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.
“ 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.
“ 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.
“ 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.
“ 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.
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.
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);
(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 t