CONFORMED COPY
STOCK EXCHANGE AGREEMENT
by and among
IDT Investments Inc.,
IDT Corporation,
IDT America, Corp.,
000 Xxx XX Xxxx, Xxx.,
000 Xxx XX Road, Inc.,
60 Park Place Holding Company, Inc.,
Liberty Media Corporation,
Microwave Holdings, L.L.C.
and
Liberty TP Management, Inc.
Dated April 18, 2001
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT, dated as of April 18, 2001 (as
the same may be amended or modified from time to time, this "Agreement"), by and
among IDT Investments Inc., a Nevada corporation (the "Company"), IDT
Corporation, a Delaware corporation ("IDTC"), IDT America, Corp., a New Jersey
corporation ("IDTA"), 000 Xxx XX Xxxx, Inc., a New Jersey corporation ("225 Xxx
XX Xxxx"), 000 Xxx XX Road, Inc., a New Jersey corporation ("226 Xxx XX Xxxx"),
00 Xxxx Xxxxx Holding Company, Inc., a New Jersey corporation ("60 Park Place"),
Liberty Media Corporation, a Delaware corporation ("LMC"), Microwave Holdings,
L.L.C., a Delaware limited liability company ("Microwave Holdings"), and Liberty
TP Management, Inc., a Delaware corporation ("TP Management").
WITNESSETH:
WHEREAS, IDTC and LMC have undertaken an expansion of their
existing strategic relationship, as detailed in the Memorandum of Understanding
attached hereto as Exhibit A, in order to leverage the strengths of each party
into greater value creation;
WHEREAS, Microwave Holdings is the beneficial and record owner
of all of the issued and outstanding capital stock of Microwave Services, Inc. a
Delaware corporation ("Microwave Services"), and Microwave Services is the
beneficial and record owner of 21,436,689 shares (the "Teligent Shares") of
Class A Common Stock, par value $0.01 per share, of Teligent, Inc. ("Teligent"),
a Delaware corporation (the "Teligent Common Stock");
WHEREAS, TP Management is the beneficial and record owner of
(a) 50,000 shares (the "ICG Shares") of the 8% Series A-1 Convertible Preferred
Stock, par value $0.01 per share (the "Series A-1 ICG Preferred Stock"), of ICG
Communications, Inc., a Delaware corporation ("ICG"), and (b) a Warrant (the
"ICG Warrant") to purchase an aggregate of 6,666,667 shares of common stock, par
value $0.01 per share, of ICG (the "ICG Common Stock");
WHEREAS, Microwave Holdings and TP Management desire to
exchange all the issued and outstanding capital stock of Microwave Services, in
the case of Microwave Holdings, and the ICG Shares and ICG Warrant, in the case
of TP Management for (i) 7,500 and 2,500 shares, respectively, of Class B Common
Stock, par value $0.01 per share, of the Company (the "Class B Common Stock" )
and (ii) 30,000 and 10,000 shares, respectively, of Series A Convertible
Preferred Stock, par value $0.01 per share, of the Company (the "Series A
Preferred Stock");
WHEREAS, the Company desires to acquire the interests
currently held by Microwave Holdings in Teligent and by TP Management in ICG;
WHEREAS, the Acquisition (as defined below) arose as a result
of an inquiry by the management of the Company as to whether LMC had, or knew
of, any opportunity to acquire financially distressed entities engaged in the
telecommunications business for the purpose of revitalizing those entities
through the provision of necessary managerial services, relationships and
assets;
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WHEREAS, the Acquisition was precipitated by the desire of the
parties to the transaction to accomplish those goals by combining their
interests in Teligent, ICG and the Company (which corporations are, directly or
indirectly through Affiliates, engaged in complementary or similar lines of the
telecommunications business) for the purpose of maximizing the value of their
stock and warrants therein through the intended realization of definite and
substantial economic benefits that are intended to be derived from uniting those
interests under the management of a single entity and the provision of necessary
managerial services, relationships and assets thereto;
WHEREAS, LMC has notified the Company of certain other
interest holders in Teligent and ICG and the Company is pursuing opportunities
to acquire additional interests and to further consolidate its ownership with
respect thereto;
WHEREAS, pursuant to a plan among the parties to this
Agreement, each of IDTC, 000 Xxx XX Xxxx, 000 Xxx XX Road, 60 Park Place and
IDTA will transfer to the Company on the Closing Date (as defined below) or as
soon as practicable thereafter, in exchange for an aggregate of 53,504 shares of
Class A Common Stock, par value $0.01 per share, of the Company (the "Class A
Common Stock"), certain assets which the Company desires to acquire and which
are described in Section 6.03 hereof; and
WHEREAS, for Federal income tax purposes, it is intended that
the Exchange (as defined below) will qualify as an exchange under the provisions
of section 351(a) of the Code (as defined below).
NOW, THEREFORE, in consideration of the premises and the
mutual agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
SECTION 1.01 Definitions.
For the purposes of this Agreement, the following terms shall
have the following respective meanings:
"Affiliate" shall mean, with respect to any Person, any Person
that, directly or indirectly, controls, is controlled by or is under common
control with such Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise. Notwithstanding the
foregoing, neither AT&T Corp. nor any Subsidiary of AT&T Corp. that is not a
member of the Liberty Media Group (as defined in the certificate of
incorporation, as amended, of AT&T Corp.) shall be deemed to be an Affiliate of
LMC or any of its Affiliates for purposes of this Agreement.
"Acquisition" shall have the meaning ascribed to such term in
Section 2.01 hereof.
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"Applicable Law" shall mean any foreign, United States
federal, state or local law, statute, rule, regulation, common law, order, writ,
injunction, judgment, decree or permit of any Governmental Entity.
"Asset Transfer" shall have the meaning ascribed to such term
in Section 6.03 hereof.
"Bankruptcy Code" means the Bankruptcy Code of the United
States of America, as amended (11 U.S.C.A. Section 101, et seq.), and any rules
or regulations promulgated by any Governmental Entity under such statute.
"Code" shall mean the Internal Revenue Code of 1986, as
amended. All citations to provisions of the Code, or to the Treasury regulations
promulgated thereunder, shall include any amendments thereto and any substitute
or successor provisions thereto.
"Commission" shall mean the Securities and Exchange Commission
or any other governmental authority at the time administering the Securities Act
or the Securities Exchange Act of 1934, as amended.
"Contract" shall mean any contract, lease, indenture,
agreement, commitment, and any other legally binding arrangement, whether in
existence on the date hereof or subsequently entered into, whether oral or in
writing, including any amendment thereto.
"DGCL" shall mean the General Corporation Law of the State of
Delaware, in effect as of the date hereof, and any amendments or successor
statutes thereto.
"Encumbrance" shall mean any mortgage, claim, charge, lien,
security interest, easement, right of way, pledge, covenant, restriction or
encumbrance of any nature whatsoever.
"Exchange" shall mean, collectively, the Acquisition and the
Asset Transfer, taken as a whole.
"Final Determination" shall mean a determination as defined in
section 1313(a) of the Code or any other event which finally and conclusively
establishes the amount of any liability for Taxes.
"Governmental Entity" shall mean any court, administrative
agency or commission or other governmental authority or instrumentality, whether
domestic or foreign.
"Person" shall mean an individual, corporation, trust,
partnership, limited liability company, joint venture, unincorporated
organization, government agency or any agency or political subdivision thereof,
or other entity.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and any similar or successor Federal statute, and the rules and
regulations of the Commission thereunder, all as the same may be in effect at
the time.
"Straddle Tax Return" shall mean any Tax Return relating to a
taxable period beginning before and ending after the Closing Date.
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"Subsidiary" shall mean, with respect to any Person, another
Person, an amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least 50% of its Board
of Directors or other governing body (or, if there are no such voting interests,
50% or more of the equity interests of which) is owned directly or indirectly by
such first Person.
"Taxes" shall mean any and all Federal, state, local and
foreign taxes, assessments and other governmental charges, duties, impositions,
levies and liabilities, including, without limitation, taxes based upon or
measured by gross receipts, income, profits, sales, use and occupation, and
value added, ad valorem, transfer, gains, franchise, withholding, payroll,
recapture, employment, excise, unemployment, insurance, social security,
business license, occupation, business organization, stamp, environmental and
property taxes, together with all interest, penalties and additions imposed with
respect to such amounts.
"Taxable Period" means any taxable year or any other period
that is treated as a taxable year or any portion thereof (or other period, or
portion thereof, in the case of a Tax imposed with respect to such other period,
e.g., a quarter) with respect to which any Tax may be imposed under any
applicable statute, rule, or regulation.
"Tax Return" means any report, return, election, notice,
estimate, declaration, information statement and other forms and documents
(including, without limitation, all amendments thereof and schedules, exhibits
and other attachments thereto) relating to and filed or required to be filed
with a taxing authority in connection with any Taxes (including, without
limitation, estimated Taxes).
SECTION 1.02 Interpretation. (a) When used in this Agreement
the words "include", "includes" and "including" shall be deemed to be followed
by the words "without limitation."
(b) Any terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) When used in this Agreement, the word "or" is not
exclusive.
(d) All references to recitals, Articles, Sections, Exhibits
and Schedules shall be deemed references to recitals, Articles, Sections,
Exhibits and Schedules to this Agreement.
(e) This Agreement shall be deemed drafted jointly by all the
parties hereto and shall not be specifically construed against any party hereto
based on any claim that such party or its counsel drafted this Agreement.
ARTICLE II
ACQUISITION OF THE COMPANY STOCK
SECTION 2.01 Acquisition of Acquired Securities. Upon the
terms and subject to the conditions of this Agreement (a) the Company hereby
agrees to issue to Microwave Holdings, and Microwave Holdings hereby agrees to
acquire from the Company, 30,000 shares of Series A Preferred Stock and 7,500
shares of Class B Common Stock and (b) the Company hereby agrees to issue to TP
Management, and TP Management hereby agrees to acquire from the Company, 10,000
shares of Series A Preferred Stock and 2,500 shares of Class B Common Stock
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(the securities to be issued to Microwave Holdings and TP Management pursuant to
this Section 2.01 are referred to herein collectively as the "Acquired
Securities" and the acquisition of the Acquired Securities by Microwave Holdings
and TP Management pursuant to this Section 2.01 is referred to herein as the
"Acquisition").
SECTION 2.02 Consideration. In consideration of the issuance
of the Acquired Securities to be issued to it, (a) Microwave Holdings shall
transfer to the Company all of the issued and outstanding capital stock of
Microwave Services and (b) TP Management shall transfer to the Company the ICG
Shares and the ICG Warrant (the interests to be transferred by the respective
parties referred to herein as the "Transferred Interests").
SECTION 2.03 The Closing. Upon the terms and subject to the
conditions contained in this Agreement, the closing of the Acquisition (the
"Closing") shall take place on the date hereof, at 10:00 A.M., Reno, Nevada
time, at the offices of Xxxxxxxx and Wedge, 0000 Xxxx Xxxx, Xxxxx 000, Xxxx,
Xxxxxx 00000, or at such other time or at such other place as shall be mutually
agreed upon by the parties hereto. The date on which the Closing occurs is
herein referred to as the "Closing Date."
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents, warrants and acknowledges to
Microwave Holdings and TP Management as follows:
SECTION 3.01 Organization, Good Standing and Qualification.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada 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.
(b) The Company has delivered to Microwave Holdings and TP
Management true and complete copies of the Articles of Incorporation, as amended
to date, and By-laws, as in effect on the date hereof, of the Company.
SECTION 3.02 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 to consummate the transactions contemplated hereby. The Company
has duly executed and delivered this Agreement. This Agreement is 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.
SECTION 3.03 Capital Structure. The authorized capital stock
of the Company consists of (i) 500,000 shares of Class A Common Stock, $0.01 par
value, of which 190,758 shares are outstanding as of the date hereof, with 1,101
shares held by IDTC, 188,556 shares held by IDT Nevada Holdings, Inc., a
wholly-owned Subsidiary of IDTC, and 1,101 shares held by LMC, (ii) 200,000
shares of Class B Common Stock, $0.01 par value, of which no shares are
outstanding as of the date hereof and (iii) 150,000 shares of "blank check"
preferred stock,
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$0.01 par value, of which 75,000 shares have been designated "Series A
Convertible Preferred Stock" and none of which are outstanding as of the date
hereof. All of the outstanding shares of Class A Common Stock have been duly
authorized and are validly issued, fully paid and nonassessable. The Acquired
Securities have been duly authorized and, when issued and delivered 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.
SECTION 3.04 Actions and Proceedings. As of the date of this
Agreement, there are no actions, suits, claims, proceedings or investigations
pending or, to the knowledge of the Company, threatened against the Company, nor
any outstanding judgments, orders, writs, injunctions or decrees of any
Governmental Entity against the Company that (i) seek to prevent or materially
restrict or delay the consummation of the transactions contemplated hereby or
(ii) would likely have a material adverse effect on the transactions
contemplated by this Agreement.
SECTION 3.05 No Violation. The execution, delivery and
performance of this Agreement by the Company and the issuance and transfer of
the Acquired 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 Articles 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 an
Encumbrance on the assets of the Company (with or without notice, lapse of time
or both) pursuant to any Contract binding upon the Company or any Applicable Law
or (iii) any change in the rights or obligations of any party under any Contract
binding upon the Company, 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, would not likely have a material adverse
effect on the transactions contemplated by this Agreement. No provision of any
Applicable Law, injunction, order or decree of any Governmental Entity is in
effect that has the effect of making the transactions contemplated by this
Agreement illegal or would likely have a material adverse effect on the
transactions contemplated by this Agreement.
SECTION 3.06 Consents and Approvals. Assuming the correctness
of the representations by Microwave Holdings and TP Management in Article IV,
all authorizations, consents, approvals, licenses, qualifications or exemptions
from, or any filings, declarations or registrations with, any Governmental
Entity or any other Person required in connection with the execution, delivery
or performance by the Company of this Agreement have been made or obtained and
are in full force and effect as of the date hereof, other than authorizations,
consents, approvals, licenses or qualifications the absence of which would not
likely have a material adverse effect on the transactions contemplated by this
Agreement.
SECTION 3.07 Ownership of AT&T Securities. As of the date
hereof, neither IDTC nor any of its Subsidiaries owns, beneficially or of
record, any securities of AT&T Corp. or of any direct or indirect Subsidiary of
AT&T Corp.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MICROWAVE HOLDINGS AND
TP MANAGEMENT
Each of Microwave Holdings, as to itself and Microwave
Services, and TP Management, as to itself and ICG, severally and not jointly,
hereby represents, warrants and acknowledges to the Company as follows:
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SECTION 4.01 Ownership. (a) Microwave Holdings represents and
warrants that (i) it is a limited liability company duly organized, validly
existing and in good standing under the laws of the state of Delaware, (ii) it
is the beneficial and record holder of all of the issued and outstanding capital
stock of Microwave Services (the "Microwave Services Stock"), (iii) Microwave
Services is the beneficial and record holder of the Teligent Shares, free and
clear of any Encumbrances other than as are (A) specifically set forth in the
Stockholders Agreement, dated January 13, 2001, among Xxxx X. Xxxxx, LMC,
Telcom-DTS Investors, L.L.C., and Microwave Services, a true and complete copy
of which has been provided by Microwave Holdings to the Company (the "2000
Teligent Stockholders Agreement"), (B) specifically set forth in the
Stockholders Agreement, dated as of November 26, 1997, by and among Teligent,
Microwave Services, Telcom-DTS Investors, L.L.C. and NTTA&T Investment Inc. (the
"1997 Teligent Stockholders Agreement"), (C) specifically set forth in the
Registration Rights Agreement, dated as of March 6, 1998, by and between
Teligent and Microwave Services (the "Teligent Registration Rights Agreement")
or (D) imposed by Section 203 of the DGCL, (iv) it has the right, power and
authority to transfer and deliver the Microwave Services Stock as provided in
this Agreement and (v) upon delivery of the Microwave Services Stock as provided
in this Agreement, there shall be vested in the Company good and valid title to
the Microwave Services Stock, free and clear of any Encumbrances.
(b) TP Management represents and warrants that (i) it is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware, (ii) it is the beneficial and record holder of the ICG
Shares and the ICG Warrant, (iii) it has the right, power and authority to
transfer and deliver the ICG Shares and the ICG Warrant as provided in this
Agreement and (iv) upon delivery of the ICG Shares and ICG Warrant as provided
in this Agreement, there shall be vested in the Company good and valid title to
the ICG Shares and the ICG Warrant, free and clear of any Encumbrances other
than as are (A) specifically set forth in the ICG Warrant, a true and complete
copy of which has been provided by TP Management to the Company, (B)
specifically set forth in the Certificate of Designation of ICG designating the
Series A-1 ICG Preferred Stock, a true and complete copy of which has been
provided by TP Management to the Company, (C) specifically set forth in the
Registration Rights Agreement, dated as of April 7, 2000, between ICG, LMC and
the other purchasers named therein (the "ICG Registration Rights Agreement"),
and (D) imposed by the Bankruptcy Code or any decisions or orders by any
Governmental Entity pursuant to the Bankruptcy Code of which TP Management does
not have knowledge.
SECTION 4.02 Authority. It 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 to consummate the
transactions contemplated hereby. It has duly executed and delivered this
Agreement. This Agreement is a valid and binding agreement of such party
enforceable against such party 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 4.03 Organization of Microwave Services; Holding
Company. (a) Microwave Holdings represents that Microwave Services is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and has all requisite corporate or similar power to
carry on its business as now being conducted. Microwave Services holds no assets
other than the Teligent Shares and has no Contractual obligations other than (i)
contingent liabilities pursuant to the Tax Sharing Agreement, dated as of March
9, 1999, by and among AT&T Corp., LMC and the other parties thereto, as amended,
a copy of which has been
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provided by Microwave Holdings to the Company (the "Tax Sharing Agreement") and
(ii) obligations pursuant to the Contracts described in Section 4.01.
(b) Microwave Holdings has delivered to the Company true and
complete copies of the Articles of Incorporation, as amended to date, and
By-laws, as in effect on the date hereof, of Microwave Services.
SECTION 4.04 Capital Structure of Microwave Services(a) . (a)
Microwave Holdings represents and warrants that the authorized capital stock of
Microwave Services consists of 10,000 shares of Common Stock, $0.01 par value,
of which 1,800 shares are outstanding as of date hereof. All of the outstanding
shares of Common Stock have been duly authorized and are validly issued, fully
paid and nonassessable. There are no other securities of Microwave Services
issued or outstanding.
(b) As of the date hereof, except as set forth in this Section
4.04, there are no outstanding (i) shares of capital stock, debt securities or
other voting securities of Microwave Services, (ii) securities of Microwave
Services convertible into or exchangeable for shares of capital stock, debt
securities or voting securities of Microwave Services, or (iii) subscriptions,
calls, contracts, commitments, understandings, restrictions, arrangements,
rights, warrants, options or other rights to acquire from Microwave Services, or
obligations of Microwave Services to issue, any capital stock, debt securities,
voting securities or securities convertible into or exchangeable for capital
stock, debt securities or voting securities of Microwave Services or obligating
Microwave Services to grant, extend or enter into any such agreement or
commitment (the items in clauses (i), (ii) and (iii) being referred to
collectively as the "Microwave Services Securities"). There are no outstanding
obligations of Microwave Services to repurchase, redeem or otherwise acquire any
Microwave Services Securities. There are no voting trusts, proxies or other
agreements or understandings to which Microwave Services is a party or is bound
with respect to the voting of any shares of capital stock of Microwave Services.
SECTION 4.05 No Other Agreement to Transfer the Transferred
Interests. It does not have any binding obligation, absolute or contingent, oral
or written, to any other Person to transfer any of the Transferred Interests
(other than the transactions contemplated hereby).
SECTION 4.06 Actions and Proceedings. As of the date of this
Agreement, there are no actions, suits, claims, proceedings or investigations
pending or, to the knowledge of such party, threatened against such party, nor
any outstanding judgments, orders, writs, injunctions or decrees of any
Governmental Entity against such party that (i) seek to prevent or materially
restrict or delay the consummation of the transactions contemplated by this
Agreement or (ii) would likely have a material adverse effect on the
transactions contemplated by this Agreement.
SECTION 4.07 No Violation. (a) The execution, delivery and
performance of this Agreement by such party do not and will not constitute or
result in (i) a breach or violation of, or a default under, the Articles of
Incorporation or By-laws of such party, (ii) a breach or violation of, or a
default under, the acceleration of any obligations or the creation of an
Encumbrance on the Transferred Interests (with or without notice, lapse of time
or both) pursuant to, any Contracts applicable to such party or the Transferred
Interests or any Applicable Law or (iii) any change in the rights or obligations
of any party under any Contracts applicable to it or the Transferred Interests
other than the Preferred Stock and Warrant Purchase Agreement, dated as of
February 27, 2000 by and between ICG, HMTF Bridge ICG, LLC, LMC and Gleacher/ICG
Investors, LLC, a true and complete copy of which has been provided by TP
Management to the
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Company. No provision of any Applicable Law, injunction, order or decree of any
Governmental Entity is in effect that has the effect of making the transactions
contemplated by this Agreement illegal or would otherwise likely have a material
adverse effect on the transactions contemplated by this Agreement.
(b) The execution, delivery and performance of this Agreement
by such party does not and will not constitute or result in (i) a breach or
violation of, or a default under, the Articles of Incorporation or By-laws of
Microwave Services, (ii) a breach or violation of, or a default under, the
acceleration of any obligations or the creation of an Encumbrance on the
Transferred Interests (with or without notice, lapse of time or both) pursuant
to, any Contracts applicable to Microwave Services or the Transferred Interests
or any Applicable Law or (iii) any change in the rights or obligations of
Microwave Services under any Contracts applicable to it or the Transferred
Interests.
SECTION 4.08 Consents and Approvals. Assuming the correctness
of the representations by the Company in Article III, all authorizations,
consents, approvals, licenses, qualifications or exemptions from, or any
filings, declarations or registrations with, any Governmental Entity or any
other Person required in connection with the execution, delivery or performance
by it of this Agreement have been made or obtained and are in full force and
effect as of the date hereof, other than authorizations, consents, approvals,
licenses or qualifications the absence of which would not likely have a material
adverse effect on the transactions contemplated by this Agreement.
SECTION 4.09 No Registration of Acquired Securities. It is
aware that the Acquired Securities have not been registered under the Securities
Act, that the offer and issuance of the Acquired Securities are intended to be
exempt from registration under the Securities Act and the rules promulgated
thereunder by the Commission, and that the Acquired Securities cannot be
offered, sold, assigned, transferred, or otherwise disposed of unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. It is also aware that sales or transfers of the
Acquired Securities are further restricted by state securities laws and that the
certificates for the Acquired Securities will bear appropriate legends
restricting their transfer pursuant to Applicable Laws and this Agreement.
SECTION 4.10 Teligent Common Stock and ICG Common Stock
Rights; Consents and Acknowledgements. All the transferable rights, powers and
privileges that Microwave Holdings, Microwave Services and TP Management
currently enjoy with respect to the Transferred Interests, whether obtained
through Applicable Law, by Contract or otherwise (the "Stock Rights"), will be
transferred to the Company at the Closing, to the fullest extent that such Stock
Rights may be transferred to the Company without violation of Applicable Law or
the Contracts described in Section 4.01.
SECTION 4.11 Holding Period. As of the date hereof, Microwave
Services has held the Teligent Common Stock for more than three years and TP
Management has held the ICG Shares and the ICG Warrant since April 10, 2000
(such respective periods being calculated in accordance with the provisions of
Rule 144(d) promulgated pursuant to the Securities Act).
SECTION 4.12 Suitability of Investment. (a) It is an
"accredited investor" within the meaning of Rule 501 of Regulation D of the
Securities Act as presently in effect and is acquiring the Acquired Securities
for its own account, or for the account of another "accredited investor" that is
one of its Affiliates and that can make all of the representations contained
herein, for investment purposes only and not with a view to the resale or
distribution thereof;
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(b) It will not, directly or indirectly, offer, sell,
transfer, assign, exchange or otherwise dispose of all or any part of the
Acquired Securities, except in accordance with applicable state and Federal
securities laws and the provisions of this Agreement;
(c) It 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 Acquired Securities;
(d) It has such knowledge and experience in financial,
business and Tax matters that it can, and it has, adequately analyzed the risks
of an investment in the Acquired Securities and it has determined the Acquired
Securities are a suitable investment for it and that it 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
(e) It is aware that there are substantial risks incident to
an investment in the Acquired Securities.
SECTION 4.13 Retention of Acquired Securities. It has no
obligation to transfer, exchange or otherwise dispose of any of the Acquired
Securities other than, with respect to the Series A Preferred Stock, as provided
in Section 6 of the Certificate of Designation relating thereto, and has not
engaged in negotiations with respect to any such transaction.
SECTION 4.14 ICG. No consent, authorization or filing with the
bankruptcy court is required for TP Management to enter into the Agreement or
consummate the transactions contemplated hereby.
SECTION 4.15 Stock Ownership. LMC owns, and will own
immediately before the Closing, 1,101 shares of Class A Common Stock of the
Company. LMC has no plan or intention to dispose of such share. LMC owns and has
owned since the formation of TP Management, directly and through wholly owned
subsidiaries, more than 50% by voting power and value of the outstanding stock
of TP Management.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MICROWAVE HOLDINGS
Microwave Holdings hereby represents, warrants and
acknowledges to the Company as follows with respect to Microwave Services,
except as set forth on Schedule 5.01 to this Agreement:
SECTION 5.01 Microwave Services. (a) All material Tax Returns
required to be filed by or with respect to Microwave Services for all Taxable
Periods have been timely filed. All such Tax Returns (i) were prepared in the
manner required by Applicable Law, (ii) are true, correct, and complete in all
material respects, and (iii) accurately reflect the liability for material Taxes
of Microwave Services. All Taxes shown to be payable on such Tax Returns, and
all assessments of Tax made against Microwave Services with respect to such Tax
Returns, have been paid when due. No adjustment relating to any such Tax Return
(insofar as such adjustment relates to Taxes of Microwave Services) has been
proposed or threatened formally or informally by any taxing authority and no
basis exists for any such adjustment. Materiality for purposes of
11
this Section 5.01 shall be based on the financial condition of Microwave
Services on a stand-alone basis and not relative to the financial condition of
AT&T Corp. or LMC.
(b) True and complete copies of all Federal, state, local and
foreign income Tax Returns of Microwave Services (or portions thereof that
relate to Microwave Services) for Taxable Periods beginning on or after January
1, 1997, that have been requested by the Company have been provided to the
Company prior to the date hereof. The statute of limitations has expired with
respect to all other income Tax Returns of or including Microwave Services.
(c) Microwave Services has paid all material Taxes due,
whether or not shown (or required to be shown) on a Tax Return.
(d) Microwave Services has complied in all material respects
with the provisions of the Code relating to the withholding and payment of
Taxes, including, without limitation, the withholding and reporting requirements
under sections 1441 through 1464, 3401 through 3406, and 6041 through 6049 of
the Code, as well as similar provisions under any other laws, and has, within
the time and in the manner prescribed by law, withheld from employee wages and
paid over to the proper governmental authorities all material amounts required.
(e) None of the Tax Returns filed by Microwave Services has
been or is currently being examined by the Internal Revenue Service ("IRS") or
relevant state, local or foreign taxing authorities. No state of facts exists or
has existed which would constitute grounds for the assessment of any material
liability for Taxes of Microwave Services with respect to periods (or portions
thereof) which have not been audited by the IRS or other taxing authority. There
are no examinations or other administrative or court proceedings relating to
Taxes of Microwave Services in progress or pending, nor has there been issued or
received a revenue agent's or similar report asserting a Tax deficiency with
respect to Microwave Services. There are no threatened or current actions,
suits, proceedings, investigations, audits or claims relating to or asserted for
material Taxes of Microwave Services and there is no basis for any such claim.
(f) No material written claim has ever been made by any taxing
authority with respect to Microwave Services in a jurisdiction where Microwave
Services does not file Tax Returns that Microwave Services is or may be subject
to taxation by that jurisdiction. There are no security interests on any of the
assets of Microwave Services that arose in connection with any failure (or
alleged failure) to pay any Taxes and, except for liens for Taxes that are not
yet due and payable, there are no liens for any Tax upon any asset of Microwave
Services.
(g) No extension of time with respect to any date on which a
Tax Return was or is to be filed by or including Microwave Services is in force,
and no waiver or agreement by or with respect to Microwave Services is in force
for the extension of time for the assessment or payment of any Taxes. Microwave
Services has not granted a power of attorney to any person with respect to any
Taxable Period that will have continuing legal effect with respect to any
Taxable Period (or portion thereof) beginning on or after the Closing.
(h) Microwave Services has not been a member of an (i)
affiliated group (within the meaning of section 1504 of the Code) or (ii)
affiliated, combined, consolidated, unitary, or similar group for state, local
or foreign Tax purposes, other than a group of which AT&T Corp., The Associated
Group, Inc. or Associated Communications Corp. is or was the common parent.
Microwave Services has no current non-contingent liability for the Taxes of any
Person under Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local or foreign law), as a transferee or successor, by contract or
otherwise.
12
(i) There are no outstanding options, warrants, securities
convertible into stock, or other contractual obligations that might be treated
for Federal income tax purposes as stock or another equity interest in Microwave
Services.
(j) Microwave Services has not agreed and is not required to
include in income any adjustment under either section 481(a) or section 482 of
the Code (or an analogous provision of state, local, or foreign law) by reason
of a change in accounting method or otherwise.
(k) Microwave Services is not, and has not been, a party to
any agreement relating to allocating or sharing the payment of, or liability
for, Taxes with respect to any Taxable Period, other than the Tax Sharing
Agreement.
(l) Microwave Services is not a party to any contract,
agreement, plan or arrangement that, individually or in the aggregate, or when
taken together with any payment that may be made under this Agreement or any
agreements contemplated hereby, could give rise to the payment of any "excess
parachute payment" within the meaning of section 280G of the Code.
(m) Microwave Services has not distributed the stock of any
corporation in a transaction satisfying the requirements of section 355 of the
Code since April 16, 1997. The stock of Microwave Services has not been
distributed in a transaction satisfying the requirements of section 355 of the
Code since April 16, 1997.
(n) Microwave Services has made (or there has been made on its
behalf) all required current estimated Tax payments sufficient to avoid any
underpayment penalties.
(o) Microwave Services does not have any deferred income
reportable for a period ending after the Closing Date but that is attributable
to a transaction (e.g., an installment sale) occurring in, or resulting from a
change of accounting method for, a period ending on or prior to the Closing
Date.
ARTICLE VI
CERTAIN COVENANTS
SECTION 6.01 Confidentiality. (a) Unless otherwise agreed to
in writing by the Company, each of LMC, Microwave Holdings and TP Management
will, and will cause its Affiliates, directors, officers, employees and agents
(such Affiliates and other Persons being collectively referred to as the
applicable party'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
such party's rights hereunder, and (iii) not use Confidential Information in any
manner detrimental to the Company. If such party is requested pursuant to, or
required by, Applicable Law or by legal process to disclose any Confidential
Information of the Company, it will provide the Company with prompt notice of
such request(s) so that the Company may seek an appropriate protective order.
Such party'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 Entity, or (iii) is required to be
disclosed by Applicable Law, will, subject in the case of clauses (ii) and (iii)
above to such party's compliance
13
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. In the event this Agreement is
terminated, LMC, Microwave Holdings and TP Management will, if so requested by
the Company, promptly return all of the Confidential Information of the Company,
including all copies, reproductions, summaries, analyses or extracts thereof or
based thereon in the possession of such party or its Representatives; provided,
however, that, upon termination of this Agreement, such party 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 promptly following such termination. The confidentiality
obligations of such party contained in this Section 6.01(a) shall survive until
the three-year anniversary of the Closing or the termination of this Agreement.
(b) For purposes of this Section 6.01, "Confidential
Information" of the Company means all confidential and proprietary information
about the Company (whether oral or written) that is furnished by it or its
agents or representatives to LMC, Microwave Holdings or TP Management or their
respective Representatives, regardless of the manner in which it is furnished.
"Confidential Information" does not include, however, information which (i) 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, Microwave Holdings or TP Management
or their respective Representatives, (ii) was available to LMC, Microwave
Holdings or TP Management or their respective Representatives on a
non-confidential basis prior to its disclosure by the disclosing party, (iii)
becomes available to LMC, Microwave Holdings or TP Management or their
respective 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, Microwave
Holdings or TP Management or their respective Representatives, or (iv) is
independently developed by LMC, Microwave Holdings or TP Management or their
respective Representatives through Persons who have not had, either directly or
indirectly, access to or knowledge of such information.
SECTION 6.02 Taxes. (a) LMC, Microwave Holdings, TP
Management, the Company, IDTC, 000 Xxx XX Xxxx, 000 Xxx XX Road, 60 Park Place
and IDTA each covenant and agree, for all Tax purposes including all Tax Returns
and any Tax controversies, to (and to cause any Affiliate or successor to their
assets or businesses to), and LMC agrees to use commercially reasonable efforts
to cause AT&T Corp. to, take each of the positions set forth below (and not to
take or permit to be taken any position, action or inaction that is inconsistent
therewith) unless there has been a Final Determination contrary to such
position:
(i) the Exchange will qualify as a transfer of property to the
Company by Microwave Holdings, TP Management, IDTC, 000 Xxx XX Xxxx,
000 Xxx XX Road, 60 Park Place and IDTA governed by section 351(a) of
the Code;
(ii) none of the Acquired Securities will be treated as other
property or money under section 351(b) of the Code;
(iii) no income, gain or loss will be recognized by Microwave
Holdings, TP Management, IDTC, 000 Xxx XX Xxxx, 000 Xxx XX Road, 60
Park Place or IDTA upon the Exchange; and
(iv) none of the consideration in the Exchange will be paid or
issued for services.
14
(b) LMC, Microwave Holdings, TP Management, the Company, IDTC,
000 Xxx XX Xxxx, 000 Xxx XX Road, 60 Park Place and IDTA each agree to report to
each other any communication from or with the Internal Revenue Service or any
other Taxing authority that relates in any way to the characterization of the
Exchange. Notwithstanding any such communication, LMC, Microwave Holdings, TP
Management, the Company, IDTC, 000 Xxx XX Xxxx, 000 Xxx XX Road, 60 Park Place
and IDTA covenant and agree to (and to cause any Affiliate or successor to their
assets or businesses to), and LMC agrees to use commercially reasonably efforts
to cause AT&T Corp. to, continue to take each of the positions specified in
Section 6.02(a) for all Tax purposes (unless there has been a Final
Determination contrary to such position).
(c) LMC, Microwave Holdings and TP Management agree to provide
to the Company such information as is reasonably required by the Company to file
its Tax Returns, including without limitation information required pursuant to
Treasury Regulation Section 1.351-3(b). In addition, the parties hereto shall
cooperate with respect to all matters relating to Taxes.
SECTION 6.03 Transfer of Assets. As soon as practicable
following the Closing Date, but in any event no more than two weeks following
the Closing Date (i) IDTC will transfer 260.96 shares of common stock, par value
$1.00 per share, of CTM Brochure Display, Inc., a New York corporation, to the
Company in exchange for 30,000 shares of Class A Common Stock, (ii) 000 Xxx XX
Xxxx will transfer certain real estate assets specifically described on Exhibit
B to the Company in exchange for 8,151 shares of Class A Common Stock, (iii) 000
Xxx XX Xxxx will transfer certain real estate assets specifically described on
Exhibit B to the Company in exchange for 5,555 shares of Class A Common Stock,
(iv) 00 Xxxx Xxxxx will transfer its interests in a limited liability company
which indirectly owns certain real estate assets specifically described on
Exhibit B to the Company in exchange for 1,707 shares of Class A Common Stock
and (v) IDTA will transfer the assets comprising its call back business and
specifically described on Exhibit B to the Company in exchange for 8,091 shares
of Class A Common Stock (collectively, the "Asset Transfer"). The Asset Transfer
shall be effected pursuant to agreements and instruments customary for
transactions similar to the Asset Transfer. To the extent necessary, each of the
Company, IDTC, 000 Xxx XX Xxxx, 000 Xxx XX Road, 60 Park Place and IDTA will
cause such agreements or instruments of transfer with respect to the Asset
Transfer to be duly executed, filed or registered.
SECTION 6.04 Tax Covenants. (a) The income of Microwave
Services (based on a closing of the books at the end of business on the Closing
Date) for the taxable period ending on the Closing Date shall be included in
AT&T Corp.'s Federal consolidated income Tax Return and any state consolidated,
combined or unitary income Tax Returns that are required and that include (i)
Microwave Services and (ii) AT&T Corp., LMC or any of their respective
Affiliates (excluding Microwave Services), and LMC shall file (or cause to be
filed) and be responsible for remitting (or causing to be remitted) all Taxes
reflected on such Tax Returns. The portion of any such Tax Returns relating to
Microwave Services shall be subject to the review and approval of the Company
prior to filing, which approval shall not be unreasonably withheld. In addition,
LMC shall prepare or cause to be prepared, and shall file or caused to be filed,
in a manner consistent with past practice, all Tax Returns required to be filed
with respect to Microwave Services or its operations for all taxable periods
ending on or before the Closing Date, and LMC shall be responsible for remitting
(or causing to be remitted) all Taxes reflected on such Tax Returns. Such Tax
Returns shall be subject to the review and approval of the Company prior to
filing, which approval shall not be unreasonably withheld.
15
(b) The Company shall prepare or cause to be prepared, and
file or cause to be filed, all Tax Returns of Microwave Services other than
those described in Section 6.04 (a). Any Straddle Tax Return shall be subject to
the review and approval of LMC prior to filing, which approval shall not be
unreasonably withheld. With respect to any Straddle Tax Return, LMC shall pay to
the Company upon demand by the Company at the time of filing, all Taxes
attributable to the Taxable Period ending on the Closing Date.
(c) In the case of any taxable period that includes (but does
not end on) the Closing Date, Taxes of Microwave Services for the period ending
on the Closing Date shall be (i) in the case of any Tax based on or measured by
income, sales or gross receipts, equal to the amount computed as if such taxable
period ended as of the close of business on the Closing Date and (ii) in the
case of Taxes other than those described in (i) above, equal to the amount of
such Tax for the entire taxable period multiplied by a fraction the numerator of
which is the number of days in the taxable period ending on the Closing Date and
the denominator of which is the number of days in the entire taxable period.
(d) LMC shall cause all contracts, agreements, or intercompany
account systems under which Microwave Services may at any time have an
obligation to share the payment of any portion of a Tax (or any amount
calculated with reference to any portion of a Tax), including without limitation
the Tax Sharing Agreement, to be terminated with respect to Microwave Services
as of the Closing Date, or, in the case of the Tax Sharing Agreement, as soon as
possible thereafter, and, upon such termination, Microwave Services shall be
released from any liability thereunder, effective as of the Closing Date.
(e) In connection with the closing of the transactions
contemplated hereunder, each of LMC and TP Management hereby agrees to deliver
to Xxxxx Xxxxxxxxxx LLP an officer's certificate, which certificate shall be in
substantially the same form as the form of officer's certificate delivered to
LMC on or before the date hereof, containing certain representations relating to
certain tax matters acceptable to Xxxxx Xxxxxxxxxx LLP. In addition, each of LMC
and TP Management hereby agrees to deliver to Xxxxx Xxxxxxxxxx LLP, as
reasonably requested after the Closing, a supplemental officer's certificate
containing certain additional representations relating to certain tax matters
acceptable to Xxxxx Xxxxxxxxxx LLP. Notwithstanding anything to the contrary in
such officer's certificates or in this Agreement, and without in any way
limiting the indemnification obligations set forth in Article IX hereof, neither
LMC, TP Management nor the officers executing such certificates shall have any
liability with respect to the representations set forth in such certificates.
SECTION 6.05 Additional Covenants. (a) Subject to the terms
and conditions hereof, IDTC shall cause each of the Company, IDTA, 000 Xxx XX
Xxxx, 000 Xxx XX Road and 00 Xxxx Xxxxx to perform its obligations under this
Agreement, including without limitation the payment of any and all amounts due
to the Purchaser Indemnified Parties under Section 9.02 hereof. With respect to
any obligations for the payment of money, if the Company, IDTA, 000 Xxx XX Xxxx,
000 Xxx XX Road or 00 Xxxx Xxxxx, as applicable, fails to pay such amount, IDTC
will promptly pay such amount, without any requirement to exhaust all remedies
against the Company, IDTA, 000 Xxx XX Xxxx, 000 Xxx XX Road or 00 Xxxx Xxxxx, as
applicable, and IDTC hereby waives all rights it would otherwise have as a
guarantor pursuant to Applicable Law.
(b) Subject to the terms and conditions hereof, LMC shall
cause each of Microwave Holdings and TP Management to perform its obligations
under this Agreement, including without limitation the payment of any and all
amounts due to the Company Indemnified
16
Parties under Sections 9.03 and 9.04 hereof. With respect to any obligations for
the payment of money, if Microwave Holdings or TP Management, as applicable,
fails to pay such amount, LMC will promptly pay such amount, without any
requirement to exhaust all remedies against Microwave Holdings or TP Management,
as applicable, and LMC hereby waives all rights it would otherwise have as a
guarantor pursuant to Applicable Law.
(c) Pursuant to Section 4.10, LMC shall execute and deliver at
the Closing a writing evidencing the assignment by LMC of its rights under the
Registration Rights Agreement dated as of April 7, 2000 between ICG and certain
purchasers named therein (the "ICG Registration Rights Agreement").
SECTION 6.06 Books and Records. Upon the Closing, Microwave
Services will be in possession of all books and records, including financial and
Tax information, relating to it.
ARTICLE VII
SECTION 7.01 Transfer Limitations; 1933 Act Legend. (a) Until
the consummation of an underwritten initial public offering of at least $10
million of the Company's equity (an "IPO"), neither Microwave Holdings nor TP
Management shall offer, transfer, pledge, encumber, contract to do any of the
foregoing or otherwise transfer or dispose of, whether or not for or without
consideration ("Transfer") any of the Acquired Securities or any interest
therein without the prior written consent of the Company, which consent shall
not be unreasonably withheld, and any purported transfer in the absence of such
written consent shall be void for all purposes. Notwithstanding the foregoing,
at any time following the one year anniversary of the Closing Date, Microwave
Holdings or TP Management may Transfer the Acquired Securities to any of their
respective Affiliates, provided that such Affiliate agrees in writing with the
Company to be bound hereby with the same effect as if were named herein in lieu
of Microwave Holdings or TP Management, as the case may be.
(b) Unless Transferred pursuant to an effective registration
statement, or as described in Section 7.01(c), each certificate representing
Acquired 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"),
OR ANY APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS
AND UNTIL SUCH SHARES ARE REGISTERED UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES OR "BLUE SKY" LAWS UNLESS SUCH TRANSFER, PLEDGE OR
HYPOTHECATION IS PERMITTED PURSUANT TO RULE 144 UNDER THE ACT OR
ANOTHER EXEMPTION FROM REGISTRATION UNDER THE ACT AND AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY IS DELIVERED TO THE
COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED. IN
ADDITION, THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
TRANSFER RESTRICTIONS AS SET FORTH IN THE STOCK EXCHANGE AGREEMENT,
DATED APRIL 18, 2001 BY AND AMONG THE COMPANY AND IDT CORPORATION, IDT
AMERICA CORP., 000 XXX XX XXXX,
00
XXX., 000 XXX XX ROAD, INC., 60 PARK PLACE HOLDING COMPANY, INC.,
LIBERTY MEDIA CORPORATION, MICROWAVE HOLDINGS, L.L.C. AND LIBERTY TP
MANAGEMENT, INC., A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY."
(c) Microwave Holdings or TP Management may cause the Company
to remove, or cause to be removed, the first sentence of the legend set forth in
Section 7.01 from certificates representing any of the Shares upon delivery to
the Company of an opinion of counsel reasonably satisfactory to the Company to
the effect that Transfers of the Shares represented thereby would not be subject
to the registration requirements of the Securities Act by operation of Rule
144(k) promulgated thereunder or otherwise. The Company shall remove, or cause
to be removed, the second sentence of the legend set forth in Section 7.01 as
promptly as practicable following consummation of an IPO.
ARTICLE VIII
DELIVERIES AT CLOSING
SECTION 8.01 Deliveries by the Company at the Closing. At the
Closing, the Company shall deliver, or shall cause to be delivered:
(a) to Microwave Holdings, (i) a certificate or certificates
representing an aggregate of 7,500 shares of Class B Common Stock and (ii) a
certificate or certificates representing an aggregate of 30,000 shares of Series
A Preferred Stock, each such certificate issued in the name of Microwave
Holdings; and
(b) to TP Management, (i) a certificate or certificates
representing an aggregate of 2,500 shares of Class B Common Stock, (ii) a
certificate or certificates representing an aggregate of 10,000 shares of Series
A Preferred Stock, each such certificate issued in the name of TP Management.
SECTION 8.02 Deliveries by Microwave Holdings at the Closing.
At the Closing, Microwave Holdings shall deliver, or shall cause to be delivered
to the Company, a certificate or certificates representing the Microwave
Services Stock and a stock power or stock powers, duly executed in blank,
sufficient to transfer the Microwave Services Stock to the Company.
SECTION 8.03 Deliveries by TP Management at the Closing. At
the Closing, TP Management shall deliver, or cause to be delivered to the
Company:
(a) a certificate representing the ICG Shares and a stock
power or stock powers, duly executed in blank, sufficient to transfer the ICG
Shares to the Company;
(b) the ICG Warrant and duly executed instruments of transfer
sufficient to transfer the ICG Warrant to the Company; and
(c) a writing evidencing the assignment to the Company by LMC
of LMC's rights under the ICG Registration Rights Agreement.
18
ARTICLE IX
SURVIVAL; INDEMNIFICATION
SECTION 9.01 Survival. The representations and warranties
contained in this Agreement, and the rights of the parties to seek
indemnification with respect thereto, shall survive the execution and delivery
of this Agreement, and the Closing hereunder, regardless of any investigation
made by the parties hereto or by any Person on their behalf for a period of
three years following the Closing Date, provided that all representations and
warranties with respect to any Tax, or under Sections 4.13 and 4.15, and the
rights of the parties to seek indemnification with respect thereto, shall
survive the Closing and shall terminate and expire thereafter on the lapse of
the applicable statute of limitations (including any extensions thereof). The
covenants and agreements of the parties contained in this Agreement shall
survive the execution and delivery of this Agreement, and the Closing hereunder,
and shall remain in full force for the applicable periods described therein or,
if no such period is specified, indefinitely.
SECTION 9.02 Indemnity by the Company and IDTC. The Company
and IDTC jointly and severally hereby agree to indemnify and hold harmless, on
an after-Tax basis, each of Microwave Holdings and TP Management and their
respective directors, officers, partners, managers, members, employees,
Affiliates, successors and assigns (each an "Acquiror Indemnified Party") from
and against:
(a) any and all damages, losses, Taxes, liabilities, claims,
judgments, penalties, costs and expenses (including amounts paid in
investigation or settlement and reasonable attorneys' fees, expert fees and
litigation expenses) direct or indirect, known or unknown, foreseeable or
unforeseeable (collectively, "Losses"), resulting to any Acquiror Indemnified
Party from or in connection with any breach of a representation or warranty of
the Company contained in this Agreement; and
(b) any and all Losses incurred or suffered by any Acquiror
Indemnified Party and based upon, attributable to or resulting from the breach
or nonfulfillment of any agreement, covenant or condition on the part of the
Company, IDTC, IDTA, 000 Xxx XX Xxxx, 000 Xxx XX Road or 00 Xxxx Xxxxx, as
applicable, contained in this Agreement.
SECTION 9.03 Indemnity by Microwave Holdings, TP Management
and LMC. Each of Microwave Holdings, TP Management and LMC jointly and
severally, hereby agrees to indemnify and hold harmless, on an after-Tax basis,
the Company and its directors, officers, partners, managers, members, employees,
Affiliates, successors and assigns (each a "Company Indemnified Party") from and
against:
(a) any and all Losses, resulting to any Company Indemnified
Party from or in connection with any breach of a representation or warranty of
Microwave Holdings or TP Management, as applicable, contained in this Agreement;
(b) any and all Losses incurred or suffered by any Company
Indemnified Party and based upon, attributable to or resulting from the breach
or nonfulfillment of any agreement, covenant or condition on the part of LMC,
Microwave Holdings or TP Management, as applicable, contained in this Agreement;
(c) any and all Losses incurred or suffered by any Company
Indemnified Party and based upon, attributable to or resulting from any
liability of Microwave Services with respect
19
to any pre-Closing period, including without limitation, liabilities relating to
the Teligent Stockholders Agreement, the Tax Sharing Agreement or any other
Contract described in Section 4.01 hereof; and
(d) any and all Losses incurred or suffered by any Company
Indemnified Party and based upon, attributable to or resulting from the
inclusion, directly or indirectly, of Microwave Services in the Tax Sharing
Agreement at any time after the Closing Date.
SECTION 9.04 Tax Indemnification. Microwave Holdings, TP
Management and LMC jointly and severally hereby agree to indemnify and hold
harmless, on an after-Tax basis, each Company Indemnified Party from and against
any and all Taxes (including, without limitation, reasonable expenses of
investigation and reasonable attorneys' and accountants' fees and expenses in
connection with any action, suit or proceeding) actually incurred or suffered at
any time by any Company Indemnified Party arising out of or attributable to (i)
any misrepresentation, inaccuracy or breach of any representation, warranty,
covenant, agreement or promise related to Taxes by Microwave Holdings, TP
Management or LMC contained in this Agreement, (ii) any and all Taxes for any
Taxable Period ending on or before the Closing Date, or (iii) any and all Taxes,
whether determined on a separate, consolidated, combined, group or unitary
basis, including any penalties and interest in respect thereof, of Microwave
Services (A) pursuant to Treas. Reg. Section 1.1502-6 or any comparable
provision of state, local, or foreign law with respect to any Taxable Period
beginning on or before the Closing Date (excluding any Tax for a Taxable Period
which includes the Closing Date with respect to which Microwave Services is
included in a consolidated, combined or affiliated group with IDTC, the Company
or any of their respective Affiliates or any successor or transferee of the
foregoing) or (B) pursuant to any guaranty, indemnification, Tax sharing, or
similar agreement made on or before the Closing (other than any agreement to
which IDTC or any of its Affiliates (other than Microwave Services) is a party)
relating to the sharing of liability for, or payment of, Taxes.
SECTION 9.05 Indemnification Procedures. (a) In the event that
any third-party judicial, administrative or arbitral action, suit, proceeding
(public or private), claim or governmental proceeding (collectively, "Legal
Proceedings") shall be instituted or any third-party claim or demand ("Claim")
shall be asserted by any Person in respect of which payment may be sought under
Article IX hereof, the Company Indemnified Party or Acquiror Indemnified Party,
as the case may be (in either case referred to herein generally as an
"Indemnified Party"), shall promptly cause written notice of the assertion of
any Claim of which it has knowledge which is covered by this indemnity to be
forwarded to the party from whom the Indemnified Person seeks indemnity (the
"Indemnifying Party"). Except in the case of Claims related to Tax for Taxable
Periods ending on or before the Closing Date with respect to which AT&T Corp.
exercises its control in the place of the Indemnifying Party, but only in the
event that the Indemnifying Party is not IDTC or the Company (an "AT&T Tax
Claim"), the Indemnifying Party shall have the right, at its sole option and
expense, to be represented by counsel of its choice, which counsel must be
reasonably satisfactory to the Indemnified Party, and to assume the defense of,
negotiate, settle or otherwise deal with any Claim which relates to any Losses
indemnified against hereunder. If the Indemnifying Party (or AT&T Corp. in the
case of an AT&T Tax Claim) elects to assume the defense of, negotiate, settle or
otherwise deal with any Claim which relates to any Losses indemnified against
hereunder, the Indemnifying Party shall within fifteen (15) Business Days of
receipt of written notice of the assertion of a Claim notify the Indemnified
Party of its (or AT&T Corp.'s) intent to do so. If each of AT&T Corp. (with
respect to an AT&T Tax Claim) and the Indemnifying Party elects not to defend
against, negotiate, settle or otherwise deal with any Claim which relates to any
Losses indemnified against hereunder the Indemnified Party may defend against,
negotiate, settle, or otherwise deal with such Claim. If the Indemnifying Party
(or AT&T
20
Corp. in the case of an AT&T Tax Claim) fails to notify the Indemnified Party of
its election as herein provided or the Indemnifying Party contests its
obligation to indemnify the Indemnified Party for such Losses under this
Agreement, the Indemnified Party may defend against, negotiate, settle or
otherwise deal with such Claim. In such event, if the Indemnified Party defends
any Claim, then the Indemnifying Party shall reimburse the Indemnified Party for
the reasonable expenses of defending such Claim upon submission of periodic
bills. If the Indemnifying Party shall assume the defense of any Claim, the
Indemnified Party may participate, at his or its own expense, in the defense of
such Claim unless such Claim is an AT&T Tax Claim, in which case such right of
participation shall be subject to the prior approval of AT&T Corp. (and LMC
agrees to use commercially reasonable efforts to obtain such AT&T Corp.
approval); provided, however, that such Indemnified Party shall be entitled to
participate in any such defense with separate counsel at the expense of the
Indemnifying Party if, (i) so requested by the Indemnifying Party to participate
or (ii) in the opinion of counsel to the Indemnifying Party, a conflict or
potential conflict exists between the Indemnified Party and the Indemnifying
Party that would make such separate representation advisable. The parties hereto
agree to cooperate fully with each other in connection with the defense,
negotiation or settlement of any such Claim. No Indemnified Party shall have the
right, without the Indemnifying Party's prior written consent (which consent
will not be unreasonably withheld or delayed), to settle, compromise or consent
to the entry of any judgment in any Claim in respect of which indemnification
may be sought under Article IX hereof.
(b) The failure of the Indemnified Party to give reasonably
prompt notice of any Claim shall not release, waive or otherwise affect the
Indemnifying Party's obligations with respect thereto except to the extent that
the Indemnifying Party can demonstrate actual loss and prejudice as a result of
such failure.
SECTION 9.06 Exclusive Remedy. Each of the parties hereto
agrees that, from and after the Closing, its sole and exclusive remedies with
respect to any and all claims against the other party relating to the subject
matter of this Agreement shall be pursuant to this Article IX or Section 10.09
hereof.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Successors and Assigns. This Agreement may not
be assigned by any party without the prior written consent of each other party
hereto and any attempted or purported assignment without such consent shall be
void. Nothing in this Agreement, express or implied, is intended to confer upon
any Person, 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.
SECTION 10.02 Governing Law; Submission to Jurisdiction. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Nevada without giving effect to conflicts of law principles
of such state. Each of the Company, LMC, Microwave Holdings and TP Management
hereby submits to the nonexclusive jurisdiction of the Second Judicial District
Court, Washoe County, Nevada for purposes of all legal proceedings arising out
of or relating to this Agreement and the transactions contemplated hereby. Each
of the Company and LMC 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
21
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
SECTION 10.03 Counterparts. This Agreement may be executed in
several 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 10.04 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 10.05 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 overnight 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:
0000X Xxxxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: Chief Financial Officer
Fax: (000) 000-0000
If to IDTC or IDTA, to such party at:
IDTC and IDTA
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: President
(000) 000-0000
If to 000 Xxx XX Xxxx or 000 Xxx XX Xxxx, to such party at:
000 Xxx XX Xxxx and 000 Xxx XX Xxxx
c/o IDT Technology
000 Xxx Xxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxxxx
If to 00 Xxxx Xxxxx, to:
00 Xxxx Xxxxx
c/o IDT Corporation
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
22
In all cases, with a copy to:
IDT Corporation
000 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: President
Fax: (000) 000-0000
and also to:
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxxxxx
Xxxxxxx Xxxx
Fax: (000) 000-0000
If to LMC, Microwave Holdings or TP Management, to such party at:
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
with a copy to
Xxxxx Xxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx Xx.
Fax: (000) 000-0000
SECTION 10.06 Amendments and Waivers. The 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 all of the parties hereto.
SECTION 10.07 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 10.08 Entire Agreement. This Agreement constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings and discussions between them.
SECTION 10.09 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
23
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.
SECTION 10.10 Expenses. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost or
expense.
SECTION 10.11 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 10.11 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.]
24
IN WITNESS WHEREOF, the parties have executed this Stock Exchange Agreement as
of the date first above written.
IDT INVESTMENTS INC.
By: /s/ Xxxxxx Xxxxxxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: President
By: /s/ Xxxxxxxx Xxxx
----------------------------------------
Name: Xxxxxxxx Xxxx
Title: Secretary
IDT CORPORATION
solely for purposes of Sections 6.03 and 6.05
and Article IX
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
IDT AMERICA, CORP.
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
000 XXX XX XXXX, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
000 XXX XX XXXX, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
60 PARK PLACE HOLDING COMPANY, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
LIBERTY MEDIA CORPORATION
solely for purposes of Sections 6.01, 6.02, 6.04,
6.05 and 10.02 and Article IX
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
MICROWAVE HOLDINGS, L.L.C.
By: AGI LLC, its sole member
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President:
LIBERTY TP MANAGEMENT, INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
Exhibit B
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding dated as of April __, 2001(this "MOU")
by and between IDT Corporation, a Delaware corporation ("IDT") and Liberty Media
Corporation, a Delaware corporation ("Liberty").
WITNESSETH
Whereas, Liberty is a leading multi-national media and
telecommunications company with significant interests in North America, Latin
America and Europe, and in the media, advertising, cable and telecommunications
industries, among others;
Whereas, IDT is a leading telecommunications company, with interests in
the United States, Latin America and Europe;
Whereas, Liberty presently is a significant shareholder in IDT;
Whereas, IDT and Liberty wish to expand and strengthen their strategic
relationship; and
Whereas, the businesses and subsidiaries and affiliates of Liberty and
IDT have significant potential for synergy, and Liberty and IDT desire to
explore ways to generate added value by leveraging each other's strengths.
NOW, THEREFORE, in consideration of the premises and the mutual
agreement contained herein, the parties hereto agree as follows:
Section 1. Areas of Potential Collaboration.
The parties agree to explore a variety of business collaboration
opportunities including, but not limited to, the following:
i) Distribution and promotion of private label prepaid calling
cards, using IDT's debit platform, technology and termination
capabilities and Liberty's relationship with its affiliates to
utilize their brand and media outlets. Such a relationship
would pair IDT's leading prepaid card distribution
infrastructure, with particular strength in the Hispanic
market, with Liberty's numerous leading media brands,
including in the Hispanic markets, reinforcing and broadening
both sides' brands;
ii) Promotion of a private label consumer long distance product
using Liberty's leading media brands and outlets and IDT's
telecommunications technology and assets. Such a relationship
would allow for greater penetration of the Hispanic long
distance telephone market and improved marketing potential;
iii) Cable telephony development in Liberty's European cable
properties using the industry-leading VoIP technology and
products of Net2Phone, Inc., a company in which IDT is a
significant investor. Such a relationship would permit
Liberty's
cable properties to expand their product offerings and
revenues and would generate additional revenue and brand
distribution for Net2Phone, ultimately resulting in an
improved value to IDT's holdings;
iv) Acquisition by IDT Investments, Inc., an IDT subsidiary, of
Liberty's existing interests in Teligent and ICG. Such a
relationship will provide IDT with an economic interest in
telecommunication assets which it presently lacks and has long
been interested in, namely, "last mile" technologies, and will
provide Liberty a means of divesting itself of assets it no
longer wishes to hold.
v) Rights of Liberty to invest in IDT Telecom, an IDT subsidiary,
both in the immediate future in advance of an IPO and also at
the IPO price, concurrent with the initial public offering of
shares of common stock of IDT Telecom. Such a relationship
will provide significant investment growth potential for
Liberty and add credibility and strength to the public
offering;
Section 2. Devotion of Resources.
Each of Liberty and IDT shall devote such resources, including personnel, as may
be necessary to fully explore, plan and execute the opportunities noted above,
as well as other opportunities as they may arise.
Section 3. Non-binding Nature.
Nothing in this document shall be construed as to create a binding obligation or
claim by or on either IDT or Liberty. The parties agree to use reasonable
efforts to find the most promising areas of collaboration, but shall be under no
obligation to finalize or execute any agreement for any such collaboration.
Section 4. Term.
The provision of this MOU shall extend for a period of one year following its
execution, and may be further extended as the parties may agree to in writing.
[Signatures on the following page]
IN WITNESS WHEROF, the parties have executed this MOU as of the date first above
written.
IDT CORPORATION
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
LIBERTY MEDIA CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
