Exhibit 10.5

 

CONFIDENTIAL

EXECUTION VERSION

 

SETTLEMENT AGREEMENT AND RELEASE

 

This Settlement Agreement and Release (this “Agreement ”) is made this 24th day
of October, 2017, by and among Straight Path Communications Inc. (“Straight
Path”), IDT Corporation (“IDT”), PR-SP IP Holdings LLC (“Assignee”), and
Straight Path IP Group, Inc. (“SPIP”). Each of Straight Path, IDT, Assignee and
SPIP is a “Party” under this Agreement, and together they constitute the
“Parties.”

 

WHEREAS, on July 31, 2013, IDT and Straight Path entered into a Separation and
Distribution Agreement (the “Separation Agreement”), to effect a separation of
Straight Path and IDT (the “Spinoff”), which provides in Article VI thereof
that, in certain circumstances, IDT shall indemnify Straight Path and its
subsidiaries for certain claims, and in certain other circumstances, Straight
Path shall indemnify IDT and its subsidiaries for certain other claims.

 

WHEREAS, on January 11, 2017, the Enforcement Bureau of the Federal
Communications Commission (the “FCC”) entered into a Consent Decree with
Straight Path and Straight Path Spectrum, LLC (“SPS LLC”) to resolve an FCC
investigation into allegations that Straight Path and SPS LLC violated the FCC’s
buildout and discontinuance rules in connection with certain SPS LLC licenses
(the “Consent Decree”). Among other things, the Consent Decree requires Straight
Path and SPS LLC to submit for cancellation certain of SPS LLC’s licenses and
pay the FCC certain civil penalties.

 

WHEREAS, on March 7, 2017, Straight Path and Charles Frischer, on behalf of the
Settlement Class (as defined therein), executed a Memorandum of Understanding
(the “MOU”) to settle claims asserted on behalf of a putative class against
Straight Path concerning allegations that Straight Path and SPS LLC violated the
FCC’s buildout and discontinuance rules in connection with certain SPS LLC
licenses (the “Securities Claims”).

 

WHEREAS, Straight Path advised IDT that it intended to assert a claim for
indemnification against IDT pursuant to the Separation Agreement for its (and
SPS LLC’s) losses (including the payment of civil penalties) arising from or
relating to the FCC investigation, the Consent Decree, the Securities Claims and
the MOU.

 

WHEREAS, IDT has denied that Straight Path has any basis to be indemnified by
IDT for its (or SPS LLC’s) losses arising from the FCC investigation, the
Consent Decree, the Securities Claims and the MOU because, among other reasons,
(i) the Separation Agreement does not provide for any indemnification to
Straight Path for losses relating to the operation of Straight Path’s business,
(ii) the conduct resulting in the Consent Decree was the result of Straight
Path’s own conduct, (iii) the asserted liabilities are not IDT liabilities under
the terms of the Separation Agreement, and (iv) Straight Path failed to follow
the procedure set forth in the Separation Agreement for any recovery thereunder.

 

WHEREAS, IDT advised Straight Path that it has incurred certain costs and may
incur further costs for which it believes it is entitled to be indemnified by
Straight Path under the Separation Agreement, and would seek to recover those
costs by filing counterclaims against Straight Path in the event Straight Path
were to commence litigation or arbitration against IDT.

 

  

 

WHEREAS, Straight Path has denied that IDT has any basis to be indemnified by
Straight Path for any costs it has incurred, or any basis to assert
counterclaims, because, among other reasons, (i) the Separation Agreement does
not provide for any indemnification to IDT for losses arising from conduct that
took place prior to the Spinoff; (ii) the conduct resulting in the Consent
Decree was the result of IDT’s own conduct; (iii) the asserted liabilities are
not Straight Path liabilities under the terms of the Separation Agreement, and
(iv) Straight Path correctly followed the procedure set forth in the Separation
Agreement for any recovery thereunder.

 

WHEREAS, considering the risks and uncertainties associated with litigation and
arbitration, and considering the potentially substantial costs of any such
proceeding, the Parties have determined that it is in the best interests of IDT,
IDT’s stockholders, Straight Path and Straight Path’s stockholders for the
Parties to fully and finally settle this dispute, on and subject to the terms
and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements contained herein, the receipt and sufficiency of which is hereby
acknowledged, and the payment and releases granted herein, and intending to be
legally bound hereby, the Parties hereby agree as follows:

 

1. Mutual Release.

 

(a)In consideration of the covenants and agreements contained herein, Straight
Path, effective as of the Effective Date (as defined in Section 3), forever
releases, holds harmless, relinquishes, acquits, settles, and discharges IDT,
its affiliates and IDT’s and its affiliates’ members, consultants, affiliates,
officers, directors, employees, attorneys, agents, subsidiaries, general
partners, limited partners, partnerships, successors and assigns (in each case,
solely in such persons’ capacities as such with respect to IDT) from any and all
claims, rights, causes of action, suits, obligations, damages and liabilities,
known or unknown (including but not limited to claims, rights, causes of action,
suits, obligations, damages and liabilities under Article VI of the Separation
Agreement arising from, based on or relating to any FCC investigation (of either
Straight Path or IDT), the Consent Decree, the Securities Claims and the MOU),
any class action or derivative action or any other claim, threatened or
otherwise, known or unknown, arising from any action by IDT, its affiliates,
subsidiaries, officers or directors, provided that such release does not release
any party’s obligations under (i) the Tax Separation Agreement between IDT and
Straight Path, dated July 31, 2013, (ii) this Agreement, (iii)   the Exchange
Agreement (as defined in Section 4(a) below), (iv) the SPIP LLC Operating
Agreement (as defined in Section 4(c) below), (v) the Redemption Agreement (as
defined in Section 4(d) below), or (vi) the Stock Transfer Agreement (as defined
in Section 4(d) below).

 

 2 

 

(b)In consideration of the covenants and agreements contained herein, IDT,
effective as of the Effective Date, forever releases, holds harmless,
relinquishes, acquits, settles, and discharges Straight Path, its affiliates and
Straight Path’s and its affiliates’ members, consultants, affiliates, officers,
directors, employees, attorneys, agents, subsidiaries, general partners, limited
partners, partnerships, successors and assigns (in each case, solely in such
persons’ capacities as such with respect to Straight Path) from any and all
claims, rights, causes of action, suits, obligations, damages and liabilities,
known or unknown (including but not limited to claims, rights, causes of action,
suits, obligations, damages and liabilities under Article VI of the Separation
Agreement arising from, based on or relating to any FCC investigation (of either
Straight Path or IDT), the Consent Decree, the Securities Claims or the MOU),
any class action or derivative action or any other claim, threatened or
otherwise, known or unknown, arising from any action by Straight Path, its
affiliates, subsidiaries, officers or directors, provided that such release does
not release any party’s obligations under (i)   the Tax Separation Agreement
between IDT and Straight Path, dated July 31, 2013, (ii) this Agreement, (iii)
the Exchange Agreement (as defined in Section 4(a) below), (iv) the SPIP LLC
Operating Agreement (as defined in Section 4(c) below), (v) the Redemption
Agreement (as defined in Section 4(d) below), or (vi) the Stock Transfer
Agreement (as defined in Section 4(d) below).

 

(c)Straight Path and IDT acknowledge that the foregoing releases were separately
bargained for and are an essential element of this Agreement.

 

2. Validity of Release. Straight Path and IDT acknowledge that they may discover
facts that are additional to or different from those that they now know or
believe to be true, including, without limitation, facts regarding the FCC
investigation, Consent Decree, Securities Claims or the MOU. Nonetheless, except
as expressly set forth in this Agreement, it is the intent of Straight Path and
IDT to fully and finally compromise and settle all claims by and between
Straight Path and IDT. To effectuate that intention, the releases set forth
herein shall remain full and complete releases, even if additional or different
facts are discovered by Straight Path or IDT. After consultation with their
respective counsel, Straight Path and IDT expressly waive and relinquish, to the
fullest extent permitted by law, the provisions, rights, and benefits conferred
by any law of any state or territory of the United States, or principle of
common law, or international or foreign law, that is similar, comparable, or
equivalent to Section 1542 of the Civil Code of the State of California, which
provides as follows:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release which
if known by him or her must have materially affected his or her settlement with
the debtor.

  

3. Payment. In consideration of the releases set forth in Section 1, in full
settlement of any potential claims, and in full settlement of claims asserted
against IDT by Straight Path and claims asserted against Straight Path by IDT,
(i) contemporaneously with the execution of this Agreement, IDT shall pay in
cash to Straight Path (or, as determined by Straight Path, to Straight Path as
agent for certain of its subsidiaries) $6,000,000 for a transfer of shares and
$10,000,000 as a portion of the consideration being paid for settlement of the
claims (the “Settlement Payment”) – the aggregate amount in cash being
$16,000,000 (the “Aggregate Cash Payment”), (ii) in accordance with Section 4(d)
hereof, Straight Path shall transfer six hundred twenty-five (625) shares of
common stock of New SPIP (as defined in Section 4(a)) to IDT or, if directed by
IDT, to Assignee, and (iii) in accordance with Section 4(d) hereof, IDT or
Assignee, as the case may be, and Straight Path shall cause New SPIP to transfer
the Class B Interest (used herein as defined in the SPIP LLC Operating
Agreement) to Straight Path. For U.S. federal and state income tax purposes, (x)
$10,000,000 of the Aggregate Cash Payment made by IDT is in settlement of
various claims and shall be reported by IDT and Straight Path as a tax-free
contribution to capital by IDT to Straight Path effective prior to the Spinoff,
and (y) $6,000,000 of the Aggregate Cash Payment shall be allocated to the
transfer of shares of New SPIP stock by Straight Path to IDT or (at the
direction of IDT) Assignee, and, in each case, neither IDT, Straight Path nor
Assignee shall take any position inconsistent therewith on any tax return
(including any amendment or claim for refund) or in connection with any tax or
audit proceeding absent a final determination by a court to the contrary. The
Aggregate Cash Payment shall be made by IDT in immediately available funds to
the account shown on Exhibit A contemporaneously with the execution of this
Agreement. Subject to the terms and conditions of this Agreement, the transfer
of shares of New SPIP common stock by Straight Path to IDT or Assignee, as the
case may be, and the other transactions contemplated by this Agreement shall be
effective on the dates mutually determined by the Parties in accordance with
Section 4 below (the latest of such dates, the “Effective Date”).

 

4. Class B Interest and Other Consideration.

 

(a)Creation of New Company. Prior to the date hereof, Straight Path formed
Straight Path IP Group Holding Inc., a Delaware corporation (“New SPIP”), and
contemporaneously with the execution of this Agreement, each of Straight Path
and IDT or Assignee, as the case may be, shall transfer all of their shares of
SPIP stock, representing all of the issued and outstanding shares of capital
stock of SPIP, to New SPIP in exchange for an equivalent number of shares of New
SPIP common stock pursuant to that certain Exchange Agreement to be entered into
among Straight Path, IDT or Assignee, all holders of shares of SPIP stock other
than Straight Path and IDT or Assignee, as the case may be (the “Minority
Stockholders”) and New SPIP on the date hereof in the form attached hereto as
Exhibit B (the “Exchange Agreement”).

 

 3 

 

(b)Conversion of SPIP into a Limited Liability Company. Promptly following, and
as part of the same plan as, the formation of New SPIP and the transfers of SPIP
stock described in Section 4(a) hereof, SPIP shall, and New SPIP, Straight Path
and IDT or Assignee, as the case may be, shall cause SPIP to, convert from a
Delaware corporation to a Delaware limited liability company (“SPIP LLC”) and
New SPIP shall adopt the operating agreement attached hereto as Exhibit C as the
initial operating agreement of SPIP LLC. The Parties intend for (i) the exchange
of all the outstanding capital stock of SPIP for identical shares of capital
stock of New SPIP pursuant to the Exchange Agreement, taken together with such
conversion of SPIP, to qualify as a reorganization under Section 368(a)(1)(F) of
the Internal Revenue Code of 1986, as amended, (ii) SPIP LLC to initially be
classified as a disregarded entity and, following the transfer of the Class B
Interest, as described in Section 4(d) hereof, to be classified as a partnership
that is not taxable as a corporation, in each case for U.S. federal and state
income tax purposes, and (iii) this Agreement, together with the related
documents attached as Exhibits hereto, to constitute a plan of reorganization
within the meaning of Treasury Regulation § 1.368-2(g). For purposes of this
Agreement, the terms “SPIP” and “SPIP LLC” may be used interchangeably to refer
to the same entity and shall have no distinguishing effect on the rights and
obligations set forth herein with respect to “SPIP” or “SPIP LLC.”

 

(c)Adoption of Amended and Restated LLC Operating Agreement. On the business day
immediately following the conversion of SPIP to SPIP LLC as described in Section
4(b) hereof, SPIP LLC shall adopt the amended and restated operating agreement
(the “SPIP LLC Operating Agreement”) attached hereto as Exhibit D, providing
for, among other things, (i) the holding, assertion, defense and prosecution of
the “Current Patent Portfolio,” which shall consist of all patent rights,
including all ownership, license or other rights in the patents held by SPIP as
of the Effective Date as listed on Exhibit E and (ii) the payment of 22% of any
Net Recovery (as such term is defined in the SPIP LLC Operating Agreement) in
relation to the Current Patent Portfolio to the holder(s) of the Class B
Interest.

 

(d)Transfer of Class B Interest; Redemption of New SPIP Stock; Sale of New SPIP
to IDT. Promptly following the adoption of the SPIP LLC Operating Agreement, as
described in Section 4(c), each of Straight Path and IDT or Assignee, as the
case may be, shall cause New SPIP to transfer the Class B Interest to Straight
Path in redemption of 220 shares of New SPIP stock held by Straight Path
pursuant to that certain Redemption Agreement that shall be entered into between
New SPIP and Straight Path immediately after the adoption of the SPIP LLC
Operating Agreement in the form attached hereto as Exhibit F (the “Redemption
Agreement”). Straight Path shall promptly thereafter transfer six hundred
twenty-five (625) shares in New SPIP, which constitute all of the shares it then
holds in New SPIP, to IDT (or a designee or assignee of IDT) pursuant to that
certain Stock Transfer Agreement that shall be entered into between Straight
Path and IDT (or a designee or assignee of IDT) immediately after the adoption
of the SPIP LLC Operating Agreement in the form attached hereto as Exhibit G
(the “Stock Transfer Agreement”).

 

 4 

  

(e)Formation of Trust; Transfer of Class B Interest to the Trust.
Contemporaneously with the execution of this Agreement, Straight Path shall form
a Delaware statutory trust (the “Trust”), and shall, promptly following the
completion of the steps described in Section 4(d) hereof, transfer the Class B
Interest to the Trust. The independent directors of Straight Path as of the
Effective Date shall be named as the initial trustees of the Trust (in addition
to any administrative and/or Delaware trustees). If, for any reason, the
independent directors of Straight Path are not the initial trustees of the
Trust, any replacement trustees must be third parties with no involvement in
resolving the disputes underlying this Agreement and must be approved by IDT or
Assignee, such approval not to be unreasonably withheld, delayed or conditioned.
Straight Path shall contribute $4,500,000 to the Trust and thereafter Straight
Path and its affiliates shall have no obligation to fund any additional amounts
to or on behalf of the Trust. None of IDT, Assignee, SPIP or Straight Path and
its affiliates shall be liable for any expenses of the Trust. The Parties intend
for the beneficial interests in the Trust not to be treated or registered as
securities under federal or state securities laws, and Straight Path shall use
its best efforts to comply with any and all obligations arising under federal or
state securities laws and regulations or imposed by the Securities and Exchange
Commission in respect thereto.

 

5. Prosecution of Patent Claims. SPIP LLC, IDT (or Assignee if IDT shall
consummate an Assignment), and New SPIP, and their respective successors and
assigns shall use their commercially reasonable efforts to cause SPIP LLC to,
assert, defend and prosecute all patent rights (including all ownership, license
or other rights) in the Current Patent Portfolio, except to the extent that the
relevant patents or claims are held to be invalid or the lawsuits may not be
asserted in a commercially reasonable manner. IDT and Assignee agree that IDT,
Assignee or their respective affiliates will provide $20,000,000, in cash or
services to SPIP LLC (directly or through New SPIP) to be used for prosecuting
and asserting the Current Patent Portfolio, except if the relevant patents or
claims are held to be invalid or the lawsuits may not be asserted in a
commercially reasonable manner. As described in the LLC Operating Agreement,
SPIP LLC shall have the sole purpose of holding, asserting, defending, and
prosecuting the Current Patent Portfolio (and making the payments described
herein). The Parties agree that no more than $5,000,000 of the aforementioned
$20,000,000 shall be in the form of services provided directly by IDT, Assignee
or any of their respective affiliates, employees or executives, except with the
prior approval of the Trust, which approval shall not be unreasonably withheld,
delayed or conditioned.

 

 5 

 

6. Assignment of Interests by IDT. Subject to Section 12 hereof, IDT (or
Assignee) may assign its rights and interests in New SPIP to an affiliate of IDT
(or Assignee) or to a third party, except that neither IDT nor Assignee shall
assign, transfer or otherwise dispose of its rights or interests to a defendant
in any lawsuit in which SPIP LLC (or any successor or assign) is a plaintiff (or
to any party against which SPIP LLC otherwise asserts a claim) without the
Trust’s prior written consent, unless the entire amount of the consideration or
other value received in respect of such assignment, transfer or disposal is
credited as revenue in the calculation of Net Recovery for purposes of the Class
B Interest and IDT or Assignee, as the case may be, takes all actions necessary
to allow the amount of the Net Recovery attributable to such consideration or
other value to be distributed to the holders of Class B Interests in accordance
with the SPIP LLC Operating Agreement. In the event that IDT or Assignee assigns
its rights and interests in New SPIP to an assignee pursuant to this provision
(an “Assignment”), all of IDT’s or Assignee’s rights under Section 5 shall pass
in full to the relevant assignee and no longer belong to IDT or Assignee, as the
case may be.

 

7. Valid and Binding Obligation. Each Party acknowledges that this Agreement,
when executed and delivered by such Party, constitutes a valid and binding
obligation of such Party, enforceable in accordance with its terms.

 

8. Voluntary Execution of Agreement. This Agreement is executed voluntarily and
without any duress or undue influence on the part or behalf of the Parties
hereto, with the full intent of releasing all claims. Each of the Parties
represents and warrants that:

 

(a)it has read this Agreement;

 

(b)it has been represented in the preparation, negotiation, and execution of
this Agreement by independent legal counsel of its own choice;

 

(c)it has negotiated this Agreement at arm’s length and in good faith;

 

(d)it understands the terms and consequences of this Agreement and of the
releases this Agreement contains; and

 

(e)it is fully aware of the legal and binding effect of this Agreement.

 

9. Due Execution; Authority to Execute. Each Party represents that (i) all
corporate actions on the part of such Party that are necessary for the
authorization, execution, delivery and performance of this Agreement have been
taken; and (ii) the individual signing this Agreement on its behalf has the
authority to execute this Agreement, to grant the releases in this Agreement,
and to compromise and settle all of its claims and defenses relating to this
matter. Each person signing this Agreement represents that he or she has the
authority to sign on behalf of the Party shown above his or her name.

 

10. No Admission. Each Party understands and agrees that this Agreement
constitutes a compromise and settlement, and that neither the Settlement Payment
nor this Agreement, nor any of its terms and provisions, shall be deemed an
admission or concession of any liability, fault or wrongdoing, and that each
Party has entered into this Agreement solely for the purpose of avoiding
possible litigation or arbitration. This Agreement shall in no event be
construed or deemed (either expressly or implicitly) to be evidence of or an
admission or concession on the part of any Party with respect to any portion of
any claim, or any fault or liability or wrongdoing or damages of any nature
whatsoever, or any deficiency of any kind in any defense any Party may have.
Moreover, neither the Settlement Payment, nor this Agreement, nor any of its
terms and provisions can be used in any action or proceeding of any kind for any
purpose whatsoever except to the extent necessary to enforce this Agreement or
seek redress for any breach thereof.

 

 6 

 

11. Successors and Assigns; Third Party Beneficiaries. This Agreement and the
respective rights and obligations of the Parties hereunder will inure to the
benefit of, and be binding upon, their respective successors, assigns, heirs and
legal and personal representatives. The Parties hereby acknowledge and agree
that the Trust shall be considered a third party beneficiary for purposes of
this Agreement, with the right to enforce all of the rights of Straight Path and
SPIP under this Agreement.

 

12. Assignment. Except in connection with (i) an assignment by IDT of all of its
rights and interests in New SPIP to an affiliate of IDT or to a third party in
accordance with Section 6 hereof or (ii) an assignment by Assignee of all of its
rights and interests in New SPIP under Section 5 to an affiliate of Assignee or
to a third party in accordance with Section 6 hereof, no Party shall assign,
transfer or delegate its rights or obligations under this Agreement without the
prior written consent of the other Parties. In the event of any assignment,
transfer or delegation, the assigning, transferring or delegating Party shall
remain liable to the other Parties and shall not be relieved of any obligation
hereunder (except in the case of an Assignment by IDT to Assignee, in which case
IDT's rights and obligations under Section 5 shall pass in full to Assignee and
no longer belong to IDT).

 

13. Representations; Warranties and Covenants:

 

(a)Organization and Authority. Each of the Parties is duly organized and validly
existing under the laws of the jurisdiction of its formation with all necessary
corporate or similar organizational power and authority to execute and deliver
this Agreement and to carry out its obligations hereunder. The execution and
delivery of this Agreement by each Party and the performance of its obligations
hereunder have been duly authorized by all requisite corporate or similar action
on the part of each relevant Party. This Agreement has been duly executed and
delivered by each Party and is a valid and binding obligation of such Party,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or
other similar law relating to creditors’ rights generally and general principles
of equity.

 

(b)Capitalization of New SPIP. Straight Path represents and warrants that New
SPIP is a Delaware corporation, has been duly incorporated and validly formed
under the laws of the State of Delaware and has conducted no business as of the
date hereof, and has an authorized share capital of one thousand, five hundred
(1,500) shares of common stock, par value $0.01 per share (the “Common Stock”)
with one thousand (1,000) shares issued and outstanding. Straight Path further
represents and warrants that immediately after giving effect to the transactions
set forth herein there will be seven hundred and eighty (780) shares of Common
Stock of New SPIP issued and outstanding, of which six hundred and twenty-five
(625) shall be held by IDT or Assignee and one hundred and fifty-five (155)
shall be held in total by the Minority Stockholders.

 

 7 

 

(c)Ownership of Shares of SPIP. Straight Path represents and warrants that as of
the date of this Agreement it is the sole legal record and beneficial owner of
eight hundred and forty-five (845) shares of SPIP, representing 84.5% of the
share capital of SPIP, free and clear of all liens, and that to the knowledge of
Straight Path, there are no other stockholders in SPIP as of the date of this
Agreement (other than those stockholders listed on Exhibit H hereto). Straight
Path further represents and warrants that it has not transferred any of its
shares in SPIP after the execution of the term sheet dated April 9, 2017, except
in accordance with the terms of this Agreement.

 

(d)Absence of Liabilities of SPIP. Straight Path represents and warrants that
SPIP has no liabilities other than (i) total liabilities of $18,527,349.65
reflected or reserved against on the balance sheet of SPIP dated as of September
30, 2017 (the “Balance Sheet Date”), of which (A) $17,067,988.10 accounts for an
intercompany debt that will be capitalized immediately prior to the consummation
of the transactions described in Section 4(d) hereof; (B) $900,000 accounts for
an accrual to Mintz Levin that was paid prior to the Effective Date; (C)
$340,266.55 accounts for accounts payable that was paid prior to the Effective
Date and (D) $219,095 accounts for a state tax accrual that will come off the
balance sheet of SPIP after the Effective Date on October 31, 2017; (ii)
liabilities related to or arising under the fee agreements set forth on Exhibit
I hereto (the “Fee Agreements”); (iii) accounts payable incurred in the ordinary
course that has been invoiced to SPIP before the Effective Date but after, and
thus not reflected on, the September 30, 2017 balance sheet, all of which will
be paid in full prior to the Effective Date; and (iv) liabilities that are not
material to SPIP.

 

(e)No Approvals. Other than the consent of the Special Committee of Straight
Path, the consent of the directors of SPIP and the consent of the stockholders
of SPIP, no authorization, approval, or consent is required for entry into this
Agreement and the related transactions contemplated hereby.

 

(f)Ownership of Current Patent Portfolio. Straight Path represents and warrants
that SPIP is, and as of the Effective Date will be, the current owner of the
entire legal right, title and interest (free and clear of all charges,
mortgages, liens and security interests but subject to the terms of the Fee
Agreements) in the Current Patent Portfolio, including the patents and patent
applications set forth on Exhibit E hereto, and that the list is full, accurate
and complete as of the Effective Date.

 

 8 

 

(g)No Effect of Conversion of SPIP. Straight Path covenants that the conversion
of SPIP from a corporation into a limited liability company, as contemplated
under Section 4(b) hereto, shall be undertaken in accordance with Section 266 of
the Delaware General Corporation Law and Section 18-214 of the Delaware Limited
Liability Company Act, such that SPIP LLC shall be deemed to be the same entity
as SPIP and the conversion shall constitute a continuation of the existence of
SPIP in the form of a Delaware domestic limited liability company.

 

(h)Funding Obligation. Assignee represents and warrants that it has and shall at
all times have available funds in an amount sufficient to satisfy the obligation
of IDT, Assignee or their respective affiliates in Section 5 of this Agreement
to provide $20,000,000, in cash or services to SPIP LLC (directly or through New
SPIP), and Assignee agrees to provide such funding to SPIP LLC in accordance
with Section 5 of this Agreement and Section 8(a) of the SPIP LLC Operating
Agreement.

 

(i)No Other Representations or Warranties. Except for the representations and
warranties expressly made by each of the Parties hereto in this Agreement, the
Exchange Agreement, the Redemption Agreement, the Stock Transfer Agreement or
the Contribution Agreement, each of the Parties agrees and acknowledges that
none of the Parties hereto nor any of their respective affiliates or
representatives makes or has made any express or implied representation or
warranty whatsoever in connection with the transactions contemplated by this
Agreement.

 

14. Limitation of Liability.

 

(a)None of Straight Path or its affiliates shall have any liability to IDT,
Assignee or any of their respective affiliates as a result of or arising out of
a breach of or inaccuracy in any of the representations and warranties set forth
in this Agreement, the Exchange Agreement, the Redemption Agreement, the Stock
Transfer Agreement or the Contribution Agreement. Except in the case of fraud,
the Trust shall have no liability to IDT, Assignee or any of their respective
affiliates as a result of or arising out of a breach of or inaccuracy in any of
the representations and warranties set forth in Section 13 of this Agreement,
the Exchange Agreement, the Redemption Agreement, the Stock Transfer Agreement
or the Contribution Agreement. The sole and exclusive remedy of IDT, Assignee
and their respective affiliates for any loss suffered by any of them as a result
of or arising out of a breach of or inaccuracy in any such representations and
warranties set forth in this Agreement shall be limited to recourse under the
insurance policy attached as Exhibit J hereto (the “R&W Insurance Policy”), that
is binding from the date hereof. The Trust shall pay the initial premium, and
any related taxes, fees or other costs of the insurance carrier and broker
associated with establishing the R&W Insurance Policy.

 

 9 

 

(b)Notwithstanding anything to the contrary contained in this Agreement, none of
the parties hereto or their respective affiliates shall have any liability under
any provision of this Agreement for any punitive, incidental, consequential,
special or indirect damages.

 

15. Governing Law; Consent to Jurisdiction. This Agreement shall be governed by
and construed in accordance with the domestic laws of the State of Delaware
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Delaware or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Delaware. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR SUCH
PARTY AND SUCH PARTY’S PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF ANY
DELAWARE STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN
NEW CASTLE COUNTY, DELAWARE, AND ANY APPELLATE COURT HEARING APPEALS THEREFROM,
OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH PARTY HEREBY IRREVOCABLY
AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH DELAWARE STATE COURT OR, TO THE
EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH PARTY HEREBY AGREES THAT
SERVICE OF SUMMONS, COMPLAINT, OR OTHER PROCESS IN CONNECTION WITH ANY SUCH
PROCEEDING MAY BE MADE IN THE SAME MANNER SET FORTH IN SECTION 19 FOR PROVIDING
NOTICES, AND THAT SERVICE SO MADE SHALL BE AS EFFECTIVE AS IF PERSONALLY MADE IN
THE STATE OF DELAWARE. EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT SUCH PARTY MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY DELAWARE STATE OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW CASTLE COUNTY,
DELAWARE. EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

 

16. Entire Agreement; Counterparts. This Agreement, including the exhibits
hereto, represents the entire agreement and understanding among the Parties
concerning the subject matter hereof, and supersedes and replaces any and all
prior and contemporaneous written or oral agreements and understandings among
the Parties concerning the subject matter hereof, including, without limitation,
the term sheets dated April 6, 2017 and April 9, 2017. This Agreement may be
executed in counterparts, each of which shall be deemed an original and shall be
enforceable against the Parties actually executing such counterparts, and all of
which together shall constitute one instrument. A facsimile or a .pdf signature
shall be deemed an original for all purposes.

 

 10 

 

17. Modification of Agreement. This Agreement may not be altered, modified,
amended or extinguished, nor may any of its provisions be waived, except by a
writing that expressly identifies itself as an amendment to this Agreement and
is signed subsequent to the date of this instrument by duly authorized
representatives of the respective Parties. This Agreement shall not be binding
until all signatories have signed.

 

18. No Drafter. The Parties acknowledge and agree that they have participated in
the negotiation and preparation of this Agreement. Accordingly, the Parties
further agree that, when interpreting this Agreement, no presumption shall be
made, and no burden of proof imposed, based upon any assertion that one Party
has drafted this Agreement or its provisions.

 

19. Notices. All notices and other communications required or permitted by this
Agreement shall be in writing and shall be delivered by personal delivery, by
nationally recognized overnight courier service, by email, by first class mail
or by certified or registered mail, return receipt requested, addressed to any
Party at its address as set forth below its name of the signature page hereto.
Notices shall be deemed given one business day after sent, if sent by overnight
courier; when delivered and receipted for, if hand delivered; when received, if
sent by email or by first class mail; or when receipted for (or upon the date of
attempted delivery where delivery is refused or unclaimed), if sent by certified
or registered mail, return receipt requested.

 

20. Time is of the Essence. Time shall be of the essence for this Agreement with
respect to all aspects of each Party’s performance of its obligations under this
Agreement.

  

[Signature page follows]

 

 11 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in
several counterparts, and each is an original as of the first date written
above.

 

STRAIGHT PATH COMMUNICATIONS INC.

 

By: /s/ Yonatan Cantor     Name: Yonatan Cantor     Title: Secretary    
Address: 5300 Hickory Park Dr. #218 Glen Allen, VA 23059

 

IDT CORPORATION

 

By: /s/ Marcelo Fischer     Name: Marcelo Fischer     Title: SVP     Address:
520 Broad Street, Newark, NJ 07102

 

Assignee:

 

PR-SP IP HOLDINGS LLC

 

By: /s/ Howard Jonas     Name: Howard Jonas     Title:     Address:

 

STRAIGHT PATH IP GROUP, INC.

 

By: /s/ Yonatan Cantor     Name: Yonatan Cantor     Title: Secretary    
Address: 5300 Hickory Park Dr. #218 Glen Allen, VA 23059

 

 

12