SERVICES AGREEMENT

 

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.

 

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.

 

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.

 

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.

 

 

(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.

 

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:

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.

 

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.

 

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

 

Annex A

ACN Services

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