EXHIBIT 7(k)
LOCK-UP AND REGISTRATION RIGHTS AGREEMENT
LOCK-UP AND REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as
of March 20, 2001, by and between IDT Corporation, a Delaware corporation (the
"Company"), and AT&T Corp., a New York corporation (the "Investor").
WHEREAS, the Company and the Investor have entered into an Option
Agreement, dated as of March 3, 2000; and
WHEREAS, it is a condition to the Closing (as defined below) of the
Option Agreement that the Company grant Investor the registration rights set
forth herein, and it is a condition to the Company's execution of the Option
Agreement that the Investor agree to the restrictions on transfer set forth
herein.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
Section 1. Definitions. For the purposes of this Agreement:
(a) The term "Affiliate" means, 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.
(b) The terms "Closing" and "Closing Date" mean the date
of the Closing, as such term is defined in the Option Agreement.
(c) The term "Holder" means a holder of Registrable
Securities or, unless the context otherwise requires, securities convertible
into or exercisable for Registrable Securities.
(d) The terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act of 1933, as amended (the "Act"),
and the declaration or ordering of effectiveness of such registration statement.
(e) The term "Registrable Securities" means the shares of
Class B Common Stock, par value $.01 per share, of the Company (the "Class B
Common Stock") issued to the Investor pursuant to the Option Agreement (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 another provision of Rule 144 of the
Act pursuant to which all of the Investor's Securities are immediately eligible
for resale or (iii) such Securities have ceased to be outstanding.
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 (an "S-3 Demand Registration"). Upon receipt of a valid
request for an S-3 Demand Registration, the Company shall promptly, in and 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 not be required to effect
any registration if the number of Registrable Securities that the Company shall
have been requested to register shall, in the aggregate, be less than 10% of the
number of shares of Class B Common Stock purchased by the Investor on the
Closing Date. The Holders shall have the right to two (2) S-3 Demand
Registrations pursuant to this Section 2.1(a).
(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 any of the
Holders and has not thereafter become effective for not less than ninety (90)
additional consecutive days, 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
2.2. "Piggy-Back" Registration. (a) At any time after the first
anniversary of the Closing Date and prior to the fifth anniversary of the
Closing Date, if the Company proposes to register any securities under the Act
in connection with any offering of its securities (other than a registration
statement on Form S-8 or Form S-4, or their successors, or any other form for a
similar limited purpose, or any registration statement covering only securities
proposed to be issued in exchange for securities or assets of another
corporation), whether or not for its own account, the Company shall furnish
promptly, and in any event not less than 10 days in advance, written notice to
the Holders of its intention to effect such registration and the intended method
of distribution in connection there with. Upon the written request of a Holder
made to the Company within 15 days after the receipt of such notice by the
Company, the Company shall include in such registration the requested number of
the Holder's Registrable Securities (a "Piggy-Back Registration"). If a Holder
decides not to include all of its Registrable Securities in any registration
statement thereafter filed by the Company, the Holder shall nevertheless
continue to have the right to include any Registrable Securities in any
subsequent registration statement or registration statements as may be filed by
the Company with respect to offerings of its Common Stock and any other
securities, all upon the terms and conditions set forth herein.
(b) Nothing in this Section 2.2 shall create any
liability on the part of the Company or any other person to the Holders if the
Company, for any reason, decides not to file a
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registration statement proposed to be filed pursuant to Section 2.2(a) or to
withdraw such registration statement subsequent to its filing, regardless of any
action whatsoever that a Holder may have taken, whether as a result of the
issuance by the Company of any notice under Section 2.2(a) or otherwise.
2.3. Blackout Periods for Holders. If the board of directors of the
Company determines in good faith that the registration and distribution of
Registrable Securities pursuant to Section 2.1 or Section 2.2 hereof (or the use
of a registration statement or related prospectus) would be materially
detrimental to the Company or its shareholders, including (without limitation)
that such filing could result in disclosure of material non-public information
or could 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 or inclusion of Registrable Securities (as the case may be), 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 or
Section 2.2, the Company shall be entitled to (i)postpone the filing of the
registration statement otherwise required to be prepared and filed by the
Company pursuant to Section 2.1 hereof for a reasonable period of time, but not
to exceed 90 days (a "Demand Blackout Period") after the date of such request,
provided that the Company's exercise of its rights under this Section 2.3 (x)
shall not result in Demand Blackout Periods for more than 180 days in any 365
day period and (y)shall not result in Demand Blackout Periods that are separated
by less than 45 days, or (ii)exclude all or a portion of the Registrable
Securities (on a pro-rata basis by Holder) otherwise required to be registered
pursuant to Section 2.2. hereof. The Company shall promptly notify each holder
of the expiration or earlier termination of any Demand Blackout Period.
2.4. 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 ninety (90) days.
(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 quotation 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 on a national securities
exchange selected by a majority in interest of the Holders of the Registrable
Securities being registered.
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(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 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.
(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
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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.
(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 seller 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 or (ii) such Information has been made generally available to the
public or (iii) as necessary to enforce a Holder's rights under this Agreement.
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 transfer agent and registrar (which may be
the same entity and which may be the Company) for such Registrable Securities.
(n) Use its reasonable efforts to take all other steps
necessary to effect the registration of such Registrable Securities pursuant to
the terms contemplated hereby.
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2.5. 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 any prospectus in its possession (other than one permanent
file copy) that contains 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.
2.6. 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 Section 2.1 or Section 2.2
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 legal fees of one counsel for the Holders in an
amount not to exceed $25,000 in connection with any registration.
2.7. Underwriting Requirements. In connection with any underwritten
offering of a Holder's Registrable Securities, the Company shall not be required
under Section 2.4 to register any of such Registrable Securities in connection
with such underwritten offering unless (i) in the case of a registration
pursuant to Section 2.1, the Company consents to the underwriters selected by
the Holders participating in the registration (which consent shall not be
unreasonably withheld) and (ii) in the case of a registration pursuant to
Section 2.2, the Holder accepts the underwriters selected by the Company and
then, in either case (i) or (ii), 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 or 2.2, the
Registrable Securities to be included shall be apportioned among the Holders on
a pro rata basis (based on the number of shares of Class B Common Stock proposed
to be registered by each), first among the Holders of Registrable Securities to
be registered
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pursuant to Section 2.1, and thereafter among the Holders of Registrable
Securities to be registered pursuant to Section 2.2; 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 shares that are not Registrable Securities and all shares 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
(including 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 of any underwriting agreement, to withdraw there from by written
notice to the Company and the lead managing underwriter. Any Registrable
Securities so withdrawn from an underwriting by such Holder shall be withdrawn
from such registration and shall not be transferred in a public distribution
prior to 180 days following the effective date of the registration statement
relating thereto.
2.8. 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.
2.9. 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 Securities Exchange Act of
1934, as amended (the "1934 Act"), and their respective directors, officers, and
each person, if any, who controls the Holder within the meaning of 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 or are based upon (collectively, a "Violation") (x) any untrue statement or
alleged untrue statement of a material fact contained in such registration
statement, including any 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
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indemnity agreement contained in this Section 2.9(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.
(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 2.9(b) in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided that the indemnity agreement contained in this
Section 2.9(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
2.9(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 2.9 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 2.9,
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
(together with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the reasonable fees and expenses to 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
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differing interests between such Indemnified Person and any other party
represented by such counsel in such proceeding. 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 2.9, 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 2.9; provided, that in no
event shall any indemnity under this Section 2.9(c) exceed the net proceeds from
the offering received by such Holder upon its sale of Registrable Securities
included in the registration statement.
(d) If the indemnification provided for in this Section
2.9 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any losses, claims, damages or liabilities
referred to herein, the indemnifying party, in lieu of indemnifying such
Indemnified Person thereunder, 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.
(e) The obligations of the Company and the Holders under
this Section 2.9 shall survive the completion of any offering of Registrable
Securities under a registration statement pursuant to this Section 2.
2.10. 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 Class B Common Stock (including entering
into any agreement or arrangement that has the effect of transferring all or a
substantial part of the economic effect of holding the Class B Common Stock)
without the written consent of the Company; provided, however, that the Investor
shall be permitted to transfer (i) all or part of the Class B Common Stock to an
Affiliate of the Investor, if such Affiliate and the Investor agree for the
benefit of the Company that such Affiliate shall remain an Affiliate of the
Investor until at least the first anniversary of the Closing Date, and (ii) up
to 20% of the aggregate number of shares of Class B Common Stock purchasable
pursuant to the Option Agreement to any party, to the extent necessary to remedy
a breach by the Investor of Section 11.1 of the Framework Agreement, dated as of
October 23, 1998, by and among the Investor, VLT Corporation, British
Telecommunications plc, BT (Netherlands) Holdings B.V. and Thistle B.V. (the
"Framework Agreement") (each such transferee, a "Permitted Transferee");
provided that in connection with any proposed transfer pursuant to clause (ii)
above, (x) the Investor shall deliver to the Company a certificate of an
executive officer of the
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Investor setting forth in reasonable detail a computation made in accordance
with the Framework Agreement and demonstrating that the proposed sale will
remedy such breach, and (y) the Company and the Investor shall have agreed to
the reinvestment of the net proceeds from the sale of such shares in equity
securities of an Affiliate of the Company in such a manner so as not to cause a
breach under the Framework Agreement. 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 2.10 shall result in termination
of the Company's obligations under Section 2.1 and Section 2.2 of this Agreement
with respect to the affected Class B Common Stock.
2.11. 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 Permitted Transferee of Registrable Securities;
provided, however, (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 all restrictions set forth in this
Agreement. 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.
2.12. 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 reasonable 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 after the effective date of the
first registration filed by the Company for an offering of its securities to the
general public;
(b) File with the SEC, in a timely manner, all reports
and other documents required of the Company under 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 said Rule 144 of the Act, and of
the 1934 Act (at any time after it has become subject to such reporting
requirements), 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 availing itself of any rule or regulation of the SEC allowing it to sell any
such securities without registration.
2.13. Self-Tender Protection. Until such time as the Investor and
its Permitted Transferees hold less than 50% of the shares of Class B Common
Stock issued to the Investor pursuant to the Option Agreement, the Company shall
not make a tender offer for its common stock, par value $.01 per share ("Common
Stock"), unless such offer is extended ratably and for equivalent per share
consideration to the Investor and its Permitted Transferees in respect of shares
of ClassB Common Stock then held by them.
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2.14. Third Party Tender Protection. Until such time as the Investor
and its Permitted Transferees hold less than 50% of the Class B Common Stock
issued to the Investor pursuant to the Option Agreement, if (i) any person makes
a tender offer for the Common Stock, (ii) such tender offer is consummated with
respect to more than 20% of the outstanding Common Stock and (iii) such tender
offer is not extended ratably and on an equal consideration basis to the
Investor and its Permitted Transferees in respect of their holdings of Class B
Common Stock, then within ten (10) business days of the date of consummation of
such tender offer, the Company shall make an offer to purchase, for
consideration equivalent to that paid in such tender offer, a portion of the
Class B Common Stock held by the Investor and its Permitted Transferees
equivalent to the portion of the outstanding Common Stock purchased pursuant to
such tender offer.
2.15. Assignment of Tender Protections. Notwithstanding Section
2.11, the provisions in Sections 2.13 and 2.14 shall be automatically assigned
to, and shall be enforceable against the Company by, subsequent holders of the
shares of ClassB Common Stock to be issued and sold hereunder, but only for so
long as there is no public market for the ClassB Common Stock.
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 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.
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
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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:
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx Xxxxxx
Fax: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxx X. Xxxxxx
Fax: (000) 000-0000
3.6. Amendments and Waivers. The 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 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
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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 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 SERIES A COMMON OR THE SUBJECT MATTER HEREOF. 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 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.]
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IN WITNESS WHEREOF, the parties have executed this Lock-up and
Registration Rights Agreement as of the date first above written.
IDT CORPORATION
By:
-------------------------------
Name:
Title:
AT&T CORP.
By:
-------------------------------
Name:
Title:
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