SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of March 24, 2000,
between IDT Corporation, a Delaware corporation (the "Company"), and Liberty
Media Corporation, a Delaware corporation ("LMC").
WHEREAS, LMC desires to purchase or cause its designee to purchase
shares of Common Stock, par value $0.01 per share, of the Company (the "Common
Stock"), and the Company desires to issue and sell shares of Common Stock to LMC
or its designee (which shall be a member of the Liberty Group (as defined
herein)), upon the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, the Company and the Investor hereby agree as follows:
Section 1. Subscription.
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1.1. Subscription for Common Stock. Upon the terms and subject to the
conditions of this Agreement, the Company hereby agrees to issue and sell and
LMC hereby agrees to purchase or cause its designee to purchase (the applicable
purchaser being referred to herein as the "Investor") from the Company 3,775,000
shares of Common Stock (the "Investor Securities"), at a price of $34.50 per
share of Common Stock. The number of Investor Securities and the purchase price
per share will be appropriately adjusted to reflect the effect of any stock
splits, reverse stock splits, stock dividends and other similar events affecting
the Common Stock.
1.2. Issuance of Common Stock; Execution of Additional Agreements. At
the Closing (as defined below) upon the terms and subject to the conditions of
this Agreement:
(a) Against delivery of the share certificate(s) referred to in clause
(b) below, the Investor will pay to the Company cash in immediately available
funds in the amount representing the aggregate purchase price for the number of
Investor Securities purchased by it (the "Purchase Price") to the bank account
specified by the Company to Investor not later than two business days prior to
the date of the Closing.
(b) Against payment of the Purchase Price, the Company will issue and
deliver to the Investor a share certificate or certificates representing the
Investor Securities purchased hereunder by the Investor, which certificate or
certificates shall be registered in the Investor's name.
(c) The Company and the Investor shall execute and deliver the Lock-up,
Registration Rights and Exchange Agreement relating to the Investor Securities
substantially in the form attached as Exhibit A hereto (the "Lock-up,
Registration Rights and Exchange Agreement").
(d) The Investor and Xxxxxx X. Xxxxx shall execute and deliver the
Voting Agreement substantially in the form attached as Exhibit B hereto (the
"Voting Agreement").
1.3. Closing. The issuance and delivery of the Investor Securities by
the Company to the Investor and the delivery of the Purchase Price by the
Investor to the Company (the "Closing"), will take place at the offices of
Xxxxxxxx & Xxxxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 A.M. on the
business day that is three (3) business days after the date on which the
conditions set forth in Section 4 have been fulfilled or, where permissible
waived, or at such other time and place as the Company and the Investor may
agree orally or in writing. "Business Day" for purposes of this Agreement means
a day other than a Saturday, Sunday or day on which banks in the City of New
York are authorized to close.
Section 2. Representations, Warranties and Acknowledgments of the
Investor. LMC hereby represents, warrants and acknowledges to the Company, as
follows:
2.1. No Registration of Investor Shares. The Investor is aware that the
Investor Securities have not been registered under the Securities Act of 1933,
as amended (the "Act"), that such offer and sale are intended to be exempt from
registration under the Act and the rules promulgated thereunder by the
Securities and Exchange Commission (the "SEC"), and that the Investor Securities
cannot be offered, sold, assigned, transferred, or otherwise disposed of unless
they are subsequently registered under the Act or an exemption from such
registration is available. The Investor is also aware that sales or transfers of
the Investor Securities are further restricted by state securities laws and the
provisions of the Lock-up, Registration Rights and Exchange Agreement and that
the certificates for the Investor Securities will bear appropriate legends
restricting their transfer pursuant to applicable laws and the Lock-up,
Registration Rights and Exchange Agreement.
2.2. Suitability of Investment. (a) The Investor is an "accredited
investor" within the meaning of Rule 501 of Regulation D of the Act as presently
in effect and is acquiring the Investor Securities for its own account, or for
the account of another "accredited investor" who is an affiliate of the Investor
and who can make all of the representations contained herein, for investment
purposes only and not with a view to the resale or distribution thereof;
(b) The Investor will not, directly or indirectly, offer, sell,
transfer, assign, exchange or otherwise dispose of all or any part of the
Investor Securities, except in accordance with applicable federal and state
securities laws, to the extent applicable, and the provisions of the Lock-up,
Registration Rights and Exchange Agreement.
(c) The Investor has such knowledge and experience in financial,
business and tax matters that the Investor is capable of evaluating the merits
and risks relating to the
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Investor's investment in the Investor Securities and making an investment
decision with respect to the Company;
(d) The Investor has been given the opportunity to obtain information
and documents relating to the Company and to ask questions of and receive
answers from representatives of the Company concerning the Company and the
investment in the Investor Securities;
(e) The Investor has such knowledge and experience in financial or
business matters that it can, and it has, adequately analyzed the risks of an
investment in the Investor Securities and it has determined the Investor
Securities are a suitable investment for the Investor and that the Investor is
able at this time, and in the foreseeable future, to bear the economic risk of a
total loss of its investment in the Company; and
(f) The Investor is aware that there are substantial risks incident to
an investment in the Investor Securities.
2.3. Corporate Authority. LMC has and prior to the Closing the Investor
will have all requisite corporate power and authority and has or will have taken
all corporate and other action necessary in order to execute, deliver and
perform its obligations under the applicable of this Agreement, the Lock-up,
Registration Rights and Exchange Agreement and the Voting Agreement
(collectively, the "Equity Documents") to which it is or will be a party. This
Agreement is and, upon the execution and delivery in accordance with the terms
of this Agreement, the Lock-up, Registration Rights and Exchange Agreement and
the Voting Agreement will be, valid and binding agreements of the applicable of
LMC or of the Investor enforceable against it in accordance with their
respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
Section 3. Representations, Warranties and Acknowledgments of the
Company. The Company hereby represents, warrants and acknowledges to LMC and the
Investor on the date hereof and as of the Closing Date as follows:
3.1. Organization, Good Standing and Qualification. (a) Each of the
Company and each of its "significant subsidiaries" (each an "IDT Subsidiary")
within the meaning of Rule 1-02(w) of Regulation S-X promulgated by the SEC, is
a corporation duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of organization and has all requisite
corporate or similar power and authority to own, lease and operate its
properties and assets and to carry on its business as currently conducted. Each
of the Company and each IDT Subsidiary is qualified to do business and is in
good standing as a foreign corporation in each jurisdiction where the ownership,
lease or operation of its assets or properties or conduct of its business
requires such qualification, except where the failure to be so qualified or in
good standing, when taken
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together with all other such failures, is not reasonably likely to have a
Company Material Adverse Effect (as defined below).
As used in this Agreement, the term "Company Material Adverse Effect"
means a material adverse effect on the financial condition, properties, assets,
business or results of operations of the Company and its subsidiaries taken as a
whole; provided, however, that any such effect resulting from any change that
affects companies in the telecommunications, Internet or Internet telephony
industries generally, shall not be considered when determining if a Company
Material Adverse Effect has occurred.
(b) All of the outstanding shares of capital stock of each IDT
Subsidiary beneficially owned by the Company have been validly issued and are
fully paid and nonassessable and are so owned free and clear of any mortgage,
pledge, lien, security interest, claim, restriction, charge or encumbrance of
any kind ("Lien").
(c) The Company has delivered to LMC true and complete copies of the
Restated Certificate of Incorporation, as amended to date, and By-laws, as in
effect on the date hereof, of the Company and the equivalent governing
instruments of each of its subsidiaries any of the equity or debt securities of
which are publicly owned.
3.2. Corporate Authority. The Company has all requisite corporate power
and authority and has taken all corporate action necessary in order to execute,
deliver and perform its obligations under this Agreement and the Lock-up,
Registration Rights and Exchange Agreement and to consummate the transactions
contemplated hereby. The Company has duly executed and delivered this Agreement,
and at the Closing, the Company will have duly executed and delivered the
Lock-up, Registration Rights and Exchange Agreement. This Agreement is and, upon
the execution and delivery in accordance with the terms of this Agreement, the
Lock-up, Registration Rights and Exchange Agreement will be, a valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
3.3. Capital Structure. (a) The authorized capital stock of the Company
consists solely of 100,000,000 shares of Common Stock, $0.01 par value, of which
24,231,999 shares were outstanding as of the close of business on the date
hereof, 35,000,000 shares of Class A Common Stock, $0.01 par value ("Class A
Stock"), of which 10,019,692 shares were outstanding as of the close of business
on the date hereof, and 10,000,000 shares of Preferred Stock, $0.01 par value,
of which no shares are outstanding as of the close of business on the date
hereof. All of the outstanding shares of Common Stock and Class A Stock have
been duly authorized and are validly issued, fully paid and nonassessable. The
Investor Securities have been duly authorized and, when issued, delivered and
paid for in accordance with the terms of this Agreement, will be validly issued,
fully paid and nonassessable, and the issuance thereof will not have been
subject to any preemptive rights or made in violation of any Applicable Law. The
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term "Applicable Law" for purposes of this Agreement means (a) any foreign,
United States Federal, state or local law, statute, rule, regulation, order,
writ, injunction, judgment, decree or permit of any Governmental Entity (as
defined in Section 5(d)) and (b) any rule or listing requirement of any
applicable national stock exchange or association or listing requirement of any
national stock exchange or association or SEC recognized trading market on which
securities issued by the Company or any of the IDT Subsidiaries are listed or
quoted.
(b) Except as set forth on Schedule 3.3, as of the date of this
Agreement, there are (i) no outstanding options, warrants, agreements,
conversion rights, exchange rights, preemptive rights or other rights (whether
contingent or not) to subscribe for, purchase or acquire any issued or unissued
shares of capital stock of the Company or any non public IDT Subsidiary, (ii) no
authorized or outstanding stock appreciation, phantom stock, profit
participation, or similar rights with respect to the Company or any non public
IDT Subsidiary, (iii) no rights, contracts, commitments or arrangements
(contingent or otherwise) obligating the Company or any IDT Subsidiary to either
(A) redeem, purchase or otherwise acquire, or offer to purchase, redeem, or
otherwise acquire, any outstanding shares of, or any outstanding warrants or
rights of any kind to acquire any shares of, or any outstanding securities that
are convertible into or exchangeable for any shares of, capital stock of the
Company, or (B) pay any dividend or make any distribution in respect of any
shares of, or any outstanding securities that are convertible or exchangeable
for any shares of, capital stock of the Company, (iv) no agreements or
arrangements under which the Company or any non public IDT Subsidiary is
obligated to register the sale of any of its securities under the Act (except as
provided hereunder) and (v) no restrictions upon, or Contracts (as defined in
Section 5(e)) or understandings of the Company or any subsidiary of the Company,
or, to the knowledge of the Company, Contracts or understandings of any other
person, with respect to, the voting or transfer of any shares of capital stock
of the Company or any non public IDT Subsidiary. Except as set forth on Schedule
3.3, there are no securities or instruments containing antidilution or similar
provisions that will be triggered by the consummation of the transactions
contemplated by the Equity Documents (collectively, the "Transactions"). Except
as set forth on Schedule 3.3, no party has any right of first refusal, right of
first offer, right of co-sale or other similar right regarding the Company's
securities. Except as set forth on Schedule 3.3, there are no provisions of the
Restated Certificate of Incorporation, as amended, or the By-laws of the
Company, no agreements to which the Company is a party and no agreements by
which the Company or any IDT Subsidiary are bound, that would (a) require the
vote of the holders of more than a majority of the voting power of the shares of
the Company's issued and outstanding Common Stock and Class A Stock, voting
together as a single class, to take or prevent any corporate action, other than
those matters requiring a class vote under the General Corporation Law of the
State of Delaware (the "DGCL"), or (b) entitle any party to nominate or elect
any director of the Company or require any of the Company's stockholders to vote
for any such nominee or other person as a director of the Company. As used in
this Agreement, the term "person" means any individual, partnership,
corporation, limited liability company, joint venture, association,
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joint-stock company trust, unincorporated organization, government or agency or
political subdivision thereof, or other entity.
3.4. No Violation; Consents. (a) Subject to the filing and consents
referred to in Section 3.4(b), the execution, delivery and performance by the
Company of each of the applicable Equity Documents and the consummation by the
Company of the Transactions do not and will not contravene any Applicable Law,
except for any such contravention that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect. The
execution, delivery and performance by the Company of each of the applicable
Equity Documents and the consummation of the Transactions (i) will not (A)
violate, result in a breach of or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under any Contract to which the Company or any IDT
Subsidiary is a party or by which the Company or any IDT Subsidiary is bound or
to which any of their respective assets is subject, or (B) result in the
creation or imposition of any Lien upon any of the assets of the Company or any
IDT Subsidiary, except for any such violations, breaches, defaults or Liens that
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect and (ii) will not conflict with or violate any
provision of the Restated Certificate of Incorporation or Bylaws of the Company
currently in effect or in effect as of the Closing.
(b) Except for (i) the filings by the Company, if any, required by the
HSR Act (as defined in Section 5(i)), (ii) applicable filings, if any, required
by applicable federal and state securities laws, and (iii) applicable filings,
if any, required by the Federal Communication Commission and state public
utility commissions which, in each case referred to in clauses (i) - (iii),
shall be made (or are not required to be made) on or prior to the Closing Date,
and except as contemplated by the Lock-up, Registration Rights and Exchange
Agreement, no consent, authorization or order of, or filing or registration
with, any Governmental Entity or other Person is required to be obtained or made
by the Company or the IDT Subsidiaries for the execution and delivery of the
Equity Documents or the consummation by the Company of the Transactions except
where the failure to obtain such consents, authorizations or orders, or make
such filings or registrations, would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect or a material
adverse effect on the ability of the Company to consummate the Transactions.
3.5. Company Reports; Financial Statements. (a) The Company has filed
all reports, registration statements and other filings, together with any
amendments or supplements required to be made with respect thereto, that it has
been required to file with the SEC under the Act and the Securities Exchange Act
of 1934, as amended (the "1934 Act"). As of the respective dates of their filing
with the SEC, the Company Reports complied in all material respects with the
applicable provisions of the Act and the 1934 Act and did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading.
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All reports, registration statements and other filings filed by the Company with
the SEC since June 30, 1998 (including exhibits and any amendments thereto and
documents incorporated by reference therein) are referred to in this Agreement
as the "Company Reports".
(b) Each of the consolidated balance sheets included in or incorporated
by reference into the Company Reports (including the related notes and
schedules) fairly presents, or will fairly present, the consolidated financial
position of the Company and its subsidiaries as of the date of such balance
sheet and each of the consolidated statements of income, changes in
stockholders' equity, and cash flows included in or incorporated by reference
into the Company Reports (including any related notes and schedules) fairly
presents, or will fairly present, the results of operations, cash flows, and
changes in stockholders' equity, as the case may be, of the Company and its
subsidiaries for the periods set forth in such statements (subject, in the case
of unaudited statements, to notes and normal year-end audit adjustments that
will not be material in amount or effect), and in each case has been prepared in
accordance with generally accepted accounting principles ("GAAP") consistently
applied during the periods involved, except as may be noted therein, and in
compliance in all material respects with the rules and regulations of the SEC.
3.6. Absence of Certain Changes. Except as disclosed in the Company
Reports filed and publicly available prior to the date hereof, since October 31,
1999 there has not been any event or occurrence or any change in the financial
condition, properties, business or results of operations of the Company that has
had or could reasonably be expected to have a Company Material Adverse Effect.
3.7. Compliance with Laws. Except as set forth in the Company Reports
filed and publicly available prior to the date hereof, the business of the
Company has not been, and is not being, conducted in violation of any Federal,
state, local or foreign law, statute, ordinance, rule, regulation, judgment,
order, injunction, decree, arbitration award, agency requirement, license or
permit of any Governmental Entity, except for violations or possible violations
that, individually or in the aggregate, would not be reasonably expected to have
a Company Material Adverse Effect or prevent or materially burden or materially
impair the ability of the Company to consummate the Transactions. Except as set
forth in the Company Reports filed and publicly available prior to the date
hereof, no investigation or review by any Governmental Entity with respect to
the Company or the IDT Subsidiaries is pending or, to the knowledge of the
executive officers of the Company, threatened, nor has any Governmental Entity
indicated an intention to conduct the same, except for those the outcome of
which are not, individually or in the aggregate, reasonably likely to have a
Company Material Adverse Effect or prevent or materially burden or materially
impair the ability of the Company to consummate the Transactions.
3.8. Private Offering. Based, in part, on LMC's and Investor's
representations in Section 2, the offer and sale of the Investor Securities is
exempt from the registration and prospectus delivery requirements of the Act.
Neither the Company, nor anyone acting
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on behalf of it, has offered or sold or will offer or sell any securities, or
has taken or will take any other action (including, without limitation, any
offering of any securities of the Company under circumstances that would
require, under the Act, the integration of such offering with the offering and
sale of the Investor Securities), that would subject the issuance of the
Investor Securities to the registration provisions of the Act.
3.9. Litigation. Except as disclosed in the Company Reports filed and
publicly available prior to the date hereof, there are not any (a) outstanding
judgments against or affecting the Company or any of the IDT Subsidiaries, or
(b) proceedings pending or, to the knowledge of the Company, threatened against
or affecting the Company or any of the IDT Subsidiaries that (i) in any manner
challenge or seek to prevent, enjoin, alter or materially delay the Transactions
or (ii) if resolved adversely to the Company or any IDT Subsidiary, would have,
individually or in the aggregate, a Company Material Adverse Effect.
3.10. Permits and Licenses. The Company and the IDT Subsidiaries have
obtained all governmental permits, licenses, franchises and authorizations
required for the Company and its subsidiaries to conduct their respective
businesses as currently conducted, except for those the failure of which to be
obtained would not have a Material Adverse Effect.
3.11. Intellectual Property, etc. The Company and the IDT Subsidiaries
have taken all reasonable efforts to ensure that they have, and have no reason
to believe that they do not have, all right, title and interest in, or a valid
and binding license to use, all Company Intellectual Property (as defined
below). The Company and the IDT Subsidiaries (i) have not defaulted in any
material respect under any license to use any Company Intellectual Property,
(ii) are not the subject of any proceeding or litigation for infringement of any
third party intellectual property, except for the proceedings disclosed in the
Company Reports filed and publicly available prior to the date hereof, which
proceedings the Company believes are without merit, (iii) have no knowledge of
circumstances that would be reasonably expected to give rise to any such
proceeding or litigation and (iv) have no knowledge of circumstances that are
causing or would be reasonably expected to cause the loss or impairment of any
Company Intellectual Property, other than a default, proceeding, litigation,
loss or impairment that is not having or would not be reasonably expected to
have, individually or in the aggregate, a Company Material Adverse Effect. The
Company and the IDT Subsidiaries have from time to time received correspondence
from third parties asserting intellectual property rights purportedly owned by
said third parties and allegedly violated by the Company or any of the IDT
Subsidiaries and have also received correspondence asserting that a license may
be necessary to avoid alleged violation of third party rights, none of which
assertions or allegations has had or would be reasonably expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
For purposes of this Agreement, "Company Intellectual Property" means
patents and patent rights, trademarks and trademark rights, tradenames and
tradename rights,
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service marks and service xxxx rights, copyrights and copyright rights, trade
secret and trade secret rights, and other intellectual property rights, and all
pending applications for and registrations of any of the foregoing that are used
in the conduct of the business of the Company or the IDT Subsidiaries as
presently conducted.
3.12. Business Combination Statutes. None of LMC, the Investor or any
of their respective "affiliates" and "associates" (as those terms are defined in
Section 203 of the DGCL or any comparable business combination statute of any
applicable jurisdiction) shall as a result of the execution of this Agreement or
consummation of the Transactions, be subject to any of the restrictions of
Section 203 of the DGCL or any similar provisions of Applicable Law with respect
to the Company or any of the Company's direct or indirect subsidiaries any of
the shares of which are publicly traded.
3.13. British Telecommunications. As of the date hereof, the Company
and its subsidiaries do not, directly or indirectly, beneficially own (within
the meaning of Rule 13d-3 promulgated under the 0000 Xxx) any shares of any
class of capital stock of British Telecommunications plc, a company organized
under the laws of England and Wales ("BT"), or any of its Subsidiaries, or any
direct or indirect rights or options to acquire (through purchase, exchange,
conversion or otherwise) any shares of any class of capital stock of BT or any
of its subsidiaries.
Section 4. Covenants.
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4.1. Operation of Business. (a) From the date hereof until the Closing
date, the Company shall, and shall cause each of the IDT Subsidiaries to:
(i) operate its business in all material respects in the ordinary
course and in compliance with Applicable Laws;
(ii) not amend the Restated Certificate of Incorporation or Bylaws
of the Company, reclassify the Company's capital stock or declare, pay or
make any dividend or other distribution on its capital stock other than (i)
reclassifications of the Company's then outstanding capital stock into
Class B Common Stock or (ii) dividends or other distributions on the
Company's then outstanding capital stock payable in the form of Class B
Common Stock;
(iii) not take any action, or knowingly omit to take any action,
that would, or that would reasonably be expected to, result in (A) any of
the representations and warranties of the Company set forth in Section 3
(other than those representations and warranties in Section 3.3 that speak
as of the date of this Agreement) becoming untrue or (B) any of the
conditions to the obligations of the Investor not being satisfied; or
(iv) enter into any agreement or commitment to do any of the
foregoing.
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(b) Without the consent of LMC, neither the Company nor any of its
subsidiaries will voluntarily acquire or agree to acquire (through purchase,
exchange, conversion or otherwise) beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the 0000 Xxx) of any shares of any class of capital
stock of BT or its Subsidiaries or any direct or indirect rights or options to
so acquire any shares of any class of capital stock of BT or any of its
subsidiaries.
4.2. Investor Director. For so long as members of the Liberty Group (as
defined below) in the aggregate own any combination of shares of Common Stock
and Class B Common Stock that, taken together, equal by number at least 50% of
the number of Investor Securities or, following the exchange thereof for Class B
Common Stock, 50% of the number of shares of Class B Common Stock issued in
exchange for the Investor Securities (in each case as appropriately adjusted to
reflect the effect of stock splits, stock dividends, reverse stock splits and
other similar events affecting the Common Stock or the Class B Common Stock),
the Investor shall be entitled to designate one member of the Company's Board of
Directors (the "Investor Director"). In the event the Investor is entitled under
this Section 4.2 to designate an Investor Director, the Investor shall so notify
the Company in writing and the Company shall (a) increase the size of the Board
of Directors by one and fill the vacancy created thereby by electing an Investor
Director and (b) in connection with the meeting of stockholders of the Company
next following such election, nominate an Investor Director for election as a
director by the stockholders and use its commercially reasonable efforts to
cause the Investor Director to be so elected. If the Investor is entitled under
this Section 4.2 to designate an Investor Director and a vacancy shall exist in
the office of the Investor Director, the Investor shall be entitled to designate
a successor and the Board of Directors shall elect such successor and, in
connection with the meeting of stockholders of the Company next following such
election, nominate such successor for election as director by the stockholders
and use its commercially reasonable efforts to cause the successor to be
elected.
As used in this Agreement, "Liberty Group" means Liberty and its
Affiliates. "Liberty" means LMC, provided that if substantially all of the
assets of LMC are at any time hereafter contributed to Liberty Media Group LLC,
a Delaware limited liability company, then from and after such contribution,
Liberty shall mean Liberty Media Group LLC. "Affiliate" has the meaning ascribed
to such term in Section 9.4.
4.3. Access to Books and Records. The Company shall afford to Investor,
its counsel and representatives full access upon reasonable notice during normal
business hours throughout the period prior to the Closing Date (or the earlier
termination of this Agreement) to all its properties, books, Contracts,
commitments and records (including, but not limited to, tax returns) and, during
such period, shall, upon request, furnish promptly to Investors (i) a copy of
each report, schedule and other document filed or received by it pursuant to the
requirements of Federal or state securities laws and (ii) all other information
concerning its business, properties and personnel as Investor may reasonably
request, provided that no investigation or receipt of information pursuant to
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this Section 4.3 shall affect any representation or warranty of the Company or
the conditions to the obligations of the Investor.
4.4. Compliance with Conditions; Commercially Reasonable Efforts. (a)
The Company shall use all commercially reasonable efforts to cause all of the
obligations imposed upon it in this Agreement to be duly complied with, and to
cause the conditions precedent to the obligations of Investor to be satisfied.
Upon the terms and subject to the conditions of this Agreement, the Company will
use all commercially reasonable efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary, proper or
advisable consistent with Applicable Law to consummate and make effective in the
most expeditious manner practicable the Transactions in accordance with the
terms of this Agreement. Nothing set forth in this Section 4.4 shall impose any
obligations with respect to any filing or approval under the HSR Act, which
requirements are the subject of Section 4.5.
(b) LMC shall use all commercially reasonable efforts to cause all of
the obligations imposed upon it in this Agreement to be duly complied with, and
to cause the conditions precedent to the obligations of the Company to be
satisfied. Upon the terms and subject to the conditions of this Agreement, LMC
will use all commercially reasonable efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary, proper or
advisable consistent with Applicable Law to consummate and make effective in the
most expeditious manner practicable the Transactions in accordance with the
terms of this Agreement. Nothing herein shall be construed to require LMC or any
of its Affiliates to divest or otherwise rearrange the composition of any assets
or agree to any conditions or requirements which are, or are reasonably likely
to be, materially adverse or burdensome to LMC or its Affiliates, as applicable.
Nothing set forth in this Section 4.4 shall impose any obligations with respect
to any filing or approval under the HSR Act, which requirements are the subject
of Section 4.5.
4.5. HSR Act Notification. (a) To the extent required by the HSR Act
(as defined in Section 5(i)), the Company shall, to the extent it has not
already done so, (i) use all commercially reasonable efforts to file or cause to
be filed, as promptly as practicable after the execution and delivery of this
Agreement, with the United States Federal Trade Commission and the Antitrust
Division of the United States Department of Justice, all reports and other
documents required to be filed by it under the HSR Act concerning the
Transactions and (ii) use all commercially reasonable efforts to promptly comply
with or cause to be complied with any requests by the United States Federal
Trade Commission or the Antitrust Division of the United States Department of
Justice for additional information concerning such Transactions, in each case so
that the waiting period applicable to this Agreement and the Transactions under
the HSR Act shall expire as soon as practicable after the execution and delivery
of this Agreement. The Company agrees to request, and to cooperate with the
Investor in requesting, early termination of any applicable waiting period under
the HSR Act.
11
(b) To the extent required by the HSR Act, LMC shall, if it has not
already done so, (i) use all commercially reasonable efforts to file or cause to
be filed, as promptly as practicable after the execution and delivery of this
Agreement, with the United States Federal Trade Commission and the Antitrust
Division of the United States Department of Justice, all reports and other
documents required to be filed by it under the HSR Act concerning the
transactions contemplated hereby and (ii) use all commercially reasonable
efforts to promptly comply with or cause to be complied with any requests by the
United States Federal Trade Commission or the Antitrust Division of the United
States Department of Justice for additional information concerning such
transactions in each case so that the waiting period applicable to this
Agreement and the transactions contemplated hereby under the HSR Act shall
expire as soon as practicable after the execution and delivery of this
Agreement. LMC agrees to request, and to cooperate with the Company in
requesting, early termination of any applicable waiting period under the HSR
Act.
4.6. Consents and Approvals. (a) The Company (i) shall use all
commercially reasonable efforts to obtain all necessary consents, waivers,
authorizations and approvals of all Governmental Entities and of all other
persons required in connection with the execution, delivery and performance by
the Company of the Equity Documents or the consummation of the Transactions and
(ii) shall diligently assist and cooperate with the Investor in preparing and
filing all documents required to be submitted by the Investor to any
Governmental Entity in connection with the Transactions (which assistance and
cooperation shall include, without limitation, timely furnishing, upon written
requests, to the Investor all information concerning the Company and the
subsidiaries that counsel to the Investor reasonably determines is required to
be included in such documents or would be helpful in obtaining any such required
consent, waiver, authorization or approval). Nothing herein shall be construed
to require the Company or any of its Affiliates to divest or otherwise rearrange
the composition of any assets or agree to any conditions or requirements which
are, or are reasonably likely to be, materially adverse or burdensome to the
Company or its Affiliates as applicable.
(b) LMC (i) shall use all commercially reasonable efforts to obtain all
necessary consents, waivers, authorizations and approvals of all Governmental
Entities other than as expressly set forth in Section 4.5(b) regarding the HSR
Act, and of all other persons required in connection with the execution,
delivery and performance by LMC of this Agreement or the consummation of the
Transactions and (ii) shall diligently assist and cooperate with the Company in
preparing and filing all documents required to be submitted by the Company to
any Governmental Entity in connection with such Transactions (which assistance
and cooperation shall include, without limitation, timely furnishing to the
Company all information concerning LMC that counsel to the Company reasonably
determines is required to be included in such documents or would be helpful in
obtaining any such required consent, waiver, authorization or approval). Nothing
herein shall be construed to require LMC or any of its Affiliates to divest or
otherwise rearrange the composition of any assets or agree to any conditions or
requirements which
12
are, or are reasonably likely to be, materially adverse or burdensome to LMC or
its Affiliates, as applicable.
4.7. Use of Proceeds. The Company shall use the Purchase Price for
payment of expenses incurred in connection with the Transactions, capital
expenditures (including acquisitions), repayment of indebtedness and such other
general corporate purposes as the Board of Directors of the Company shall
determine.
4.8. Listing of Shares. The Company shall use all commercially
reasonable efforts to cause the Investor Securities to be listed or otherwise
eligible for trading on the Nasdaq National Market System.
4.9. Confidentiality. Unless otherwise agreed to in writing by the
Company, LMC will, and will cause its affiliates, directors, officers, employees
and agents (such affiliates and other persons being collectively referred to as
LMC's "Representatives") to, (i) keep all Confidential Information of the
Company confidential and not disclose or reveal any such Confidential
Information to any person other than those Representatives who are participating
in effecting the transactions contemplated hereby or who otherwise need to know
such Confidential Information, (ii) use such Confidential Information only in
connection with consummating the transactions contemplated hereby and enforcing
LMC's and Investor's rights hereunder, and (iii) not use Confidential
Information in any manner detrimental to the Company. In the event that LMC is
requested pursuant to, or required by, applicable law or regulation or by legal
process to disclose any Confidential Information of the Company, LMC will
provide the Company with prompt notice of such request(s) so that the Company
may seek an appropriate protective order. LMC's obligations hereunder with
respect to Confidential Information that (i) is disclosed to a third party with
the Company's written approval, (ii) is required to be produced under order of a
court of competent jurisdiction or other similar requirements of a governmental
agency, or (iii) is required to be disclosed by applicable law or regulation,
will, subject in the case of clauses (ii) and (iii) above to LMC's compliance
with the preceding sentence, cease to the extent of the disclosure so consented
to or required, except to the extent otherwise provided by the terms of such
consent or covered by a protective order. If LMC uses a degree of care to
prevent disclosure of the Confidential Information that is at least as great as
the care it normally takes to preserve its own information of a similar nature,
it will not be liable for any disclosure that occurs despite the exercise of
that degree of care, and in no event will LMC be liable for any indirect,
punitive, special or consequential damages unless such disclosure resulted from
its willful misconduct or gross negligence in which event it will be liable in
damages for the Company's lost profits resulting directly and solely from such
disclosure. In the event this Agreement is terminated, LMC will, if so requested
by the Company, promptly return or destroy all of the Confidential Information
of the Company, including all copies, reproductions, summaries, analyses or
extracts thereof or based thereon in the possession of LMC or its
Representatives; provided, however, that LMC will not be required to return or
cause to be returned summaries, analyses or extracts prepared by it or its
Representatives, but will destroy (or cause to be destroyed) the same upon
request of the Company. The
13
confidentiality obligations of LMC contained in this Section 4.9 shall survive
until the third anniversary of the date of this Agreement.
For purposes of this Section 4.9, "Confidential Information" of the
Company means all confidential and proprietary information about the Company and
its subsidiaries that is furnished by it or its agents or representatives to LMC
or its Representatives, regardless of the manner in which it is furnished.
"Confidential Information" does not include, however, information which (a) has
been or in the future is published or is now or in the future is otherwise in
the public domain through no fault of LMC or its Representatives, (b) was
available to LMC or its Representatives on a non-confidential basis prior to its
disclosure by the disclosing party, (c) becomes available to LMC or its
Representatives on a non-confidential basis from a person other than the Company
or its representatives or agents who is not otherwise bound by a confidentiality
agreement with the Company or its representatives or agents, or is not otherwise
prohibited from transmitting the information to LMC or its Representatives, or
(d) is independently developed by the Company or its Representatives through
persons who have not had, either directly or indirectly, access to or knowledge
of such information.
Section 5. Conditions to Obligations of the Investor. The obligation of
LMC to pay or cause the Investor to pay the Purchase Price for the Investor
Securities to the Company against delivery of the share certificate(s) therefor
at the Closing is absolute, subject to the fulfillment or waiver at or before
the Closing of each of the following conditions, any or all of which may be
waived by the Investor:
(a) Representations and Warranties. The representations and warranties
of the Company set forth in Section 3 hereof shall (i) have been true and
correct when made and (ii) (except with respect to representations and
warranties made in Section 3.3 that speak as of the date of this Agreement)
shall be (A) in the case of representations and warranties that are qualified as
to materiality or Company Material Adverse Effect, true and correct and (B) in
all other cases, true and correct in all material respects, in the case of
clauses (A) and (B), as of the Closing date with the same force and effect as
though made on and as of the Closing date.
(b) Covenants. The Company shall have performed in all material
respects all of its obligations and agreements and complied in all material
respects with all of its covenants contained in this Agreement to be performed
and complied with at or prior to the Closing date.
(c) Authorized Securities. The issuance of the Investor Securities
shall have been duly authorized, and upon payment of the Purchase Price by the
Investor and delivery of the Investor Securities by the Company, the Investor
Securities shall be validly issued, fully paid and nonassessable and the
issuance thereof shall not be subject to any preemptive rights.
14
(d) Governmental Filings. All notices, reports and other filings
required to be made by the Company with, and consents, registrations, approvals,
permits or authorizations required to be obtained by the Company from, any
governmental or regulatory authority, agency, commission, body or other
governmental entity or court ("Governmental Entity"), in connection with the
execution, delivery and performance of this Agreement and the Lock-up,
Registration Rights and Exchange Agreement by the Company and the issuance and
sale of the Investor Securities by the Company hereunder have been made or
obtained, except those that the failure to make or obtain are not, individually
or in the aggregate, reasonably likely to have a Company Material Adverse
Effect.
(e) No Violation. The execution, delivery and performance of this
Agreement and the Lock-up, Registration Rights and Exchange Agreement by the
Company and the issuance and sale of the Investor Securities by the Company
hereunder do not and will not constitute or result in (i) a breach or violation
of, or a default under, the Restated Certificate of Incorporation or By-laws of
the Company, (ii) a breach or violation of, or a default under, the acceleration
of any obligations or the creation of a Lien on the assets of the Company (with
or without notice, lapse of time or both) pursuant to, any agreement, lease,
license, contract, note, mortgage, indenture, arrangement or other obligation
("Contracts") binding upon the Company or any law or governmental or
non-governmental permit or license to which the Company is subject or (iii) any
change in the rights or obligations of any party under any of the Contracts,
except, in the case of clause (ii) or (iii) above, for any breach, violation,
default, acceleration, creation or change that, individually or in the
aggregate, is not reasonably likely to prevent, materially delay or materially
impair the ability of the Company to consummate the Transactions. No provision
of any Applicable Law, injunction, order or decree of any Governmental Entity
shall be in effect which has the effect of making the Transactions illegal or
shall otherwise restrain or prohibit the consummation of the Transactions.
(f) Certificate. The Investor shall have received (i) a certificate,
dated as of the Closing Date, executed by an executive officer of the Company
and stating that, to the best knowledge of such executive officer, the
conditions set forth in clauses (a), (b), (c), (d) and (e) above have been
satisfied, (ii) a certificate of the secretary of the Company covering such
matters as are customarily covered by such certificates, and (iii) a long form
good standing certificate for the Company from the Delaware Secretary of State.
(g) Opinion of Counsel to the Company. Investor shall have received an
opinion of (x) Xxxxxxxx & Xxxxxxxx, counsel to the Company with respect to the
valid existence of the Company and due authorization and valid issuance of the
Investor Securities, and of (y) Xxxxx X. Xxxxx, general counsel of the Company,
with respect to the matters set forth in Exhibit C, in each case addressed to
the Investor, dated the date of the Closing and in form and substance reasonably
satisfactory to the Investor.
15
(h) Lock-up, Registration Rights and Exchange Agreement. The Lock-up,
Registration Rights and Exchange Agreement shall have been duly executed and
delivered by the Company.
(i) HSR Act. All applicable waiting periods under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976 ("HSR Act") with respect to the Transactions
shall have expired or been terminated and no litigation arising therefrom shall
have been commenced and remain outstanding.
(j) No Adverse Change. There shall not have occurred any event,
circumstance, condition, fact, effect or other matter which has had or could
reasonably be expected to have a material adverse effect (x) on the business,
assets, financial condition, or results of operations of the Company and its
subsidiaries taken as a whole or (y) on the ability of the Company and its
subsidiaries to perform on a timely basis any material obligation under this
Agreement or the other Equity Documents or to consummate the Transactions
contemplated hereby.
Section 6. Conditions to Obligations of the Company. The obligation of
the Company to deliver the Investor Securities to the Investor at the Closing
against payment of the Purchase Price is absolute, subject to the fulfillment or
waiver at or before the Closing of each of the following conditions, any or all
of which may be waived by the Company:
(a) Representations and Warranties. The representations and warranties
of the Investor set forth in Section 2 hereof shall have been true and correct
in all material respects as of the date of this Agreement (or as of such other
earlier date or dates as of which any such representation and warranty may be
expressly made).
(b) Governmental Filings. All notices, reports and other filings
required to be made by the Investor with, and consents, registrations,
approvals, permits or authorizations required to be obtained by the Investor
from a Governmental Entity, in connection with the execution and delivery of
this Agreement, the Lock-up, Registration Rights and Exchange Agreement and the
Voting Agreement by the Investor have been made or obtained.
(c) No Violation. The execution, delivery and performance of this
Agreement, the Lock-up, Registration Rights and Exchange Agreement and the
Voting Agreement by the Investor do not and will not constitute or result in (i)
a breach or violation of, or a default under, the certificate of incorporation
or by-laws of the Investor, (ii) a breach or violation of, or a default under,
the acceleration of any obligations or the creation of a Lien on the assets of
the Investor (with or without notice, lapse of time or both) pursuant to any
Contracts binding upon the Investor or any law or governmental or
non-governmental permit or license to which the Investor is subject or (iii) any
change in the rights or obligations of any party under any of such Contracts,
except, in the case of clause (ii) or (iii) above, for any breach, violation,
default, acceleration, creation or
16
change that, individually or in the aggregate, is not reasonably likely to
prevent, materially delay or materially impair the ability of the Investor to
consummate the Transactions. No provision of any Applicable Law, injunction,
order or decree of any Governmental Entity shall be in effect which has the
effect of making the Transactions illegal or shall otherwise restrain or
prohibit the consummation of the Transactions.
(d) Certificate. The Company shall have received a certificate, dated
as of the Closing Date, executed by an executive officer of the Investor and
stating that, to the best knowledge of such executive officer, the conditions
set forth in clauses (a), (b) and (c) above have been satisfied.
(e) Lock-up, Registration Rights and Exchange Agreement. The Lock-up,
Registration Rights and Exchange Agreement has been executed and delivered by
the Investor.
(f) Voting Agreement. The Voting Agreement has been executed and
delivered by the Investor.
Section 7. Transfer Limitations: 1933 Act Legend.
-------------------------------------
(a) Unless sold pursuant to an effective registration statement, each
certificate representing Securities shall bear a legend substantially in the
following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS
AND UNTIL SUCH SHARES ARE REGISTERED UNDER THE ACT OR, EXCEPT AS OTHERWISE
PERMITTED PURSUANT TO RULE 144 UNDER THE ACT OR ANOTHER EXEMPTION FROM
REGISTRATION UNDER THE ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE COMPANY IS OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED AND
ARE SUBJECT TO TRANSFER RESTRICTIONS AS SET FORTH IN A LOCK-UP, REGISTRATION
RIGHTS AND EXCHANGE AGREEMENT, DATED _________ o, 2000, COPIES OF WHICH MAY BE
OBTAINED FROM THE COMPANY."
(b) The foregoing legend shall be removed from the certificates
representing any shares of Common Stock, at the request of the holder thereof,
at such time as (i) they are sold pursuant to an effective registration
statement, (ii) they become eligible for resale pursuant to Rule 144(k) or
another provision of Rule 144 of the Act pursuant to which all or a portion of
Securities could be sold in a single transaction, or (iii) an opinion of counsel
reasonably satisfactory to the Company is obtained to the effect that the
proposed transfer is exempt from the Act; provided that in the case of clauses
(ii) and (iii) the holder is permitted to transfer the Securities pursuant to
the Lock-up, Registration Rights and Exchange Agreement. The portion of the
legend referring to the Lock-up,
17
Registration Rights and Exchange Agreement shall be eliminated at such time as
Section 2.9 of that agreement ceases to be applicable.
Section 8. Indemnification.
---------------
8.1. Company Indemnification. The Company covenants and agrees to
defend, indemnify and save and hold harmless the Investor, together with its
officers, directors, partners, shareholders, employees, trustees, affiliates
(within the meaning of Rule 405 of the SEC under the Act), beneficial owners,
attorneys and representatives, from and against any and all losses, costs,
expenses, liabilities, claims or legal damages (including, without limitation,
reasonable fees and disbursements of counsel and accountants and other costs and
expenses incident to any actual or threatened claim, suit, action or proceeding,
whether incurred in connection with a claim against the Company or a third party
claim) (collectively, "Investor Losses") up to the amount equal to the Purchase
Price arising out of or resulting from:
(i) any inaccuracy in or breach of any representation, warranty,
covenant or agreement made by the Company in this Agreement or in any writing
delivered pursuant to this Agreement; or
(ii) the failure of the Company to perform or observe fully any
covenant, agreement or provision to be performed or observed by it pursuant to
this Agreement;
provided that the indemnity agreement contained in this 8.1 shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld).
8.2. Investor Indemnification. The Investor covenants and agrees to
defend, indemnify and save and hold harmless the Company, together with its
officers, directors, partners, shareholders, employees, trustees, affiliates
(within the meaning of Rule 405 of the SEC under the Act), attorneys and
representatives, from and against any and all losses, costs, expenses,
liabilities, claims or legal damages (including, without limitation, reasonable
fees and disbursements of counsel and accountants and other costs and expenses
incident to any actual or threatened claim, suit, action or proceeding, whether
incurred in connection with a claim against the Investor or a third party claim)
(collectively, "Company Losses"), up to the amount equal to the Purchase Price
arising out of or resulting from:
(i) any inaccuracy in or breach of any representation, warranty,
covenant or agreement made by the Investor in this Agreement or in any writing
delivered pursuant to this Agreement; or
(ii) the failure of the Investor to perform or observe fully any
covenant, agreement or provision to be performed or observed by it pursuant to
this Agreement.
18
8.3. Procedure. Each party entitled to be indemnified pursuant to
Section 8.1 and 8.2 (each, an "Indemnified Party") shall notify the other party
in writing of any action against such Indemnified Party in respect of which the
other party is or may be obligated to provide indemnification on account of
Section 8.1 or 8.2, promptly after the receipt of notice. The omission of any
Indemnified Party so to notify the other party of any such action shall not
relieve such other party from any liability which it may have to such
Indemnified Party except to the extent the other party shall have been
materially prejudiced by the omission of such Indemnified Party so to notify it,
pursuant to this Section 8.3. In case any such action shall be brought against
any Indemnified Party and it shall notify the other party of the commencement
thereof, the other party shall be entitled to participate therein and, to the
extent that such other party may wish, to assume the defense thereof, with
counsel reasonably satisfactory to such Indemnified Party, and after notice from
it to such Indemnified Party of its election so to assume the defense thereof,
the other party will not be liable to such Indemnified Party under Section 8.1
or 8.2 for any legal or other expense subsequently incurred by such Indemnified
Party in connection with the defense thereof nor for any settlement thereof
entered into without the consent of the other party; provided, however, that (i)
if the other party shall elect not to assume the defense of such claim or action
or (ii) if the Indemnified Party reasonably determines (x) that there may be a
conflict between the positions of the other party and of the Indemnified Party
in defending such claim or action or (y) that there may be legal defenses
available to such Indemnified Party different from or in addition to those
available to the other party, then separate counsel for the Indemnified Party
shall be entitled to participate in and conduct the defense, in the case of (i)
and (ii)(x), or such different defenses, in the case of (ii)(y), and the other
party shall be liable for any reasonable legal or other expenses incurred by the
Indemnified Party in connection with the defense.
8.4. Indemnification Non-Exclusive. The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory,
equitable or common-law remedy any party may have for breach of representation,
warranty, covenant or agreement.
Section 9. Miscellaneous.
-------------
9.1. Survival of Representations and Warranties. The representations
and warranties set forth in Sections 2 and 3 hereof shall survive until the
eighteen month anniversary of the Closing, except that the third sentence of
Section 3.3(a) shall survive indefinitely.
9.2. Termination. (a) This Agreement may be terminated (i) at any time
prior to the Closing date by mutual written agreement of the Company and LMC,
(ii) if the Closing shall not have occurred on or prior to June 30, 2000 (the
"Outside Date"), by either the Company or LMC at any time after the Outside
Date, provided that if a necessary regulatory approval is pending or the waiting
period under the HSR Act has not expired by June 30, 2000, then the Outside Date
shall be extended until such approval is
19
obtained or waiting period has expired, but not beyond December 31, 2000, and
provided, further, that the right to terminate this Agreement under this clause
(ii) shall not be available to any party whose failure to fulfill any obligation
under this Agreement was the cause of or resulted in the failure of the Closing
to occur on or before such date, or (iii) if any Governmental Entity shall have
issued a nonappealable final order, decree or ruling or taken any other action
having the effect of permanently restraining, enjoining or otherwise prohibiting
the Transactions, by either the Company or LMC. Any party desiring to terminate
this Agreement shall promptly give notice of such termination to the other
party.
(b) If this Agreement is terminated, as permitted by Section 9.2(a),
such termination shall be without liability of any party (or any stockholder,
director, officer, partner, employee, agent, consultant or representative of
such party) to any other party to this Agreement; provided that if such
termination shall result from the willful (i) failure of any party to fulfill a
condition to the performance of the obligations of the other party, (ii) failure
to perform a covenant made by it in this Agreement or (iii) breach by any party
hereto of any of its representations or warranties contained herein, such
failing or breaching party shall be fully liable for any and all losses
(excluding consequential damages) incurred or suffered by the other party as a
result of such failure or breach, subject to the express limitations of Section
8. The provisions of Sections 8 and 9 shall survive any termination hereof.
9.3. Certain Limitations. The indemnification obligations of the
parties hereto with respect to claims asserted for any breach of a
representation and warranty set forth in Section 2 or 3 prior to expiration of
the survival period applicable to such representation or warranty shall survive
until such claims are finally adjudicated or otherwise resolved.
9.4. Successors and Assigns. This Agreement may not be assigned by the
Investor or the Company without the prior written consent of the other party
hereto and the attempted or purported assignment shall be void; provided,
however, that the Investor may, without written consent of the Company, assign
its rights and obligations hereunder to any of its Affiliates (provided that no
such assignment shall relieve the Investor of its responsibility for the
performance of the obligations hereunder and any such assignment shall be valid
only for the time and to the extent the assignee remains an Affiliate of the
Investor). Nothing in this Agreement, express or implied, is intended to confer
upon any party, other than the parties hereto or their respective successors and
permitted assigns, any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this Agreement.
As used in this Agreement, the term "Affiliates" shall mean, with
respect to any person or entity, any other person or entity directly or
indirectly controlling, controlled by or under common control with the first
such person or entity.
9.5. Governing Law; Submission to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York.
20
Each of the Company and the Investor hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to this Agreement and the
transactions contemplated hereby. Each of the Company and the Investor
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
9.6. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, and all of which together shall be deemed
to constitute one and the same instrument.
9.7. Captions and Headings. The captions and headings used in this
Agreement are for convenience only and are not to be considered in construing or
interpreting this Agreement.
9.8. Notices. Unless otherwise provided, any notice or other
communication required or permitted to be given or effected under this Agreement
shall be in writing and shall be deemed effective upon personal or facsimile
delivery to the party to be notified or one business day after deposit with an
internationally recognized courier service, delivery fees prepaid, or three
business days after the deposit with the U.S. mail, return receipt requested,
postage prepaid, and in each case, addressed to the party to be notified at the
following respective addresses, or at such other addresses as may be designated
by written notice; provided that any notice of change of address shall be deemed
effective only upon receipt:
If to the Company, to it at:
000 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Xxx Xxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000
If to the Investor, to it at:
0000 Xxxxx Xxxxxx Xxxxxx
21
Englewood, Colorado 80112
Attn: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
with copies to:
Liberty Media Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Legal Department
Telephone: (000) 000-0000
Fax: (000) 000-0000
and
Xxxxx Xxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
9.9. Amendments and Waivers. All terms of this Agreement may be
amended, and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of each of the Company and LMC.
Any amendment or waiver effected in accordance with this Section 9.9 shall be
binding upon Investor and the other parties to this Agreement.
9.10. Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provisions shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
9.11. Entire Agreement. This Agreement (and the Exhibits hereto) and
the Lock-up, Registration Rights and Exchange Agreement constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings and discussions between them.
9.12. Specific Enforcement. The parties hereto agree that irreparable
harm would occur in the event that any of the provisions of this Agreement were
not performed in accordance with its specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this
22
Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
9.13. Expenses. All costs and expenses incurred in connection with this
Agreement shall be paid by the party incurring such cost or expense; provided,
however, that the Company and the Investor shall each pay one-half of the filing
fees in respect of any filings pursuant to the HSR Act.
9.14. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES ITS RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT AND THE LOCK-UP, REGISTRATION RIGHTS AND CONVERSION RIGHTS
AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
THIS SECTION 9.14 HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND
THESE PROVISIONS SHALL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO
HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR
MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT. IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL (WITHOUT A JURY) BY
THE COURT.
[Signatures on the following page.]
23
IN WITNESS WHEREOF, the parties have executed this Subscription
Agreement as of the date first above written.
IDT CORPORATION
By: /s/ XXXXXX X. XXXXX
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive
LIBERTY MEDIA CORPORATION
By: /s/ XXXXXXX X. XXXXXX
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
24
EXHIBIT A
FORM OF LOCK-UP, REGISTRATION RIGHTS AND EXCHANGE
AGREEMENT
LOCK-UP, REGISTRATION RIGHTS AND EXCHANGE AGREEMENT
LOCK-UP, REGISTRATION RIGHTS AND EXCHANGE AGREEMENT (this "Agreement"),
dated as of _______ o, 2000, by and between IDT Corporation, a Delaware
corporation (the "Company"), and o, a o corporation (the "Investor").
WHEREAS, the Company and Liberty Media Corporation, a Delaware
corporation ("LMC") have entered into a Subscription Agreement, dated as of
March o, 2000 (the "Subscription Agreement"), pursuant to which LMC has agreed
to purchase, or cause its designee to purchase, and the Company has agreed to
sell to LMC or its designee, shares (the "Investor Securities") of the Common
Stock, par value $0.01 per share, of the Company (the "Common Stock");
WHEREAS, Investor is LMC's designee for purposes of the Subscription
Agreement; and
WHEREAS, it is a condition to the consummation of the Subscription
Agreement that the Company and Investor enter into this Agreement.
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:
Section 1. Definitions. (a) For the purposes of this Agreement:
-----------
"Act" means the Securities Act of 1933, as amended.
"Affiliate" means, with respect to any person, any other
person directly or indirectly controlling, controlled by or under common control
with the first such person.
"Class B Common Stock" means the Class B Common Stock, par
value $0.01 per share, of the Company to be authorized pursuant to the Charter
Amendment referred to in Section 2.13.
"Closing" and "Closing Date" mean the date of the Closing, as
such term is defined in the Subscription Agreement.
"Holder" means a holder of Registrable Securities or, unless
the context otherwise requires, securities convertible into or exercisable for
Registrable Securities.
"Initially Issued Number" means the total number of Investor
Securities issued to the Investor at the Closing or, if applicable, the total
number of shares of Class B Common Stock issuable in exchange for all of the
Investor Securities if all of the initially issued Investor Securities continued
to be outstanding immediately prior to the Exchange Date, in each case, as
appropriately adjusted for stock splits, stock dividends, reverse stock splits
and other similar events affecting the Common Stock or the Class B Common Stock.
"person" means any individual, partnership, corporation,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or agency or political
subdivision thereof, or other entity.
"register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act, and the declaration or ordering of effectiveness of
such registration statement.
"Registrable Securities" means the Investor Securities, or the
shares of Class B Common Stock for which the Investor Securities are exchanged
in accordance with Section 2.13 (collectively, the "Securities"); provided,
however, that such Securities shall cease to be Registrable Securities when and
to the extent that (i) such Securities have been sold pursuant to an effective
registration statement under the Act, (ii) such Securities have become eligible
for resale pursuant to Rule 144(k) of the Act (or any similar provision then in
force) or (iii) such Securities have ceased to be outstanding.
(b) Capitalized terms used and not otherwise defined in this Agreement
have the meaning ascribed to them in the Subscription Agreement.
Section 2. Registration Rights.
-------------------
2.1. (a) Registration Upon Demand. At any time on or after the first
anniversary of the Closing Date, one or more Holders that in the aggregate
beneficially own at least 20% of the Registrable Securities may make a demand
that the Company effect the registration of all or part of such Holders'
Registrable Securities (a "Demand Registration"). Upon receipt of a valid
request for a Demand Registration, the Company shall promptly, and in any event
no later than 15 days after such receipt, notify all other Holders of the making
of such demand and shall use its reasonable efforts to register under the Act as
expeditiously as may be practicable the Registrable Securities which Holders
have requested the Company to register in accordance with this Section 2.1.
Notwithstanding the foregoing, the Company shall only be required to effect a
registration if the number of Registrable Securities that the Company shall have
been requested to register shall, in the aggregate, (i) represent at least 20%
of the Initially
2
Issued Number or (ii) represent all of the Registrable Securities then held by
all Holders. The Holders shall together have the right to two Demand
Registrations pursuant to this Section 2.1(a), provided, however, that no more
than one such Demand Registration may be requested in any 12 month period.
(b) Effective Registration Statement. A registration requested pursuant
to Section 2.1(a) hereof shall not be deemed to have been effected (i) if a
registration statement with respect thereto has not been declared effective by
the Securities and Exchange Commission ("SEC"), (ii) if after it has become
effective and prior to the date ninety (90) days after the effective date, such
registration is materially interfered with by any stop order, injunction or
similar order or requirement of the SEC or other governmental agency or court
for any reason not attributable to the fault of any of the Holders, or (iii) the
conditions to closing specified in the underwriting agreement, if any, entered
into in connection with such registration are not satisfied or waived, other
than by reason of a failure on the part of a Holder to perform its obligations
under such underwriting agreement.
(c) Piggyback Registration. If the Company proposes to file a
registration statement under the Act with respect to an offering of its equity
securities for its own account or for the account of another person or entity
(other than a registration statement on Form S-4 or S-8 (or any substitute forms
that may be adopted by the Commission)), the Company shall give written notice
of such proposed filing to the Holders at the address set forth in the share
register of the Company as soon as reasonably practicable (but in no event less
than 7 business days before the anticipated filing date), undertaking to provide
each Holder the opportunity to register on the same terms and conditions such
amount of Registrable Securities as such Holder may request (a "Piggyback
Registration"). Each Holder will have 5 business days after receipt of any such
notice to notify the Company as to whether it wishes to participate in a
Piggyback Registration (which notice shall not be deemed to be a request for a
Demand Registration). If the registration statement is filed on behalf of a
person or entity other than the Company, the Company will use its reasonable
best efforts to have the Registrable Securities that the Holders wish to sell
included in the registration statement. If the Company or the person or entity
for whose account such offering is being made shall determine in its sole
discretion not to register or to delay the proposed offering, the Company may,
at its election, provide written notice of such determination to the Holders and
(i) in the case of a determination not to effect the proposed offering, shall
thereupon be relieved of the obligation to register such Registrable Securities
in connection therewith and (ii) in the case of a determination to delay a
proposed offering, shall thereupon be permitted to delay registering such
Registrable Securities for the same period as the delay in respect of the
proposed offering.
3
If the Registrable Securities requested to be included in the Piggyback
Registration by any Holder differ from the type of securities proposed to be
registered by the Company and the managing underwriter for such offering advises
the Company that due to such differences the inclusion of such Registrable
Securities would cause a material adverse effect on the price of the offering (a
"Material Adverse Effect"), then (x) the number of such Holders' Registrable
Securities to be included in the Piggyback Registration shall be reduced to an
amount which, in the opinion of the managing underwriter, would eliminate such
Material Adverse Effect or (y) if no such reduction would, in the opinion of the
managing underwriter, eliminate such Material Adverse Effect, then the Company
shall have the right to exclude all such Registrable Securities from such
Piggyback Registration, provided, that no other securities of such type are
included and offered for the account of any other Person in such Piggyback
Registration. Any partial reduction in number of Registrable Securities of any
Holder to be included in the Piggyback Registration pursuant to clause (x) of
the immediately preceding sentence shall be effected pro rata based on the ratio
which such Holder's requested securities bears to the total number of securities
requested to be included in such Piggyback Registration by all persons or
entities other than the Company who have the contractual right to request that
their securities be included in such registration statement and who have
requested that their securities be included. If the Registrable Securities
requested to be included in the registration statement are of the same type as
the securities being registered by the Company and the managing underwriter
advises the Company that the inclusion of such Registrable Securities would
cause a Material Adverse Effect, the Company will be obligated to include in
such registration statement, as to each Holder, only a portion of the
Registrable Securities such Holder has requested be registered equal to the
ratio which such Holder's requested securities bears to the total number of
securities requested to be included in such registration statement by all
persons or entities (other than any persons or entities initiating such
registration request) who have the contractual right to request that their
securities be included in such registration statement and who have requested
their securities be included. If the Company initiated the registration, then
the Company may include all of its securities in such registration statement
before any such Holder's requested securities are included. If another
securityholder initiated the registration, then the Company may not include any
of its securities in such registration statement unless all Registrable
Securities requested to be included in the registration statement by all Holders
are included in such registration statement. If as a result of the provisions of
this Section 2.1(c) any Holder shall not be entitled to include all Registrable
Securities in a registration that such Holder has requested to be so included,
such Holder may withdraw such Holder's request to include Registrable Securities
in such registration statement prior to its effectiveness.
2.2. Blackout Periods for Holders. If the board of directors of the
Company determines in good faith that the registration of Registrable Securities
pursuant to Section
4
2.1(a) hereof (or the use of a registration statement or related prospectus)
would be materially detrimental to the Company or its shareholders because such
filing would require disclosure of material non-public information or would
materially interfere with the Company's financing plans, and therefore the board
of directors determines that it is in the Company's best interest to defer the
filing of the registration statement, and promptly gives the Holders written
notice of such determination in the form of a certificate signed by an executive
officer of the Company following their request to register any Registrable
Securities pursuant to Section 2.1(a), the Company shall be entitled to postpone
the filing of the registration statement otherwise required to be prepared and
filed by the Company pursuant to Section 2.1(a) hereof for a reasonable period
of time, but not to exceed 60 days (a "Demand Blackout Period") after the date
of such request, provided that the Company's exercise of its rights under this
Section 2.2 (i) shall not result in Demand Blackout Periods for more than 180
days in any 365 day period, (ii) shall not result in Demand Blackout Periods
that are separated by less than 45 days and (iii) shall only be effective when
and for so long as the officers and directors of the Company and other holders,
if any, of registration rights with respect to the Company's securities are
similarly restricted from buying or selling securities of the Company and/or
exercising their registration rights, as applicable. The Company shall promptly
notify each Holder of the expiration or earlier termination of any Demand
Blackout Period.
2.3. Obligations of the Company. Whenever the Company is required to
effect the registration of any Registrable Securities under this Section 2, the
Company shall, at its expense and as expeditiously as may be practicable:
(a) Prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use its reasonable efforts to cause such
registration statement to become effective and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, use
reasonable efforts to keep such registration statement effective for not less
than 120 days, unless all Registrable Securities included therein are earlier
sold.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
applicable law with respect to the disposition of all of the Registrable
Securities covered by such registration statement.
(c) Use its best efforts to qualify such Registrable Securities (i) for
listing on the Nasdaq National Market or listing on the New York Stock Exchange,
Inc. or (ii) if neither such quotation system or exchange is available for
quotation or listing, for listing
5
on a national securities exchange selected by a majority in interest of the
Holders of the Registrable Securities being registered.
(d) Furnish to the Holders of Registrable Securities registering such
securities such numbers of copies of a prospectus, including a preliminary
prospectus (in the event of an underwritten offering), in conformity with the
requirements of applicable law, and such other documents as each such Holder may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by it.
(e) Use reasonable efforts to register and qualify the securities
covered by such registration statement under state blue sky laws in any U.S.
jurisdictions in which such registration and qualification is reasonably
requested by any Holder; provided, that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such jurisdictions.
(f) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form and substance as agreed to by the Company and the managing underwriter of
such offering.
(g) Promptly notify the Holders in writing: (i) when the registration
statement, the prospectus or any prospectus supplement related thereto or
post-effective amendment to the registration statement has been filed, and, with
respect to the registration statement or any post-effective amendment thereto,
when the same has become effective; (ii) of any request by the SEC for
amendments or supplements to the registration statement or related prospectus or
any written request by the SEC for additional information; (iii) of the issuance
by the SEC of any stop order suspending the effectiveness of the registration
statement or prospectus or any amendment or supplement thereto or the initiation
of any proceedings by any person for that purpose, and promptly use its
reasonable efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued; and (iv) of the receipt by the
Company of any written notification with respect to the suspension of the
qualification of any Registrable Securities for sale in any jurisdiction or the
initiation or overt threat of any proceeding for such purpose.
(h) Notify the Holders in writing on a timely basis, at any time when a
prospectus relating to such Registrable Securities is required to be delivered
under applicable law, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing and at the request of
any such Holder promptly prepare and furnish to such Holder a reasonable
6
number of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the offerees of such securities,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing. Upon receipt of any notice of the occurrence of any event of the kind
described in the preceding sentence, each Holder will cease using such
prospectus until receipt by the Holders of the copies of such supplemented or
amended prospectus. If so requested by the Company, each Holder will deliver to
the Company any copies of such prospectus then in its possession (other than one
permanent file copy). If the Company shall give such notice, the Company shall
extend the period during which such registration statement shall be maintained
effective as provided in Section 2.3(a) hereof by the number of days during the
period from and including the date of the giving of such notice to the date when
the Company shall make available to the Holders such supplemented or amended
prospectus.
(i) Furnish, at the request of any Holder participating in the
registration, on the date that such Registrable Securities are delivered to the
underwriters for sale, if such securities are being sold through underwriters,
or, if such securities are not being sold through underwriters, on the date that
the registration statement with respect to such securities becomes effective,
(i) an opinion, dated as of such date, of the counsel representing the Company
for the purposes of such registration, in form and substance as if customarily
given to underwriters in an underwritten public offering and reasonably
satisfactory to a majority in interest of the Holders participating in the
registration, addressed to the underwriters, if any, and to the Holders
participating in the registration of Registrable Securities and (ii) a "Cold
Comfort" letter dated as of such date, from the independent certified public
accountants to the underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders participating
in the registration, addressed to the board of directors of the Company, to the
underwriters, if any, and if permitted by applicable accounting standards, to
the Holders participating in the registration of Registrable Securities.
(j) Use reasonable efforts to cause the transfer agent to remove
restrictive legends on certificates representing the securities covered by such
registration statement, as the Company determines to be appropriate, upon advice
of counsel.
7
(k) Prepare and file with the SEC, promptly upon the request of any
such Holders, any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for such Holders, is required under
the Act or the rules and regulations thereunder in connection with the
distribution of the Registrable Securities by such Holders.
(l) Make available for inspection by any Holder of such Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such Holder or underwriter (collectively, the "Inspectors"), all pertinent
financial and other records, pertinent corporate documents and properties of the
Company (collectively, the "Records"), as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause the
Company's officers, directors and employees to supply all information (together
with the Records, the "Information") reasonably requested by any such Inspector
in connection with such registration statement. Any of the Information that the
Company determines in good faith to be confidential, and of which determination
the Inspectors are so notified, shall not be disclosed by the Inspectors unless
(i) the release of such Information is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction, (ii) such Information has been
made generally available to the public, (iii) as necessary to enforce a Holder's
rights under this Agreement or (iv) such Holder of Registrable Securities
requiring such information agrees to enter into a confidentiality agreement in
customary form and subject to customary exceptions. Each Holder of Registrable
Securities shall be responsible for any breach of the foregoing covenant by any
Inspector retained by or on behalf of such Holder. The Holder of Registrable
Securities, agrees that it will, upon learning that disclosure of such
Information is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of the Information deemed confidential
and the Inspectors shall not disclose such Information until such action is
determined.
(m) Provide a CUSIP number for the Registrable Securities included in
any registration statement not later than the effective date of such
registration statement.
(n) Cooperate with each selling Holder and each underwriter
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.
(o) During the period when the prospectus is required to be delivered
under the Act, promptly file all documents required to be filed with the SEC
pursuant to
8
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "1934 Act").
(p) Make generally available to its securityholders, as soon as
reasonably practicable, an earnings statement covering a period of 12 months,
beginning within three months after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Act and the rules and regulations of the SEC thereunder
(q) Provide a transfer agent and registrar (which may be the same
entity and which may be the Company) for such Registrable Securities.
(r) Use its reasonable efforts to take all other steps necessary to
effect the registration of such Registrable Securities pursuant to the terms
contemplated hereby.
2.4. Furnish Information.
-------------------
(a) It shall be a condition precedent to the obligation of the Company
to include any Registrable Securities of any Holder in a registration statement
pursuant to this Section 2 that the Holder shall furnish to the Company such
information regarding itself, the Registrable Securities held by it, any other
securities of the Company held by it, and the intended method of disposition of
such Registrable Securities as shall be required to effect the registration of
the Registrable Securities held by such Holder. Any such information shall be
provided to the Company within any reasonable time period requested by the
Company.
(b) Each Holder shall notify the Company, at any time when a prospectus
is required to be delivered under applicable law, of the happening of any event
as a result of which the prospectus included in the applicable registration
statement, as then in effect, in each case only with respect to information
provided by such Holder, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing. Such Holder shall immediately upon the happening of any such event
cease using such prospectus. Any other Holders shall cease using such prospectus
immediately upon receipt of notice from the Company to that effect. If so
requested by the Company, each Holder shall promptly return to the Company any
copies of such prospectus in its possession (other than one permanent file
copy). The Company shall promptly prepare and furnish to each such Holder a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the offerees
of such securities, such prospectus shall not include an untrue statement of a
9
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing.
2.5. Expenses of Registration. The Company shall bear and pay all
reasonable expenses incurred in connection with any registration, filing or
qualification of Registrable Securities pursuant to this Section 2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, but excluding underwriting discounts and commissions
relating to the Registrable Securities. The Company also shall be required to
pay and bear the reasonable legal fees of not more than one counsel for the
Holders in an amount not to exceed $50,000 in connection with any registration.
2.6. Underwriting Requirements. In connection with any underwritten
offering of a Holder's Registrable Securities, the Company shall not be required
under Section 2.3 to register any of such Registrable Securities in connection
with such underwritten offering unless the Company consents to the underwriters
selected by the Holders participating in the registration (which consent shall
not be unreasonably withheld) and the Company shall be required to register
Registrable Securities only in such quantity as the lead managing underwriter
determines, in its good faith discretion, will not jeopardize the success of the
offering by the Company. To the extent that the lead managing underwriter will
not permit the registration of all of the Registrable Securities sought to be
registered, in the case of a registration pursuant to Section 2.1(a), the
Registrable Securities to be included shall be apportioned among the Holders on
a pro rata basis (based on the number of Securities proposed to be registered by
each); provided, however, that the right of the underwriters to exclude
Registrable Securities from the registration and underwriting as described above
shall be restricted such that all securities that are not Registrable Securities
and all securities that are held by persons who are employees or directors of
the Company (or any subsidiary of the Company) shall first be excluded from such
registration and underwriting before any Registrable Securities are so excluded.
Those Registrable Securities and other securities that are excluded from the
underwriting by reason of the managing underwriter's marketing limitation and
all other Registrable Securities not originally requested to be so included
shall not be included in such registration and shall be withheld from the market
by the Holders thereof for a period, not to exceed 90 days, which the managing
underwriter reasonably determines necessary to effect the underwritten public
offering. No Holder of Registrable Securities shall be entitled to participate
in an underwritten offering unless such Holder enters into, and performs its
obligations under, one or more underwriting agreements and any related
agreements and documents (which may include an escrow agreement and/or a power
of attorney with respect to the disposition of the Registrable Securities), in
the form that such Holder shall agree to with the lead managing underwriter of
the transaction. If any Holder disapproves of the terms of any underwriting, it
may elect, prior to the execution
10
of any underwriting agreement, to withdraw therefrom by written notice to the
Company and the lead managing underwriter.
2.7. Delay of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Section 2.
2.8. Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 2:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each Holder and each person, if any, who controls such Holder within
the meaning of the Act and the 1934 Act and their respective directors,
officers, partners, stockholders, members, employees, agents and representatives
and each person, if any, who controls such Holder within the meaning of the Act
and the 1934 Act (each, an "Indemnified Person"), against any losses, claims,
damages, or liabilities joint or several) to which they may become subject
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of, are based upon or relate to (collectively, a "Violation")
(x) any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary or final
prospectus contained therein or any amendments or supplements thereto or (y) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; or
(z) any violation by the Company of the Act, the 1934 Act, any state securities
law or any rule or regulation promulgated under the Act, the 1934 Act or any
state securities law in connection with the offering covered by any registration
statement; and the Company will pay to each Indemnified Person any reasonable
legal or other expenses incurred by it in connection with investigating or
defending any such loss, claim, damage, liability or action; provided that the
indemnity agreement contained in this Section 2.8(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
strict conformity with written information furnished by a Holder expressly for
use in connection with such registration or is caused by any failure by the
Holder to deliver a prospectus or preliminary prospectus (or amendment or
supplement thereto) as and when required under the Act after such prospectus has
been timely furnished by the Company.
11
(b) To the extent permitted by law, each Holder will indemnify and hold
harmless the Company, each of its directors, each of its officers who has signed
the registration statement, and each person, if any, who controls the Company
within the meaning of the Act or the 1934 Act (each, an "Indemnified Person"),
against any losses, claims, damages or liabilities (joint or several) to which
any of the foregoing persons may become subject, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to the extent) that
such Violation is caused by (x) any untrue statement or alleged untrue statement
contained in, or by any omission or alleged omission from, information furnished
in writing to the Company by the Holder specifically and expressly for use in
any such registration statement or prospectus but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
so made in reliance upon and in strict conformity with written information
furnished by such Holder specifically for use in the preparation thereof or (y)
any failure by the Holder to deliver a prospectus or preliminary prospectus (or
amendment or supplement thereto) as and when required under the Securities Act
after such prospectus has been timely filed by the Company. Such Holder will pay
any reasonable legal or other expenses incurred by any Indemnified Person
pursuant to this Section 2.8(b) in connection with investigating or defending
any such loss, claim, damage, liability or action; provided that the indemnity
agreement contained in this Section 2.8(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided, further, that in no event shall any
indemnity under this Section 2.8(b) exceed the net proceeds from the offering
received by such Holder upon its sale of Registrable Securities included in the
registration statement.
(c) Promptly after receipt by an Indemnified Person under this Section
2.8 of notice of the commencement of any action (including any governmental
action), such Indemnified Person will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 2.8, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the indemnifying parties; provided that an Indemnified Person
shall have the right to retain separate counsel, and the reasonable fees and
expenses of such counsel shall be paid by the indemnifying party if
representation of such Indemnified Person by the counsel retained by the
indemnifying party would be inappropriate (in the opinion of the Indemnified
Person) due to actual or potential differing interests between such Indemnified
Person and any other party represented by such counsel in such proceeding,
provided that the indemnifying party in such event shall not be responsible for
the fees of more than one separate firm of attorneys (in addition to
12
any local counsel) for all Indemnified Persons that may be represented without
conflict by one counsel. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the Indemnified Person under
this Section 2.8, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
Indemnified Person otherwise than under this Section 2.8.
(d) If the indemnification provided for in this Section 2.8 is held by
a court of competent jurisdiction to be unavailable to an Indemnified Person
with respect to any losses, claims, damages or liabilities referred to herein,
the indemnifying party, in lieu of indemnifying such Indemnified Person
hereunder, agrees to contribute to the amount paid or payable by such
Indemnified Person as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the Indemnified Person on the other in connection
with the Violation(s) that resulted in such loss, claim, damage or liability, as
well as any other relevant equitable considerations. The relative fault of the
indemnifying party and of the Indemnified Person shall be determined by a court
of law by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the Indemnified Person and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. No person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution hereunder from any person who was not guilty
of such fraudulent misrepresentation. In no event shall a Holder's obligation to
contribute pursuant to this Section 2.8(d) exceed the net proceeds from the
offering received by such Holder upon its sale of Registrable Securities
included in the registration statement.
(e) The obligations of the Company and the Holders under this Section
2.8 shall survive the completion of any offering of Registrable Securities under
a registration statement pursuant to this Section 2.
2.9. Lock-up and Permitted Transfers. At any time prior to the first
anniversary of the Closing Date, Investor shall not offer, sell, contract to
sell or otherwise dispose of any of the Investor Securities or any interest
therein without the written consent of the Company; provided, however, that the
Investor without the Company's consent shall be permitted (a) to transfer all or
part of the Investor Securities (i) to the Company, as contemplated by Section
2.12 or otherwise; (ii) to any other member of the Liberty Group (a "Permitted
Transferee") provided that such member agrees with the Company to be bound
hereby with the same effect as if it were named herein in lieu of the Investor;
and (iii) in any transaction in which holders of Common Stock generally
13
participate or have the opportunity to participate pro rata, including, without
limitation, a merger, consolidation or binding share exchange involving the
Company or a tender or exchange offer for shares of the Company's capital stock;
and (b) to pledge the Investor Securities to secure bona fide indebtedness,
provided that the transferee in the event of foreclosure agrees with the Company
to be bound hereby with the same effect as if it were named herein in lieu of
the Investor. Without limiting any other remedy that may be available to the
Company, failure of the Investor or any Permitted Transferee to comply with the
provisions of this Section 2.9 shall result in termination of the Company's
obligations under Section 2.1 of this Agreement with respect to the affected
Investor Securities.
2.10. Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Section 2 may be
assigned by a Holder to a transferee of Registrable Securities (other than a
competitor of the Company or any of its subsidiaries, except that neither AT&T
Corp. nor any of its Affiliates shall be deemed a competitor for this purpose),
provided that, in the case of a transfer prior to the first anniversary of the
Closing Date, such transferee is a Permitted Transferee; and provided, further,
that (i) the transferor shall, within ten (10) days after such transfer, furnish
to the Company written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned and (ii) such transferee shall agree with the Company in writing
to be subject to the terms and conditions of this Agreement to the extent then
applicable. No other assignment of the Investor's or any Holder's rights
hereunder shall be permitted, and the attempted or purported assignment in
violation of this provision shall be void.
2.11. Rule 144 Reporting. With a view to making available to the
Holders the benefits of certain rules and regulations of the SEC that permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Act, at all times;
(b) File with the SEC, in a timely manner, all reports and other
documents required to be filed by the Company under the Act and the 1934 Act;
and
(c) So long as a Holder owns any Registrable Securities, furnish such
Holder upon request a written statement by the Company as to its compliance with
the reporting requirements of SEC Rule 144 or any similar or analogous rule
promulgated under the Act, and of the 1934 Act, a copy of the most recent annual
or quarterly report of the Company and such other reports and documents as a
Holder may reasonably request in
14
availing itself of any rule or regulation of the SEC allowing it to sell any
such securities without registration.
2.12. Exchange. (a) The Company shall use its best efforts to ensure
that no later than the first anniversary of the Closing Date it shall have
complied with its covenant set forth in Section 2.13 and issued, registered,
qualified under applicable state securities laws, and caused to be listed or
quoted on the applicable of the Nasdaq National Market or The New York Stock
Exchange or such other national securities exchange or national securities
association as is the then principal market on which the Common Stock is listed
or quoted, an aggregate number of shares of Class B Common Stock at least equal
to the number of shares of Common Stock then listed or quoted on such market
("Equivalent Float"). The date as of which the Equivalent Float is first
achieved is referred to as the "Trigger Date" . The Company shall notify the
Investor of the Trigger Date promptly and in any event within 2 business days
after its occurrence.
(b) The Investor Securities shall be exchanged for shares of Class B
Common Stock at the Exchange Rate (as defined below) effective immediately prior
to the close of business on the trading day (the "Automatic Exchange Date")
immediately following the expiration of the period of 60 consecutive trading
days commencing with the Trigger Date, provided that such exchange shall not be
effected unless the Trigger Date occurs on or prior to the first anniversary of
the Closing. At any time following the first anniversary of the Closing, but
subject to the Trigger Date having occurred and not earlier than the 30th
trading day following the Trigger Date, the Investor may deliver a written
notice to the Company requesting it to exchange its Investor Securities for
shares of Class B Common Stock at the Exchange Rate, in which event such
exchange shall be effected immediately prior to the close of business on the
trading day (the "Elective Exchange Date", and together with the Automatic
Exchange Date if the Trigger Date occurs prior to the first anniversary of the
Closing, the "Exchange Date") immediately following the expiration of the period
of 30 consecutive trading days commencing with the trading day on which such
notice from the Investor is given to the Company.
(c) On the Exchange Date or as soon as possible thereafter, the
Investor shall surrender the certificate or certificates for the Investor
Securities, duly endorsed or assigned to the Company or in blank, at the
Company's address for notices as specified in Section 3.5. The Investor
Securities shall be deemed to have been exchanged immediately prior to the close
of business on the Exchange Date in accordance with the foregoing provisions,
and the person or persons entitled to receive the Class B Common Stock issuable
upon such exchange shall be treated for all purposes as the recordholder or
holders of such Class B Common Stock at such time.
15
(d) As promptly as practicable on or after the Exchange Date, the
Company shall issue and deliver at such office a certificate or certificates for
the number of full shares of Class B Common Stock issuable upon such exchange
based on the Exchange Rate, as defined below, together with a cash payment in
lieu of any fraction of a share of Class B Common Stock (based on the same
fraction of the price determined pursuant to clause (y) of the definition of
Exchange Rate below), to the person or persons entitled to receive the same.
The "Exchange Rate" shall be the number of shares of Class B Common
Stock to be delivered in exchange for each share of Common Stock surrendered by
the Investor. The Exchange Rate shall be equal to the number obtained by
dividing (x) the Average Market Price per share of Common Stock for the 30
consecutive trading days ending on the trading day immediately preceding the
Exchange Date by (y) the Average Market Price per share of Class B Common Stock
for the 30 consecutive trading days ending on the trading day immediately
preceding the Exchange Date. "Average Market Price" of a share of Common Stock
or Class B Common Stock, as applicable, means the average (rounded to the
nearest 1/10,000) of the volume weighted averages (rounded to the nearest
1/10,000) of the trading prices of the applicable security on the principal
market on which shares of the applicable security are then listed or quoted
(whether the Nasdaq National Market, The New York Stock Exchange or another
national securities exchange or association) as reported by Bloomberg Financial
Markets (or such other source as the Investor and the Company shall agree) for
the relevant 30 trading day period.
(e) The Company shall not declare a dividend or make a distribution on,
or reclassify, subdivide or combine, the Class B Common Stock or the Common
Stock or take any other action with respect to the Class B Common Stock or the
Common Stock of the kind that would typically require an adjustment to the
conversion price or conversion rate of a convertible security, if the "ex" date,
record date, payment date or effective date for such event would occur during
the period during which the Exchange Rate is established, and will not effect
repurchases of Class B Common Stock or Common Stock in the market, or announce
its intention to effect repurchases of any such securities, during such period.
The Investor will not effect market purchases of the Common Stock or Class B
Common Stock during the period the Exchange Rate is established, provided, in
the case of the period related to the Automatic Exchange Date, that it has been
notified of the occurrence of the Trigger Date.
2.13. Amendment to Restated Certificate of Incorporation. As soon as
practicable after the execution of this Agreement, the Company and its Board of
Directors shall:
16
(a) Take all action necessary in accordance with applicable law, the
Company's Restated Certificate of Incorporation and the Company's By-laws to
obtain the requisite approval of the Company's stockholders for the adoption of
the Certificate of Amendment to the Company's Restated Certificate of
Incorporation (the "Charter Amendment"), in the form annexed hereto as Exhibit
A, which shall be authorized by the Board of Directors to, among other things,
establish the terms of the Class B Common Stock; and
(b) File the Charter Amendment with the Secretary of State of the State
of Delaware.
Section 3. Miscellaneous.
-------------
3.1. Successors and Assigns. The provisions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
permitted assigns of the parties hereto. Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties hereto or
their respective successors and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement. Nothing
contained herein shall be construed as permitting any transfer of any securities
of the Company in violation of any applicable law or agreement.
3.2. Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York. The Investor and
the Company hereby submit to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York State
court sitting in New York City for purposes of all legal proceedings arising out
of or relating to this Agreement and the transactions contemplated hereby. The
Investor and the Company irrevocably waive, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the venue
of any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
3.3. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, and all of which together shall constitute
one and the same instrument.
3.4. Captions and Headings. The captions and headings used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
17
3.5. Notices. Unless otherwise provided, any notice or other
communication required or permitted to be given or effected under this Agreement
shall be in writing and shall be deemed effective upon (i) personal or facsimile
delivery to the party to be notified, (ii) one business day after deposit with
an internationally recognized courier service, delivery fees prepaid, or (iii)
three business days after deposit with the U.S. mail, return-receipt requested,
postage prepaid, and in each case, addressed to the party to be notified at the
following respective addresses, or at such other addresses as may be designated
by written notice; provided that any notice of change of address shall be deemed
effective only upon receipt.
If to the Company:
IDT Corporation
000 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Xxx Xxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000
If to the Investor:
o
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx
Attn: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
with copies to:
Liberty Media Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Legal Department
18
Telephone: (000) 000-0000
Fax: (000) 000-0000
and
Xxxxx Xxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
3.6. Amendments and Waivers. The provisions of Sections 2.9, 2.12 and
2.13 of this Agreement and the provisions of this sentence may be amended, and
the observance of any such provision may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of each of the Company and the Investor. The remaining
provisions of this Agreement, including the provisions of this sentence, may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the Company has obtained written
consent of Holders owning in the aggregate at least 51% of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure.
3.7. Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provisions shall be excluded from
this Agreement and the balance of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
3.8. Entire Agreement. This Agreement (together with the agreements
referenced herein) contains the entire understanding of the parties hereto with
respect to the subject matter contained herein, and supersedes and cancels all
prior agreements, negotiations, correspondence, undertakings and communications
of the parties, oral or written, respecting such subject matter. There are no
restrictions, promises, representations, warranties, agreements or undertakings
of any party hereto with respect to the matters contemplated hereby, other than
those set forth herein or made hereunder.
3.9. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES ITS RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT, THE SECURITIES OR THE SUBJECT MATTER HEREOF. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
19
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF
THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS
SECTION 3.9 HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE
PROVISIONS SHALL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY
FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH
ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR
MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT. IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL (WITHOUT A JURY) BY
THE COURT.
[Signatures on the following page.]
20
IN WITNESS WHEREOF, the parties have executed this Lock-up,
Registration Rights and Exchange Agreement as of the date first above written.
IDT CORPORATION
By:
-----------------------------
Name:
Title:
o
By:
-----------------------------
Name:
Title:
21
EXHIBIT A
FORM OF CERTIFICATE OF AMENDMENT TO RESTATED CERTIFICATE
OF INCORPORATION OF IDT CORPORATION
CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
IDT CORPORATION
(pursuant to Section 242 of the Delaware General Corporation Law)
IDT Corporation, a Delaware corporation, hereby certifies as follows:
1. The name of the corporation is IDT Corporation (hereinafter the
"Corporation").
2. The Corporation's Certificate of Incorporation was initially filed
with the Secretary of State of the State of Delaware on December 22, 1995 and a
Restated Certificate of Incorporation was filed on February 7, 1996.
3. The Restated Certificate of Incorporation of the Corporation is
hereby amended by deleting the preamble of Article Fourth thereof and replacing
it with the following:
"FOURTH: The aggregate number of shares of all classes of
capital stock which the Corporation shall have the authority to issue
is two hundred and forty five million (245,000,000) shares, consisting
of (a) 100,000,000 shares of common stock, par value $0.0l per share
("Common Stock"), (b) 35,000,000 shares of Class A Common Stock, par
value $0.01 per share (the "Class A Stock"), (c) 100,000,000 shares of
Class B Common Stock, par value $0.01 per share (the "Class B Stock",
and collectively, such Common Stock, Class A Stock and Class B Stock
are referred to herein as the "Common Shares"), and (d) 10,000,000
shares of preferred stock, par value $0.01 per share ("Preferred
Stock")."
4. The Restated Certificate of Incorporation of the Corporation is
hereby further amended by deleting Sections 1(h), 2(a), 2(b), 2(c), 2(d),
2(e)(6) and 2(f) of Article Fourth and replacing them with the following:
"1. Preferred Stock
(h) the limitations and restrictions, if any, to be effective
while any shares of such series are outstanding upon the
payments of dividends or the making of other distributions on,
and upon the purchase, redemption or other acquisition by the
Corporation of, the Common Stock, the Class A Stock, the Class
B Stock or shares of stock of any other class or any other
series of this class;"
"2. Common Stock, Class A Stock and Class B Stock
(a) General. Except as hereinafter expressly set forth in Section
2, and subject to the rights and preferences of the holders of
Preferred Stock at any time outstanding, the Class A Stock,
Class B Stock and the Common Stock, all of which are classes
of common stock, shall have the same rights and privileges and
shall rank equally, share ratably and be identical in respects
as to all matters, including rights in liquidation.
(b) Voting Rights. Except as otherwise provided in this Restated
Certificate of Incorporation or as expressly provided by law,
and subject to any voting rights provided to holders of
Preferred Stock at any time outstanding, the Common Shares
have exclusive voting rights on all matters requiring a vote
of the Corporation.
The holders of Common Stock shall be entitled to one
vote per share on all matters to be voted on by the
stockholders of the Corporation. The holders of Class A Stock
shall be entitled to three votes per share on all matters to
be voted on by the stockholders of the Corporation. The
holders of Class B Stock shall entitled to one-tenth (1/10) of
a vote per share on all matters to be voted on by the
stockholders of the Corporation.
Except as otherwise provided in this Restated
Certificate of Incorporation or as required by law, and
subject to any voting rights provided to holders of Preferred
Stock at any time outstanding, the holders of shares of Class
A Stock, the holders of shares of Class B Stock and the
holders of shares of Common Stock shall vote together as one
class on all matters submitted to a vote of stockholders of
the Corporation.
(c) (1) Dividends and Distributions. Subject to the rights of the
holders of Preferred Stock, and subject to any other
provisions of this Restated Certificate of Incorporation, as
it may be amended from time to time, holders of Class A Stock,
holders of Class B Stock and holders of Common Stock shall be
entitled to receive such dividends and other distributions in
cash, in property or in shares of the Corporation as may be
declared thereon by the Board of Directors from time to time
out of assets or funds of the Corporation legally available
therefor; provided, however, that no cash, property or share
dividend or distribution may be declared or paid on the
outstanding shares of any of the Class A Stock, the Class B
Stock or the Common Stock unless an identical per share
dividend or distribution is simultaneously declared and paid
on the outstanding shares of the other classes of common
stock; provided, further, however, that a dividend of shares
may be declared and paid in Class A Stock to holders of Class
A Stock, in Class B Stock to holders of Class B Stock and in
-2-
Common Stock to holders of Common Stock if the number of
shares paid per share to holders of Class A Stock, to holders
of Class B Stock and to holders of Common Stock shall be the
same. If the Corporation shall in any manner subdivide,
combine or reclassify the outstanding shares of Class A Stock,
Class B Stock or Common Stock, the outstanding shares of the
other classes of common stock shall be subdivided, combined or
reclassified proportionately in the same manner and on the
same basis as the outstanding shares of Class A Stock, Class B
Stock or Common Stock, as the case may be, have been
subdivided, combined or reclassified.
(2) Consideration in Merger and Similar Transactions. The
Corporation shall not be a party to a merger, consolidation,
binding share exchange, recapitalization, reclassification or
similar transaction (whether or not the Corporation is the
surviving or resulting entity) (an "Extraordinary
Transaction"), unless the per share consideration, if any,
that the holders of Common Stock and Class B Stock receive in
connection with such Extraordinary Transaction or are entitled
to elect to receive in such Extraordinary Transaction is the
same as the per share consideration that the holders of the
other of such classes of common stock are entitled to receive
or elect to receive in connection with the Extraordinary
Transaction.
(d) Optional Conversion.
-------------------
(1) The shares of Common Stock and Class B Stock are not
convertible into or exchangeable for shares of Class
A Stock.
(2) Each share of Class A Stock may be converted, at any
time and at the option of the holder thereof, into
one fully paid and nonassessable share of Common
Stock.
(3) Each share of Class B Stock may be converted, at any
time and at the option of the Corporation, into one
fully paid nonassessable share of Common Stock
provided that all shares of Class B Stock are so
converted."
"(e) Mandatory Conversion.
--------------------
(6) This Section 2(e) may not be amended without the
affirmative vote of holders of the majority of the shares of the Class A Stock,
the affirmative vote of holders of the majority of the shares of the Class B
Stock and the affirmative vote of holders of the majority of the shares of the
Common Stock, each voting separately as a class."
-3-
"(f) Conversion Procedures.
---------------------
(1) Each conversion of shares pursuant to Section 2(d) hereof
will be effected by the surrender of the certificate or certificates, duly
endorsed, representing the shares to be converted at the principal office of the
transfer agent of the Class A Stock, in the case of conversion pursuant to
Section 2(d)(2), or of the Class B Stock, in the case of conversion pursuant to
Section 2(d)(3), at any time during normal business hours, together with a
written notice by the holder stating the number of shares that such holder
desires to convert and the names or name in which he wishes the certificate or
certificates for the Common Stock to be issued. Such conversion shall be deemed
to have been effected as of the close of business on the date on which such
certificate or certificates have been surrendered, and at such time, the rights
of any such holder with respect to the converted shares of such holder will
cease and the person or persons in whose name or names the certificate or
certificates for shares are to be issued upon such conversion will be deemed to
have become the holder or holders of record of such shares represented thereby.
Promptly after such surrender, the Corporation will issue and
deliver in accordance with the surrendering holder's instructions the
certificate or certificates for the Common Stock issuable upon such conversion
and a certificate representing any Class A Stock, in the case of conversion
pursuant to Section 2(d)(2) which was represented by the certificate or
certificates delivered to the Corporation in connection with such conversion,
but which was not converted.
(2) The issuance of certificates upon conversion of shares
pursuant to Section 2(d) hereto will be made without charge to the holder or
holders of such shares for any issuance tax (except stock transfer tax) in
respect thereof or other costs incurred by the Corporation in connection
therewith.
(3) The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock or its
treasury shares, solely for the purpose of issuance upon the conversion of the
Class A Stock and the Class B Stock, such number of shares of Common Stock as
may be issued upon conversion of all outstanding Class A Stock and the Class B
Stock.
(4) Shares of the Class A Stock and Class B Stock surrendered
for conversion as above provided or otherwise acquired by the Corporation shall
be cancelled according to law and shall not be reissued.
(5) All shares of Common Stock which may be issued upon
conversion of shares of Class A Stock and Class B Stock will, upon issue, be
fully paid and nonassessable."
-4-
5. The Restated Certificate of Incorporation of the Corporation is
hereby further amended by deleting the first sentence to Article Fifth and
replacing it with the following:
"FIFTH: The business and affairs of the Corporation
shall be managed by or under the direction of a Board of
Directors consisting of not less than three (3) and not more
than seventeen (17) directors, the exact number of which shall
be fixed from time to time by the Board of Directors."
-5-
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be executed on its behalf this ___ day of _______, 2000.
IDT CORPORATION
By:
-------------------------------
Name:
Title:
-6-
EXHIBIT B
FORM OF VOTING AGREEMENT
VOTING AGREEMENT
VOTING AGREEMENT (this "Agreement"), dated as of ______ o, 2000,
between Xxxxxx X. Xxxxx (the "Stockholder"), and o, a o corporation (the
"Investor").
WHEREAS, IDT Corporation, a Delaware corporation (the "Company") and
Liberty Media Corporation, a Delaware corporation ("LMC") have entered into a
Subscription Agreement, dated as of March o, 2000, (the "Subscription
Agreement"), pursuant to which LMC has agreed to purchase, or cause its designee
to purchase, and the Company has agreed to sell to LMC or its designee,
3,775,000 shares (the "Investor Securities") of the Company's Common Stock, par
value $0.01 per share (the "Common Stock"); and
WHEREAS, Investor is LMC's designee for purposes of the Subscription
Agreement; and
WHEREAS, the Stockholder is a principal stockholder of the Company; and
WHEREAS, it is a condition to the consummation of the Subscription
Agreement that the Stockholder and the Investor enter into this Agreement; and
WHEREAS, capitalized terms used and not otherwise defined herein shall
have the respective meanings ascribed thereto in the Subscription Agreement.
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:
Section 1. Representations, Warranties and Acknowledgments of the
Investor. The Investor hereby represents, warrants and acknowledges to the
Stockholder, as follows:
1.1. Ownership of Securities. The Investor will, upon purchasing the
Investor Securities, be the record and beneficial owner of the Investor
Securities. Upon purchasing the Investor Securities, the Investor will have sole
voting power, sole power to issue instructions with respect to the voting and
sole power of disposition, in each case with respect to all of the Investor
Securities.
1.2. Power; Binding Agreement. The Investor has the legal capacity,
power and authority to enter into and perform all its obligations under this
Agreement. The execution, delivery and performance of this Agreement by the
Investor will not violate any other agreement relating to the Investor
Securities to which the Investor is a party, including, without limitation, any
voting agreement, shareholders' agreement, partnership
agreement or voting trust. This Agreement has been duly authorized and duly and
validly executed and delivered by the Investor and constitutes a valid and
binding agreement of the Investor, enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
Section 2. Representations, Warranties and Acknowledgments of the
Stockholder. The Stockholder hereby represents, warrants and acknowledges to the
Investor, as follows:
2.1. Ownership of Securities. The Stockholder is the record and
beneficial owner of the number of shares of Class A Common Stock, par value
$0.01 per share, of the Company (the "Class A Common Stock") and Common Stock
set forth on the signature page to this Agreement (collectively, the
"Stockholder Securities"). The Stockholder does not beneficially or of record
own any securities of the Company on the date hereof other than the Stockholder
Securities. The Stockholder has sole voting power, sole power to issue
instructions with respect to the voting and sole power of disposition, in each
case with respect to all of the Stockholder Securities.
2.2. Power; Binding Agreement. The Stockholder has the legal capacity,
power and authority to enter into and perform all his obligations under this
Agreement. The execution, delivery and performance of this Agreement by the
Stockholder will not violate any other agreement relating to the Stockholder
Securities to which the Stockholder is a party, including, without limitation,
any voting agreement, shareholders' agreement, partnership agreement or voting
trust. This Agreement has been duly authorized and duly and validly executed and
delivered by the Stockholder and constitutes a valid and binding agreement of
the Stockholder, enforceable against him in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
Section 3. Agreement to Vote Investor Securities. Until the first to
occur of (x) the first anniversary of the date of the Closing and (y) the date
on which the Investor Securities are exchanged in full for shares of Class B
Common Stock, par value $0.01 per share, of the Company ("Class B Common Stock")
in accordance with the Lock-up, Registration Rights and Exchange Agreement,
except as provided in the following sentence and subject to Stockholder's
compliance with his obligations herein, the Investor shall, at any meeting of
the stockholders of the Company or in any written consent in lieu thereof, vote
the Investor Securities in the same manner as the Stockholder votes the
Stockholder Securities, as notified by Stockholder to the Investor not less than
two Business Days prior to the date of such stockholder meeting or action by
written consent. Notwithstanding the foregoing, without regard to the manner in
which the Stockholder votes the Stockholder Securities, (a) Investor shall be
entitled to vote the Investor Securities in favor of, or give its written
consent to, an amendment to the Company's Restated Certificate of Incorporation
substantially in the form annexed as
2
Exhibit A to the Lock-up, Registration Rights and Exchange Agreement, (the
"Charter Amendment"), (b) Investor shall be entitled to vote the Investor
Securities for or against or abstain from voting, or give or withhold its
consent, in its sole discretion with respect to (i) any proposed amendment to
the Company's Restated Certificate of Incorporation, other than the Charter
Amendment, that would alter or change the powers, preferences or special rights
of the Common Stock or Class B Common Stock so as to affect them adversely, or
that would establish different terms for the Class B Common Stock or change the
powers, preferences or special rights of the Common Stock or Class B Common
Stock (collectively with the Class A Common Stock, the "Common Shares") relative
to any other class of Common Shares from that contemplated by the Restated
Certificate of Incorporation of the Company as in effect on the date of the
Subscription Agreement, as proposed to be amended by the Charter Amendment, and
(ii) any proposed reclassification of any shares of capital stock of the Company
into shares having any preference or priority as to dividends or upon
liquidation superior to that of the Common Stock and/or Class B Common Stock,
other than capital stock so preferred as to dividends or upon liquidation prior
to such reclassification, and (c) Investor shall be entitled to vote or abstain
from voting the Investor Securities, or give or withhold its written consent, in
each case in the same proportion (by voting power) as the other Common Shares
with respect to (i) any proposed consolidation, merger, binding share exchange
or similar transaction involving the Company in which the Company is not the
surviving or resulting entity, or the Class A Common Stock, the Common Stock
and/or the Class B Common Stock is changed or reclassified or the holders of
Common Shares immediately prior to such transaction own less than 50% of the
Common Shares immediately following consummation of such transaction, (ii) any
conveyance of all or substantially all of the consolidated assets of the Company
to any other Person, or (iii) the liquidation or dissolution of the Company.
Section 4. Agreement to Vote Stockholder Securities.
----------------------------------------
(a) For so long as the members of the Liberty Group in the
aggregate own any combination of shares of Common Stock and Class B Common Stock
that, taken together, equal by number at least 50% of the number of Investor
Securities or, following the exchange thereof for Class B Common Stock, 50% of
the number of shares of Class B Common Stock issued in exchange for the Investor
Securities (in each case, as appropriately adjusted to reflect the effect of
stock splits, reverse stock splits, stock dividends and other similar events
affecting the Common Stock or the Class B Common Stock), Investor shall be
entitled to nominate a person to serve as a director on the Company's Board of
Directors (the "Investor Director") and the Stockholder shall vote (or give its
written consent with respect to) or cause to be voted all of the Stockholder
Securities in favor of the election of the Investor Director. Subject to
applicable regulatory constraints, the Investor will nominate the Chairman of
the Board or the Chief Executive Officer of LMC as the Investor Director. Once
the members of the Liberty Group no longer hold a majority of the Investor
Securities, the Investor shall use its reasonable best efforts to secure the
immediate resignation of the Investor Director.
3
(b) Stockholder further agrees that until Investor is relieved
of its obligations under Section 3 above and Sections 2.9 and 2.12 of the
Lock-up, Registration Rights and Exchange Agreement, Stockholder will vote or
cause to be voted (or give his written consent with respect to) all of the
Stockholder Securities in favor of the Charter Amendment and, if requested by
the Investor, against any other proposed amendment to the Company's Restated
Certificate of Incorporation that would establish different terms for the Class
B Common Stock or relative powers, preferences and special rights for any of the
Class A Common Stock, Common Stock or Class B Common Stock than those
contemplated by the Charter Amendment.
Section 5. Fiduciary Duties. Notwithstanding anything in this Agreement
to the contrary, the covenants and agreements set forth herein shall not prevent
the Stockholder or the Investor Director, in their respective capacities as
members of the Company's Board of Directors, from taking any action which such
director shall deem to be required by his fiduciary duties to the Company while
acting in such person's capacity as a director of the Company.
Section 6. Successors and Assigns. This Agreement may not be assigned
by the Investor or the Stockholder without the prior written consent of the
other party hereto and the attempted or purported assignment of this Agreement
without such consent shall be void; provided, however, that the Investor may,
without written consent of the Stockholder, assign its rights and obligations
hereunder in whole or in part to any other member of the Liberty Group to which
it transfers Investor Securities (provided that no such assignment shall relieve
the Investor of its responsibility for the performance of the obligations
hereunder for so long as it holds any Investor Securities). This Agreement shall
be binding upon and inure to the benefit of the parties hereto and, in the case
of Investor, its successors and permitted assigns. Nothing in this Agreement,
express or implied, is intended to confer upon any party, other than the parties
hereto or, in the case of Investor, its successors and permitted assigns, any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
Section 7. Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by and construed in accordance with the internal laws of the
State of New York. Each of the Stockholder and the Investor hereby submits to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York State court sitting in New
York City for purposes of all legal proceedings arising out of or relating to
this Agreement and the transactions contemplated hereby. Each of the Stockholder
and the Investor irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
4
Section 8. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to constitute one and the same instrument.
Section 9. Captions and Headings. The captions and headings used in
this Agreement are for convenience only and are not to be considered in
construing or interpreting this Agreement.
Section 10. Notices. Unless otherwise provided, any notice or other
communication required or permitted to be given or effected under this Agreement
shall be in writing and shall be deemed effective upon personal or facsimile
delivery to the party to be notified or one business day after deposit with an
internationally recognized courier service, delivery fees prepaid, or three
business days after deposit with the U.S. mail, return receipt requested,
postage prepaid, and in each case, addressed to the party to be notified at the
following respective addresses, or at such other addresses as may be designated
by written notice; provided that any notice of change of address shall be deemed
effective only upon receipt:
If to the Stockholder:
Xxxxxx X. Xxxxx
000 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000
If to the Investor:
o
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
with copies to:
5
Liberty Media Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Legal Department
Telephone: (000) 000-0000
Fax: (000) 000-0000
and
Xxxxx Xxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Section 11. Amendments and Waivers. All terms of this Agreement may be
amended, and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of each of the Stockholder and the
Investor. Any amendment or waiver effected in accordance with this Section 11
shall be binding upon each holder of any Investor Securities and Stockholder
Securities at the time outstanding, each future holder of such Investor
Securities and Stockholder Securities, and the other parties to this Agreement.
Section 12. Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provisions shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
Section 13. Entire Agreement. This Agreement (together with the
agreements referred to herein) constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes all prior
agreements, understandings and discussions between them, and all documents
delivered between them, with respect to such subject matter.
Section 14. Specific Performance. The parties hereto agree that
irreparable harm would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof, this being in addition to
any other remedy to which they are entitled at law or in equity.
6
Section 15. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES ITS
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING
OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. THIS SECTION 16 HAS BEEN FULLY DISCUSSED BY EACH OF THE
PARTIES HERETO AND THESE PROVISIONS SHALL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH
PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT. IN THE EVENT
OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
(WITHOUT A JURY) BY THE COURT.
[Signatures on the following page.]
7
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as
of the date first above written.
----------------------------------
Xxxxxx X. Xxxxx
o Shares of Class A Stock
o Shares of Common Stock
o
By:
-------------------------------
Name:
Title:
8
EXHIBIT C
OPINION MATTERS
1. The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware and has all corporate
powers required to carry on its business as now conducted.
2. The execution, delivery and performance by the Company of the
Agreement and the other Equity Documents are within the corporate power of the
Company and have been duly authorized by all necessary corporate and shareholder
action on the part of the Company.
3. The execution, delivery and performance by the Company of the
Agreement and the other Equity Documents and the consummation of the
transactions contemplated therein do not and will not (a) violate the
certificate of incorporation or bylaws of the Company or (b) to the best
knowledge of such counsel after due inquiry, (i) violate any Applicable Law,
other than violations that would not individually or in the aggregate be
reasonably expected to have a Company Material Adverse Effect or a material
adverse effect on the Investor, (ii) except as to matters which would not
individually or in the aggregate be reasonably expected to have a Company
Material Adverse Effect or a material adverse effect on the Investor, constitute
a default under, or give rise to any rights of termination, cancellation or
acceleration of any right or obligation of the Company or any IDT Subsidiary or
to a loss of any benefit to which the Company or any IDT Subsidiary is entitled
under any provision of any agreement or other instrument binding upon the
Company or any IDT Subsidiary or (iii) result in the creation or imposition of
any Lien on any asset of the Company or any IDT Subsidiary, except where such
Lien would not have a Company Material Adverse Effect.
4. The Agreement and the other Equity Documents constitute valid and
binding agreements of the Company, enforceable in accordance with their terms,
subject to the effects of applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and equitable principles of general
applicability.
5. The authorized capital stock of the Company conforms as to legal
matters to the description thereof set forth in Section 3.3 of the Agreement. To
the best knowledge of such counsel after due inquiry, all outstanding capital
stock of the Company is duly authorized, validly issued and fully paid and
non-assessable. The issuance, sale and delivery of the Investor Securities have
been duly authorized by all requisite corporate and shareholder action of the
Company. The Investor Securities are validly issued, fully paid and
nonassessable, free and clear of any Liens and are not subject to preemptive or
other similar rights.
6. Neither the Investor nor its affiliates or associates shall, as a
result of the execution of the Agreement or the consummation of the Transactions
contemplated by
the Agreement, become subject to any of the restrictions of Section 203 of the
DGCL with respect to IDT or any of its direct or indirect subsidiaries any of
the stock of which is publicly traded.
2
