrators, legal representatives, successors
and permitted assigns, any legal or equitable rights hereunder.

    
      
         

      

      
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    5.7           Headings. All
captions contained in this Agreement are for convenience of reference only, do
not form a part of this Agreement and shall not affect in any way the meaning or
interpretation of this Agreement.

     

    5.8           Counterparts.  This
Agreement may be executed in two or more counterparts (delivery of which may
occur via facsimile or as an attachment to an electronic mail message in “pdf”
or similar format), each of which shall be binding as of the date first written
above, and, when delivered, all of which shall constitute one and the same
instrument.  This Agreement and any other certificate, instrument,
agreement or document required to be delivered pursuant to this Agreement, and
any amendments hereto or thereto, to the extent signed and delivered by means of
a facsimile machine or as an attachment to an electronic mail message in “pdf”
or similar  format, shall be treated in all manner and respects as an
original agreement or instrument and shall be considered to have the same
binding legal effect as if it were the original signed version thereof delivered
in person.  At the request of any Party, the other Party shall
re-execute original forms of this Agreement and any other certificate,
instrument, agreement or document required to be delivered pursuant to this
Agreement, and any amendments hereto or thereto, and deliver them to the other
Party.  No Party shall raise the use of a facsimile machine or
electronic mail attachment in “pdf” or similar format to deliver a signature or
the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine or as an attachment to an
electronic mail message as a defense to the formation of a contract and each
such Party forever waives any such defense.  A facsimile signature or
electronically scanned copy of a signature shall constitute and shall be deemed
to be sufficient evidence of a Party’s execution of this Agreement, without
necessity of further proof.  Each such copy shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.

     

    5.9           Severability;
Enforcement. Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

     

    5.10         Specific Performance.
The Parties agree that irreparable damage would occur in the event that any of
the provisions of this Agreement were not performed by them in accordance with
the terms hereof and that each Party shall be entitled to specific performance
of the terms hereof, in addition to any other remedy at law or
equity.

     

    5.11         Consent to
Jurisdiction.  Each Party irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting the City of Wilmington,
Delaware, for the purposes of any suit, action or other proceeding arising out
of this Agreement or any transaction contemplated hereby. Each Party further
agrees that service of any process, summons, notice or document by U.S.
registered mail to such Party’s respective address set forth above shall be
effective service of process for any action, suit or proceeding with respect to
any matters to which it has submitted to jurisdiction in this Section 5.11. Each
Party irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in the state and federal courts sitting the
City of Wilmington, Delaware and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such action,
suit or proceeding brought in any such court has been brought in an inconvenient
forum.

    
      
         

      

      
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    5.12         Governing
Law.  This Agreement shall be governed by and interpreted and
enforced in accordance with the laws of the State of Delaware, without giving
effect to any choice of law or conflict of laws rules or provisions (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of
Delaware.

     

    5.13         Waiver of Jury
Trial.  Each Party hereby waives to the fullest extent
permitted by applicable Law, any right it may have to a trial by jury in respect
of any litigation directly or indirectly arising out of, under or in connection
with this Agreement, any transaction contemplated hereby or any dispute relating
hereto. Each Party (a) certifies that no representative, agent or attorney of
the other Party has represented, expressly or otherwise, that such other Party
would not, in the event of litigation, seek to enforce the foregoing waiver and
(b) acknowledges that it and the other Party hereto have been induced to enter
into this Agreement by, among other things, the mutual waivers and
certifications in this Section 5.13.

     

    5.14         Independent
Contractor. Nothing contained in this Agreement shall be deemed or
construed to create a partnership or joint venture, to create the relationships
of employee/employer or principal/agent, or otherwise create any liability
whatsoever of either Party with respect to the indebtedness, liabilities,
obligations or actions of the other or any of their Related Persons, or any
other person or entity.

     

    5.15         Survival.  The
provisions of Article II through and including Article V shall survive the
expiration or earlier termination of this Agreement for any reason
whatsoever.

     

    5.16         Force
Majeure.

     

    (a)           The
Provider shall not be in default hereunder by reason of any failure or delay in
the performance of its obligations hereunder where such failure or delay is due
to any cause beyond its reasonable control, including, but not limited to,
strikes, labor disputes, civil disturbances, riot, rebellion, invasion,
epidemic, hostilities, war, embargo, natural disaster, acts of God, acts of
terrorism, flood, fire, sabotage, accident, delay in transportation, loss and
destruction of property, intervention by governmental entities, change in laws,
regulations or orders, other events or any other circumstances or causes beyond
the Provider’s reasonable control.

     

    (b)           Upon
learning of the occurrence of such event of force majeure, the Provider shall
promptly notify the Recipient, either orally or in writing.  In the
event of any failure or delay in performance of the Services, the Provider shall
use its reasonable best efforts to restore the Services as soon as may be
reasonably possible in accordance with its existing contingency plans for such
Services. The Recipient shall not be liable for payment of any Applicable Fees
or Expenses during the period in which the Services could not be provided by
reason of force majeure.

     

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        9

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the Parties have executed and delivered this Agreement by their
duly authorized officers as of the date first set forth above.

     

    
      
        
          	 
      	
                  ACN,
      INC.,

                
	 
      	
                  a
      Michigan corporation

                
	 
      	 
      
	 
      	
                  By:  

                	
                     /s/ Dave
      Stevanovski

                
	 
      	 
      	
                  Name:
      Dave Stevanovski

                
	 
      	 
      	
                  Title:  Vice
      President, and Chief Operating Officer, North America

                
	 
      	 
      
	 
      	
                  WORLDGATE
      COMMUNICATIONS, INC.,

                
	 
      	
                  a
      Delaware corporation

                
	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Christopher V.
Vitale

                
	 
      	 
      	
                  Name:
      Christopher V. Vitale

                
	 
      	 
      	
                  Title:
      SVP, General Counsel and
Secretary

                

        

      

    

     

    
      
         

      

      
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    Annex A

     

    ACN
Services

    

    Table of
Contents

    
      
        
          	
                  Annex
      A-1 – Secondment Services

                
	
                  Annex
      A-2 – Use of EMI Test Chamber

                
	
                  Annex
      A-3 – Administrative and Travel Support

                
	
                  Annex
      A-4 – Real Estate Co-Location and Customer Operations
    Services

                
	
                  Annex
      A-5 – Provisioning of VOIP Communication
Devices

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Annex
A-1

    Secondment
Services

    

    ARTICLE
I

     

    DEFINITIONS

     

    1.1          Definitions.  When
used in this Annex A-1, the following terms shall have the meanings assigned to
them in this Section 1.1.

     

    (a)          
“Direct Payroll Costs”
shall mean, with respect to any Seconded Employee, the gross amount of all
salaries and wages, employee benefit program costs and other compensation with
respect to such Seconded Employee and all applicable fees, taxes, and other
amounts owed to third parties as a result of the employment of such Seconded
Employee, including federal, state and local income tax withholding,
contributions pursuant to the Federal Insurance Contribution Act and Federal
Unemployment Tax Act, workers’ compensation, unemployment insurance, other
withholding or other payments required by federal, state or local law or
regulations, and all payments to applicable pension and welfare plans and other
employee fringe benefit outlays, including but not limited to, direct premiums
to Plans and claims for self-funded plans on an individual level or, if required
by the design of the relevant Plan, such benefit costs as ACN reasonably
determines using its usual methods of cost accounting.

     

    (b)           “Indirect Payroll Costs” shall
mean with respect to any Seconded Employee, all reasonable costs, other than
Direct Payroll Costs, associated with the compensation of or benefits provided
to such Seconded Employee, including allocable general administrative and
overhead costs arising in connection with the employment and compensation of
such Seconded Employee, as reasonably determined by ACN using its usual methods
of cost accounting.

     

    (c)           “Out-of-Pocket Expenses” means,
with respect to any Seconded Employee, any actual out-of-pocket expenses that
are incurred by such Seconded Employee or by the applicable ACN Entity in the
course of such Seconded Employee’s performance of his or her duties and paid or
reimbursed by such applicable ACN Entity, as reasonably determined by ACN using
its usual methods of cost accounting.

     

    (d)           “Payroll Costs” means Direct
Payroll Costs, Indirect Payroll Costs and Out-of-Pocket Expenses.  For
any Seconded Employee, the Payroll Costs may consist of a portion of Direct
Payroll Costs, Indirect Payroll Costs and Out-of-Pocket Expenses associated with
such Seconded Employee as reasonably determined by ACN in good faith to reflect
an equitable sharing of the costs associated with such Seconded Employee based
on the facts and circumstances, including, without limitation, the time spent by
the Seconded Employee on matters relating to the business of
WorldGate.

     

    (e)           “Person” means an individual, a
corporation, a partnership, a limited liability company, an association, a trust
or other entity or organization.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (f) 
          “Plans” means all employee
benefit plans, as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended, and all other plans, policies, and
arrangements which the ACN Entities maintain on behalf of or makes available to
the Seconded Employees on or after the date hereof.

     

    (g)           “Seconded Employee” means any
employee of any ACN Entity listed on Exhibit 1 to this Annex A-1, as such
exhibit may be amended or supplemented from time to time by mutual agreement of
the Parties.

     

    ARTICLE
II

     

    SECONDED EMPLOYEE
SERVICES

     

    2.1           Seconded Employee
Services.  Upon the terms and subject to the conditions
contained in this Annex A-1 and the Agreement, the ACN Entities shall furnish to
the WorldGate Entity specified by WorldGate (the “Applicable WGAT Entity”) the
services of the Seconded Employees.

     

    (a)           Seconded
Employees shall remain employees of the applicable ACN Entity and shall remain
on the payroll of the applicable ACN Entity, but shall perform services for and,
to the fullest extent permitted by applicable law, under the sole supervision,
direction and control of the Applicable WGAT Entity.  The Applicable
WGAT Entity shall direct and control the Seconded Employees in the manner and
method of performing services for the Applicable WGAT Entity; provided that, the
Applicable WGAT Entity shall not direct or cause any Seconded Employee to act or
omit to act where such act or omission would violate applicable law or
regulations.  The ACN Entities shall have no responsibility for, or
control over, the day-to-day work activities of any Seconded
Employee.  The Applicable WGAT Entity shall be solely responsible for
each Seconded Employee’s actions in connection with their assigned duties for
the Applicable WGAT Entity as if they were employees of the Applicable WGAT
Entity.  Seconded Employees shall not, during the period in which they
are Seconded Employees, be required by any ACN Entity to provide any material
services to any ACN Entity or to devote any material time to efforts or
activities sponsored by or for the direct benefit of any ACN
Entity.  The ACN Entities make no representations or warranties,
express or implied, concerning (i) any service rendered or to be rendered by a
Seconded Employee hereunder, (ii) any Seconded Employee’s compliance with his or
her obligations set forth in a Seconded Employee Letter Agreement (as defined
below), or (iii) the fitness, qualifications, experience or other attributes of
any Seconded Employee.  For the avoidance of doubt, the Services
contemplated by Annex A-1 shall not be subject to Sections 1.6 or 1.9 of the
body of the Agreement.

     

    (b)           The
applicable ACN Entity shall continue to pay the compensation, withhold and pay
taxes and make other deductions and, to the extent permitted by the Plans and by
applicable law, provide the benefits to which the Seconded Employees are
entitled pursuant to the Plans, in each case, in a timely manner.  The
applicable ACN Entity shall determine in its sole discretion the compensation
and benefits that are provided to each Seconded Employee; provided that, such
ACN Entity shall notify the Applicable WGAT Entity in writing in advance of any
change in such compensation or benefits that would materially increase the
Payroll Costs associated with any Seconded Employee.

    
      
         

      

      
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    2.2           Limitation on Provision of
Services of Seconded Employees.  Notwithstanding anything
herein to the contrary, no provision of this Agreement shall obligate any ACN
Entity to provide (or continue to provide) the services of a Seconded Employee
pursuant hereto if such ACN Entity determines, in its sole discretion, that to
do so would (i) interfere with the conduct of its business in the ordinary
course, (ii) violate any applicable law, rule, regulation, judgment, order
or decree, (iii) constitute a default or give rise to any right of
termination, cancellation or acceleration of any right or to a loss of any
benefit to which such ACN Entity is entitled under any provisions of any
agreement or other instrument binding on such ACN Entity or (iv) violate
any obligation or duty owed by any Seconded Employee to such ACN
Entity.  In furtherance of the foregoing, if any term or provision of
this Agreement or the performance thereof would result in any of the foregoing,
the Parties agree that any such provision shall be modified accordingly so as to
not result in any of the foregoing.

     

    2.3           Seconded Employee Letter
Agreement.  Notwithstanding any Seconded Employee’s employment
by an ACN Entity, prior to any Seconded Employee’s commencement of services to
the Applicable WGAT Entity hereunder, ACN shall require each Seconded Employee
to execute and deliver to ACN a Seconded Employee Letter Agreement (a “Seconded Employee Letter
Agreement”) substantially in the form attached as Exhibit 2 to
this Annex A-1 (and ACN shall deliver a copy thereof to the Applicable WGAT
Entity), which shall require, among other things, such Seconded Employee to
agree to abide by and comply with all applicable policies and procedures of the
Applicable WGAT Entity.  Nothing in this Agreement or in the Seconded
Employee Letter Agreement shall alter the “at-will” status of any Seconded
Employee or the ability of ACN to terminate the employment of any Seconded
Employee at any time, for any reason or for no reason.

     

    2.4           Intellectual Property
Matters.  ACN, on behalf of itself and the other ACN Entities,
agrees that any and all intellectual property developed by any Seconded Employee
during the secondment, including without limitation all ideas, formulas,
concepts, themes, inventions, designs, improvements, fund management and
administration, accounting systems, processes, computer software, and
discoveries conceived, developed, learned, or written by any Seconded Employee,
individually or jointly in collaboration with employees of any WorldGate Entity,
shall belong to and be the sole and exclusive property of the Applicable WGAT
Entity, are “works made for hire” as that term is defined in the copyright laws
of the United States, and shall be assigned promptly by the Seconded Employee to
the Applicable WGAT Entity.  ACN, on behalf of itself and the other
ACN Entities, agrees that the Applicable WGAT Entity is the sole and absolute
owner of all patents, copyrights, trademarks, and other property rights to any
of the intellectual properties described in the first sentence of this Section
2.4 and ACN will, and will cause the other ACN Entities to, fully assist the
Applicable WGAT Entity to obtain the patents, copyrights, trademarks, or other
property rights to all such inventions, improvements, discoveries, formulas,
fund management and administration, accounting systems, processes, or computer
software, and ACN will, and will cause the other ACN Entities to, execute all
documents and do all things necessary to vest the Applicable WGAT Entity with
full and exclusive title and protect against infringement by
others.  This Section 2.4 shall not apply to intellectual property or
rights therein derived from any ACN Entity’s or any Seconded Employee’s
activities prior to the time the Parties entered into the
Agreement.  This section shall not apply to assign to any ACN Entity
or any WorldGate Entity any Seconded Employee’s rights in any invention that
such Seconded Employee developed entirely on his or her own time without using
any WorldGate Entity’s equipment, supplies, facilities or information, unless
the invention (a) relates directly to the business of any WorldGate Entity; (b)
relates directly to any WorldGate Entity’s actual or demonstrably anticipated
research and development; or (c) results from any work performed by such
Seconded Employee for any WorldGate Entity pursuant to this
Agreement.

    
      
         

      

      
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    ARTICLE
III

     

    EXPENSES

     

    3.1           Reimbursement Of Payroll
Costs.  The Applicable WGAT Entity shall reimburse ACN for all
Payroll Costs associated with the Seconded Employees during the period of
secondment for each such Seconded Employee.

     

    3.2           Method Of
Reimbursement.  ACN will provide the Applicable WGAT Entity
with monthly invoices setting forth the Payroll Costs (in reasonable detail) for
the preceding month and the cumulative amount of Payroll Costs (in reasonable
detail) remaining unpaid.  On or before the later of (a) December 31,
2010 or (b) the date WorldGate has sufficient cash generated from the operations
of WorldGate to pay any outstanding Payroll Costs (such later date, the “Initial Payment Date”), the
Applicable WGAT Entity shall pay, by wire transfer of immediately available
funds to an account designated in advance by ACN, an amount equal to the lesser
of (i) the aggregate amount of Payroll Costs remaining unpaid or (ii) twenty
percent (20%) of the amount of cash generated from the operations of WorldGate
for the most recent fiscal quarter immediately preceding the Initial Payment
Date for which WorldGate has publicly released its financial
statements.  After the Initial Payment Date, within ninety (90) days
after the delivery of each such invoice, the Applicable WGAT Entity shall pay,
by wire transfer of immediately available funds to an account designated in
advance by ACN, the lesser of (i) the aggregate amount of Payroll Costs
remaining unpaid or (ii) twenty percent (20%) of the amount of cash generated
from the operations of WorldGate for the most recent fiscal quarter immediately
preceding the date of such invoice for which WorldGate has publicly released its
financial statements.  The Applicable WGAT Entity shall have no right
of offset with respect to its payment obligations hereunder.

     

    ARTICLE
IV

     

    TERMINATION OF SECONDED
EMPLOYEE SERVICES

     

    4.1           Termination By
WorldGate.  WorldGate may, in its sole discretion, terminate
the services provided to any WorldGate Entity by any Seconded Employee at any
time by providing thirty (30) days’ advance written notice thereof to ACN
specifying the effective date of such termination.

    
      
         

      

      
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    4.2           Termination By
ACN.  ACN may, in its sole discretion, terminate the provision
of services to any WorldGate Entity by any Seconded Employee at any time by
providing sixty (60) days’ advance written notice thereof to WorldGate
specifying the effective date of such termination.

     

    4.3           Termination of
Agreement.  The services of all Seconded Employees to the any
WorldGate Entity will automatically terminate (without any further notice to
either Party) effective upon the termination of the Agreement in accordance with
Article III of the Agreement.

     

    4.4           Effect of Termination of
Services.  As of the effective date of any termination in
accordance with Section 4.1,
Section 4.2 or
Section 4.3, or
as of the date of the termination of any Seconded Employee’s employment with ACN
for any other reason, such Seconded Employee shall cease to be a Seconded
Employee.

     

    ARTICLE
V

     

    INDEMNIFICATION

     

    5.1     
     General.

     

     (a)           WorldGate
acknowledges and agrees that the Seconded Employees and the services they
provide are provided as an accommodation to WorldGate, and that ACN shall
neither indemnify nor have any liability to any WorldGate Entity for any Loss
relating to or arising out of (i) the availability or continued employment of
any Seconded Employee, (ii) the performance of services by any Seconded
Employee, or (iii) any Seconded Employee’s compliance with its obligations
under a Seconded Employee Letter Agreement, in each case except to the extent
that any such Loss results from the bad faith, gross negligence, fraud or
willful misconduct of ACN.

     

     (b)           WorldGate
agrees to indemnify, defend and hold harmless the ACN Entities and their Related
Persons from, against and in respect of Losses imposed on, sustained, incurred
or suffered by or asserted against any ACN Entity or any of their Related
Persons relating to or arising out of the performance by the WorldGate Entities
of their obligations under this Annex  A-1 and any claim, charge,
action, suit or proceeding brought by any Seconded Employee under any federal,
state or local employment law other than for payment of any compensation to any
Seconded Employee, in each case except to the extent that any such Loss results
from the bad faith, gross negligence, fraud or willful misconduct of any ACN
Entity.

     

     (c)           ACN
agrees to indemnify, defend and hold harmless the WorldGate Entities and their
Related Persons from, against and in respect of any Loss, imposed on, sustained,
incurred or suffered by or asserted against any WorldGate Entity or any of their
Related Persons relating to or arising out of the performance by the ACN
Entities of their obligations under this Annex  A-1 and any claim,
charge, action, suit or proceeding brought by any Seconded Employee with respect
to the payment of any compensation to any Seconded Employee, in each case except
to the extent that any such Loss results from the bad faith, gross negligence,
fraud or willful misconduct of any WorldGate Entity.

    
      
         

      

      
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    5.2           Workers
Compensation.  Without limiting the provisions of Section 5.1 of
this Annex A-1, WorldGate hereby agrees to indemnify, defend and hold harmless
the ACN Entities and their Related Persons for any workers’ compensation claims
liability the ACN Entities incur with respect to a Seconded Employee arising out
of any injury or condition incurred during or caused by work performed for or on
behalf of the Applicable WGAT Entity by such Seconded Employee; it being
understood that to the extent any ACN Entity is compensated by a third party
with respect to such liability, or such liability is assumed by a third party,
the amount owed by WorldGate to the ACN Entities and their Related Persons with
respect to such liability shall be offset by the amount of such compensation or
assumption.  ACN will, and will cause the other ACN Entities to, use
its commercially reasonable efforts to obtain compensation or assumption for
such liability from any relevant third party (including applicable insurance
companies, but not including any WorldGate Entity).

     

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        A-1 Page
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    Exhibit 1
to Annex A-1

     

    Seconded
Employees

     

    No
seconded employees are contemplated as of the date of the
Agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit 2
to Annex A-1

     

    Form
of Seconded Employee Letter Agreement

     

    [Date]

     

    [Seconded Employee
Name]

    [Address]

     

    Re:
Secondment To WorldGate Service, Inc.

     

    Dear
[Secondee
Name]:

     

    This
letter confirms the basis upon which, while still employed by [identify relevant ACN Entity]
(“ACN”), you
will be seconded (the “Secondment”) to
WorldGate Service, Inc. (“WorldGate”).

     

    1.           During
the Secondment, while you will remain an ACN employee and will not be a
WorldGate employee, your employment remains at will, meaning you or ACN can
terminate your employment at any time, for any reason or for no reason, and you
will be supervised and directed, to the fullest extent permitted by applicable
law, by WorldGate.  You will work at WorldGate’s premises, unless
otherwise jointly notified to you by WorldGate and ACN.  Additionally,
the Secondment is at will, and either WorldGate or ACN can terminate it at any
time.  ACN or WorldGate will notify you if and when your Secondment is
terminated.  If during your Secondment you have any questions
regarding your employment by ACN or the terms of the Secondment, you can contact
ACN’s Vice President of Human Resources for assistance.

     

    2.           ACN
will continue to provide and determine your salary, benefits and other
compensation on the same basis ACN has done to date.

     

    3.           During
the Secondment, you shall in no event represent that you are acting on behalf of
ACN or have any authority to do so, nor shall you represent that you are in any
respect controlled by ACN.

     

    4.           During
the Secondment you will report to the person(s) designated by WorldGate and your
duties will be those which WorldGate reasonably requests you to
perform.

     

    5.           During
the Secondment you will comply with all (a) internal policies, rules,
regulations, and procedures and employee handbooks of both ACN and WorldGate
(including, without limitation and as applicable, with respect to
confidentiality, conflicts of interest, code of ethics, intellectual property
and invention assignment, insider trading, sexual harassment and substance
abuse) as the same may be amended from time to time and provided to you, and
(b) applicable state, local and federal laws whether now existing or
hereafter adopted applicable to the business of WorldGate.  You agree
to execute and deliver to WorldGate, upon its request, a countersigned copy of
any internal WorldGate policy, rule, regulation or procedure that is generally
applicable to similarly situated employees of WorldGate.  In the event
you believe that there is a conflict between the internal policies, procedures
or employee handbooks of ACN and WorldGate, you should promptly raise such
concerns with your WorldGate supervisor.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    6.           You
will devote your full time and attention to your Secondment duties unless
otherwise agreed by ACN and WorldGate and jointly notified to
you.  You agree to use reasonable skill and care in carrying out your
duties for WorldGate and you will act at all times in the best interests of
WorldGate (including fulfilling any duty of loyalty to WorldGate that you would
have if WorldGate were your employer).  In the event you believe you
have an actual or potential conflict of interest at any time between the
interests of WorldGate and the interests of ACN, you should promptly raise such
concerns with your WorldGate supervisor.  Any such actual or potential
conflict of interest should be resolved in favor of WorldGate during your
Secondment.

     

    7.           The
Secondment will terminate automatically if your employment with ACN ends for any
reason or if you are no longer lawfully entitled to work in the United
States.

     

    8.           You
acknowledge that the Secondment may result in your exposure and access to
confidential and proprietary information of WorldGate and its subsidiaries,
parent company, customers, suppliers and other third parties, including, but not
limited to, accounting systems, processes, computer software, customer and
supplier lists, due diligence files, financial information, business strategies
and personal information about WorldGate, its subsidiaries and parent company
and their respective employees, to which information you may not have had access
to prior to the Secondment to WorldGate and which information is of significant
value to WorldGate and its subsidiaries, parent company, customers, suppliers
and other third parties.  You agree that you shall not, other than on
WorldGate’s behalf, at any time during your Secondment to WorldGate and
thereafter, make available, divulge, disclose, or communicate in any manner
whatsoever to anyone including, but not limited to, any person, firm,
corporation, investor, member of the media, or entity, including without
limitation ACN, any such confidential or proprietary information, or use any
such confidential or proprietary information for any purpose other than on
WorldGate’s behalf, unless previously authorized to do so in writing by a duly
authorized officer of WorldGate, required by law or court order, or such
confidential or proprietary information has become publicly available other than
by reason of a breach by you of such agreement, or of another individual’s or
entity’s violation of an obligation not to disclose such
information.  Should you be required by law or court order to disclose
such confidential or proprietary information, you agree to give WorldGate such
notice as is reasonably practicable under the circumstances so as to allow
WorldGate to challenge such application of the law or court order, or otherwise
to attempt to limit the scope of such disclosure.  This paragraph
shall apply to all confidential and proprietary information of WorldGate and its
subsidiaries, parent company, customers, suppliers and other third parties,
regardless of when such information is or was disclosed to you.  You
acknowledge that WorldGate shall have the right to enforce your agreements under
this paragraph.  You further acknowledge that a breach of this
paragraph would cause a loss to WorldGate for which it could not reasonably or
adequately be compensated by damages in an action at law, that remedies other
than injunctive relief could not fully compensate WorldGate for a breach of this
paragraph, and that, accordingly, WorldGate shall be entitled to injunctive
relief to prevent any breach or continuing breaches of this
paragraph.  It is the your intention and the intention of WorldGate
that if, in any action before any court empowered to enforce your agreements in
this paragraph, any term, restriction, covenant, or promise is found to be
unenforceable, then such term, restriction, covenant, or promise shall be deemed
modified to the extent necessary to make it enforceable by such
court.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    This
letter is governed by, and will be interpreted in accordance with, the laws of
the State of Delaware without reference to its principles of conflicts or choice
of laws.  The provisions of this letter are intended for the benefit
of ACN and WorldGate.

     

    Please
sign and date the enclosed copy of this letter to confirm your acceptance of the
terms of the Secondment and the variation to your existing terms and conditions
of employment by this letter.  You should then return it to [________]
as soon as possible.  If you have any questions about this letter or
the Secondment, please contact [_______] at [_________] or via e-mail at
[___________].

     

    
      
        
          	 
      	
                  Sincerely,

                
	 
      	 
      
	 
      	
                  [identify ACN
      entity],

                
	 
      	
                  a
      Delaware corporation

                
	 
      	 
      
	 
      	
                  By:  

                	 
      
	 
      	 
      	
                  Name:

                
	 
      	 
      	
                  Title:

                

        

      

    

     

    I hereby
accept the Secondment to WorldGate and acknowledge and agree to the terms and
conditions set out in this letter.  I acknowledge and agree that this
letter varies the terms and conditions of my employment with ACN, but that I
remain an at will employee of ACN and the at-will nature of my employment with
ACN can only be changed pursuant to a writing executed by me and a duly
authorized officer of ACN.

     

    
      
        
          
            	 
      	
                    Signed: 

                  	 
      

          

        

      

    

    

    
      
        
          
            
              	 
      	
                      Print Name: 

                    	 
      

            

          

        

      

    

    

    
      
        
          	 
      	
                  Date: 

                	 
      

        

      

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    Annex
A-2

    Use of EMI Test
Chamber

    

    
      
        
          
            	
                    Service
      Description:

                  	 	
                    ACN
      shall provide the EMI Test Chamber to WorldGate.

                  
	 
      	 	 
      
	
                    Location
      of Service:

                  	 	
                    3190
      Tremont Avenue, Trevose, PA 19053, or such other location where the EMI
      Test Chamber is relocated to by WorldGate.

                  
	 
      	 	 
      
	
                    EMI
      Fee:

                  	 	
                    $1,937.50
      per month for 24 months.

                  
	 
      	 	 
      
	
                    Payment
      Terms:

                  	 	
                    On
      or before the later of (a) December 31, 2010 or (b) the date WorldGate has
      sufficient cash generated from the operations of WorldGate to pay the
      aggregate outstanding Payroll Costs (as defined in Annex A-1) plus the
      aggregate outstanding amount of the EMI Fee (such later date, the “EMI Payment Date”),
      WorldGate shall pay, by wire transfer of immediately available funds to an
      account designated in advance by ACN, an amount equal to the lesser of (i)
      the aggregate outstanding amount of the EMI Fee remaining unpaid or (ii)
      ten percent (10%) of the amount of cash generated from the operations of
      WorldGate for the most recent fiscal quarter immediately preceding the EMI
      Payment Date for which WorldGate has publicly released its financial
      statements.  Within ninety (90) days after the EMI Payment Date,
      WorldGate shall pay, by wire transfer of immediately available funds to an
      account designated in advance by ACN, the aggregate outstanding amount of
      the EMI Fee remaining unpaid.

                  
	 
      	 	 
      
	
                    Title
      Transfer:

                  	 	
                    Title
      to the EMI Test Chamber shall transfer, free and clear of all liens and
      encumbrances, to WorldGate upon payment to ACN of the EMI
    Fee.

                  

          

        

      

    

    

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    Annex
A-3

    Administrative and Travel
Support

    

    
      
        	
                Service
      Description:

              	 	
                ACN
      shall provide administrative and travel support to WorldGate as requested
      by WorldGate.

              
	 
      	 	 
      
	
                Administrative
      Fees:

              	 	
                ACN
      and WorldGate shall agree on an hourly or project fee for administrative
      support services to be provided.  Administrative fees shall also
      include the actual out-of-pocket expenses incurred by ACN or any employee
      of ACN providing administrative support to WorldGate in the course of such
      employee’s performance of administrative support services and paid or
      reimbursed by ACN, as reasonably determined by ACN using its usual methods
      of cost accounting.

              
	 
      	 	 
      
	
                Travel
      Costs:

              	 	
                Actual
      out-of-pocket costs paid by ACN to third parties for travel services
      requested and utilized by WorldGate and its employees and
      directors.

              
	 
      	 	 
      
	
                Accounting:

              	 	
                ACN
      shall provide a full accounting of outstanding Administrative Fees and
      Travel Costs as and when requested by WorldGate.

              
	 
      	 	 
      
	
                Payment
      Terms:

              	 	
                On
      or before the later of (a) December 31, 2010 or (b) the date WorldGate has
      sufficient cash generated from the operations of WorldGate to pay the
      aggregate outstanding Payroll Costs (as defined in Annex A-1) plus the
      aggregate outstanding amount of the EMI Fee (as defined in Annex A-2) plus
      the aggregate outstanding amount of Administrative Fees and Travel Costs
      (such later date, the “Admin Payment Date”),
      WorldGate shall pay, by wire transfer of immediately available funds to an
      account designated in advance by ACN, an amount equal to the lesser of (i)
      the aggregate outstanding amount of the Administrative Fees and Travel
      Costs remaining unpaid or (ii) ten percent (10%) of the amount of cash
      generated from the operations of WorldGate for the most recent fiscal
      quarter immediately preceding the Admin Payment Date for which WorldGate
      has publicly released its financial statements.  Within ninety
      (90) days after the Admin Payment Date, WorldGate shall pay, by wire
      transfer of immediately available funds to an account designated in
      advance by ACN, the aggregate outstanding amount of the Administrative
      Fees and Travel Costs remaining
unpaid.

              

      

    

    

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    Annex
A-4

    Real Estate Co-Location and
Customer Operations Services

    

    
      
        	
                Service
      Description:

              	 	
                ACN
      shall provide to WorldGate office space (both for customer operations and
      for general office use), telecommunications and electronic communications
      services, computer support, recruiting services, tax and regulatory
      advice, force management and other requested services relating to a
      telecommunications customer operation center, in each case as requested by
      WorldGate.  For the avoidance of doubt, the Services
      contemplated by Annex A-4 shall not be subject to Section 1.9 of the body
      of the Agreement.

              
	 
      	 	 
      
	
                Location
      of Service:

              	 	
                1000
      Progress Place, Concord, North Carolina 28025, or such other location by
      mutual agreement of ACN and WorldGate.

              
	 
      	 	 
      
	
                Real
      Estate Fees:

              	 	
                Incremental
      out-of-pocket costs incurred by ACN in order to provide office space (both
      for call center operations and for general office use) to WorldGate, as
      reasonably determined by ACN using its usual methods of cost
      accounting.

              
	 
      	 	 
      
	
                Operations
      Fees:

              	 	
                Incremental
      out-of-pocket costs incurred by ACN in order to provide the customer
      operations services to WorldGate, as reasonably determined by ACN using
      its usual methods of cost accounting.

              
	 
      	 	 
      
	
                Invoicing:

              	 	
                ACN
      will provide WorldGate with monthly invoices setting forth the Real Estate
      Fees and Operations Fees (in reasonable detail) for the preceding month
      and the cumulative amount of Real Estate Fees and Operations Fees (in
      reasonable detail) remaining unpaid.

              
	 
      	 	 
      
	
                Payment
      Terms:

              	 	
                On
      or before the later of (a) December 31, 2010 or (b) the date WorldGate has
      sufficient cash generated from the operations of WorldGate to pay the
      aggregate outstanding Payroll Costs (as defined in Annex A-1) plus the
      aggregate outstanding amount of the EMI Fee (as defined in Annex A-2) plus
      the aggregate outstanding amount of Administrative Fees (as defined in
      Annex A-3)  and Travel Costs (as defined in Annex
      A-3)  plus the aggregate outstanding amount of Real Estate Fees
      and Operations Fees (such later date, the “OF Payment Date”),
      WorldGate shall pay, by wire transfer of immediately available funds to an
      account designated in advance by ACN, an amount equal to the lesser of (i)
      the aggregate outstanding amount of the Real Estate Fees and Operations
      Fees remaining unpaid or (ii) ten percent (10%) of the amount of cash
      generated from the operations of WorldGate for the most recent fiscal
      quarter immediately preceding the OF Payment Date for which WorldGate has
      publicly released its financial statements.  Within ninety (90)
      days after the OF Payment Date, WorldGate shall pay, by wire transfer of
      immediately available funds to an account designated in advance by ACN,
      the aggregate outstanding amount of the Real Estate Fees and Operations
      Fees remaining unpaid.

              

      

    

     

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    Annex
A-5

    Provisioning of VOIP
Communication Devices

    

    ACN
Digital Phone Service, LLC, a Delaware limited liability company, with its
principal place of business at 1000 Progress Place, Concord, North Carolina
28025 (“ACN DPS”) and
Ojo Video Phones LLC, a Pennsylvania limited liability company with its
principal place of business at 3190 Tremont Avenue, Trevose, Pennsylvania
(“WGAT Sub”) agree to
the following business terms:

     

    
      	
              A)

            	
              Ordering of
      Products.  WGAT Sub will purchase from ACN DPS, from time
      to time, the Iris 3000 video phone (the “Product”) with the
      specifications mutually agreed to by ACN DPS and WGAT Sub.  At
      such time or times and in amounts as mutually agreed by the parties, WGAT
      Sub will provide ACN DPS with a written order regarding the quantity,
      collateral and shipping destination for the Product.  Risk of
      loss for the Product will pass to WGAT FOB
  destination.

            

    

     

    
      	
              B)

            	
              Purchase
      Price.  The price to be paid by WGAT Sub for each unit of
      Product shall be the amount incurred by ACN DPS to manufacture the phone
      without any markup, plus the costs and expenses for shipping and handling
      the Products to a location to be specified by WGAT Sub (the “Purchase
      Price”).

            

    

     

    
      	
              C)

            	
              Payment of Purchase
      Price.  ACN DPS will provide WGAT Sub with monthly
      invoices setting forth the separate line items for each category of costs
      included in the Purchase Price (in reasonable detail) incurred by WGAT Sub
      for the preceding month and the cumulative amount owed by WGAT Sub to ACN
      DPS (in reasonable detail) remaining unpaid under this Annex A-5,
      including without limitation any carrying costs as described
      herein.  The Purchase Price for each Product is due and payable
      thirty (30) days after the date of receipt of the invoice from ACN DPS by
      WGAT Sub relating to such Product.  Notwithstanding the
      foregoing, if WGAT Sub has paid ACN DPS all outstanding amounts under
      paragraph D of this Annex A-5 when due, WGAT shall not be in default under
      this Annex A-5 or the Agreement if WGAT Sub fails to pay ACN DPS the
      Purchase Price for each Product as contemplated by this paragraph C of
      Annex A-5; provided,
      however, that WGAT Sub must pay outstanding invoices with respect to
      Product, to the extent commercially reasonable, upon WGAT Sub having
      sufficient cash generated from the operations of WGAT Sub (after payment
      of any other due and outstanding amounts under the Agreement (including
      the other Annexes to the Agreement)) to pay such outstanding invoiced
      amounts, regardless of whether WGAT Sub is current in payment of its
      carrying costs pursuant to paragraph D of this Annex
      A-5.

            

    

     

    
      	
              D)

            	
              Product Carrying
      Costs.  WGAT Sub will pay ACN DPS a carrying cost of one
      percent (1%) per month applied to the total value in a given month of
      Product received by WGAT Sub and for which WGAT Sub has not paid the
      Purchase Price in accordance with this Annex-A-5.  The carrying
      cost (1) will not be applied to Product within the first thirty (30) days
      after receipt of the invoice relating to delivery of such Product, (2)
      will apply monthly thereafter until WGAT Sub has made full payment with
      respect to such Product and (3) shall be due and payable thirty (30) days
      after the date of receipt of the invoice from ACN DPS by WGAT Sub relating
      to such carrying cost.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              E)

            	
              Security
      Interest.  ACN DPS shall have a purchase money security
      interest in all Product received by WGAT Sub for which WGAT Sub has not
      made full payment to ACN DPS, such interest securing WGAT Sub’s payment
      obligation under this Annex A-5.  WGAT Sub further agrees that
      it will:

            

    

     

    
      	
               
      

            	
              1.

            	
              not
      create or permit to exist any lien, security interest or other charge or
      encumbrance upon or with respect to the Product other than any security
      interest contemplated by any financing that may be provided by WGI
      Investor LLC to WGAT Sub;

            

    

     

    
      	
               
      

            	
              2.

            	
              maintain
      all Product in good condition and
repair;

            

    

     

    
      	
               
      

            	
              3.

            	
              maintain,
      or cause to be maintained, insurance against fire and such other hazards,
      sufficient to cover the value of Product received by WGAT Sub and naming
      the Secured Party as a loss payee.  Such insurance shall be
      non-cancellable except upon thirty (30) days’ prior written notice to ACN
      DPS.  The Debtor will furnish to the Secured Party such evidence
      of insurance upon request.

            

    

     

    
      	
               
      

            	
              4.

            	
              make
      the Product available for inspection by ACN DPS; and, when requested,
      furnish the Secured Party any information regarding the Debtor’s business
      affairs and financial condition within a reasonable time after written
      request therefor.

            

    

     

    
      	
              F)

            	
              Warranty.

            

    

     

    
      	
               
      

            	
              1.

            	
              The
      Products purchased under this Agreement are warranted by ACN DPS to be
      free from defects in materials and workmanship at the time of delivery and
      for a period of either twelve (12) months starting from the date of
      commencement of commercial operation or use of the Product, or eighteen
      (18) months starting from the date of delivery, whichever is
      longer.  WGAT Sub will accumulate all allegedly defective
      Products, and will ship them to ACN DPS in 100 piece increments, at ACN
      DPS’s cost.

            

    

     

    
      	
               
      

            	
              2.

            	
              The
      above warranty shall not apply to any defects or deficiency arising
      from:

            

    

     

    
      	
               
      

            	
              a.

            	
              Any
      interference with Products which is not as a result of normal usage (for
      instance, but not limited to, by not following the instructions given in
      the user’s manual);

            

    

     

    
      	
               
      

            	
              b.

            	
              Any
      modification made to the Products by WGAT Sub or other third party not
      duly authorized by ACN DPS;

            

    

     

    
      	
               
      

            	
              c.

            	
              Any
      WGAT Sub provided, consigned or designated hardware, software, and/or
      service, which are incorporated in the Products and are not authorized or
      approved for use with the Products by ACN DPS; provided, however, that any
      provided, consigned or designated hardware, software, and/or service
      relating to the deltathree, inc. network shall be deemed authorized and
      approved for use with the Products by ACN
DPS;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              d.

            	
              Any
      operation or use of any of the Products in combination with other
      hardware, software or system not furnished or authorized by ACN DPS;
      provided, however, that any operation or use of the Products in
      combination with the deltathree, inc. network shall be deemed authorized
      by ACN DPS;

            

    

     

    
      	
               
      

            	
              e.

            	
              Any
      accident or deterioration or as a result of the occurrence of an event
      such as damage by water, fire, explosion or
  lightening;

            

    

     

    
      	
               
      

            	
              f.

            	
              Any
      malfunctions resulting from negligent operation or unfit operating
      environment; or

            

    

     

    
      	
               
      

            	
              g.

            	
              Any
      malicious act or intentional damage committed by any person
      whatsoever.

            

    

     

    
      	
               
      

            	
              3.

            	
              EXCEPT
      AS PROVIDED IN SECTION C-4 BELOW, THE FOREGOING WARRANTY IS EXCLUSIVE AND
      IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT
      LIMITED TO, ANY WARRANTY OR MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
      PURPOSE.  ACN DPS SHALL HAVE NO RESPONSIBILITY FOR ANY
      PARTICULAR APPLICATION FOR ANY
PRODUCTS.

            

    

     

    
      	
               
      

            	
              4.

            	
              In
      addition to the warranty above, ACN DPS hereby represents, warrant and
      agrees that (a) the Products shall, at the time of receipt by WGAT Sub, be
      new Products, be free from any material design defects or defects in
      workmanship or materials and shall substantially perform in the manner for
      which such Products were designed; (b) to the knowledge of ACN DPS or of
      UMEC, a Taiwan corporation and manufacturer of the Product, the Products
      shall comply with all applicable laws, statutes, regulations, rules,
      ordinances and judicial or governmental agency orders; (c) all
      intellectual property rights embodied or contained in the Product,
      including the software and firmware, shall and do not infringe upon or
      violate any intellectual property right, including copyright, trademark,
      service mark, trade secret, patent, trade dress, trade name or any other
      proprietary right of any third parties; and (d) to the extent applicable,
      each Product shall, at ACN DPS’s option, either (i) contain, on the
      outside surface of all exposed power cords, cables, or wires, no more than
      300 parts per millions of lead by weight; or (ii) be accompanied by the
      following warning label:  “WARNING:  The cord(s) on
      this product contain(s) lead, a chemical known to the State of California
      to cause birth defects or other reproductive harm.  Wash hands
      after handling.”  If ACN DPS elects to utilize option (d)(i)
      above, ACN DPS shall use commercially reasonable efforts to make available
      to WGAT Sub test results verifying that the lead content of the Product
      cords, cables or wires does not exceed 300 parts per million, using a
      testing method of sufficient sensitivity to establish a limit of
      quantification (as distinguished from detection) of less than 300 parts
      per million.  If ACN DPS elections to utilize option (d)(ii)
      above, the warning shall appear in the same section of the label that
      contains other safety information, if any, or near its displayed price
      and/or UPC code.  Moreover, the word “WARNING” shall appear in
      all capital letters and in bold and italicized typeface.  If
      space does not permit the warning to be inserted into the label, it shall
      be prominently affixed to each Product until itself or to each Product
      unit packaging.  Type shall be similar in size to that used to
      convey other important information regarding use of the
      Product.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              5.

            	
              ACN
      DPS agrees to indemnify, defend and hold the WorldGate Entities and their
      respective Related Persons harmless from and against any claim, suit or
      proceeding to the extent such claim or proceeding is based on a claim
      related to ACN DPS’s obligations under Section 1(D)(4) of this Annex A-5;
      provided that, ACN DPS is notified promptly in writing and given complete
      authority, information and assistance required for defense of same, and
      ACN DPS shall pay all damages as a result thereof.  ACN DPS,
      however, shall not be responsible for any settlement made by WGAT Sub or
      their respective Related Persons without ACN DPS’s prior written
      consent.

            

    

     

    
      	
              E)

            	
              License.  Subject
      to the terms and conditions of this Agreement, ACN DPS grants to WGAT Sub
      a non-exclusive, perpetual, fully paid, royalty free, worldwide license to
      distribute firmware and software used solely with or embedded in the
      Products, in executable form only, solely as used with or embedded in
      Product furnished to WGAT Sub by ACN DPS under this Agreement in order to
      enable WGAT Sub’s customer’s to use the Products.   Subject
      to the terms and conditions of this Agreement, ACN DPS grants to WGAT Sub
      a non-exclusive, perpetual, fully paid, royalty free, worldwide license to
      use, revise, print and distribute any materials or documentation
      associated with the Products in connection with WGAT Sub’s use or sale of
      the Products.

            

    

     

    
      	
              F)

            	
              Acknowledgment.  ACN
      DPS acknowledges and agrees to be bound by the terms of the Agreement to
      which this Annex A-5 forms a part (1) as an “ACN Entity” and as a
      “Provider” in Articles 1, 2, 3 and 4 of the Agreement and (2) as if ACN
      DPS was a “Party” in Article 5 of the Agreement.  WGAT Sub
      acknowledges and agrees to be bound by the terms of the Agreement to which
      this Annex A-5 forms a part (i) as a “WorldGate Entity” and as a
      “Recipient” in Articles 1, 2, 3 and 4 of the Agreement and (ii) as if WGAT
      Sub was a “Party” in Article 5 of the
Agreement.

            

    

     

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    IN
WITNESS WHEREOF, WGAT Sub and ACN DPS have executed and delivered this Annex A-5
by their duly authorized officers as of October 12, 2009.

     

    
      
        
          
            
              	 
      	
                      ACN
      Digital Phone Service, LLC

                    
	 	 
	 
      	
                      By:  

                    	
                         /s/ Dave
      Stevanovski

                    
	 
      	 
      	
                      Name:
      Dave Stevanovski

                    
	 
      	 
      	
                      Title:
      President

                    
	 	 	 
	 
      	 
      
	 
      	
                      Ojo
      Video Phones LLC

                    
	 
      	 
      
	 
      	
                      By:
      WorldGate Communications, Inc., its sole member

                    
	 
      	 
      
	 
      	
                      By: 

                    	
                         /s/ Christopher V.
      Vitale

                    
	 
      	 
      	
                      Name:
      Christopher V. Vitale

                    
	 
      	 
      	
                      Title:
      SVP, General Counsel and
Secretary

                    

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Annex B

    

    WorldGate
Services

    

    No
WorldGate Services are contemplated as of the date of the
Agreement.

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