-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lzr5sHsj8sSFhaW6GspxZ/ge689wm3Htr7Q2zhsKBk+JfH02ExcKdIvX94havkDj Ej1fzw+juvU5LvBqkZW5Yw== /in/edgar/work/20000616/0001021408-00-001944/0001021408-00-001944.txt : 20000919 0001021408-00-001944.hdr.sgml : 20000919 ACCESSION NUMBER: 0001021408-00-001944 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20000616 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: IDT CORP CENTRAL INDEX KEY: 0001005731 STANDARD INDUSTRIAL CLASSIFICATION: [7373 ] IRS NUMBER: 223415036 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-48167 FILM NUMBER: 656655 BUSINESS ADDRESS: STREET 1: 190 MAIN ST CITY: HACKENSACK STATE: NJ ZIP: 07601 BUSINESS PHONE: 2019281000 MAIL ADDRESS: STREET 1: 294 STATE STREET CITY: HACKENSACK STATE: NJ ZIP: 07601 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LIBERTY MEDIA CORP /DE/ CENTRAL INDEX KEY: 0001082114 STANDARD INDUSTRIAL CLASSIFICATION: [4841 ] IRS NUMBER: 841288730 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 9197 SOUTH PEORIA STREET CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 7208755400 MAIL ADDRESS: STREET 1: 9197 SOUTH PEORIA STREET CITY: ENGLEWOOD STATE: CO ZIP: 80112 SC 13D 1 0001.txt SCHEDULE 13-D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Rule 13d-101) Under the Securities Exchange Act of 1934 IDT Corporation ________________________________________________________________________________ (Name of Issuer) Common Stock, par value $0.01 per share ________________________________________________________________________________ (Title of Class of Securities) 448947101 ________________________________________________________________________________ (CUSIP Number) Charles Y. Tanabe, Esq. Senior Vice President and General Counsel Liberty Media Corporation 9197 South Peoria Street Englewood, Colorado 80112 (720) 875-5400 ________________________________________________________________________________ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 6, 2000 ________________________________________________________________________________ (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [_]. Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. ________________ * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). (Continued on following pages) Page 1 of 17 Pages CUSIP NO. 448947101 - ------------------------------------------------------------------------------ NAMES OF REPORTING PERSONS 1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Liberty Media Corporation - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP 2 (a) [_] (b) [X] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 WC - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 DELAWARE - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 3,728,949 shares SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY See Items 5(b) and 6 ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 3,728,949 shares PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 0 - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 3,728,949 shares - ------------------------------------------------------------------------------ CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 12 [X] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 Approximately 13.9% See Item 5. - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON (See Instructions) 14 CO - ------------------------------------------------------------------------------ Page 2 of 17 Pages SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Statement of LIBERTY MEDIA CORPORATION Pursuant to Section 13(d) of the Securities Exchange Act of 1934 in respect of IDT CORPORATION ITEM 1. SECURITY AND ISSUER. Liberty Media Corporation ("Liberty" or the "Reporting Person") is filing this statement on Schedule 13D (the "Statement") with respect to the shares (the "Shares") of Common Stock, par value $0.01 per share (the "Common Stock") of IDT Corporation, a Delaware Corporation ("IDT" or the "Issuer"). The Issuer's principal executive offices are located at 520 Broad Street, Newark, New Jersey 07102. ITEM 2. IDENTITY AND BACKGROUND. The reporting person is Liberty, a Delaware corporation whose principal business address is 9197 South Peoria Street, Englewood, Colorado 80112. Prior to March 9, 1999, Liberty was controlled by Tele-Communications, Inc., a Delaware corporation ("TCI"). As a result of the consummation on March 9, 1999 of the merger (the "AT&T Merger") of a wholly owned subsidiary of AT&T Corp., a New York corporation ("AT&T"), with and into TCI: (i) TCI became a wholly owned subsidiary of AT&T; (ii) the businesses and assets of the Liberty Media Group and TCI Ventures Group of TCI were combined; and (iii) the holders of TCI's Liberty Media Group common stock and TCI Ventures Group common stock received in exchange for their shares a new class of common stock of AT&T intended to reflect the results of AT&T's "Liberty Media Group." Following the AT&T Merger, AT&T's "Liberty Media Group" consists of the assets and businesses of TCI's Liberty Media Group and its TCI Ventures Group prior to the AT&T Merger, except for certain assets that were transferred to TCI's "TCI Group" in connection with the AT&T Merger, the "AT&T Wireless Group" consists of the assets of the wireless operations of AT&T, and the "AT&T Page 3 of 17 Pages Common Stock Group" consists of all of the other assets and businesses of AT&T. AT&T's principal business address is 32 Avenue of the Americas, New York, New York 10013. AT&T is principally engaged in the business of providing voice, data and video communications services to large and small businesses, consumers and government entities in the United States and internationally. On March 10, 2000, in connection with certain restructuring transactions, TCI was converted into a Delaware limited liability company, of which AT&T is the sole member, and renamed AT&T Broadband, LLC ("AT&T Broadband"). AT&T Broadband's principal business address is 9197 South Peoria Street, Englewood, Colorado 80112. AT&T Broadband is principally engaged through its subsidiaries and affiliates in the acquisition, development and operation of cable television systems throughout the United States. The Board of Directors and management of the Reporting Person manage the business and affairs of the Reporting Person, including, but not limited to, making determinations regarding the disposition and voting of the Shares. Although the Reporting Person is a wholly owned subsidiary of AT&T, a majority of the Reporting Person's Board of Directors consists of individuals designated by TCI prior to the AT&T Merger. If these individuals or their designated successors cease to constitute a majority of the Reporting Person's Board of Directors, the Reporting Person will transfer all of its assets and businesses to a new entity. Although this new entity would be owned substantially by AT&T, it would continue to be managed (including with respect to the voting and disposition of the Shares) by management of the Reporting Person prior to such transfer of assets. As a result, the Reporting Person, acting through its Board of Directors and management, will have the power to determine how the Shares will be voted and, subject to the limitations of the Delaware General Corporation Law, will have the power to dispose of the Shares, and thus is considered the beneficial owner of the Shares for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Liberty Media Group, principally through the Reporting Person, is engaged in (i) the production, acquisition and distribution through all available formats and media of branded entertainment, educational and informational programming and software, including multimedia products, (ii) electronic retailing, direct marketing, advertising sales related to programming services, infomercials and transaction processing, (iii) international cable television distribution, telephony and programming, (iv) satellite communications, and (v) investments in wireless domestic telephony and other technology ventures. Schedule 1 attached to this Statement contains the following information concerning each director, executive officer or controlling person of the Reporting Person: (i) name and residence or business address, (ii) principal occupation or employment, and (iii) the name, principal business and address of any corporation or other organization in which such employment is conducted. Schedule 1 is incorporated herein by reference. To the knowledge of the Reporting Person, each of the persons named on Schedule 1 (the "Schedule 1 Persons") is a United States citizen, except for David J.A. Flowers, who is a Canadian citizen. During the last five years, neither the Reporting Person nor any of the Page 4 of 17 Pages Schedule 1 Persons (to the knowledge of the Reporting Person) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, neither the Reporting Person nor any of the Schedule 1 Persons (to the knowledge of the Reporting Person) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, is or was subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Schedule 2 attached to this Statement contains the following information, which has been provided to the Reporting Person by AT&T, concerning each director, executive officer or controlling person of AT&T: (i) name and residence or business address, (ii) principal occupation or employment, and (iii) the name, principal business and address of any corporation or other organization in which such employment is conducted. Schedule 2 is incorporated herein by reference. Based upon information provided to the Reporting Person by AT&T, (i) to the knowledge of AT&T, each of the persons named on Schedule 2 (the "Schedule 2 Persons") is a United States citizen, (ii) during the last five years, neither AT&T nor any of the Schedule 2 Persons (to the knowledge of AT&T) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), and (iii) during the last five years, neither AT&T nor any of the Schedule 2 Persons (to the knowledge of AT&T) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, is or was subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. The foregoing summary of the terms of the AT&T Merger is qualified in its entirety by reference to the text of the Agreement and Plan of Restructuring and Merger, dated as of June 23, 1998, among AT&T, Italy Merger Corp. and TCI, a copy of which has been incorporated by reference as Exhibit 7(a), and to the text of the AT&T/TCI Proxy Statement/Prospectus, a copy of which has been incorporated by reference as Exhibit 7(b). ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The Reporting Person and IDT entered into a Subscription Agreement, dated as of March 24, 2000 (the "Original Subscription Agreement"), providing for the acquisition (the "Acquisition") by the Reporting Person of 3,775,000 shares of Common Stock at a purchase price of $34.50 per share. The Reporting Person and IDT entered into an amendment to the Original Subscription Agreement, dated as of May 26, 2000 (the "Subscription Agreement Amendment"). The Subscription Agreement Amendment revised the number of shares to be acquired by the Reporting Person to be equal to the lesser of (a) 3,775,000 shares of Common Stock and (b) 9.99% of the outstanding shares of Common Stock, as of the date of the closing of the acquisition immediately following such issuance. On the date of the closing of the Acquisition (the "Closing Date"), the Reporting Person and IDT concluded that this number was equal to 3,728,949 shares of Common Stock. The Original Subscription Agreement as amended by the Subscription Agreement Amendment is referred to herein as the "Subscription Agreement." Page 5 of 17 Pages Subsequent to the execution of the Original Subscription Agreement, the Reporting Person loaned a total of $30,000,000 to IDT pursuant to the terms of a pair of promissory notes executed by IDT on May 19, 2000 and May 25, 2000, respectively (the "Notes"). The Notes bore an interest rate of 9% per annum and are deemed to have been repaid out of the proceeds of the Acquisition. The total purchase price for the Acquisition of $128,648,740.50 was paid to IDT on the Closing Date by delivery to IDT of (a) $98,563,672.01 in cash and (b) the Notes for cancellation. The funds advanced under the Notes and the cash consideration paid on the Closing Date were paid with funds from the Reporting Person's existing cash reserves. The foregoing summary of the terms of the Original Subscription Agreement, the Subscription Agreement Amendment and the Notes is qualified in its entirety by reference to the full text of each such document, copies of which have been attached hereto or incorporated by reference as Exhibits 7(c), 7(d), 7(e) and 7(f), respectively, and are incorporated herein by this reference. ITEM 4. PURPOSE OF TRANSACTION. The Reporting Person currently holds its interest in IDT for investment purposes. The Reporting Person intends to continuously review its investment in the Issuer, and may in the future determine (i) to acquire additional securities of the Issuer, through open market purchases, private agreements or otherwise, (ii) to dispose of all or a portion of the securities of the Issuer owned by it or (iii) to take any other available course of action, which could involve one or more of the types of transactions or have one or more of the results described in the next paragraph of this Item 4. Notwithstanding anything contained herein, the Reporting Person specifically reserves the right to change its intention with respect to any or all of such matters. In reaching any decision as to its course of action (as well as to the specific elements thereof), the Reporting Person currently expects that it would take into consideration a variety of factors, including, but not limited to, the following: the Issuer's business and prospects; other developments concerning the Issuer and its businesses generally; other business opportunities available to the Reporting Person; developments with respect to the business of the Reporting Person; changes in law and government regulations; general economic conditions; and money and stock market conditions, including the market price of the securities of the Issuer. Other than as set forth in this Statement, the Reporting Person has no present plans or proposals which relate to or would result in: (a) The acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer; (b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) A sale or transfer of a material amount of assets of the Issuer or of any of its subsidiaries; Page 6 of 17 Pages (d) Any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) Any material change in the present capitalization or dividend policy of the Issuer; (f) Any other material change in the Issuer's business or corporate structure; (g) Changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (h) A class of securities of the Issuer being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) A class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) Any action similar to any of those enumerated in this paragraph. AT&T announced on March 31, 2000 that it had agreed to acquire from IDT approximately 14.9 million shares of the Class A common stock, par value $.01 per share (the "Net2Phone Class A Stock"), of Net2Phone, Inc., an entity controlled by IDT, at a cash purchase price of $75 per share. The Reporting Person and AT&T have executed a non-binding letter of intent pursuant to which they are negotiating the Reporting Person's potential participation in a joint venture to acquire these shares of Net2Phone Class A Stock from IDT. In addition, the matters set forth in Item 6 are incorporated in this Item 4 by reference as if fully set forth herein. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) As of the date hereof, the Reporting Person beneficially owns 3,728,949 shares of Common Stock. Based on the 26,905,041 shares of Common Stock that were issued and outstanding as of June 13, 2000 (as disclosed by the Issuer in its Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2000), the 3,728,949 shares of Common Stock beneficially owned by the Reporting Person represented on that date, calculated in accordance with Rule 13d-3 promulgated under the Exchange Act, approximately 13.9% of the issued and outstanding shares of Common Stock. Assuming the conversion of the 9,969,733 shares of the Class A Common Stock, par value $0.01 per share (the "Class A Stock"), of IDT outstanding as of June 13, 2000 (as disclosed by the Issuer in its Quarterly Report on Form 0-Q for the quarterly period ended April 30, 2000), each of which is convertible into one share of Common Stock by the holders thereof, the 3,728,949 shares of Common Stock owned by the Reporting Person would represent approximately 10.1% of the issued and outstanding shares of Common Stock. The Malone Family Foundation, a charitable foundation of which John C. Malone, the Chairman of the Board of the Reporting Person, is a director, holds 170,000 shares of Common Page 7 of 17 Pages Stock, representing less than 1% of the issued and outstanding shares of Common Stock, calculated in the manner described in the penultimate sentence of the preceding paragraph. (b) Subject to the Voting Agreement described in Item 6, the Reporting Person has the sole power to vote or to direct the voting of the Shares and the sole power to dispose of, or to direct the disposition of, the Shares. Dr. Malone shares voting power over the shares of Common Stock held by the Malone Family Foundation with the other members of the board of directors of that foundation, each of whom is a member of Dr. Malone's immediate family. (c) Immediately following the Acquisition, the Reporting Person transferred all of the Shares to Liberty IDTC, Inc., a Delaware corporation and a wholly owned subsidiary of the Reporting Person, as a contribution to capital. Paul A. Gould, a director of the Reporting Person, purchased 3,000 shares of Common Stock on April 19, 2000 for $30.75 per share and 3,000 shares of Common Stock on May 9, 2000 for $31.9375 per share. Mr. Gould sold 6,000 shares of Common Stock on June 8, 2000 for $32.749 per share. Each of these transactions was executed by Allen & Company on the NASDAQ Stock Market. Except for the transactions described in the two preceding paragraphs and the Acquisition, no transactions in the shares of Common Stock have been effected by the Reporting Person or, to the knowledge of the Reporting Person, by any of the Schedule 1 Persons or Schedule 2 Persons during the past 60 days. (d) None. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. The matters set forth in Item 3 are incorporated in this Item 6 by reference as if fully set forth herein. Subscription Agreement. - ---------------------- The Subscription Agreement provides that so long as members of the "Liberty Group" (as defined in the Subscription Agreement generally as the Reporting Person and entities controlling, controlled by or under common control with the Reporting Person) hold at least 50% of the Common Stock issued pursuant to the Subscription Agreement (with an appropriate adjustment to reflect the exchange of such shares of Common Stock for shares of Class B Stock issued pursuant to the Lock-up Agreement described below), the Reporting Person will be entitled to designate one person to serve as a director of IDT. Because the size of IDT's board is currently equal to the maximum size permitted under its certificate of incorporation, the Reporting Person has waived this right to designate a director pending the effectiveness of the Charter Amendment described below. Page 8 of 17 Pages The foregoing summary of the terms of the Original Subscription Agreement and the Subscription Agreement Amendment is qualified in its entirety by reference to the full text of such documents, copies of which have been attached hereto or incorporated by reference as Exhibits 7(c) and 7(d), respectively, and are incorporated herein by this reference. Lock-up, Registration Rights and Exchange Agreement. - --------------------------------------------------- IDT and the Reporting Person executed a Lock-up, Registration Rights and Exchange Agreement (the "Lock-up Agreement") on the Closing Date. The Lock-up Agreement provides that the Reporting Person may not offer, sell, contract to sell or otherwise dispose of any of the Shares for a period of one year without IDT's consent except for (a) transfers to IDT, to any member of the Liberty Group (provided such member of the Liberty Group agrees to be bound by the Lock- up Agreement) or any transaction in which holders of Common Stock have the right to participate pro rata (e.g., a merger, tender offer or similar transaction) and (b) a pledge to secure bona fide indebtedness (provided that the transferee in the event of foreclosure agrees to be bound by the terms of the Lock-up Agreement). The Lock-up Agreement also provides that the Reporting Person, or its designee, is entitled to certain customary registration rights with respect to the Shares (or shares of Class B Stock issued upon exchange thereof), including the right to demand that IDT make up to two registrations with respect to such Shares or shares of Class B Stock, as well as customary piggyback registration rights. The Lock-up Agreement provides that IDT shall take all action necessary to cause an amendment to IDT's certificate of incorporation (the "Charter Amendment") to become effective. The Charter Amendment will provide the following: (a) The authorization of 245,000,000 shares of stock consisting of (i) 100,000,000 shares of Common Stock, (ii) 35,000,000 shares of Class A Stock, (iii) 100,000,000 shares of Class B Common Stock, par value $0.01 per share ("Class B Stock") and (iv) 10,000,000 shares of preferred stock, par value $0.01 per share. (b) The Common Stock will be entitled to one vote per share, the Class A Stock will be entitled to three votes per share and the Class B Stock will be entitled to 1/10 of a vote per share on all matters voted upon by the stockholders of IDT. (c) Dividends and distributions to holders of Common Stock, Class A Stock and Class B Stock must be equivalent (provided that stock dividends must be paid in Common Stock to holders of Common Stock, in Class A Stock to holders of Class A Stock and in Class B Stock to holders of Class B Stock). Subdivisions, combinations and reclassifications of the Common Stock, Class A Stock and Class B Stock must be similarly equivalent. (d) In the case of an Extraordinary Transaction (as defined to include mergers, consolidations and similar transactions) the per share consideration, if any, received by holders of Common Stock and Class B Stock must be the same. Page 9 of 17 Pages (e) Each share of Class A Stock may be converted into one share of Common Stock at any time. Each share of Class B Stock may be converted into one share of Common Stock at any time provided that all shares of Class B Stock are so converted. (f) The board of directors of IDT shall consist of not less than 3 nor more than 17 directors, as fixed from time to time by the board of directors of IDT. IDT has agreed to use its best efforts to cause the Charter Amendment to become effective no later than the first anniversary of the Closing Date and to cause to be listed on the principal market for the Common Stock an aggregate number of shares of Class B Stock at least equal to the number of shares of Common Stock then listed on such primary market (the "Equivalent Float"). The date the Equivalent Float is first achieved is the "Trigger Date." The Shares will be exchanged at the Exchange Rate (as defined below) effective immediately prior to the close of business on the trading day immediately following the expiration of the period of 60 consecutive trading days commencing with the Trigger Date (provided that this automatic exchange will not be effected unless the Trigger Date occurs on or prior to the first anniversary of the Closing Date). At any time following the first anniversary of the Closing Date (but subject to the Trigger Date having occurred and not earlier than the 30th trading day following the Trigger Date) the Reporting Person may elect to exchange the Common Stock for Class B Stock at the Exchange Rate. Such an elective exchange will be effected immediately following the expiration of the period of 30 consecutive trading days commencing with the trading day on which notice from the Reporting Person is given to IDT. The "Exchange Rate" will be equal to the number obtained by dividing (x) the Average Market Price (as defined below) per share of the Common Stock for the 30 consecutive trading days ending on the trading day immediately preceding the date such exchange is effected by (y) the Average Market Price per share of Class B Stock for the 30 consecutive trading days ending on the trading day immediately preceding the date such exchange is effected. The "Average Market Price" of a security means the average (rounded to the nearest 1/10,000) of the volume weighted averages (rounded to the nearest 1/10,000) of the trading prices of the applicable security for the relevant 30 trading day period. The foregoing summary of the terms of the Lock-up Agreement and the Charter Amendment is qualified in its entirety by reference to the full text of such documents, copies of which have been attached hereto or incorporated by reference as Exhibits 7(g) and 7(h), respectively, and are incorporated herein by this reference. Voting Agreement. - ---------------- The Reporting Person and Howard S. Jonas ("Jonas") entered into a Voting Agreement (the "Voting Agreement") on the Closing Date. Jonas currently holds 9,969,733 shares of Class A Stock and 951,605 shares of Common Stock. The Voting Agreement provides that, until the earlier of the first anniversary of the Closing Date and the date on which all of the Shares are exchanged for shares of Class B Stock Page 10 of 17 Pages pursuant to the Lock-up Agreement, the Reporting Person will vote such Shares in the same manner that Jonas votes the IDT securities held by him; provided that, the Reporting Person will be entitled to (a) vote in favor of the Charter Amendment; (b) vote for or against or abstain from voting, in its own discretion, with respect to (i) any proposed amendment to IDT's certificate of incorporation which would alter the features of the Class B Stock or (ii) any proposed reclassification of the capital stock of IDT into shares having any preference or priority as to dividends or upon liquidation senior to that of the Common Stock and/or the Class B Stock; and (c) vote or abstain from voting in the same proportion (by voting power) as the other shares of Common Stock, Class A Stock and Class B Stock (collectively, the "Common Shares") with respect to (i) any proposed consolidation, merger or similar transaction in which IDT is not the surviving entity, in which the Common Shares are changed or reclassified or the holders of the Common Shares prior to such transaction do not hold at least 50% of the Common Shares following such transaction, (ii) any conveyance of all or substantially all the consolidated assets of IDT or (iii) the liquidation or dissolution of IDT. So long as members of the Liberty Group hold at least 50% of the Shares issued under the Subscription Agreement (including shares of Class B Stock issued pursuant to the Lock-up Agreement), the Reporting Person will be entitled to nominate one person to serve as a director of IDT and Jonas will vote in favor of the election of that person. The Reporting Person has agreed that, subject to regulatory constraints, it will nominate its Chairman or Chief Executive Officer to serve as a director of IDT. Once the Reporting Person no longer holds the requisite amount of IDT securities, it will use its reasonable best efforts to secure the resignation of its nominee. Jonas has agreed to vote in favor of the Charter Amendment and against any inconsistent proposal. The foregoing summary of the terms of the Voting Agreement is qualified in its entirety by reference to the full text of such document, a copy of which has been attached hereto as Exhibit 7(i) and is incorporated herein by this reference. ITEM 7. MATERIALS TO BE FILED AS EXHIBITS. Exhibit No. Description - ----------- ----------- 7(a) Agreement and Plan of Restructuring and Merger, dated as of June 23, 1998, among AT&T Corp., Italy Merger Corp. and Tele- Communications, Inc. (incorporated by reference to Appendix A to the AT&T/TCI Proxy Statement/Prospectus that forms a part of the Registration Statement on Form S-4 Page 11 of 17 Pages of AT&T Corp. (File No. 333-70279), filed on January 8, 1999 (the "AT&T Registration Statement")) 7(b) AT&T/TCI Proxy Statement/Prospectus (incorporated by reference to the AT&T Registration Statement). 7(c) Subscription Agreement, dated as of March 24, 2000, between IDT Corporation and Liberty Media Corporation (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K of IDT Corporation, dated March 28, 2000). 7(d) Amendment to Subscription Agreement, dated as of May 26, 2000, between IDT Corporation and Liberty Media Corporation. 7(e) Note, dated as of May 19, 2000, executed by IDT Corporation in favor of Liberty Media Corporation. 7(f) Note, dated as of May 25, 2000, executed by IDT Corporation in favor of Liberty Media Corporation. 7(g) Lock-up, Registration Rights and Exchange Agreement, dated as of June 6, 2000, between IDT Corporation and Liberty Media Corporation. 7(h) Form of Certificate of Amendment to the Restated Certificate of Incorporation of IDT Corporation (incorporated by reference to Exhibit C to the Information Statement on Schedule 14C of IDT Corporation filed on June 12, 2000). 7(i) Voting Agreement, dated as of June 6, 2000, between Howard S. Jonas and Liberty Media Corporation. Page 12 of 17 Pages SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: June 16, 2000 LIBERTY MEDIA CORPORATION By: /s/ Vivian J. Carr ------------------------ Name: Vivian J. Carr Title: Vice President Page 13 of 17 Pages SCHEDULE 1 DIRECTORS AND EXECUTIVE OFFICERS OF LIBERTY MEDIA CORPORATION The name and present principal occupation of each director and executive officer of Liberty Media Corporation ("Liberty") are set forth below. The business address for each person listed below is c/o Liberty Media Corporation, 9197 South Peoria Street, Englewood, Colorado 80112. All executive officers and directors listed on this Schedule 1 are United States citizens, except for David J.A. Flowers, who is a Canadian citizen.
Name Title - ---- ----- John Malone Chairman of the Board and Director of Liberty; Director of AT&T Corp. Robert R. Bennett President, Chief Executive Officer and Director of Liberty Gary S. Howard Executive Vice President, Chief Operating Officer and Director of Liberty Daniel E. Somers Director of Liberty; President and Chief Executive Officer of AT&T Broadband LLC (f/k/a Tele-Communications, Inc.) John C. Petrillo Director of Liberty; Executive Vice President, Corporate Strategy and Business Development of AT&T Corp. Larry E. Romrell Director of Liberty; Consultant to AT&T Broadband LLC (f/k/a Tele-Communications, Inc.) Jerome H. Kern Director of Liberty; Chairman of the Board and Chief Executive Officer of On Command Corporation Paul A. Gould Director of Liberty; Managing Director of Allen & Company Incorporated John D. Zeglis Director of Liberty; Director and President of AT&T Corp.; Chairman of the Board and Chief Executive Officer of AT&T Wireless Group David B. Koff Senior Vice President and Assistant Secretary of Liberty Charles Y. Tanabe Senior Vice President, General Counsel and Assistant Secretary of Liberty Carl E. Vogel Senior Vice President of Liberty Peter Zolintakis Senior Vice President of Liberty Vivian J. Carr Vice President and Secretary of Liberty David J.A. Flowers Vice President and Treasurer of Liberty Kathryn Scherff Vice President and Controller of Liberty
Page 14 of 17 Pages SCHEDULE 2 DIRECTORS AND EXECUTIVE OFFICERS OF AT&T CORP. The name and present principal occupation of each director and executive officer of AT&T Corp. are set forth below. The business address for each person listed below is c/o AT&T Corp., 295 North Maple Avenue, Basking Ridge, New Jersey 07920. All executive officers and directors listed on this Schedule 3 are United States citizens.
Name Title - ---- ----- C. Michael Armstrong Chairman of the Board, Chief Executive Officer and Director Kenneth T. Derr Director; Chairman of the Board, Retired, of Chevron Corporation M. Kathryn Eickhoff Director; President of Eickhoff Economics Incorporated Walter Y. Elisha Director; Chairman of the Board and Chief Executive Officer, Retired, of Springs Industries, Inc. George M. C. Fisher Director; Chairman and Chief Executive Officer of Eastman Kodak Company Donald V. Fites Director; Chairman of the Board, Retired, of Caterpillar, Inc. Amos B. Hostetter, Jr. Director; Chairman of the Board of Pilot House Associates Ralph S. Larsen Director; Chairman of the Board and Chief Executive Officer of Johnson & Johnson John C. Malone Director; Chairman of the Board of Liberty Media Corporation Donald F. McHenry Director; President of The IRC Group LLC Michael I. Sovern Director; President Emeritus and Chancellor Kent Professor of Law at Columbia University Sanford I. Weill Director; Chairman and Co-CEO of Citigroup Inc. John D. Zeglis President of AT&T Corp.; Chief Executive Officer of AT&T Wireless Group and Director
Page 15 of 17 Pages James W. Cicconi Executive Vice President-Law & Government Affairs and General Counsel Nicholas S. Cyprus Vice President and Controller Mirian M. Graddick Executive Vice President, Human Resources Frank Ianna Executive Vice President and President, AT&T Network Services Richard J. Martin Executive Vice President, Public Relations and Employee Communication David C. Nagel President of, AT&T Labs; Chief Technology Officer Charles H. Noski Senior Executive Vice President and Chief Financial Officer John C. Petrillo Executive Vice President, Corporate Strategy and Business Development Richard R. Roscitt Executive Vice President and President of AT&T Business Services Daniel E. Somers President and CEO of AT&T Broadband
Page 16 of 17 Pages EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 7(a) Agreement and Plan of Restructuring and Merger, dated as of June 23, 1998, among AT&T Corp., Italy Merger Corp. and Tele- Communications, Inc. (incorporated by reference to Appendix A to the AT&T/TCI Proxy Statement/Prospectus that forms a part of the Registration Statement on Form S-4 of AT&T Corp. (File No. 333- 70279), filed on January 8, 1999 (the "AT&T Registration Statement")). 7(b) AT&T/TCI Proxy Statement/Prospectus (incorporated by reference to the AT&T Registration Statement). 7(c) Subscription Agreement, dated as of March 24, 2000, between IDT Corporation and Liberty Media Corporation (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K of IDT Corporation, dated March 28, 2000). 7(d) Amendment to Subscription Agreement, dated as of May 26, 2000, between IDT Corporation and Liberty Media Corporation. 7(e) Note, dated as of May 19, 2000, executed by IDT Corporation in favor of Liberty Media Corporation. 7(f) Note, dated as of May 25, 2000, executed by IDT Corporation in favor of Liberty Media Corporation. 7(g) Lock-up, Registration Rights and Exchange Agreement, dated as of June 6, 2000, between IDT Corporation and Liberty Media Corporation. 7(h) Form of Certificate of Amendment to the Restated Certificate of Incorporation of IDT Corporation (incorporated by reference to Exhibit C to the Information Statement on Schedule 14C of IDT Corporation filed on June 12, 2000). 7(i) Voting Agreement, dated as of June 6, 2000, between Howard S. Jonas and Liberty Media Corporation. Page 17 of 17 Pages (1) EX-7.(D) 2 0002.txt AMENDMENT TO SUBSCRIPTION AGREEMENT Exhibit 7(d) Amendment to Subscription Agreement AMENDMENT TO SUBSCRIPTION AGREEMENT (this "Amendment"), dated as of May 26, 2000, between IDT Corporation, a Delaware corporation (the "Company"), and Liberty Media Corporation, a Delaware corporation ("LMC"). WHEREAS, the Company and LMC entered into a Subscription Agreement, dated as of March 24, 2000 (the "Subscription Agreement"); and WHEREAS, the Company and LMC desire to amend certain sections of the Subscription Agreement relating to the number of shares of Common Stock, par value $0.01 per share, of the Company (the "Common Stock") to be issued and sold by the Company to LMC or its designee, upon the terms and subject to the conditions set forth in the Subscription Agreement. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the LMC hereby agree as follows: Section 1. The Subscription Agreement is hereby amended by deleting --------- Section 1.1 in its entirety and replacing it with the following: "1.1. Subscription for Common Stock. Upon the terms and ----------------------------- subject to the conditions of this Agreement, the Company hereby agrees to issue and sell and LMC hereby agrees to purchase or cause its designee to purchase (the applicable purchaser being referred to herein as the "Investor") from the Company shares of Common Stock in an amount equal to the lesser of (a) 3,775,000 shares of Common Stock and (b) 9.99% of the outstanding shares of Common Stock, as of the date of Closing immediately following such issuance (the "Investor Securities"), at a price of $34.50 per share of Common Stock. The purchase price per share will be appropriately adjusted to reflect the effect of any stock splits, reverse stock splits, stock dividends and other similar events affecting the Common Stock." Section 2. The Subscription Agreement is hereby amended by deleting --------- Section 5(f) in its entirety and replacing it with the following: "(f) Certificate. The Investor shall have received (i) a ---------- certificate, dated as of the Closing Date, executed by an executive officer of the Company and stating (x) that, to the best knowledge of such executive officer, the conditions set forth in clauses (a), (b), (c), (d) and (e) above have been satisfied and (y) the number of shares of Common Stock, Class A Stock and Preferred Stock outstanding on the Closing Date, prior to giving effect to the issuance of the Investor Securities, (ii) a certificate of the secretary of the Company covering such matters as are customarily covered by such certificates, and (iii) a long form good standing certificate for the Company from the Delaware Secretary of State." Section 3. Section 9.2(a) of the Subscription Agreement is hereby amended --------- by adding the following language immediately after the final sentence thereof: "Prior to and as a condition of the effectiveness of any termination of this Agreement by the Company pursuant to clauses (ii) or (iii) above, the Company shall repay the outstanding principal balance under the Notes, dated May 19, 2000 and May 25, 2000, respectively, made by the Company to the order of LMC, together with all accrued and unpaid interest thereon." Section 4. Exhibit B to the Subscription Agreement is hereby amended by --------- deleting the first recital thereof in its entirety and replacing it with the following: "WHEREAS, IDT Corporation, a Delaware corporation (the ------------------------------------------------------ "Company"), and Liberty Media Corporation, a Delaware corporation ("LMC"), have entered into a Subscription Agreement, dated as of March ., 2000, as amended (the "Subscription Agreement"), pursuant to which LMC has agreed to purchase, or cause its designee to purchase, and the Company has agreed to sell to LMC or its designee, shares (the "Investor Securities") of the Company's Common Stock, par value $0.01 per share, of the Company (the "Common Stock");" Section 5. In all other respects, the Subscription Agreement remains in --------- full force and effect. Section 6. This Amendment may be executed in counterparts, each of --------- which shall be deemed an original, and all of which together shall be deemed to constitute one and the same instrument. [Signatures on the following page.] 2 IN WITNESS WHEREOF, the parties have executed this Amendment to Subscription Agreement as of the date first above written. IDT CORPORATION By: /s/ Howard S. Jonas --------------------- Name: Howard S. Jonas Title: Chief Executive Officer LIBERTY MEDIA CORPORATION By: /s/ Charles Y. Tanabe ----------------------- Name: Charles Y. Tanabe Title: Senior Vice President 3 EX-7.(E) 3 0003.txt NOTE, DATED AS OF MAY 19, 2000 Exhibit 7(e) NOTE $30,000,000.00 May 19, 2000 FOR VALUE RECEIVED, IDT Corporation, a Delaware corporation ("Borrower"), -------- promises to pay to the order of Liberty Media Corporation, a Delaware corporation ("Lender"), the sum of THIRTY MILLION AND NO/100 DOLLARS ------ ($30,000,000.00), together with interest thereon, pursuant to the terms and subject to the conditions herein set forth. 1. The Loan and Advances. Subject to the terms hereof, the Lender may, --------------------- in its sole discretion (without reference to any independent standard of conduct), make advances (each, an "Advance") to the Borrower from time to time ------- on any business day during the period from the date hereof until the Maturity Date (as defined below), in an aggregate amount not to exceed at any time outstanding an amount equal to the face amount hereof. 2. Maturity Date. The entire unpaid principal balance of this Note, ------------- together with all accrued and unpaid interest hereon, will be due and payable on August 1, 2000 (the "Maturity Date"). ------------- 3. Prepayment. Borrower shall have the right from time to time to prepay ---------- without notice or premium the principal balance of this Note in whole or in part. The Borrower shall be required to make mandatory prepayments on this Note equal to the net proceeds from any issuance and sale of equity securities of the Borrower (excluding any issuance pursuant to options granted to employees and directors of the Borrower or issued pursuant to stock option plans of the Borrower, but specifically including any issuance contemplated by the Subscription Agreement, dated as of March 24, 2000, between the Borrower and the Lender (the "Subscription Agreement")). ---------------------- 4. Payment of Principal and Interest. All payments made pursuant to this --------------------------------- Note shall be applied first against accrued and unpaid interest and then against unpaid principal on this Note. 5. Interest. Subject to the effect of Section 8, each Advance shall bear -------- interest at a rate per annum equal at all times to the lesser of (i) 9% and (ii) the Maximum Rate. All computations of interest pursuant to this Note shall be made on the basis of a year of 365 or 366 days, as the case maybe, for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. For purposes of this Note, "Maximum Rate" means the maximum nonusurious interest rate that any ------------ time or from time to time may be contracted for, taken, reserved, charged, or received with respect to this Note under laws applicable to the Lender. 6. General Provisions as to Payment. Except as otherwise provided -------------------------------- herein, Borrower shall make all payments of the principal amount of, and interest on, this Note not later than 4:00 p.m. New York City time on the date when due, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 7. Events of Default. Each of the following events shall be an "Event of ----------------- Default" with respect to this Note: (a) Borrower fails to make any payment pursuant to this Note when the same is due; (b) the insolvency of, the appointment of a custodian, trustee, liquidator or receiver for or for any of the property of, the assignment for the benefit of creditors by, or the filing of a petition under bankruptcy, insolvency or debtor's relief law or the filing of a petition for any adjustment of indebtedness, composition or extension by or against Borrower; or (c) the seizure or forfeiture of, or the issuance of any writ of possession, garnishment or attachment, or any turnover order for any material property of Borrower. 8. Default Remedies. Upon the occurrence of an Event of Default, Lender ---------------- shall have the right and option to declare the principal balance on this Note to be, and all principal hereunder shall thereupon become, due and payable, without any further presentment, demand, notice of nonpayment, notice of acceleration, notice of intent to accelerate or other notice of any kind, all of which hereby are expressly waived. After default or maturity, the unpaid principal shall bear interest at an annual rate equal to the lesser of (a) 15% or (b) the Maximum Rate. 9. Representations and Warranties. The Borrower hereby makes the same ------------------------------ representations, warranties and acknowledgements to the Lender as are set forth in Section 3 of the Subscription Agreement as if such representations, warranties and acknowledgements were made as of the date hereof; provided that (a) each of the representations and warranties made in Section 3.2 of the Subscription Agreement with respect to the Subscription Agreement and the Lock- up, Registration Rights and Exchange Agreement (as defined in the Subscription Agreement) shall be deemed to have also been made with respect to this Note, (b) all references therein to the "Transactions" shall be deemed to refer also to the execution, delivery and performance of this Note, including without limitation the payment of principal, interest and default interest hereunder, and (c) all references therein to the "Equity Documents" shall be deemed to refer also to this Note. 10. Limitation on Agreements. It is the intention of Borrower and Lender ------------------------ to comply with applicable usury laws. In furtherance thereof, Borrower and Lender stipulate and agree that, notwithstanding any provisions contained in this Note, Lender shall never be entitled to receive, collect or apply as interest on this Note, any amount in excess of the Maximum Rate (as defined below), and if Lender ever receives, collects or applies as interest any such excess, such amount that would be excessive interest shall be deemed to be a partial prepayment of principal and treated hereunder as such, and if the principal balance of this Note is paid in full, any remaining excess promptly shall be paid to Borrower. In determining whether the interest paid or payable, under any specific contingency, exceeds the Maximum Rate, Borrower and Lender shall, to the maximum extent permitted under applicable law, (a) characterize any non-principal payments (other than payments that are expressly designated as interest payments hereunder) as 2 an expense, fee or premium rather than as interest, (b) exclude voluntary prepayments and the effects thereof and (c) amortize, prorate, allocate and spread in equal parts the total amount of interest throughout the entire contemplated term of this Note so that the interest rate is uniform throughout such term. 11. Governing Law. THIS NOTE IS EXECUTED AND DELIVERED AND IS INTENDED TO ------------- BE PERFORMED IN THE STATE OF NEW YORK. THIS NOTE SHALL BE CONSTRUED AS TO BOTH VALIDITY AND PERFORMANCE AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE CHOICE OF LAW PRINCIPLES THEREOF. 12. Rights Cumulative. All rights and remedies of the Lender under any ----------------- provision of this Note shall be cumulative of all other rights and remedies granted to the Lender at law or in equity, whether or not this Note is then due and payable and whether or not the Lender shall have instituted any suit for collection or any other action in connection with this Note. 13. Amendments; Waivers. No change or modification of this Note will be ------------------- valid or binding, nor will any waiver of any term or condition of this Note be effective unless in writing and signed by Borrower and Lender. 14. Binding Effect. This Note will inure to the benefit of and will be -------------- binding upon Borrower and Lender and the successors and assigns of each of them. Borrower may not assign this Note to any person or entity without the express written consent of Lender. Lender may assign this Note to any person or entity without the consent of Borrower. 15. Titles. The titles of the sections in this Note have been inserted as ------ a matter of convenience for reference only and do not affect the meaning or construction of any of the provisions of this Note. 16. Legal Construction. If any one or more of the provisions contained in ------------------ this Note is held to be invalid or unenforceable in any respect, then the invalidity or unenforceability will not affect any other provision of this Note, which will be construed as if the invalid or unenforceable provision had never been contained in this Note. 17. Third-Party Beneficiaries; Creditors Not Benefitted. Nothing in this --------------------------------------------------- Note is intended to benefit any creditor of the Borrower or the Lender or to create any third-party beneficiary hereto. 18. Entire Agreement. EXCEPT AS EXPRESSLY PROVIDED HEREIN, THIS NOTE ---------------- REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 3 IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above. IDT CORPORATION By: /s/ Stephen Brown --------------------------------- Name: Stephen Brown Title: Chief Financial Officer 4 EX-7.(F) 4 0004.txt NOTE, DATED AS OF MAY 25, 2000 Exhibit 7(f) NOTE $70,000,000.00 May 25, 2000 FOR VALUE RECEIVED, IDT Corporation, a Delaware corporation ("Borrower"), -------- promises to pay to the order of Liberty Media Corporation, a Delaware corporation ("Lender"), the sum of SEVENTY MILLION AND NO/100 DOLLARS ------ ($70,000,000.00), together with interest thereon, pursuant to the terms and subject to the conditions herein set forth. 1. The Loan and Advances. Subject to the terms hereof, the Lender may, --------------------- in its sole discretion (without reference to any independent standard of conduct), make advances (each, an "Advance") to the Borrower from time to time ------- on any business day during the period from the date hereof until the Maturity Date (as defined below), in an aggregate amount not to exceed at any time outstanding an amount equal to the face amount hereof. 2. Maturity Date. The entire unpaid principal balance of this Note, ------------- together with all accrued and unpaid interest hereon, will be due and payable on August 1, 2000 (the "Maturity Date"). ------------- 3. Prepayment. Borrower shall have the right from time to time to prepay ---------- without notice or premium the principal balance of this Note in whole or in part. The Borrower shall be required to make mandatory prepayments on this Note equal to the net proceeds from any issuance and sale of equity securities of the Borrower (excluding any issuance pursuant to options granted to employees and directors of the Borrower or issued pursuant to stock option plans of the Borrower, but specifically including any issuance contemplated by the Subscription Agreement, dated as of March 24, 2000, as amended, between the Borrower and the Lender (the "Subscription Agreement")). ---------------------- 4. Payment of Principal and Interest. All payments made pursuant to this --------------------------------- Note shall be applied first against accrued and unpaid interest and then against unpaid principal on this Note. 5. Interest. Subject to the effect of Section 8, each Advance shall bear -------- interest at a rate per annum equal at all times to the lesser of (i) 9% and (ii) the Maximum Rate. All computations of interest pursuant to this Note shall be made on the basis of a year of 365 or 366 days, as the case may be, for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. For purposes of this Note, "Maximum Rate" means the maximum nonusurious interest rate that any ------------ time or from time to time may be contracted for, taken, reserved, charged, or received with respect to this Note under laws applicable to the Lender. 6. General Provisions as to Payment. Except as otherwise provided -------------------------------- herein, Borrower shall make all payments of the principal amount of, and interest on, this Note not later than 4:00 p.m. New York City time on the date when due, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 7. Events of Default. Each of the following events shall be an "Event of ----------------- Default" with respect to this Note: (a) Borrower fails to make any payment pursuant to this Note when the same is due; (b) the insolvency of, the appointment of a custodian, trustee, liquidator or receiver for or for any of the property of, the assignment for the benefit of creditors by, or the filing of a petition under bankruptcy, insolvency or debtor's relief law or the filing of a petition for any adjustment of indebtedness, composition or extension by or against Borrower; or (c) the seizure or forfeiture of, or the issuance of any writ of possession, garnishment or attachment, or any turnover order for any material property of Borrower. 8. Default Remedies. Upon the occurrence of an Event of Default, Lender ---------------- shall have the right and option to declare the principal balance on this Note to be, and all principal hereunder shall thereupon become, due and payable, without any further presentment, demand, notice of nonpayment, notice of acceleration, notice of intent to accelerate or other notice of any kind, all of which hereby are expressly waived. After default or maturity, the unpaid principal shall bear interest at an annual rate equal to the lesser of (a) 15% or (b) the Maximum Rate. 9. Representations and Warranties. The Borrower hereby makes the same ------------------------------ representations, warranties and acknowledgements to the Lender as are set forth in Section 3 of the Subscription Agreement as if such representations, warranties and acknowledgements were made as of the date hereof; provided that (a) each of the representations and warranties made in Section 3.2 of the Subscription Agreement with respect to the Subscription Agreement and the Lock- up, Registration Rights and Exchange Agreement (as defined in the Subscription Agreement) shall be deemed to have also been made with respect to this Note, (b) all references therein to the "Transactions" shall be deemed to refer also to the execution, delivery and performance of this Note, including without limitation the payment of principal, interest and default interest hereunder, and (c) all references therein to the "Equity Documents" shall be deemed to refer also to this Note. 10. Limitation on Agreements. It is the intention of Borrower and Lender ------------------------ to comply with applicable usury laws. In furtherance thereof, Borrower and Lender stipulate and agree that, notwithstanding any provisions contained in this Note, Lender shall never be entitled to receive, collect or apply as interest on this Note, any amount in excess of the Maximum Rate (as defined below), and if Lender ever receives, collects or applies as interest any such excess, such amount that would be excessive interest shall be deemed to be a partial prepayment of principal and treated hereunder as such, and if the principal balance of this Note is paid in full, any remaining excess promptly shall be paid to Borrower. In determining whether the interest paid or payable, under any specific contingency, exceeds the Maximum Rate, Borrower and Lender shall, to the maximum extent permitted under applicable law, (a) characterize any non-principal payments (other than payments that are expressly designated as interest payments hereunder) as 2 an expense, fee or premium rather than as interest, (b) exclude voluntary prepayments and the effects thereof and (c) amortize, prorate, allocate and spread in equal parts the total amount of interest throughout the entire contemplated term of this Note so that the interest rate is uniform throughout such term. 11. Governing Law. THIS NOTE IS EXECUTED AND DELIVERED AND IS INTENDED TO ------------- BE PERFORMED IN THE STATE OF NEW YORK. THIS NOTE SHALL BE CONSTRUED AS TO BOTH VALIDITY AND PERFORMANCE AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE CHOICE OF LAW PRINCIPLES THEREOF. 12. Rights Cumulative. All rights and remedies of the Lender under any ----------------- provision of this Note shall be cumulative of all other rights and remedies granted to the Lender at law or in equity, whether or not this Note is then due and payable and whether or not the Lender shall have instituted any suit for collection or any other action in connection with this Note. 13. Amendments; Waivers. No change or modification of this Note will be ------------------- valid or binding, nor will any waiver of any term or condition of this Note be effective unless in writing and signed by Borrower and Lender. 14. Binding Effect. This Note will inure to the benefit of and will be -------------- binding upon Borrower and Lender and the successors and assigns of each of them. Borrower may not assign this Note to any person or entity without the express written consent of Lender. Lender may assign this Note to any person or entity without the consent of Borrower. 15. Titles. The titles of the sections in this Note have been inserted as ------ a matter of convenience for reference only and do not affect the meaning or construction of any of the provisions of this Note. 16. Legal Construction. If any one or more of the provisions contained in ------------------ this Note is held to be invalid or unenforceable in any respect, then the invalidity or unenforceability will not affect any other provision of this Note, which will be construed as if the invalid or unenforceable provision had never been contained in this Note. 17. Third-Party Beneficiaries; Creditors Not Benefitted. Nothing in this --------------------------------------------------- Note is intended to benefit any creditor of the Borrower or the Lender or to create any third-party beneficiary hereto. 18. Entire Agreement. EXCEPT AS EXPRESSLY PROVIDED HEREIN, THIS NOTE ---------------- REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 3 IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above. IDT CORPORATION By: /s/ Howard S. Jonas ----------------------------- Name: Howard S. Jonas Title: Chief Executive Officer 4 EX-7.(G) 5 0005.txt LOCK-UP, REGISTRATION RIGHTS AND EXCHANGE AGREE. Exhibit 7(g) Lock-up, Registration Rights and Exchange Agreement LOCK-UP, REGISTRATION RIGHTS AND EXCHANGE AGREEMENT (this "Agreement"), dated as of June 6, 2000, by and between IDT Corporation, a Delaware corporation (the "Company"), and Liberty Media Corporation, a Delaware corporation (the "Investor"). WHEREAS, the Company and the Investor have entered into a Subscription Agreement, dated as of March 24, 2000 and amended as of May 26, 2000 (the "Subscription Agreement"), pursuant to which the Investor has agreed to purchase, or cause its designee to purchase, and the Company has agreed to sell to Investor or its designee, shares (the "Investor Securities") of the Common Stock, par value $0.01 per share, of the Company (the "Common Stock"); and WHEREAS, it is a condition to the consummation of the Subscription Agreement that the Company and Investor enter into this Agreement. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: Section 1. Definitions. (a) For the purposes of this Agreement: ----------- "Act" means the Securities Act of 1933, as amended. "Affiliate" means, with respect to any person, any other person directly or indirectly controlling, controlled by or under common control with the first such person. "Class B Common Stock" means the Class B Common Stock, par value $0.01 per share, of the Company to be authorized pursuant to the Charter Amendment referred to in Section 2.13. "Closing" and "Closing Date" mean the date of the Closing, as such term is defined in the Subscription Agreement. "Holder" means a holder of Registrable Securities or, unless the context otherwise requires, securities convertible into or exercisable for Registrable Securities. "Initially Issued Number" means the total number of Investor Securities issued to the Investor at the Closing or, if applicable, the total number of shares of Class B Common Stock issuable in exchange for all of the Investor Securities if all of the initially issued Investor Securities continued to be outstanding immediately prior to the Exchange Date, in each case, as appropriately adjusted for stock splits, stock dividends, reverse stock splits and other similar events affecting the Common Stock or the Class B Common Stock. "person" means any individual, partnership, corporation, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or agency or political subdivision thereof, or other entity. "register," "registered" and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement. "Registrable Securities" means the Investor Securities, or the shares of Class B Common Stock for which the Investor Securities are exchanged in accordance with Section 2.13 (collectively, the "Securities"); provided, -------- however, that such Securities shall cease to be Registrable Securities when and - ------- to the extent that (i) such Securities have been sold pursuant to an effective registration statement under the Act, (ii) such Securities have become eligible for resale pursuant to Rule 144(k) of the Act (or any similar provision then in force) or (iii) such Securities have ceased to be outstanding. (b) Capitalized terms used and not otherwise defined in this Agreement have the meaning ascribed to them in the Subscription Agreement. Section 2. Registration Rights. ------------------- 2.1 (a) Registration Upon Demand. At any time on or after the first ------------------------ anniversary of the Closing Date, one or more Holders that in the aggregate beneficially own at least 20% of the Registrable Securities may make a demand that the Company effect the registration of all or part of such Holders' Registrable Securities (a "Demand Registration"). Upon receipt of a valid request for a Demand Registration, the Company shall promptly, and in any event no later than 15 days after such receipt, notify all other Holders of the making of such demand and shall use its reasonable efforts to register under the Act as expeditiously as may be practicable the Registrable Securities which Holders have requested the Company to register in accordance with this Section 2.1. Notwithstanding the foregoing, the Company shall only be required to effect a registration if the number of Registrable Securities that the Company shall have been requested to 2 register shall, in the aggregate, (i) represent at least 20% of the Initially Issued Number or (ii) represent all of the Registrable Securities then held by all Holders. The Holders shall together have the right to two Demand Registrations pursuant to this Section 2.1(a), provided, however, that no more than one such Demand Registration may be requested in any 12 month period. (b) Effective Registration Statement. A registration requested pursuant -------------------------------- to Section 2.1(a) hereof shall not be deemed to have been effected (i) if a registration statement with respect thereto has not been declared effective by the Securities and Exchange Commission ("SEC"), (ii) if after it has become effective and prior to the date ninety (90) days after the effective date, such registration is materially interfered with by any stop order, injunction or similar order or requirement of the SEC or other governmental agency or court for any reason not attributable to the fault of any of the Holders, or (iii) the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived, other than by reason of a failure on the part of a Holder to perform its obligations under such underwriting agreement. (c) Piggyback Registration. If the Company proposes to file a ---------------------- registration statement under the Act with respect to an offering of its equity securities for its own account or for the account of another person or entity (other than a registration statement on Form S-4 or S-8 (or any substitute forms that may be adopted by the Commission)), the Company shall give written notice of such proposed filing to the Holders at the address set forth in the share register of the Company as soon as reasonably practicable (but in no event less than 7 business days before the anticipated filing date), undertaking to provide each Holder the opportunity to register on the same terms and conditions such amount of Registrable Securities as such Holder may request (a "Piggyback Registration"). Each Holder will have 5 business days after receipt of any such notice to notify the Company as to whether it wishes to participate in a Piggyback Registration (which notice shall not be deemed to be a request for a Demand Registration). If the registration statement is filed on behalf of a person or entity other than the Company, the Company will use its reasonable best efforts to have the Registrable Securities that the Holders wish to sell included in the registration statement. If the Company or the person or entity for whose account such offering is being made shall determine in its sole discretion not to register or to delay the proposed offering, the Company may, at its election, provide written notice of such determination to the Holders and (i) in the case of a determination not to effect the proposed offering, shall thereupon be relieved of the obligation to register such Registrable Securities in connection therewith and (ii) in the case of a determination to delay a proposed offering, shall thereupon be permitted to 3 delay registering such Registrable Securities for the same period as the delay in respect of the proposed offering. If the Registrable Securities requested to be included in the Piggyback Registration by any Holder differ from the type of securities proposed to be registered by the Company and the managing underwriter for such offering advises the Company that due to such differences the inclusion of such Registrable Securities would cause a material adverse effect on the price of the offering (a "Material Adverse Effect"), then (x) the number of such Holders' Registrable Securities to be included in the Piggyback Registration shall be reduced to an amount which, in the opinion of the managing underwriter, would eliminate such Material Adverse Effect or (y) if no such reduction would, in the opinion of the managing underwriter, eliminate such Material Adverse Effect, then the Company shall have the right to exclude all such Registrable Securities from such Piggyback Registration, provided, that no other securities of such type are included and offered for the account of any other Person in such Piggyback Registration. Any partial reduction in number of Registrable Securities of any Holder to be included in the Piggyback Registration pursuant to clause (x) of the immediately preceding sentence shall be effected pro rata based on the ratio which such Holder's requested securities bears to the total number of securities requested to be included in such Piggyback Registration by all persons or entities other than the Company who have the contractual right to request that their securities be included in such registration statement and who have requested that their securities be included. If the Registrable Securities requested to be included in the registration statement are of the same type as the securities being registered by the Company and the managing underwriter advises the Company that the inclusion of such Registrable Securities would cause a Material Adverse Effect, the Company will be obligated to include in such registration statement, as to each Holder, only a portion of the Registrable Securities such Holder has requested be registered equal to the ratio which such Holder's requested securities bears to the total number of securities requested to be included in such registration statement by all persons or entities (other than any persons or entities initiating such registration request) who have the contractual right to request that their securities be included in such registration statement and who have requested their securities be included. If the Company initiated the registration, then the Company may include all of its securities in such registration statement before any such Holder's requested securities are included. If another securityholder initiated the registration, then the Company may not include any of its securities in such registration statement unless all Registrable Securities requested to be included in the registration statement by all Holders are included in such registration statement. If as a result of the provisions of this Section 2.1(c) any Holder shall not be entitled to include all Registrable Securities in a registration that such Holder has 4 requested to be so included, such Holder may withdraw such Holder's request to include Registrable Securities in such registration statement prior to its effectiveness. 2.2 Blackout Periods for Holders. If the board of directors of the Company ---------------------------- determines in good faith that the registration of Registrable Securities pursuant to Section 2.1(a) hereof (or the use of a registration statement or related prospectus) would be materially detrimental to the Company or its shareholders because such filing would require disclosure of material non-public information or would materially interfere with the Company's financing plans, and therefore the board of directors determines that it is in the Company's best interest to defer the filing of the registration statement, and promptly gives the Holders written notice of such determination in the form of a certificate signed by an executive officer of the Company following their request to register any Registrable Securities pursuant to Section 2.1(a), the Company shall be entitled to postpone the filing of the registration statement otherwise required to be prepared and filed by the Company pursuant to Section 2.1(a) hereof for a reasonable period of time, but not to exceed 60 days (a "Demand Blackout Period") after the date of such request, provided that the Company's -------- exercise of its rights under this Section 2.2 (i) shall not result in Demand Blackout Periods for more than 180 days in any 365 day period, (ii) shall not result in Demand Blackout Periods that are separated by less than 45 days and (iii) shall only be effective when and for so long as the officers and directors of the Company and other holders, if any, of registration rights with respect to the Company's securities are similarly restricted from buying or selling securities of the Company and/or exercising their registration rights, as applicable. The Company shall promptly notify each Holder of the expiration or earlier termination of any Demand Blackout Period. 2.3 Obligations of the Company. Whenever the Company is required to effect -------------------------- the registration of any Registrable Securities under this Section 2, the Company shall, at its expense and as expeditiously as may be practicable: (a) Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its reasonable efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, use reasonable efforts to keep such registration statement effective for not less than 120 days, unless all Registrable Securities included therein are earlier sold. (b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of applicable law with 5 respect to the disposition of all of the Registrable Securities covered by such registration statement. (c) Use its best efforts to qualify such Registrable Securities (i) for listing on the Nasdaq National Market or listing on the New York Stock Exchange, Inc. or (ii) if neither such quotation system or exchange is available for quotation or listing, for listing on a national securities exchange selected by a majority in interest of the Holders of the Registrable Securities being registered. (d) Furnish to the Holders of Registrable Securities registering such securities such numbers of copies of a prospectus, including a preliminary prospectus (in the event of an underwritten offering), in conformity with the requirements of applicable law, and such other documents as each such Holder may reasonably request in order to facilitate the disposition of Registrable Securities owned by it. (e) Use reasonable efforts to register and qualify the securities covered by such registration statement under state blue sky laws in any U.S. jurisdictions in which such registration and qualification is reasonably requested by any Holder; provided, that the Company shall not be required in -------- connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such jurisdictions. (f) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form and substance as agreed to by the Company and the managing underwriter of such offering. (g) Promptly notify the Holders in writing: (i) when the registration statement, the prospectus or any prospectus supplement related thereto or post- effective amendment to the registration statement has been filed, and, with respect to the registration statement or any post-effective amendment thereto, when the same has become effective; (ii) of any request by the SEC for amendments or supplements to the registration statement or related prospectus or any written request by the SEC for additional information; (iii) of the issuance by the SEC of any stop order suspending the effectiveness of the registration statement or prospectus or any amendment or supplement thereto or the initiation of any proceedings by any person for that purpose, and promptly use its reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued; and (iv) of the receipt by the Company of any written notification with respect to the suspension of the qualification of any Registrable Securities for sale in any jurisdiction or the initiation or overt threat of any proceeding for such purpose. 6 (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. Upon receipt of any notice of the occurrence of any event of the kind described in the preceding sentence, each Holder will cease using such prospectus until receipt by the Holders of the copies of such supplemented or amended prospectus. If so requested by the Company, each Holder will deliver to the Company any copies of such prospectus then in its possession (other than one permanent file copy). If the Company shall give such notice, the Company shall extend the period during which such registration statement shall be maintained effective as provided in Section 2.3(a) hereof by the number of days during the period from and including the date of the giving of such notice to the date when the Company shall make available to the Holders such supplemented or amended prospectus. (i) Furnish, at the request of any Holder participating in the registration, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as if customarily given to underwriters in an underwritten public offering and reasonably satisfactory to a majority in interest of the Holders participating in the registration, addressed to the underwriters, if any, and to the Holders participating in the registration of Registrable Securities and (ii) a "Cold Comfort" letter dated as of such date, from the independent certified public accountants to the underwriters in an underwritten public offering and reasonably satisfactory to a majority in interest of the Holders participating in the registration, addressed to the board of directors of the Company, to the underwriters, if any, and if permitted by applicable accounting standards, to the Holders participating in the registration of Registrable Securities. 7 (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 Holder or underwriter (collectively, the "Inspectors"), all pertinent financial and other records, pertinent corporate documents and properties of the Company (collectively, the "Records"), as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company's officers, directors and employees to supply all information (together with the Records, the "Information") reasonably requested by any such Inspector in connection with such registration statement. Any of the Information that the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, shall not be disclosed by the Inspectors unless (i) the release of such Information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, (ii) such Information has been made generally available to the public, (iii) as necessary to enforce a Holder's rights under this Agreement or (iv) such Holder of Registrable Securities requiring such information agrees to enter into a confidentiality agreement in customary form and subject to customary exceptions. Each Holder of Registrable Securities shall be responsible for any breach of the foregoing covenant by any Inspector retained by or on behalf of such Holder. The Holder of Registrable Securities, agrees that it will, upon learning that disclosure of such Information is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at the Company's expense, to undertake appropriate action to prevent disclosure of the Information deemed confidential and the Inspectors shall not disclose such Information until such action is determined. (m) Provide a CUSIP number for the Registrable Securities included in any registration statement not later than the effective date of such registration statement. (n) Cooperate with each selling Holder and each underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection 8 with any filings required to be made with the National Association of Securities Dealers, Inc. (o) During the period when the prospectus is required to be delivered under the Act, promptly file all documents required to be filed with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act"). (p) Make generally available to its securityholders, as soon as reasonably practicable, an earnings statement covering a period of 12 months, beginning within three months after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Act and the rules and regulations of the SEC thereunder (q) Provide a transfer agent and registrar (which may be the same entity and which may be the Company) for such Registrable Securities. (r) Use its reasonable efforts to take all other steps necessary to effect the registration of such Registrable Securities pursuant to the terms contemplated hereby. 2.4 Furnish Information. ------------------- (a) It shall be a condition precedent to the obligation of the Company to include any Registrable Securities of any Holder in a registration statement pursuant to this Section 2 that the Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, any other securities of the Company held by it, and the intended method of disposition of such Registrable Securities as shall be required to effect the registration of the Registrable Securities held by such Holder. Any such information shall be provided to the Company within any reasonable time period requested by the Company. (b) Each Holder shall notify the Company, at any time when a prospectus is required to be delivered under applicable law, of the happening of any event as a result of which the prospectus included in the applicable registration statement, as then in effect, in each case only with respect to information provided by such Holder, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. Such Holder shall immediately upon the happening of any such event cease using such prospectus. Any other Holders shall cease using such prospectus immediately upon receipt of notice from the Company to that effect. If so requested by the Company, 9 each Holder shall promptly return to the Company any copies of such prospectus in its possession (other than one permanent file copy). The Company shall promptly prepare and furnish to each such Holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the offerees of such securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. 2.5 Expenses of Registration. The Company shall bear and pay all ------------------------ reasonable expenses incurred in connection with any registration, filing or qualification of Registrable Securities pursuant to this Section 2, including (without limitation) all registration, filing and qualification fees, printers' and accounting fees, but excluding underwriting discounts and commissions relating to the Registrable Securities. The Company also shall be required to pay and bear the reasonable legal fees of not more than one counsel for the Holders in an amount not to exceed $50,000 in connection with any registration. 2.6 Underwriting Requirements. In connection with any underwritten ------------------------- offering of a Holder's Registrable Securities, the Company shall not be required under Section 2.3 to register any of such Registrable Securities in connection with such underwritten offering unless the Company consents to the underwriters selected by the Holders participating in the registration (which consent shall not be unreasonably withheld) and the Company shall be required to register Registrable Securities only in such quantity as the lead managing underwriter determines, in its good faith discretion, will not jeopardize the success of the offering by the Company. To the extent that the lead managing underwriter will not permit the registration of all of the Registrable Securities sought to be registered, in the case of a registration pursuant to Section 2.1(a), the Registrable Securities to be included shall be apportioned among the Holders on a pro rata basis (based on the number of Securities proposed to be registered by each); provided, however, that the right of the underwriters to exclude -------- ------- Registrable Securities from the registration and underwriting as described above shall be restricted such that all securities that are not Registrable Securities and all securities that are held by persons who are employees or directors of the Company (or any subsidiary of the Company) shall first be excluded from such registration and underwriting before any Registrable Securities are so excluded. Those Registrable Securities and other securities that are excluded from the underwriting by reason of the managing underwriter's marketing limitation and all other Registrable Securities not originally requested to be so included shall not be included in such registration and shall be withheld from the market by the Holders thereof for a period, not to exceed 90 days, which the managing underwriter reasonably determines necessary to effect the underwritten public offering. No Holder of Registrable Securities 10 shall be entitled to participate in an underwritten offering unless such Holder enters into, and performs its obligations under, one or more underwriting agreements and any related agreements and documents (which may include an escrow agreement and/or a power of attorney with respect to the disposition of the Registrable Securities), in the form that such Holder shall agree to with the lead managing underwriter of the transaction. If any Holder disapproves of the terms of any underwriting, it may elect, prior to the execution of any underwriting agreement, to withdraw therefrom by written notice to the Company and the lead managing underwriter. 2.7 Delay of Registration. No Holder shall have any right to obtain or --------------------- seek an injunction restraining or otherwise delaying any registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2. 2.8 Indemnification. In the event any Registrable Securities are included --------------- in a registration statement under this Section 2: (a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder and each person, if any, who controls such Holder within the meaning of the Act and the 1934 Act and their respective directors, officers, partners, stockholders, members, employees, agents and representatives and each person, if any, who controls such Holder within the meaning of the Act and the 1934 Act (each, an "Indemnified Person"), against any losses, claims, damages, or liabilities joint or several) to which they may become subject insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of, are based upon or relate to (collectively, a "Violation") (x) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary or final prospectus contained therein or any amendments or supplements thereto or (y) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; or (z) any violation by the Company of the Act, the 1934 Act, any state securities law or any rule or regulation promulgated under the Act, the 1934 Act or any state securities law in connection with the offering covered by any registration statement; and the Company will pay to each Indemnified Person any reasonable legal or other expenses incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action; provided that the -------- indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in 11 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 2.8(b) in connection with investigating or defending any such loss, claim, damage, liability or action; provided that the indemnity -------- agreement contained in this Section 2.8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided, further, that in no event shall any -------- ------- indemnity under this Section 2.8(b) exceed the net proceeds from the offering received by such Holder upon its sale of Registrable Securities included in the registration statement. (c) Promptly after receipt by an Indemnified Person under this Section 2.8 of notice of the commencement of any action (including any governmental action), such Indemnified Person will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the indemnifying parties; provided that an Indemnified Person -------- shall have 12 the right to retain separate counsel, and the reasonable fees and expenses of such counsel shall be paid by the indemnifying party if representation of such Indemnified Person by the counsel retained by the indemnifying party would be inappropriate (in the opinion of the Indemnified Person) due to actual or potential differing interests between such Indemnified Person and any other party represented by such counsel in such proceeding, provided that the indemnifying party in such event shall not be responsible for the fees of more than one separate firm of attorneys (in addition to any local counsel) for all Indemnified Persons that may be represented without conflict by one counsel. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the Indemnified Person under this Section 2.8, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any Indemnified Person otherwise than under this Section 2.8. (d) If the indemnification provided for in this Section 2.8 is held by a court of competent jurisdiction to be unavailable to an Indemnified Person with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such Indemnified Person hereunder, agrees to contribute to the amount paid or payable by such Indemnified Person as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the Indemnified Person on the other in connection with the Violation(s) that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the Indemnified Person shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the Indemnified Person and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. No person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution hereunder from any person who was not guilty of such fraudulent misrepresentation. In no event shall a Holder's obligation to contribute pursuant to this Section 2.8(d) exceed the net proceeds from the offering received by such Holder upon its sale of Registrable Securities included in the registration statement. (e) The obligations of the Company and the Holders under this Section 2.8 shall survive the completion of any offering of Registrable Securities under a registration statement pursuant to this Section 2. 13 2.9 Lock-up and Permitted Transfers. At any time prior to the first ------------------------------- anniversary of the Closing Date, Investor shall not offer, sell, contract to sell or otherwise dispose of any of the Investor Securities or any interest therein without the written consent of the Company; provided, however, that the -------- ------- Investor without the Company's consent shall be permitted (a) to transfer all or part of the Investor Securities (i) to the Company, as contemplated by Section 2.12 or otherwise; (ii) to any other member of the Liberty Group (a "Permitted Transferee") provided that such member agrees with the Company to be bound hereby with the same effect as if it were named herein in lieu of the Investor; and (iii) in any transaction in which holders of Common Stock generally participate or have the opportunity to participate pro rata, including, without limitation, a merger, consolidation or binding share exchange involving the Company or a tender or exchange offer for shares of the Company's capital stock; and (b) to pledge the Investor Securities to secure bona fide indebtedness, provided that the transferee in the event of foreclosure agrees with the Company to be bound hereby with the same effect as if it were named herein in lieu of the Investor. Without limiting any other remedy that may be available to the Company, failure of the Investor or any Permitted Transferee to comply with the provisions of this Section 2.9 shall result in termination of the Company's obligations under Section 2.1 of this Agreement with respect to the affected Investor Securities. 2.10 Assignment of Registration Rights. The rights to cause the Company to --------------------------------- register Registrable Securities pursuant to this Section 2 may be assigned by a Holder to a transferee of Registrable Securities (other than a competitor of the Company or any of its subsidiaries, except that neither AT&T Corp. nor any of its Affiliates shall be deemed a competitor for this purpose), provided that, in -------- the case of a transfer prior to the first anniversary of the Closing Date, such transferee is a Permitted Transferee; and provided, further, that (i) the -------- ------- transferor shall, within ten (10) days after such transfer, furnish to the Company written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned and (ii) such transferee shall agree with the Company in writing to be subject to the terms and conditions of this Agreement to the extent then applicable. No other assignment of the Investor's or any Holder's rights hereunder shall be permitted, and the attempted or purported assignment in violation of this provision shall be void. 2.11 Rule 144 Reporting. With a view to making available to the Holders ------------------ the benefits of certain rules and regulations of the SEC that permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its best efforts to: (a) Make and keep public information available, as those terms are understood and defined in SEC Rule 144 or any similar or analogous rule promulgated under the Act, at all times; 14 (b) File with the SEC, in a timely manner, all reports and other documents required to be filed by the Company under the Act and the 1934 Act; and (c) So long as a Holder owns any Registrable Securities, furnish such Holder upon request a written statement by the Company as to its compliance with the reporting requirements of SEC Rule 144 or any similar or analogous rule promulgated under the Act, and of the 1934 Act, a copy of the most recent annual or quarterly report of the Company and such other reports and documents as a Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any such securities without registration. 2.12 Exchange. (a) The Company shall use its best efforts to ensure that -------- no later than the first anniversary of the Closing Date it shall have complied with its covenant set forth in Section 2.13 and issued, registered, qualified under applicable state securities laws, and caused to be listed or quoted on the applicable of the Nasdaq National Market or The New York Stock Exchange or such other national securities exchange or national securities association as is the then principal market on which the Common Stock is listed or quoted, an aggregate number of shares of Class B Common Stock at least equal to the number of shares of Common Stock then listed or quoted on such market ("Equivalent Float"). The date as of which the Equivalent Float is first achieved is referred to as the "Trigger Date" . The Company shall notify the Investor of the Trigger Date promptly and in any event within 2 business days after its occurrence. (b) The Investor Securities shall be exchanged for shares of Class B Common Stock at the Exchange Rate (as defined below) effective immediately prior to the close of business on the trading day (the "Automatic Exchange Date") immediately following the expiration of the period of 60 consecutive trading days commencing with the Trigger Date, provided that such exchange shall not be effected unless the Trigger Date occurs on or prior to the first anniversary of the Closing. At any time following the first anniversary of the Closing, but subject to the Trigger Date having occurred and not earlier than the 30th trading day following the Trigger Date, the Investor may deliver a written notice to the Company requesting it to exchange its Investor Securities for shares of Class B Common Stock at the Exchange Rate, in which event such exchange shall be effected immediately prior to the close of business on the trading day (the "Elective Exchange Date", and together with the Automatic Exchange Date if the Trigger Date occurs prior to the first anniversary of the Closing, the "Exchange Date") immediately following the expiration of the period of 30 consecutive trading days commencing with the trading day on which such notice from the Investor is given to the Company. 15 (c) On the Exchange Date or as soon as possible thereafter, the Investor shall surrender the certificate or certificates for the Investor Securities, duly endorsed or assigned to the Company or in blank, at the Company's address for notices as specified in Section 3.5. The Investor Securities shall be deemed to have been exchanged immediately prior to the close of business on the Exchange Date in accordance with the foregoing provisions, and the person or persons entitled to receive the Class B Common Stock issuable upon such exchange shall be treated for all purposes as the recordholder or holders of such Class B Common Stock at such time. (d) As promptly as practicable on or after the Exchange Date, the Company shall issue and deliver at such office a certificate or certificates for the number of full shares of Class B Common Stock issuable upon such exchange based on the Exchange Rate, as defined below, together with a cash payment in lieu of any fraction of a share of Class B Common Stock (based on the same fraction of the price determined pursuant to clause (y) of the definition of Exchange Rate below), to the person or persons entitled to receive the same. The "Exchange Rate" shall be the number of shares of Class B Common Stock to be delivered in exchange for each share of Common Stock surrendered by the Investor. The Exchange Rate shall be equal to the number obtained by dividing (x) the Average Market Price per share of Common Stock for the 30 consecutive trading days ending on the trading day immediately preceding the Exchange Date by (y) the Average Market Price per share of Class B Common Stock for the 30 consecutive trading days ending on the trading day immediately preceding the Exchange Date. "Average Market Price" of a share of Common Stock or Class B Common Stock, as applicable, means the average (rounded to the nearest 1/10,000) of the volume weighted averages (rounded to the nearest 1/10,000) of the trading prices of the applicable security on the principal market on which shares of the applicable security are then listed or quoted (whether the Nasdaq National Market, The New York Stock Exchange or another national securities exchange or association) as reported by Bloomberg Financial Markets (or such other source as the Investor and the Company shall agree) for the relevant 30 trading day period. (e) The Company shall not declare a dividend or make a distribution on, or reclassify, subdivide or combine, the Class B Common Stock or the Common Stock or take any other action with respect to the Class B Common Stock or the Common Stock of the kind that would typically require an adjustment to the conversion price or conversion rate of a convertible security, if the "ex" date, record date, payment date or effective date for such event would occur during the period during which the Exchange Rate is established, and will not effect repurchases of Class B Common Stock or Common Stock 16 in the market, or announce its intention to effect repurchases of any such securities, during such period. The Investor will not effect market purchases of the Common Stock or Class B Common Stock during the period the Exchange Rate is established, provided, in the case of the period related to the Automatic Exchange Date, that it has been notified of the occurrence of the Trigger Date. 2.13 Amendment to Restated Certificate of Incorporation. As soon as -------------------------------------------------- practicable after the execution of this Agreement, the Company and its Board of Directors shall: (a) Take all action necessary in accordance with applicable law, the Company's Restated Certificate of Incorporation and the Company's By-laws to obtain the requisite approval of the Company's stockholders for the adoption of the Certificate of Amendment to the Company's Restated Certificate of Incorporation (the "Charter Amendment"), in the form annexed hereto as Exhibit A, which shall be authorized by the Board of Directors to, among other things, establish the terms of the Class B Common Stock; and (b) File the Charter Amendment with the Secretary of State of the State of Delaware. Section 3. Miscellaneous. ------------- 3.1 Successors and Assigns. The provisions of this Agreement shall inure ---------------------- to the benefit of and be binding upon the respective successors and permitted assigns of the parties hereto. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement. Nothing contained herein shall be construed as permitting any transfer of any securities of the Company in violation of any applicable law or agreement. 3.2 Governing Law. This Agreement shall be governed by and construed in ------------- accordance with the internal laws of the State of New York. The Investor and the Company hereby submit to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement and the transactions contemplated hereby. The Investor and the Company irrevocably waive, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a 17 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 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 520 Broad Street Newark, New Jersey 07102 Attn: Hal Brecher Fax: (201) 928-2885 with a copy to: Sullivan & Cromwell 125 Broad Street New York, New York 10004 Attn: Robert S. Risoleo Fax: (212) 558-1600 18 If to the Investor: Liberty Media Corporation 9197 South Peoria Street Englewood, Colorado 80112 Attn: Legal Department Telephone: (720) 875-5400 Fax: (720) 875-5382 with a copy to: Baker Botts L.L.P. 599 Lexington Avenue New York, New York 10022 Attn: Elizabeth M. Markowski Telephone: (212) 705-5000 Fax: (212) 705-5125 3.6 Amendments and Waivers. The provisions of Sections 2.9, 2.12 and 2.13 ---------------------- of this Agreement and the provisions of this sentence may be amended, and the observance of any such provision may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of each of the Company and the Investor. The remaining provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained written consent of Holders owning in the aggregate at least 51% of the outstanding Registrable Securities affected by such amendment, modification, supplement, waiver or departure. 3.7 Severability. If one or more provisions of this Agreement are held to ------------ be unenforceable under applicable law, such provisions shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 3.8 Entire Agreement. This Agreement (together with the agreements ---------------- referenced herein) contains the entire understanding of the parties hereto with respect to the subject matter contained herein, and supersedes and cancels all prior agreements, negotiations, correspondence, undertakings and communications of the parties, oral or written, respecting such subject matter. There are no restrictions, promises, 19 representations, warranties, agreements or undertakings of any party hereto with respect to the matters contemplated hereby, other than those set forth herein or made hereunder. 3.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES ITS RIGHTS TO A -------------------- JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE SECURITIES OR THE SUBJECT MATTER HEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION 3.9 HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS SHALL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL (WITHOUT A JURY) BY THE COURT. [Signatures on the following page.] 20 IN WITNESS WHEREOF, the parties have executed this Lock-up, Registration Rights and Exchange Agreement as of the date first above written. IDT CORPORATION By: /s/ Howard S. Jonas ------------------------------- Name: Howard S. Jonas Title: Chief Executive Officer LIBERTY MEDIA CORPORATION By: /s/ Charles Y. Tanabe ------------------------------- Name: Charles Y. Tanabe Title: Senior Vice President 21 EX-7.(I) 6 0006.txt VOTING AGREEMENT, DATED AS OF JUNE 6, 2000 Exhibit 7(i) Voting Agreement VOTING AGREEMENT (this "Agreement"), dated as of June 6, 2000, between Howard S. Jonas (the "Stockholder"), and Liberty Media Corporation, a Delaware corporation (the "Investor"). WHEREAS, IDT Corporation, a Delaware corporation (the "Company"), and Investor have entered into a Subscription Agreement, dated as of March 24, 2000, as amended on May 26, 2000 (the "Subscription Agreement"), pursuant to which Investor has agreed to purchase, or cause its designee to purchase, and the Company has agreed to sell to Investor or its designee, shares (the "Investor Securities") of the Company's Common Stock, par value $0.01 per share, of the Company (the "Common Stock"); and WHEREAS, the Stockholder is a principal stockholder of the Company; and WHEREAS, it is a condition to the consummation of the Subscription Agreement that the Stockholder and the Investor enter into this Agreement; and WHEREAS, capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed thereto in the Subscription Agreement. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: Section 1. Representations, Warranties and Acknowledgments of the ------------------------------------------------------ Investor. The Investor hereby represents, warrants and acknowledges to the - -------- Stockholder, as follows: 1.1 Ownership of Securities. The Investor will, upon purchasing the ----------------------- Investor Securities, be the record and beneficial owner of the Investor Securities. Upon purchasing the Investor Securities, the Investor will have sole voting power, sole power to issue instructions with respect to the voting and sole power of disposition, in each case with respect to all of the Investor Securities. 1.2 Power; Binding Agreement. The Investor has the legal capacity, power ------------------------ and authority to enter into and perform all its obligations under this Agreement. The execution, delivery and performance of this Agreement by the Investor will not violate any other agreement relating to the Investor Securities to which the Investor is a party, including, without limitation, any voting agreement, shareholders' agreement, partnership agreement or voting trust. This Agreement has been duly authorized and duly and validly executed and delivered by the Investor and constitutes a valid and binding agreement of the Investor, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. Section 2. Representations, Warranties and Acknowledgments of the ------------------------------------------------------ Stockholder. The Stockholder hereby represents, warrants and acknowledges to the - ----------- Investor, as follows: 2.1 Ownership of Securities. The Stockholder is the record and beneficial ----------------------- owner of the number of shares of Class A Common Stock, par value $0.01 per share, of the Company (the "Class A Common Stock") and Common Stock set forth on the signature page to this Agreement (collectively, the "Stockholder Securities"). The Stockholder does not beneficially or of record own any securities of the Company on the date hereof other than the Stockholder Securities. The Stockholder has sole voting power, sole power to issue instructions with respect to the voting and sole power of disposition, in each case with respect to all of the Stockholder Securities. 2.2 Power; Binding Agreement. The Stockholder has the legal capacity, ------------------------ power and authority to enter into and perform all his obligations under this Agreement. The execution, delivery and performance of this Agreement by the Stockholder will not violate any other agreement relating to the Stockholder Securities to which the Stockholder is a party, including, without limitation, any voting agreement, shareholders' agreement, partnership agreement or voting trust. This Agreement has been duly authorized and duly and validly executed and delivered by the Stockholder and constitutes a valid and binding agreement of the Stockholder, enforceable against him in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. Section 3. Agreement to Vote Investor Securities. Until the first to ------------------------------------- occur of (x) the first anniversary of the date of the Closing and (y) the date on which the Investor Securities are exchanged in full for shares of Class B Common Stock, par value $0.01 per share, of the Company ("Class B Common Stock") in accordance with the Lock-up, Registration Rights and Exchange Agreement, except as provided in the following sentence and subject to Stockholder's compliance with his obligations herein, the Investor shall, at any meeting of the stockholders of the Company or in any written consent in lieu thereof, vote the Investor Securities in the same manner as the Stockholder votes the Stockholder Securities, as notified by Stockholder to the Investor not less than two Business Days prior to the date of such stockholder meeting or action by written consent. Notwithstanding the foregoing, without regard to the manner in which the Stockholder votes the Stockholder Securities, (a) Investor shall be entitled to vote the Investor Securities in favor of, or give its written consent to, an amendment to the 2 Company's Restated Certificate of Incorporation substantially in the form annexed as Exhibit A to the Lock-up, Registration Rights and Exchange Agreement, (the "Charter Amendment"), (b) Investor shall be entitled to vote the Investor Securities for or against or abstain from voting, or give or withhold its consent, in its sole discretion with respect to (i) any proposed amendment to the Company's Restated Certificate of Incorporation, other than the Charter Amendment, that would alter or change the powers, preferences or special rights of the Common Stock or Class B Common Stock so as to affect them adversely, or that would establish different terms for the Class B Common Stock or change the powers, preferences or special rights of the Common Stock or Class B Common Stock (collectively with the Class A Common Stock, the "Common Shares") relative to any other class of Common Shares from that contemplated by the Restated Certificate of Incorporation of the Company as in effect on the date of the Subscription Agreement, as proposed to be amended by the Charter Amendment, and (ii) any proposed reclassification of any shares of capital stock of the Company into shares having any preference or priority as to dividends or upon liquidation superior to that of the Common Stock and/or Class B Common Stock, other than capital stock so preferred as to dividends or upon liquidation prior to such reclassification, and (c) Investor shall be entitled to vote or abstain from voting the Investor Securities, or give or withhold its written consent, in each case in the same proportion (by voting power) as the other Common Shares with respect to (i) any proposed consolidation, merger, binding share exchange or similar transaction involving the Company in which the Company is not the surviving or resulting entity, or the Class A Common Stock, the Common Stock and/or the Class B Common Stock is changed or reclassified or the holders of Common Shares immediately prior to such transaction own less than 50% of the Common Shares immediately following consummation of such transaction, (ii) any conveyance of all or substantially all of the consolidated assets of the Company to any other Person, or (iii) the liquidation or dissolution of the Company. Section 4. Agreement to Vote Stockholder Securities. ---------------------------------------- (a) For so long as the members of the Liberty Group in the aggregate own any combination of shares of Common Stock and Class B Common Stock that, taken together, equal by number at least 50% of the number of Investor Securities or, following the exchange thereof for Class B Common Stock, 50% of the number of shares of Class B Common Stock issued in exchange for the Investor Securities (in each case, as appropriately adjusted to reflect the effect of stock splits, reverse stock splits, stock dividends and other similar events affecting the Common Stock or the Class B Common Stock), Investor shall be entitled to nominate a person to serve as a director on the Company's Board of Directors (the "Investor Director") and the Stockholder shall vote (or give its written consent with respect to) or cause to be voted all of the Stockholder Securities in favor of the election of the Investor Director. Subject to applicable regulatory constraints, the Investor will nominate the Chairman of the Board or the Chief Executive Officer of Investor as the Investor Director. Once the members of the Liberty 3 Group no longer hold a majority of the Investor Securities, the Investor shall use its reasonable best efforts to secure the immediate resignation of the Investor Director. (b) Stockholder further agrees that until Investor is relieved of its obligations under Section 3 above and Sections 2.9 and 2.12 of the Lock-up, Registration Rights and Exchange Agreement, Stockholder will vote or cause to be voted (or give his written consent with respect to) all of the Stockholder Securities in favor of the Charter Amendment and, if requested by the Investor, against any other proposed amendment to the Company's Restated Certificate of Incorporation that would establish different terms for the Class B Common Stock or relative powers, preferences and special rights for any of the Class A Common Stock, Common Stock or Class B Common Stock than those contemplated by the Charter Amendment. Section 5. Fiduciary Duties. Notwithstanding anything in this ---------------- Agreement to the contrary, the covenants and agreements set forth herein shall not prevent the Stockholder or the Investor Director, in their respective capacities as members of the Company's Board of Directors, from taking any action which such director shall deem to be required by his fiduciary duties to the Company while acting in such person's capacity as a director of the Company. Section 6. Successors and Assigns. This Agreement may not be assigned ---------------------- by the Investor or the Stockholder without the prior written consent of the other party hereto and the attempted or purported assignment of this Agreement without such consent shall be void; provided, however, that the Investor may, -------- ------- without written consent of the Stockholder, assign its rights and obligations hereunder in whole or in part to any other member of the Liberty Group to which it transfers Investor Securities (provided that no such assignment shall relieve -------- the Investor of its responsibility for the performance of the obligations hereunder for so long as it holds any Investor Securities). This Agreement shall be binding upon and inure to the benefit of the parties hereto and, in the case of Investor, its successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or, in the case of Investor, its successors and permitted assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. Section 7. Governing Law; Submission to Jurisdiction. This Agreement ----------------------------------------- shall be governed by and construed in accordance with the internal laws of the State of New York. Each of the Stockholder and the Investor hereby submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement and the transactions contemplated hereby. Each of the Stockholder and the Investor irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the 4 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. Section 8. Counterparts. This Agreement may be executed in ------------ counterparts, each of which shall be deemed an original, and all of which together shall be deemed to constitute one and the same instrument. Section 9. Captions and Headings. The captions and headings used in --------------------- this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement. Section 10. Notices. Unless otherwise provided, any notice or other ------- communication required or permitted to be given or effected under this Agreement shall be in writing and shall be deemed effective upon personal or facsimile delivery to the party to be notified or one business day after deposit with an internationally recognized courier service, delivery fees prepaid, or three business days after deposit with the U.S. mail, return receipt requested, postage prepaid, and in each case, addressed to the party to be notified at the following respective addresses, or at such other addresses as may be designated by written notice; provided that any notice of change of address shall be deemed -------- effective only upon receipt: If to the Stockholder: Howard S. Jonas 520 Broad Street Newark, New Jersey 07102 Attn: Howard S. Jonas Fax: (201) 928-2885 with a copy to: Sullivan & Cromwell 125 Broad Street New York, New York 10004 Attn: Robert S. Risoleo Fax: (212) 558-1600 5 If to the Investor: Liberty Media Corporation 9197 South Peoria Street Englewood, Colorado 80112 Attn: Legal Department Telephone: (720) 875-5400 Fax: (720) 875-5382 with a copy to: Baker Botts L.L.P. 599 Lexington Avenue New York, New York 10022 Attn: Elizabeth M. Markowski Telephone: (212) 705-5000 Fax: (212) 705-5125 Section 11. Amendments and Waivers. All terms of this Agreement may be ---------------------- amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of each of the Stockholder and the Investor. Any amendment or waiver effected in accordance with this Section 11 shall be binding upon each holder of any Investor Securities and Stockholder Securities at the time outstanding, each future holder of such Investor Securities and Stockholder Securities, and the other parties to this Agreement. Section 12. Severability. If one or more provisions of this Agreement ------------ are held to be unenforceable under applicable law, such provisions shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. Section 13. Entire Agreement. This Agreement (together with the ---------------- agreements referred to herein) constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and discussions between them, and all documents delivered between them, with respect to such subject matter. Section 14. Specific Performance. The parties hereto agree that -------------------- irreparable harm would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions 6 hereof, this being in addition to any other remedy to which they are entitled at law or in equity. Section 15. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES ITS -------------------- RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION 16 HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS SHALL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL (WITHOUT A JURY) BY THE COURT. [Signatures on the following page.] 7 IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first above written. /s/ Howard S. Jonas ------------------------------------ Howard S. Jonas 9,969,733 Shares of Class A Stock 951,605 Shares of Common Stock LIBERTY MEDIA CORPORATION By: /s/ Charles Y. Tanabe --------------------------------- Name: Charles Y. Tanabe Title: Senior Vice President -----END PRIVACY-ENHANCED MESSAGE-----