Attached files
| file | filename |
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| EX-10.1 - WORLDGATE COMMUNICATIONS INC | v162889_ex10-1.htm |
| EX-99.1 - WORLDGATE COMMUNICATIONS INC | v162889_ex99-1.htm |
| EX-10.2 - WORLDGATE COMMUNICATIONS INC | v162889_ex10-2.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
_________________________
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (date of earliest event reported): October 9,
2009
__________________________
WorldGate
Communications, Inc.
(Exact
Name of Registrant as Specified in its Charter)
__________________________
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Delaware
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000-25755
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23-2866697
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(State
or Other Jurisdiction of
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(Commission
File Number)
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(I.R.S.
Employer
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Incorporation
or Organization)
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Identification
No.)
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3190
Tremont Avenue
Trevose,
Pennsylvania 19053
(Address
of Principal Executive Offices) (Zip Code)
(215)
354-5100
(Registrant’s
telephone number,
including
area code)
(Former
Name or Former Address, if Changed Since Last Report)
__________________________
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 1.01
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Entry into a Material Definitive
Agreement.
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Service Agreement with
deltathree, Inc.
On
October 9, 2009, Ojo Service LLC (“OJO Service”), a
subsidiary of WorldGate Communications, Inc. (“WGAT”), entered into
a master service agreement (the “D3 Agreement”) with
deltathree, Inc. (“D3”).
Pursuant
to the D3 Agreement, D3 will provide OJO Service, and OJO Service will purchase
from D3, wholesale voice over internet protocol telephony and video services,
including providing D3’s operational support systems to OJO Service in the
United States. As discussed in WGAT’s Form 10-Q Report for the
quarter ended June 30, 2009, these services will provide OJO Service one of the
tools necessary to provide “turn-key” digital video phone services (meaning a
complete, ready-to-use digital video phone services solution) directly to end
using customers. OJO Service will pay D3 an activation fee and a
monthly subscriber-based fee for each customer of OJO Service that subscribes
for the services provided to OJO Service under the D3 Agreement. The
initial term of the D3 Agreement is for a period five years from the date OJO
Service begins offering voice over internet protocol telephony and video
services to customers. The term will renew automatically for
successive terms of one 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. The Agreement can be terminated by either party
for cause or upon 180 days notice for convenience. If OJO Service
does not incur charges payable to D3 pursuant to the D3 Agreement of at least
$300,000 during the six month period following the date that the first customer
of OJO Service is provided voice over internet protocol telephony and video
services pursuant to the D3 Agreement, OJO Service will be obligated to pay D3
an amount equal to 33.0% multiplied by the difference between $300,000 and the
actual amount of such charges during such six month period.
D3 is
majority owned by D4 Holdings, LLC and WGAT is majority owned by WGI Investor
LLC. D4 Holdings, LLC and WGI Investor LLC have common majority
ownership and a common manager. Each of Robert Stevanovski, Anthony
Cassara, David Stevanovski and Gregory Provenzano is a director of D3 and of
WGAT and has an indirect ownership interest in D4 Holdings, LLC and WGI Investor
LLC. As a result of these relationships, each of WGI Investor LLC,
Robert Stevanovski, Anthony Cassara, David Stevanovski and Gregory Provenzano
may be deemed to have a direct or indirect interest in the transactions
contemplated by the D3 Agreement. Due to the preceding facts, the
independent members of the board of directors of WGAT separately considered,
discussed and approved the D3 Agreement.
Services Agreement with ACN,
Inc.
On
October 12, 2009, WGAT entered into a Service Agreement (the “ACN Service
Agreement”) with ACN, Inc. (“ACN”), pursuant to
which ACN will provide to WGAT, and WGAT will provide to ACN, certain
services. No services are currently contemplated to be provided by
WGAT to ACN. The following services are currently contemplated to be
provided by ACN to WGAT:
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·
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Secondment
Services. ACN has agreed to second mutually agreed
employees of ACN to WGAT on customary terms. At the current
time, no employees have been
seconded.
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·
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Use of
Equipment. ACN has agreed to provide WGAT with use of an EMI test
chamber owned by ACN. WGAT has agreed to pay ACN a fee of
approximately $1,940 per month for 24 months for use of the EMI test
chamber. At the end of the 24 month period, title to the EMI
test chamber will transfer to WGAT. Payment of the fee for the
EMI Test Chamber is not due until the later of December 31, 2010 or the
date WGAT has sufficient cash generated from operations to pay the
outstanding amount of the deferred
payments.
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·
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Administrative and
Travel Support. ACN has agreed to provide to WGAT, as
requested by WGAT, administrative and travel support. The cost
for administrative support shall be mutually agreed by the parties as such
services are requested. The cost for travel support is the
actual out-of-pocket costs paid by ACN to third parties for travel
services requested by WorldGate. Payment of the costs for
administrative and travel support are not due until the later of December
31, 2010 or the date WGAT has sufficient cash generated from operations to
pay the outstanding amount of the deferred
payments.
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·
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Real Estate and
Operations Services. ACN has agreed to provide to WGAT,
as requested by WGAT, office space, 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. The cost for
the use of real estate services is the incremental out-of-pocket costs
incurred by ACN in order to provide office space to WGAT. The
cost for the use of operations services is the incremental out-of-pocket
costs incurred by ACN in order to provide the operations services to
WGAT. Payment of the costs for real estate and operations
services are not due until the later of December 31, 2010 or the date WGAT
has sufficient cash generated from operations to pay the outstanding
amount of the deferred payments.
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·
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Provisioning of VOIP
Communication Devices. ACN has agreed, through its
subsidiary ACN Digital Phone Service, LLC (“ACN DPS”), to provide to OJO
Video, a subsidiary of WGAT, the ability to purchase from time to time the
Iris 3000 video phone. The price to be paid by OJO Video for
each video phone is the amount incurred by ACN DPS to manufacture the
phone without any markup, plus the costs and expenses for shipping and
handling. The purchase price for each video phone is due and
payable thirty (30) days after the date of the receipt of the invoice
relating to such video phone. Notwithstanding the foregoing, if
OJO Video has paid ACN DPS all outstanding carrying costs contemplated by
the next sentence when due, WGAT shall not be in default if OJO Video
fails to pay ACN DPS the purchase price for each video phone as
contemplated by the prior sentence; provided, however, that OJO Video must
pay outstanding invoices, to the extent commercially reasonable, upon OJO
Video having sufficient cash generated from operations to pay such
outstanding invoiced amounts. OJO Video will pay ACN DPS a
carrying cost of 1% per month applied to the total value in a given month
of video phones received by OJO Video and for which OJO Video has not made
payment; provided that, the carrying cost will not be applied to video
phones within the first 30 days after receipt of the invoice relating to
delivery of such video phone, but will apply monthly thereafter until OJO
Video has made full payment with respect to such video
phone. ACN DPS will have a purchase money security interest in
all video phones received by OJO Video for which OJO Video has not made
full payment to ACN DPS. ACN DPS provided customary warranties
to OJO Video regarding the video
phones.
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WGAT is
majority owned by WGI Investor LLC. The ultimate ownership of WGI
Investor LLC includes owners of ACN. Each of Robert Stevanovski,
Anthony Cassara, David Stevanovski and Gregory Provenzano is a director of WGAT,
have an indirect ownership interest in WGI Investor LLC, have an ownership
interest in ACN and have a director, officer and/or advisory position with
ACN. As a result of these relationships, each of Robert Stevanovski,
Anthony Cassara, David Stevanovski and Gregory Provenzano may be deemed to have
a direct or indirect interest in the transactions contemplated by the ACN
Service Agreement. Due to the preceding facts, the independent
members of the board of directors of WGAT separately considered, discussed and
approved the ACN Service Agreement.
The
following documents are incorporated by reference into this Current Report on
Form 8-K:
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·
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the
Master Service Agreement, dated October 9, 2009, between Ojo Service LLC
and deltathree, Inc., filed as Exhibit 10.1 to this Current Report on Form
8-K; and
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·
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the
Services Agreement, dated October 12, 2009, between ACN, Inc. and
WorldGate Communications, Inc., filed as Exhibit 10.2 to this Current
Report on Form 8-K.
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Item
7.01
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Regulation
FD Disclosure.
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On
October 16, 2009, WGAT issued a press release announcing the signing of the D3
Agreement. The press release is furnished herewith as Exhibit
99.1.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits.
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10.1
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Master
Service Agreement, dated October 9, 2009, between Ojo Service LLC and
deltathree, Inc.
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10.2
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Services
Agreement, dated October 12, 2009, between ACN, Inc. and WorldGate
Communications, Inc.
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99.1
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Press
Release, dated October 16,
2009
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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WORLDGATE
COMMUNICATIONS, INC.
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Dated:
October 16, 2009
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By:
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/s/
Christopher V. Vitale
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Name:
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Christopher
V. Vitale
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Title:
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Senior
Vice President, Legal and
Regulatory,
General Counsel and
Secretary
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EXHIBIT
INDEX
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Exhibit No.
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Description
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10.1
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Master
Service Agreement, dated October 9, 2009, between Ojo Service LLC and
deltathree, Inc.
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10.2
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Services
Agreement, dated October 12, 2009, between ACN, Inc. and WorldGate
Communications, Inc.
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99.1
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Press
Release, dated October 16,
2009
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