FIRST AMENDMENT TO MASTER PURCHASE AGREEMENT
Certain
information in this exhibit has been omitted and has been filed separately with
the Securities and Exchange Commission pursuant to a confidential treatment
request under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended. The copy filed herewith omits the information subject to the
confidential treatment request. Omissions are designated as
“***”.
FIRST
AMENDMENT
TO
THIS FIRST AMENDMENT TO MASTER
PURCHASE AGREEMENT (this “Amendment”) is made and
entered into as of March 30, 2010 by and between ACN Digital Phone Service, LLC,
a Delaware limited liability company, with its principal place of business at
0000 Xxxxxxxx Xxxxx, Xxxxxxx, XX 00000 (hereinafter referred to as
“ACN”), and Ojo Video
Phones LLC, a Pennsylvania limited liability company, with its principal place
of business at 0000 Xxxxxxx Xxxxxx, Xxxxxxx, XX 00000 (hereinafter
referred to as “Seller”). Seller
and ACN are individually referred to herein as a “Party” and together, as the
“Parties.”
WHEREAS, ACN and Seller
entered into that certain Master Purchase Agreement as of April 6, 2009 (the
“Agreement”);
WHEREAS, the Parties
acknowledge that the price for the Products is higher than the Parties had
predicted in the Agreement and desire to amend the Agreement to provide for,
among other things, a revised pricing structure for the Products;
and
WHEREAS, Seller has requested
that certain amendments be made to the Agreement, and ACN is willing to agree to
such amendments on the terms and conditions set forth herein.
NOW, THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:
1. Definitions. Capitalized
terms used herein and not otherwise defined herein have the meanings given to
such terms in the Agreement, as amended hereby.
a) Section
1.4 of the Agreement is hereby deleted and replaced in its entirety with the
following:
“1.4 “Product” means the Seller’s
video phone communications devices, including all equipment hardware, materials,
software and firmware, as specified in the document “Functional Requirements
Document WG 4K Videophone September 10, 2009” or any amendment, update or
modification thereto agreed in writing between the parties.”
b)
Section 3.3 of the Agreement is hereby deleted and replaced in its entirety with
the following:
“3.3 Initial
Order. The first Purchase Order for eighty thousand (80,000)
pieces of Product, of which twenty-five thousand (25,000) pieces of Product
shall be non-cancelable (such order for 25,000 pieces of Product, the “Initial Order”), is to be
issued as soon as practicable after Seller provides a demonstration of working
Product to ACN.”
c) Section
4.1.1 of the Agreement is hereby deleted and replaced in its entirety with the
following:
“4.1.1. (a) For
the first [***] units of Product purchased under this Agreement, ACN shall pay
to the Seller an amount per unit of Product equal to [***]. For all
units of Product in excess of [***]units, ACN shall pay to Seller an amount per
unit of Product equal to [***] (the “Purchase Price”).
Notwithstanding the first and second sentence of this Section 4.1.1(a), mutually
agreed changes or additions to the Seller’s video phone communications devices
specified in the document “Functional Requirements Document WG 4K Videophone
September 10, 2009” that increase or decrease manufacturing cost shall be
applied [***]. On a quarterly basis, Seller will provide ACN with
full documentation of Seller’s costs. Any changes to Seller’s costs
at any time will apply upon the effective date of such cost change and will
apply to all new Purchase Orders accepted thereafter by Seller.
(b) Deliveries After July 31,
2010 and On or Prior to October 31, 2010. Notwithstanding
anything to the contrary in this Agreement, if product and parts lead time is
higher than ninety (90) days for delivery of Products to ACN FOB Origin after
July 31, 2010 and on or prior to October 31, 2010, the Purchase Order process
for such Products will be done in two steps as follows: (i) Purchase Orders will
be provided by ACN to Seller no less than 120 days prior to ACN’s requested FOB
Origin delivery date (“120 Day
Purchase Orders”); provided that ACN shall only be responsible for 30% of
the costs of the Products related to 120 Day Purchase Orders if such 120 Day
Purchase Orders are cancelled by ACN; and (ii) ACN shall affirm such 120 Day
Purchase Orders to Seller no less than 90 days prior to ACN’s requested FOB
Origin delivery date (“90 Day
Purchase Orders”) that has a corresponding accepted 120 Day Purchase
Order; provided that, Seller shall not be obligated to continue producing
Products to meet expected delivery dates under a 120 Day Purchase Order until a
corresponding 90 Day Purchase Order is received.
(c) Deliveries After October 31,
2010. Purchase Orders for delivery of Products to ACN FOB
Origin after October 31, 2010 will be provided by ACN to Seller no less than 90
days prior to ACN’s requested FOB Origin delivery date.”
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d) Section
4.2 of the Agreement is hereby deleted and replaced in its entirety with the
following:
“4.2. Invoicing. Seller
shall separately invoice ACN for Products ordered under each Purchase
Order. Seller shall invoice ACN fifty percent (50%) of the total
price of the Products set forth in a Purchase Order upon the later of (a)
acceptance of the Purchase Order by Seller and (b) five (5) weeks prior to the
delivery of the Products by Seller to ACN FOB Origin pursuant to Section 8.1,
and payment for such amount shall be due upon receipt of such
invoice. Upon delivery of the Products by Seller to ACN FOB Origin
pursuant to Section 8.1, Seller shall invoice ACN for the remaining fifty
percent (50%), and payment for such amount shall be due upon receipt of such
invoice.”
e) Section
4.3.2 of the Agreement is hereby deleted and replaced in its entirety with the
following:
“The bank
information for Seller will be included in each invoice delivered to
ACN.”
f) The
following sentence is hereby added to the end of Section 5.3 of the
Agreement:
“Notwithstanding
anything in this Agreement to the contrary, ACN shall be entitled, without any
additional charge or penalty, to change the country designation of any Products
covered by a Purchase Order no less than sixty (60) days prior to the production
of any such Products.”
g) Section
6 of the Agreement is hereby deleted and replaced in its entirety with the
following:
“6. PRODUCT
FORECASTS. On or before the fifteenth day of each calendar
month, ACN shall provide Seller with a monthly, detailed rolling forecast of its
delivery requirements for each model of the Product for the following six (6)
calendar months. Such forecast shall be non-binding and provided
solely for planning purposes.”
h) Section
8.1 of the Agreement is hereby deleted and replaced in its entirety with the
following:
“8.1. All
Products and Spare Parts shall be shipped FOB Origin at the location of Seller’s
manufacturing site for such Products and Spare Parts.”
i) Section
8.2 of the Agreement is hereby deleted and replaced in its entirety with the
following:
“8.2. ACN
shall be responsible for arranging, and shall pay all actual costs of, all
shipping, freight, handling, customs fees and insurance for delivery to ACN’s
fulfillment facility. Seller will package the Products in accordance
with ACN’s standard fulfillment guidelines as provided to Seller with the cost
of such compliance being included within the Seller’s costs. All
shipments shall be prepared by Seller for delivery to ACN on pallets and in a
manner acceptable for entry into the country of destination in accordance with
ACN’s standard fulfillment guidelines as provided to Seller with the cost of
such preparation being included within the Seller’s costs.”
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j) Section
8.3 of the Agreement is hereby deleted in its entirety.
k) Section
23.1 of the Agreement is hereby amended by deleting the addresses for Seller and
ACN and replacing them with the following:
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Seller:
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Ojo
Video Phones LLC
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0000
Xxxxxxx Xxxxxx
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Xxxxxxx,
XX, 00000
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Attn: General
Counsel
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Fax: 000-000-0000
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Email:
xxxxxxx@xxxxx.xxx
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ACN:
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ACN
Digital Phone Service, LLC
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0000
Xxxxxxxx Xxxxx
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Xxxxxxx,
XX 00000
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Attn: General
Counsel – North America
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Fax: 000-000-0000
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Email:
xxxxxxxxxxxx@xxxxxx.xxx
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3. Other
Terms. Except as provided herein, the Agreement remains
unchanged and in full force and effect, and references to the “Agreement”
contained in the Agreement shall for all purposes be deemed to refer to the
Agreement as amended by this Amendment.
4. Miscellaneous.
a) Governing Law. This Amendment shall be
governed by and construed in accordance with the laws of the State of New York,
excluding its conflicts of law rules.
b) Entire
Agreement. The Agreement, as amended by this Amendment,
constitutes the entire understanding and agreement with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
between the Parties except as herein and therein contained.
c) Counterparts; Facsimile
Signatures. This Amendment may be executed in any number of
counterparts, each of which will be an original as regards any Party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Amendment, 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 and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in
person.
[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, the undersigned have executed this Amendment as of the date
first written above.
| ACN DIGITAL PHONE SERVICE, LLC | |||
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By:
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/s/ Xxxx Xxxxxxxxxxx | |
| Name: Xxxx Xxxxxxxxxxx | |||
| Title: President | |||
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OJO
VIDEO PHONES LLC
By: WorldGate Communications, Inc., its sole
member
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By:
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/s/ Xxxxxx X. Xxxxxx Xx. | |
| Name: Xxxxxx X. Xxxxxx Xx. | |||
| Title: Chief Executive Officer and President | |||
