[Execution Copy]

 

Exhibit 10.1

 

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AGREEMENT AND PLAN OF MERGER

 

dated as of

 

December 15, 2004

 

among

 

LMC ANIMAL PLANET, INC.,

 

LIBERTY N2P, INC.,

 

LIBERTY N2P II, INC., and

 

LIBERTY N2P III, INC.

 

and

 

IDT CORPORATION,

 

IDT LMC-N2P ACQUISITION I, INC.,

 

IDT LMC-N2P ACQUISITION II, INC., and

 

IDT LMC-N2P ACQUISITION III, INC.

and

 

solely with respect to Section 6.07,

the other signatories listed on the signature pages hereto

 

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TABLE OF CONTENTS

 

          Page

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ARTICLE I THE MERGERS

   2

Section 1.01

       The Mergers    2

Section 1.02

       Conversion of Shares    2

Section 1.03

       No Fractional Shares    3

Section 1.04

       Stock Transfer Books; Extinction of Stockholder Rights    3

Section 1.05

       Tax Effect    4

ARTICLE II THE SURVIVING ENTITIES; CLOSING

   4

Section 2.01

       Certificate of Incorporation    4

Section 2.02

       Bylaws    4

Section 2.03

       Officers    4

Section 2.04

       Closing    4

ARTICLE III CONDITIONS TO CLOSING

   6

Section 3.01

       Conditions to Each Party’s Obligation to Effect the Mergers    6

Section 3.02

       Conditions of LMC Animal Planet and the Seller Subsidiaries to Effect the
Mergers    7

Section 3.03

       Conditions of IDT Parent and each IDT Subsidiary to Effect the Mergers   
8

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF LMC ANIMAL PLANET

   8

Section 4.01

       Organization, Good Standing and Qualification    8

Section 4.02

       Capitalization; No Liens    8

Section 4.03

       Assets of Seller Subsidiaries    9

Section 4.04

       Corporate Authority    10

Section 4.05

       No Violation; Consents    11

Section 4.06

       Litigation    12

Section 4.07

       Unregistered Consideration Shares    12

Section 4.08

       Suitability of Investment    12

ARTICLE V REPRESENTATIONS AND WARRANTIES OF IDT PARENT AND IDT SUBSIDIARIES

   13

Section 5.01

       Organization, Good Standing and Qualification    13

Section 5.02

       Capitalization; No Liens    13

Section 5.03

       Corporate Authority    16

Section 5.04

       No Violation; Consents    17

Section 5.05

       IDT Reports; Financial Statements; Information Statement    17

Section 5.06

       Absence of Certain Changes    18

Section 5.07

       Litigation    18

Section 5.08

       Compliance with Laws    18

Section 5.09

       Permits and Licenses    19

Section 5.10

       Intellectual Property, etc.    19

Section 5.11

       Private Offering    19

 

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Section 5.12

       Business Combination Statutes    20

Section 5.13

       Conducted Own Diligence    20

ARTICLE VI COVENANTS

   20

Section 6.01

       NYSE Listing    20

Section 6.02

       Commercially Reasonable Efforts to Close; Preparation and Mailing of
Information Statement    20

Section 6.03

       Confidentiality    21

Section 6.04

       Transfer Limitations; 1933 Act Legend    23

Section 6.05

       Confidentiality of Agreement    23

Section 6.06

       Notification of Certain Matters    23

Section 6.07

       NTOP    23

Section 6.08

       Rule 144    24

Section 6.09

       Asset Maintenance    24

ARTICLE VII TAX MATTERS

   25

Section 7.01

       Tax Definitions    25

Section 7.02

       Tax Representations    26

Section 7.03

       Covenants    27

Section 7.04

       Tax Sharing    27

Section 7.05

       Cooperation On Tax Matters    27

Section 7.06

       Tax Indemnification    28

Section 7.07

       Purchase Price Adjustment    29

Section 7.08

       IDT Parent Representations, Warranties and Covenants    30

Section 7.09

       Transfer Taxes    31

Section 7.10

       Survival    32

ARTICLE VIII EMPLOYEE BENEFIT PLANS

   32

Section 8.01

       Employee Benefit Plans Representations    32

ARTICLE IX INDEMNIFICATION

   32

Section 9.01

       Indemnification by each of IDT Parent and each IDT Subsidiary    32

Section 9.02

       Indemnification by LMC Animal Planet    33

Section 9.03

       Procedure    33

Section 9.04

       Exclusivity of Remedy    34

Section 9.05

       Certain Limitations    34

Section 9.06

       Method of Payment for Certain Indemnification Payments    34

ARTICLE X TERMINATION

   35

Section 10.01

       Termination    35

ARTICLE XI MISCELLANEOUS

   35

Section 11.01

       Successors and Assigns    35

Section 11.02

       Survival    36

Section 11.03

       Governing Law    36

Section 11.04

       Counterparts; Effectiveness    36

Section 11.05

       Captions and Headings    36

Section 11.06

       Notices    36

Section 11.07

       Amendments and Waivers    38

Section 11.08

       Severability    38

Section 11.09

       Entire Agreement    38

Section 11.10

       Specific Enforcement    38

 

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Section 11.11

       Expenses    38

Section 11.12

       Further Assurances    38

Section 11.13

       Waiver of Jury Trial    39

Section 11.14

       Third Party Beneficiaries    39

 

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Disclosure Schedules

 

I. Seller Disclosure Schedules

 

A. Schedule 4.02(b)

 

  1. Section 2.1(a) of the NTOP ROFR Agreement restricts LMC’s ability to effect
direct or indirect Transfers (as defined therein) of its interests in NTOP.

 

  2. Section 9.2 of the NTOP LLC Agreement restricts LMC’s ability to effect
direct or indirect Transfers (as defined therein) of its interests in NTOP.

 

B. Schedule 4.02(d)

 

  1. Section 2.1(a) of the NTOP ROFR Agreement restricts LMC’s ability to effect
direct or indirect Transfers of its interests in NTOP.

 

  2. Section 9.2 of the NTOP LLC Agreement restricts LMC’s ability to effect
direct or indirect Transfers of its interests in NTOP.

 

C. Schedule 4.03(a)

 

  1. The NTOP Class A Units and NTOP Class B Units are subject to the
restrictions of transfer set forth in Section 2.1(a) of the NTOP ROFR Agreement
and Section 9.2 of the NTOP LLC Agreement.

 

  2. Liberty N2P and Liberty N2P II are parties to the NTOP ROFR Agreement and
the NTOP LLC Agreement, which agreements subject them to certain rights and
obligations as members of NTOP.

 

II. Purchaser Disclosure Schedules

 

A. Schedule 5.02(b)(i): Equity Rights and Other Equity-Related Agreements

 

[to come]

 

B. Schedule 5.02(b)(ii): Equity Rights and Other Equity-Related Agreements

 

[to come]

 

C. Schedule 5.07: Litigation

 

[to come]

 

-Sched. 1-

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AGREEMENT AND PLAN OF MERGER

 

AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of December 15, 2004,
by and among LMC Animal Planet, Inc., a Colorado corporation (“LMC Animal
Planet”), Liberty N2P, Inc., a Delaware corporation (“Liberty N2P”), Liberty N2P
II, Inc., a Delaware corporation (“Liberty N2P II”), Liberty N2P III, Inc., a
Delaware corporation (“Liberty N2P III,” and together with Liberty N2P and
Liberty N2P II, the “Seller Subsidiaries”), IDT Corporation, a Delaware
corporation (“IDT Parent”), IDT LMC-N2P Acquisition I, Inc., a Delaware
corporation (“IDT Sub 1”), IDT LMC-N2P Acquisition II, Inc., a Delaware
corporation (“IDT Sub 2”), and IDT LMC-N2P Acquisition III, Inc., a Delaware
corporation (“IDT Sub 3,” and together with IDT Sub 1 and IDT Sub 2, the “IDT
Subsidiaries”), and, solely with respect to Section 6.07, the other signatories
listed on the signature pages to this Agreement.

 

R E C I T A L S:

 

WHEREAS, each Seller Subsidiary is a direct, wholly owned subsidiary of LMC
Animal Planet, which is an indirect majority owned subsidiary of Liberty Media
Corporation, a Delaware corporation (“Liberty Parent”);

 

WHEREAS, each IDT Subsidiary is a direct wholly owned subsidiary of IDT Parent;

 

WHEREAS, the sole assets of Liberty N2P and Liberty N2P II consist of membership
interests in NTOP Holdings, LLC, a Delaware limited liability company (“NTOP”);

 

WHEREAS, the sole assets of NTOP consist of shares of Class A common stock, par
value $.01 per share (“Net2Phone Class A Common Stock”), of Net2Phone, Inc., a
Delaware corporation (“Net2Phone”), and membership interests in IT Stock, LLC, a
Delaware limited liability company, the sole assets of which consist of shares
of Net2Phone Class A Common Stock;

 

WHEREAS, the sole assets of Liberty N2P III consist of shares of common stock,
par value $.01 per share (“Net2Phone Common Stock”), of Net2Phone;

 

WHEREAS, IDT Parent desires to acquire each Seller Subsidiary by means of a
merger, and LMC Animal Planet desires to effect such mergers; and

 

WHEREAS, it is intended that, for U.S. federal income tax purposes, each such
merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the “Code”).

 

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NOW THEREFORE, the parties hereto agree as follows:

 

ARTICLE I

THE MERGERS

 

Section 1.01 The Mergers.

 

(a) At the Closing (as defined in Section 2.04(a) below), (i) IDT Sub 1 shall be
merged with and into Liberty N2P (“Merger 1”), (ii) IDT Sub 2 shall be merged
with and into Liberty N2P II (“Merger 2”) and (iii) IDT Sub 3 shall be merged
with and into Liberty N2P III (“Merger 3,” and each, a “Merger,” and
collectively, the “Mergers”), in each case in accordance with Section 251 of the
General Corporation Law of the State of Delaware (the “DGCL”) and in accordance
with the terms and conditions hereof, whereupon the separate existence of each
IDT Subsidiary shall cease in accordance with the DGCL, and (A) Liberty N2P
shall be the surviving entity of Merger 1 (“Surviving Entity 1”), (B) Liberty
N2P II shall be the surviving entity of Merger 2 (“Surviving Entity 2”) and (C)
Liberty N2P III shall be the surviving entity of Merger 3 (“Surviving Entity 3;”
and each, a “Surviving Entity,” and collectively, the “Surviving Entities”), in
each case in accordance with the DGCL.

 

(b) On the Closing Date (as defined in Section 2.04(a) below), each Seller
Subsidiary shall file a certificate of merger with the Secretary of State of
Delaware and make all other filings or recordings required by the DGCL in
connection with the Merger to which it is a party. Each Merger shall become
effective at such time (the “Effective Time”) as the corresponding certificate
of merger is duly filed with the Secretary of State of Delaware or at such later
time as is specified in such certificate of merger.

 

(c) From and after the Effective Time of each Merger, the Surviving Entity of
such Merger shall possess all the rights, powers, privileges and franchises and
be subject to all of the obligations, liabilities, restrictions and disabilities
of the Seller Subsidiary party to such Merger and the IDT Subsidiary party to
such Merger, all as provided under the DGCL, and thereafter neither LMC Animal
Planet nor any of its Affiliates (as defined in Section 7.01 below) shall have
any right, obligation or liability with respect to any Seller Subsidiary other
than as expressly set forth in this Agreement.

 

Section 1.02 Conversion of Shares.

 

(a) At the Effective Time of the Merger of Liberty N2P and IDT Sub 1, by virtue
of such Merger and without any action on the part of any of the parties hereto
or any holder of any securities of Liberty N2P or IDT Sub 1, (i) each share of
common stock of Liberty N2P outstanding immediately prior to such Effective Time
shall automatically be converted into the right to receive 3,268.9719 shares of
Class B Common Stock, par value $.01 per share, of IDT Parent (“IDT Parent Class
B Common Stock”), and (ii) each share of common stock of IDT Sub 1 outstanding
immediately prior to such Effective Time shall automatically be converted into
one share of common stock of Surviving Entity 1.

 

(b) At the Effective Time of the Merger of Liberty N2P II and IDT Sub 2, by
virtue of such Merger and without any action on the part of any of the parties
hereto or

 

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any holder of any securities of Liberty N2P II or IDT Sub 2, (i) each share of
common stock of Liberty N2P II outstanding immediately prior to such Effective
Time shall automatically be converted into the right to receive 236.3762 shares
of IDT Parent Class B Common Stock, and (ii) each share of common stock of IDT
Sub 2 outstanding immediately prior to such Effective Time shall automatically
be converted into one share of common stock of Surviving Entity 2.

 

(c) At the Effective Time of the Merger of Liberty N2P III and IDT Sub 3, by
virtue of such Merger and without any action on the part of any of the parties
hereto or any holder of any securities of Liberty N2P III or IDT Sub 3, (i) each
share of common stock of Liberty N2P III outstanding immediately prior to such
Effective Time shall automatically be converted into the right to receive
249.1313 shares of IDT Parent Class B Common Stock, and (ii) each share of
common stock of IDT Sub 3 outstanding immediately prior to such Effective Time
shall automatically be converted into one share of common stock of Surviving
Entity 3. The shares of IDT Parent Class B Common Stock issuable in the Mergers,
as may be adjusted pursuant to Section 1.02(d), are referred to herein as the
“Consideration Shares.”

 

(d) In the event of any dividend, distribution, recapitalization, stock split or
combination, or similar event with respect to or affecting the IDT Parent Class
B Common Stock after the date hereof and prior to the Effective Time of the
Mergers, the foregoing exchange ratios shall be appropriately adjusted.

 

(e) At the Effective Time of each Merger, all shares of common stock of Liberty
N2P, Liberty N2P II and Liberty N2P III, as applicable, that have been converted
into the right to receive shares of IDT Parent Class B Common Stock shall be
automatically canceled and shall cease to exist, and the holder of the common
stock of Liberty N2P, Liberty N2P II and Liberty N2P III shall cease to have any
rights with respect to such shares, other than the right to receive certificates
representing the Consideration Shares exchangeable therefor.

 

Section 1.03 No Fractional Shares. No certificates or scrip representing
fractional shares of IDT Parent Class B Common Stock shall be issued as a result
of any conversion provided for in Section 1.02. In lieu of the issuance of
fractional shares, in the event a holder of Seller Subsidiary capital stock
would be entitled to receive any fraction of a share of IDT Parent Class B
Common Stock pursuant to Section 1.02, such fraction shall be rounded up to the
nearest whole number, so that such holder will receive a whole number of shares
of IDT Parent Class B Common Stock; provided, however, that if more than one
certificate representing shares of any Seller Subsidiary capital stock shall be
surrendered for the account of the same holder, the number of shares of IDT
Parent Class B Common Stock for which certificates have been surrendered shall
be computed on the basis of the aggregate number of shares represented by the
certificates so surrendered with respect to such Seller Subsidiary.

 

Section 1.04 Stock Transfer Books; Extinction of Stockholder Rights. At the
Effective Time of each Merger, the stock transfer books of the Seller Subsidiary
party to such Merger shall be closed with respect to the shares of common stock
of such Seller

 

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Subsidiary outstanding immediately prior to such Effective Time. All
Consideration Shares issued upon surrender of a certificate representing shares
of common stock of any Seller Subsidiary in accordance with the terms hereof
shall be deemed to have been issued in full satisfaction of all rights
pertaining to that certificate and the shares of Seller Subsidiary common stock
represented thereby, and there shall be no further registration of transfers on
the stock transfer books of any Seller Subsidiary of shares of common stock of
such Seller Subsidiary outstanding immediately prior to the Effective Time of
the Merger to which such Seller Subsidiary is party.

 

Section 1.05 Tax Effect. The parties intend that each of the Mergers shall
qualify as a tax-free reorganization within the meaning of Section 368(a) of the
Code and that this Agreement shall be and hereby is adopted by each of the
parties as a plan of reorganization for purposes of Section 368 of the Code and
the Treasury Regulations (as defined in Section 7.01 below) thereunder.

 

ARTICLE II

THE SURVIVING ENTITIES; CLOSING

 

Section 2.01 Certificate of Incorporation. The certificate of incorporation of
each IDT Subsidiary in effect at the Effective Time of the Merger to which such
IDT Subsidiary is party shall be the certificate of incorporation of the
Surviving Entity of such Merger, until amended in accordance with the DGCL.

 

Section 2.02 Bylaws. The bylaws of each IDT Subsidiary in effect at the
Effective Time of the Merger to which such IDT Subsidiary is party shall be the
bylaws of the Surviving Entity of such Merger, until amended in accordance with
the DGCL.

 

Section 2.03 Officers and Directors. From and after the Effective Time of each
Merger, the officers and directors of each IDT Subsidiary immediately prior to
such Effective Time shall be the officers and directors of the corresponding
Surviving Entity, each to hold office in accordance with the bylaws of such
Surviving Entity or until his or her successor is designated in accordance
therewith.

 

Section 2.04 Closing.

 

(a) Time and Place. The consummation of the Mergers and the issuance and
delivery of the Consideration Shares by IDT Parent to LMC Animal Planet, in its
capacity as the sole stockholder of the Seller Subsidiaries (the “Closing”),
will take place at the offices of Baker Botts L.L.P., 30 Rockefeller Plaza, New
York, New York, at 5:00 p.m. on the Business Day that is three (3) Business Days
after the date on which the conditions set forth in Article 3 have been
fulfilled or, where permissible, waived, or at such other time and place as IDT
Parent and LMC Animal Planet may agree orally or in writing (the “Closing
Date”). For purposes of this Agreement, “Business Day” means a day other than a
Saturday, Sunday or day on which banks in the City of New York are authorized to
close.

 

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(b) Deliveries. At the Closing:

 

(i) LMC Animal Planet shall deliver to IDT Parent:

 

(1) a certificate of the secretary of LMC Animal Planet, dated the Closing Date,
certifying (A) the signature and incumbency of each officer of LMC Animal Planet
who signed this Agreement or the Registration Rights Agreement and (B) that all
necessary corporate and shareholder action required to be taken by the board of
directors and shareholders of LMC Animal Planet in connection with the
execution, delivery and performance of this Agreement and the Registration
Rights Agreement and the consummation of the transactions contemplated hereby
and thereby has been taken;

 

(2) a certificate of the secretary of each Seller Subsidiary, dated the Closing
Date, certifying (A) the signature and incumbency of each officer of such
company who signed this Agreement and (B) that all necessary corporate and
shareholder action required to be taken by the board of directors and
shareholders of such company in connection with the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby (including, without limitation, the Mergers) has been taken;

 

(3) a long form certificate of good standing of LMC Animal Planet from the
Colorado Secretary of State, as of a date not more than 3 days prior to the
Closing Date;

 

(4) a long form certificate of good standing of each Seller Subsidiary from the
Delaware Secretary of State, each as of a date not more than 3 days prior to the
Closing Date;

 

(5) the certificate of LMC Animal Planet described in Section 3.03(b);

 

(6) certificates representing all of the issued and outstanding shares of common
stock of each Seller Subsidiary;

 

(7) the stock transfer book of each Seller Subsidiary, if any;

 

(8) resignations from the directors and officers of each Seller Subsidiary; and

 

(9) a Registration Rights Agreement, in the form attached hereto as Annex A (the
“Registration Rights Agreement”), executed by LMC Animal Planet.

 

(ii) IDT Parent and the IDT Subsidiaries shall deliver to LMC Animal Planet:

 

(1) a certificate of the secretary of (A) each of IDT Parent and each IDT
Subsidiary, dated the Closing Date, certifying the signature and incumbency of
each officer of such company who signed this Agreement or the Registration
Rights Agreement and that all necessary corporate and shareholder action
required to be taken

 

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by the board of directors and shareholders of each of IDT Parent and each IDT
Subsidiary in connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
(including, without limitation, the Mergers) has been taken; and (B) IDT Parent,
dated the Closing Date, certifying that all necessary corporate and shareholder
action required to be taken by IDT Parent in connection with the execution,
delivery and performance of the Registration Rights Agreement and the
consummation of the transactions contemplated thereby has been taken;

 

(2) a long form certificate of good standing of each of IDT Parent and each IDT
Subsidiary from the Delaware Secretary of State, each as of a date not more than
3 days prior to the Closing Date;

 

(3) the certificates described in Section 3.02(d);

 

(4) duly executed stock certificates representing 3,754,479 Consideration Shares
(subject to adjustment as provided in Section 1.02(d)), duly executed and in
proper form, registered in the name of LMC Animal Planet in such denominations
as shall be provided by LMC Animal Planet to IDT Parent not less than 3 Business
Days prior to the Closing Date;

 

(5) the Registration Rights Agreement executed by IDT Parent; and

 

(6) a fully executed listing application authorizing the Consideration Shares
for listing on the New York Stock Exchange, Inc. (“NYSE”), subject only to
official notice of issuance.

 

ARTICLE III

CONDITIONS TO CLOSING

 

Section 3.01 Conditions to Each Party’s Obligation to Effect the Mergers. The
respective obligations of each party to consummate the Mergers are subject to
and conditioned on the satisfaction (or, to the extent permitted by Applicable
Law (as defined in Section 4.05(d) below), waiver) prior to or at the Closing,
of the following condition(s):

 

(a) No Restraints. No provision of Applicable Law shall be in effect which has
the effect of making the Mergers or any of the other transactions contemplated
hereby or by the Registration Rights Agreement illegal or shall otherwise
restrain or prohibit the consummation of the transactions contemplated hereby
(including, without limitation, the Mergers) and thereby.

 

(b) No Litigation. No court, governmental or other proceedings shall be pending
or, to the knowledge of the executive officers of any party hereto, threatened
against or affecting any party hereto that, if resolved adversely to any party
hereto, would have, individually or in the aggregate, the effect of preventing
or materially burdening or

 

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materially impairing the ability of any party hereto to consummate the
transactions contemplated hereby (including, without limitation, the Mergers).

 

(c) Shareholder Consent; Expiration of Waiting Period. The Shareholder Consent
(as defined in Section 5.02(e)) shall have been obtained and be in full force
and effect, and the twenty (20)-calendar waiting period (the “Waiting Period”)
prescribed by Rule 14c-2 under the Securities Act of 1933, as amended (the
“Securities Act”), with respect to the distribution of the related Information
Statement (as defined in Section 6.02(b) below) shall have expired, and no
action, suit, proceeding or investigations by the Securities and Exchange
Commission (the “SEC”) or the NYSE shall have been initiated and be continuing
or have been threatened and resolved adverse to IDT Parent, in respect of such
Shareholder Consent or Information Statement.

 

(d) HSR. Any waiting period (and any extension thereof) under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR
Act”), applicable to the transactions contemplated hereby shall have expired or
shall have been terminated.

 

Section 3.02 Conditions of LMC Animal Planet and the Seller Subsidiaries to
Effect the Mergers. The respective obligations of LMC Animal Planet and the
Seller Subsidiaries, or any of them, to consummate the Mergers are subject to
and conditioned upon the satisfaction (or, to the extent permitted by Applicable
Law, waiver by LMC Animal Planet) prior to or at the Closing, of each of the
following conditions:

 

(a) Representations and Warranties; Covenants. The representations and
warranties of each of IDT Parent and each IDT Subsidiary contained in this
Agreement shall, if specifically qualified by materiality, be true and correct
in all respects and, if not so qualified, be true and correct in all material
respects, in each case as of the Closing Date, except to the extent such
representations and warranties are expressly made as of only an earlier date (in
which case such representations and warranties qualified as to materiality shall
be true and correct in all respects, and those not so qualified shall be true
and correct in all material respects, on and as of such earlier date), and all
covenants and agreements of each of IDT Parent and each IDT Subsidiary contained
in this Agreement to be performed on or prior to the Closing Date shall have
been performed or complied with, as applicable, in all material respects on or
prior to the Closing Date.

 

(b) Registration Rights Agreement. IDT Parent shall have executed and delivered
the Registration Rights Agreement for execution by LMC Animal Planet.

 

(c) NYSE Listing. The Consideration Shares issuable in the Mergers shall have
been authorized for listing on the NYSE, subject only to official notice of
issuance, and the shareholder approval requirements of Section 312.03 of the
NYSE Listed Company Manual shall have been complied with.

 

(d) Compliance Certificate. LMC Animal Planet shall have received a certificate
from each of IDT Parent and each IDT Subsidiary, dated as of the Closing Date,
executed by an executive officer of IDT Parent and by an executive officer of
each

 

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IDT Subsidiary, respectively, stating that, to the knowledge of such person, the
conditions set forth in Sections 3.01(c) and 3.02(a), (b), (c) and (e) have been
satisfied.

 

(e) No Material Adverse Effect. Since the date of this Agreement, there shall
have been no event, occurrence or circumstance which has had, or would
reasonably be expected to have, a Material Adverse Effect (as defined in Section
5.01 below).

 

Section 3.03 Conditions of IDT Parent and each IDT Subsidiary to Effect the
Mergers. The respective obligations of IDT Parent and the IDT Subsidiaries, or
any of them, to consummate the Mergers are subject to and conditioned upon the
satisfaction (or, to the extent permitted by Applicable Law, waiver by IDT
Parent) prior to or at the Closing, of the following conditions:

 

(a) Representations and Warranties; Covenants. The representations and
warranties of LMC Animal Planet contained in this Agreement shall, if
specifically qualified by materiality, be true and correct in all respects and,
if not so qualified, be true and correct in all material respects, in each case
as of the Closing Date, except to the extent such representations and warranties
are expressly made as of only an earlier date (in which case such
representations and warranties qualified as to materiality shall be true and
correct in all respects, and those not so qualified shall be true and correct in
all material respects, on and as of such earlier date), and all covenants and
agreements of each of LMC Animal Planet and each Seller Subsidiary contained in
this Agreement to be performed on or prior to the Closing Date shall have been
performed or complied with, as applicable, in all material respects on or prior
to the Closing Date.

 

(b) Compliance Certificate of LMC Animal Planet. IDT Parent shall have received
a certificate from LMC Animal Planet, dated as of the Closing Date, executed by
an executive officer of LMC Animal Planet stating that, to the knowledge of such
executive officer, the condition set forth in Section 3.03(a) has been
satisfied.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF LMC ANIMAL PLANET

 

LMC Animal Planet represents and warrants to each of IDT Parent and each IDT
Subsidiary that:

 

Section 4.01 Organization, Good Standing and Qualification. Each of LMC Animal
Planet and each Seller Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to own, lease
and operate its properties and assets and to carry on its business as currently
conducted. No Seller Subsidiary is required to be qualified to do business as a
foreign corporation in any jurisdiction.

 

Section 4.02 Capitalization; No Liens.

 

(a) The authorized capital stock of each of Liberty N2P, Liberty N2P II and
Liberty N2P III consists solely of 10,000 shares of common stock, par value $.01
per share, 1,000 shares of which are issued and outstanding in the case of each
of Liberty

 

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N2P, Liberty N2P II and Liberty N2P III (collectively, the “Seller Subsidiaries
Stock”). LMC Animal Planet owns all of the issued and outstanding shares of
Seller Subsidiaries Stock.

 

(b) Other than this Agreement, there are (i) no outstanding options, warrants,
agreements, conversion rights, exchange rights, preemptive rights or other
rights (whether contingent or not) to subscribe for, purchase or acquire any
issued or unissued shares of common stock of any of the Seller Subsidiaries,
(ii) no outstanding stock appreciation, phantom stock, profit participation, or
similar rights with respect to any of the Seller Subsidiaries, (iii) no rights,
contracts, commitments or arrangements (contingent or otherwise) obligating any
Seller Subsidiary to either (A) redeem, purchase or otherwise acquire, or offer
to purchase, redeem or otherwise acquire, any outstanding shares of, or any
outstanding warrants or rights of any kind to acquire any shares of, or any
outstanding securities that are convertible into or exchangeable for any shares
of, common stock of such Seller Subsidiary, or (B) pay any dividend or make any
distribution in respect of any shares of, or any outstanding securities that are
convertible or exchangeable for any shares of, common stock of such Seller
Subsidiary, (iv) no agreements or arrangements under which any Seller Subsidiary
is obligated to register the sale of any of its securities under the Securities
Act, and (v) except as described on Schedule 4.02(b) of the Seller Disclosure
Schedules, no restrictions upon, or Contracts (as defined below) or
understandings of any Seller Subsidiary, or to the knowledge of the executive
officers of each of LMC Animal Planet and each Seller Subsidiary, Contracts or
understandings of any other person, with respect to, the voting or transfer of
any shares of common stock of such Seller Subsidiary. Except as described on
Schedule 4.02(b) of the Seller Disclosure Schedules, no party has any right of
first refusal, right of first offer, right of co-sale or other similar right
regarding the securities of any Seller Subsidiary. For purposes of this
Agreement, “Contract” means any written or oral agreement, lease, license,
contract, note, mortgage, indenture, arrangement or other obligation.

 

(c) LMC Animal Planet has delivered to IDT Parent true and complete copies of
the Certificate of Incorporation and Bylaws of each Seller Subsidiary, as in
effect on the date hereof and as will be in effect on the Closing Date.

 

(d) Except as described on Schedule 4.02(d) of the Seller Disclosure Schedules,
all shares of the Seller Subsidiaries Stock have been duly authorized and
validly issued and are fully paid and nonassessable and are owned free and clear
of any mortgage, pledge, lien, security interest, purchase option, call, claim,
restriction on transfer, voting restriction, charge or encumbrance of any kind
(each, a “Lien”).

 

Section 4.03 Assets of Seller Subsidiaries.

 

(a) Liberty N2P is the record owner of 33 Class A Membership Interests of NTOP
(“NTOP Class A Units”) and 97 Class B Membership Interests of NTOP (“NTOP Class
B Units”). Liberty N2P II is the record owner of 23 NTOP Class A Units. Liberty
N2P III is the record owner of 1,250,000 shares of Net2Phone Common Stock.
Except as described on Schedule 4.03(a) of the Seller Disclosure Schedule, the
Seller Subsidiaries own the foregoing securities (collectively, the
“Securities”) free and

 

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clear of any Lien. Other than the Securities, no Seller Subsidiary owns any
other asset, and, except for Taxes (as defined in Article 7 below), its
obligations under this Agreement and the obligations described on Schedule
4.03(a) of the Seller Disclosure Schedules, no Seller Subsidiary has any
liabilities. No Seller Subsidiary is a party to any Contract other than this
Agreement and the agreements listed on Schedule 4.03(a) of the Seller Disclosure
Schedules. No Seller Subsidiary has any employees or conducts any business other
than owning its respective Securities.

 

(b) Except as expressly set forth in Section 4.03(a), LMC Animal Planet makes no
representation or warranty with respect to the business, assets, capital
structure, results or operations, financial condition or prospects of, or any
other matter concerning, NTOP or Net2Phone.

 

Section 4.04 Corporate Authority.

 

(a) Each of LMC Animal Planet and each Seller Subsidiary has all requisite
corporate power and authority necessary in order to execute, deliver and perform
its obligations under this Agreement and to consummate the transactions
contemplated hereby (including, without limitation, the Mergers). LMC Animal
Planet has all requisite corporate power and authority necessary to execute,
deliver and perform its obligations under the Registration Rights Agreement and
to consummate the transactions contemplated thereby.

 

(b) The execution, delivery and performance by each of LMC Animal Planet and
each Seller Subsidiary of this Agreement and the consummation of the
transactions contemplated hereby (including, without limitation, the Mergers)
have been duly authorized by all necessary corporate and shareholder action on
the part of each of LMC Animal Planet and each Seller Subsidiary. The execution,
delivery and performance by LMC Animal Planet of the Registration Rights
Agreement and the consummation of the transactions contemplated thereby have
been duly authorized by all necessary corporate action on the part of LMC Animal
Planet.

 

(c) Each of LMC Animal Planet and each Seller Subsidiary has duly executed and
delivered this Agreement. This Agreement is a valid and binding agreement of
each of LMC Animal Planet and each Seller Subsidiary, 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 general equity principles.

 

(d) The Registration Rights Agreement, when executed and delivered by LMC Animal
Planet in accordance with this Agreement, will be duly executed and delivered by
LMC Animal Planet and will constitute a valid and binding agreement of LMC
Animal Planet, 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 general equity principles.

 

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Section 4.05 No Violation; Consents.

 

(a) The execution, delivery and performance by each of LMC Animal Planet and
each Seller Subsidiary of this Agreement and the consummation of the
transactions contemplated hereby (including, without limitation, the Mergers) by
each of LMC Animal Planet and each Seller Subsidiary, and the execution,
delivery and performance by LMC Animal Planet of the Registration Rights
Agreement and the consummation of the transactions contemplated thereby by LMC
Animal Planet, do not and will not contravene any Applicable Law (assuming the
expiration or termination of any applicable waiting period under the HSR Act),
except for any such contravention that would not, individually or in the
aggregate, reasonably be expected (i) as to any Seller Subsidiary, to have a
material adverse effect on its assets, (ii) as to each of LMC Animal Planet and
each Seller Subsidiary, to prevent or materially burden or materially impair its
ability to perform its obligations hereunder, or (iii) as to LMC Animal Planet,
to prevent or materially burden or materially impair its ability to perform its
obligations under the Registration Rights Agreement.

 

(b) The execution, delivery and performance of this Agreement by each of LMC
Animal Planet and each Seller Subsidiary (i) will not violate, result in a
breach of or constitute (with or without due notice or lapse of time or both) a
material default (or give rise to any right of termination, cancellation or
acceleration) under any Contract to which LMC Animal Planet or such Seller
Subsidiary is a party or by which its assets is subject (assuming that the
waiver and consent contemplated by Section 6.07(a) is valid, binding and
enforceable against each of IDT Parent and each IDT Member), and (ii) will not
conflict with or violate any provision of the Certificate of Incorporation or
Bylaws of LMC Animal Planet or such Seller Subsidiary, as in effect on the date
hereof and as will be in effect on the Closing Date.

 

(c) Except for (i) the waiver and consent contemplated by Section 6.07(a), (ii)
the making of any applicable filings under the HSR Act, (iii) the expiration or
termination of any applicable waiting periods under the HSR Act and (iv) the
filing of the certificates of merger contemplated by Section 1.01(b), no
consent, authorization or order of, or filing or registration with, any
Governmental Entity (as defined below) or other person is required to be
obtained or made by LMC Animal Planet or any Seller Subsidiary for the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby (including, without limitation, the Mergers) by
LMC Animal Planet and the Seller Subsidiaries, or by LMC Animal Planet for the
execution, delivery and performance of the Registration Rights Agreement or the
consummation of the transactions contemplated thereby, except where the failure
to obtain such consents, authorizations or orders, or make such filings or
registrations, would not, individually or in the aggregate, reasonably be
expected (A) as to any Seller Subsidiary, to have a material adverse effect on
its assets, (B) as to each of LMC Animal Planet and each Seller Subsidiary, to
prevent or materially burden or materially impair its ability to perform its
obligations hereunder, or (C) as to LMC Animal Planet, to prevent or materially
burden or materially impair its ability to perform its obligations under the
Registration Rights Agreement.

 

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(d) The term “Applicable Law” for purposes of this Agreement means (i) any
foreign, United States federal, state or local law, statute, rule, regulation,
order, writ, injunction, judgment, decree, arbitration award, agency
requirement, license or permit of any Governmental Entity, and (ii) any rule or
listing requirement of the NYSE. The term “Governmental Entity” for purposes of
this Agreement means any governmental or regulatory authority, agency,
commission, body or other governmental entity or court.

 

Section 4.06 Litigation. There are no outstanding judgments against or affecting
any of the Seller Subsidiaries, or proceedings pending or, to the knowledge of
the executive officers of each of LMC Animal Planet and each Seller Subsidiary,
threatened against or affecting any of the Seller Subsidiaries or any of their
respective assets.

 

Section 4.07 Unregistered Consideration Shares. LMC Animal Planet represents and
warrants that it is aware that (i) the offer and sale of the Consideration
Shares have not been registered under the Securities Act, (ii) the issuance of
the Consideration Shares pursuant to the Mergers is intended to be exempt from
registration under the Securities Act and the rules promulgated thereunder by
the SEC, (iii) the Consideration Shares cannot be offered, sold, assigned,
transferred or otherwise disposed of, other than pursuant to an effective
registration statement or an available exemption from registration, (iv) sales
or transfers of the Consideration Shares are further restricted by state
securities laws, and (v) the certificates for the Consideration Shares will bear
the legend referred to in Section 6.04.

 

Section 4.08 Suitability of Investment. LMC Animal Planet represents and
warrants that it:

 

(a) is an “accredited investor” within the meaning of Rule 501 of Regulation D
of the Securities Act as presently in effect and is acquiring the Consideration
Shares for its own account for investment purposes only and not with a view to
the resale or distribution thereof;

 

(b) will not, directly or indirectly, offer, sell, transfer, assign, exchange or
otherwise dispose of all or any part of the Consideration Shares, except in
accordance with applicable federal and state securities laws;

 

(c) has such knowledge and experience in financial, business and tax matters
that it is capable of evaluating the merits and risks relating to investment in
the Consideration Shares and making an investment decision with respect to IDT
Parent;

 

(d) has been given the opportunity to obtain information and documents relating
to IDT Parent and to ask questions of and receive answers from representatives
of IDT Parent concerning IDT Parent and the investment in Consideration Shares;

 

(e) has such knowledge and experience in financial or business matters that it
can, and it has, adequately analyzed the risks of an investment in the
Consideration Shares and it has determined the Consideration Shares are a
suitable investment for it and

 

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that it is able at this time, and in the foreseeable future, to bear the
economic risk of a total loss of its investment in the Consideration Shares; and

 

(f) is aware that there are substantial risks incident to an investment in the
Consideration Shares.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF

IDT PARENT AND IDT SUBSIDIARIES

 

Each of IDT Parent and each IDT Subsidiary jointly and severally represents and
warrants to each of LMC Animal Planet and each Seller Subsidiary that:

 

Section 5.01 Organization, Good Standing and Qualification. Each of IDT Parent
and each IDT Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate or similar power and authority to own, lease and operate its
properties and assets and to carry on its business as currently conducted. IDT
Parent is the sole stockholder of each IDT Subsidiary. Each of IDT Parent and
each IDT Subsidiary is qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the ownership, lease or operation
of its assets or properties or conduct of its business requires such
qualification, except where the failure to be so qualified or in good standing,
when taken together with all other such failure, is not reasonably likely to
have a Material Adverse Effect. For purposes of this Agreement, “Material
Adverse Effect” means (i) a material adverse effect on the financial condition,
prospects, properties, assets, business or results of operations of IDT Parent
and its subsidiaries taken as a whole; provided, however, that any such effect
resulting from any change that affects companies in the telecommunications,
Internet or Internet telephony industries generally shall not be considered to
be a Material Adverse Effect; or (ii) the effect of preventing or materially
burdening or materially impairing the ability of IDT Parent or any IDT
Subsidiary to perform its obligations under this Agreement or, in the case of
IDT Parent alone, to perform its obligations under the Registration Rights
Agreement.

 

Section 5.02 Capitalization; No Liens.

 

(a) The authorized capital stock of IDT Parent consists solely of (i)
100,000,000 shares of common stock, par value $.01 per share (“IDT Parent Common
Stock”), of which 18,845,933 shares are issued and outstanding and 6,228,927
shares are held in treasury, (ii) 35,000,000 shares of Class A common stock, par
value $.01 per share (“IDT Parent Class A Common Stock”), of which 9,816,988
shares are issued and outstanding and none are held in treasury, (iii)
100,000,000 shares of IDT Parent Class B Common Stock, of which 67,554,116
shares are issued and outstanding and 1,608,290 shares are held in treasury, and
10,000,000 shares of preferred stock, par value $.01 per share, none of which
are issued and outstanding and none are held in treasury.

 

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(b) Equity Rights and Other Equity-Related Agreements.

 

(i) Except as set forth on Schedule 5.02(b)(i) to the Purchaser Disclosure
Schedules or as specifically disclosed in the Current IDT Reports (as defined
below), there are no:

 

(1) outstanding options, warrants, agreements, conversion rights, exchange
rights, preemptive rights or other rights (whether contingent or not)
(collectively, “Equity Rights”) to subscribe for, purchase or acquire any issued
or unissued shares of capital stock of IDT Parent or any Significant Subsidiary
(as defined below);

 

(2) authorized or outstanding stock appreciation, phantom stock, profit
participation or similar rights with respect to IDT Parent or any Significant
Subsidiary (collectively, “Equity-Based Awards”); or

 

(3) securities or instruments containing antidilution or similar provisions that
will be triggered by the consummation of the Mergers (collectively,
“Antidilution Rights”);

 

provided, however, that the representations and warranties of IDT Parent and the
IDT Subsidiaries set forth in this Section 5.02(b)(i) shall not be breached by
the existence of any Equity Rights, Equity-Based Awards or Antidilution Rights,
the existence of which would otherwise constitute a breach of this Section
5.02(b)(i) (collectively, “Undisclosed Rights”), if the exercise of all such
Undisclosed Rights as of immediately prior to the Effective Time of each Merger
(whether or not then immediately exercisable) could not, in the aggregate,
result in (x) the issuance of capital stock (or payment of other consideration
based on the value of capital stock) representing more than 3% (by value or
voting power) of the capital stock of IDT Parent then outstanding, or (y) the
issuance of capital stock (or payment of other consideration based on the value
of capital stock) representing more than 1% (by value or voting power) of the
capital stock of any Significant Subsidiary then outstanding.

 

(ii) Except as set forth on Schedule 5.02(b)(ii) to the Purchaser Disclosure
Schedules or as specifically disclosed in the Current IDT Reports, there are no:

 

(1) rights, contracts, commitments or arrangements (contingent or otherwise)
obligating IDT Parent or any Significant Subsidiary to either (x) redeem,
purchase or otherwise acquire, or offer to purchase, redeem or otherwise
acquire, any outstanding shares of, or any outstanding warrants or rights of any
kind to acquire any shares of, or any outstanding securities that are
convertible into or exchangeable for any shares of, capital stock of IDT Parent
or any Significant Subsidiary, or (y) pay any dividend or make any distribution
in respect of any shares of, or any outstanding securities that are convertible
or exchangeable for any shares of, capital stock of IDT Parent or any
Significant Subsidiary;

 

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(2) agreements or arrangements under which IDT Parent or any Significant
Subsidiary is obligated to register the sale of any of its securities under the
Securities Act;

 

(3) restrictions upon, or Contracts or understandings of IDT Parent or any
Significant Subsidiary, or to the knowledge of the executive officers of each of
IDT Parent and each Significant Subsidiary, Contracts or understandings of any
other person, with respect to the voting or transfer of any shares of capital
stock of IDT Parent or any Significant Subsidiary;

 

(4) provisions of the Certificate of Incorporation or Bylaws of IDT Parent as
currently in effect, and no agreement to which IDT Parent or any subsidiary of
IDT Parent is a party or by which IDT Parent or any subsidiary of IDT Parent is
bound, that would (x) require the vote of the holders of more than a majority of
the voting power of the shares of IDT Parent’s issued and outstanding IDT Parent
Common Stock, IDT Parent Class A Common Stock and IDT Parent Class B Common
Stock, voting together as a single class, to take or prevent any corporate
action, other than those matters requiring a class vote under the DGCL, or (y)
entitle any party to nominate or elect any director of IDT Parent or require any
of IDT Parent’s stockholders to vote for any such nominee or other person as a
director of IDT Parent; or

 

(5) rights of first refusal, rights of first offer, rights of co-sale or other
similar rights regarding the securities of IDT Parent.

 

(iii) For purposes of this Agreement: (A) the term “Current IDT Reports” means
the report of IDT Parent on Form 10-K, as filed with the SEC on October 14,
2004, the definitive proxy statement of IDT Parent on Schedule 14A, as filed
with the SEC on November 3, 2004, and any reports of IDT Parent on Form 10-Q and
Form 8-K as filed with the SEC from the period commencing October 14, 2004 and
ending on the date of this Agreement; (B) the term “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; and (C) the term
“Significant Subsidiary” means each of IDT Telecom, Inc., IDT Media, Inc. and
IDT Entertainment, Inc.

 

(c) IDT Parent has delivered to LMC Animal Planet true and complete copies of
the Certificate of Incorporation and Bylaws of each of IDT Parent and each IDT
Subsidiary, as in effect on the date hereof and as will be in effect on the
Closing Date.

 

(d) All of the issued and outstanding shares of IDT Parent capital stock are
duly authorized, validly issued, fully paid and nonassessable. All outstanding
shares of the capital stock of each subsidiary of IDT Parent beneficially owned
by IDT Parent have been validly issued and are fully paid and nonassessable.

 

(e) The issuance of the Consideration Shares has been approved by a written
consent in lieu of a meeting of IDT Parent shareholders holding a majority of
the outstanding voting power of IDT Parent (the “Shareholder Consent”) in
accordance

 

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with Section 228 of the DGCL. The Shareholder Consent meets the shareholder
approval requirements of Section 312.03 of the NYSE Listed Company Manual.

 

(f) Upon delivery in accordance with the terms of this Agreement and the
Mergers, the Consideration Shares will be issued by IDT Parent from its
authorized but unissued shares of IDT Parent Class B Common Stock and will be
validly issued, fully paid and nonassessable and free of all Liens, other than
those created by this Agreement and the Registration Rights Agreement. Upon
delivery of the Consideration Shares in accordance with the terms of this
Agreement and the Mergers, LMC Animal Planet will receive good title to all of
the Consideration Shares, free and clear of any preemptive or similar rights.
Each of the Consideration Shares, when issued, will be issued in compliance with
the requirements of the Securities Act (subject to the accuracy of the
representations and warranties of LMC Animal Planet set forth in Sections 4.07
and 4.08), the NYSE and applicable state securities laws or exemptions
therefrom.

 

Section 5.03 Corporate Authority.

 

(a) Each of IDT Parent and each IDT Subsidiary has all requisite corporate power
and authority necessary in order to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby
(including, without limitation, the Mergers). IDT Parent has all requisite
corporate power and authority necessary to execute, deliver and perform its
obligations under the Registration Rights Agreement and to consummate the
transactions contemplated thereby.

 

(b) The execution, delivery and performance by each of IDT Parent and each IDT
Subsidiary of this Agreement and the consummation of the transactions
contemplated hereby (including, without limitation, the Mergers) have been duly
authorized by all necessary corporate and shareholder action on the part of each
of IDT Parent and each IDT Subsidiary. The execution, delivery and performance
by IDT Parent of the Registration Rights Agreement and the consummation of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action on the part of IDT Parent.

 

(c) Each of IDT Parent and each IDT Subsidiary has duly executed and delivered
this Agreement. This Agreement is a valid and binding agreement of each of IDT
Parent and each IDT Subsidiary, 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 general equity principles.

 

(d) The Registration Rights Agreement, when executed and delivered by IDT Parent
in accordance with this Agreement, will be duly executed and delivered by IDT
Parent and will constitute a valid and binding agreement of IDT Parent,
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 general
equity principles.

 

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Section 5.04 No Violation; Consents.

 

(a) The execution, delivery and performance by each of IDT Parent and each IDT
Subsidiary of this Agreement and the consummation of the transactions
contemplated hereby (including, without limitation, the Mergers) by each of IDT
Parent and each IDT Subsidiary, and the execution, delivery and performance by
IDT Parent of the Registration Rights Agreement and the consummation of the
transactions contemplated thereby by IDT Parent, do not and will not contravene
any Applicable Law (subject to the expiration of the Waiting Period and the
expiration or termination of any applicable waiting period under the HSR Act),
except for any such contravention that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The
execution, delivery and performance by each of IDT Parent and each IDT
Subsidiary of this Agreement and the consummation of the transactions
contemplated hereby (including, without limitation, the Mergers) by each of IDT
Parent and each IDT Subsidiary, and the execution, delivery and performance by
IDT Parent of the Registration Rights Agreement and the consummation of the
transactions contemplated thereby by IDT Parent, (i) will not (A) violate,
result in a breach of or constitute (with or without due notice or lapse of time
or both) a default (or give rise to any right of termination, cancellation or
acceleration) under any Contract to which IDT Parent or any IDT Subsidiary is a
party or by which its respective assets is subject, or (B) result in the
creation or imposition of any Lien upon any of the assets of IDT Parent or any
IDT Subsidiary, and (ii) will not conflict with or violate any provision of the
Certificate of Incorporation or Bylaws of IDT Parent or any IDT Subsidiary, each
as in effect on the date hereof and as will be in effect on the Closing Date.

 

(b) Except for (i) filings with the NYSE to list the Consideration Shares, (ii)
filings of the Information Statement with the SEC, (iii) filings and approvals
contemplated by the terms of the Registration Rights Agreement, (iv) the making
of any applicable filings under the HSR Act, (v) the expiration or termination
of any applicable waiting periods under the HSR Act and (vi) the filing of the
certificates of merger contemplated by Section 1.01(b), no consent,
authorization or order of, or filing or registration with, any Governmental
Entity or other person is required to be obtained or made by IDT Parent or any
IDT Subsidiary for the execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated hereby (including, without
limitation, the Mergers) by IDT Parent or the IDT Subsidiaries, or by IDT Parent
for the execution, delivery and performance of the Registration Rights Agreement
or the consummation of the transactions contemplated thereby by IDT Parent,
except where the failure to obtain such consents, authorizations or orders, or
make such filings or registrations, would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

Section 5.05 IDT Reports; Financial Statements; Information Statement.

 

(a) IDT Parent has timely filed all reports, registration statements and other
filings, together with any amendments or supplements required to be made with
respect thereto, that it has been required to file with the SEC under the
Securities Act and the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). As of the

 

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respective dates of their filing with the SEC, the IDT Reports complied in all
material respects with the applicable provisions of the Securities Act and the
Exchange Act and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. For purposes of this Agreement, “IDT Reports” means all
reports, registration statements and other filings made by IDT Parent with the
SEC since January 1, 2000 (including any amendments thereto, exhibits and
documents incorporated by reference therein).

 

(b) Each of the consolidated balance sheets included in or incorporated by
reference into the IDT Reports (including the related notes and schedules)
fairly presents, or will fairly present, the consolidated financial position of
IDT Parent and its subsidiaries as of the date of such balance sheet, and each
of the consolidated statements of income, changes in stockholders’ equity, and
cash flows included in or incorporated by reference into the IDT Reports
(including any related notes and schedules) fairly presents, or will fairly
present, the results of operations, cash flows, and changes in stockholders’
equity, as the case may be, of IDT Parent and its subsidiaries for the periods
set forth in such statements (subject, in the case of unaudited statements, to
notes and normal year-end audit adjustments that will not be material in amount
or effect), and in each case has been prepared in accordance with generally
accepted accounting principles (“GAAP”), consistently applied during the periods
involved, except as may be noted therein, and in compliance in all material
respects with the rules and regulations of the SEC.

 

(c) The Information Statement will be prepared in compliance with the
requirements of Regulation 14C promulgated under the Exchange Act and, when
filed with the SEC, when mailed to shareholders of IDT Parent and on the Closing
Date will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.

 

Section 5.06 Absence of Certain Changes. Except as otherwise expressly disclosed
in the Current IDT Reports, since October 14, 2004 there has not been any event
or occurrence or any change in the financial condition, properties, business or
results of operations of IDT Parent that has caused or could reasonably be
expected to have a Material Adverse Effect.

 

Section 5.07 Litigation. Except as otherwise expressly disclosed in the Current
IDT Reports or as otherwise set forth on Schedule 5.07 to the Purchaser
Disclosure Schedules, there are not any (a) outstanding judgments against or
affecting IDT Parent or any of its subsidiaries, or (b) proceedings pending or,
to the knowledge of the executive officers of each of IDT Parent and each IDT
Subsidiary, threatened against or affecting IDT Parent or any of its
subsidiaries that, if resolved adversely to IDT Parent or any of its
subsidiaries, would have, individually or in the aggregate, a Material Adverse
Effect.

 

Section 5.08 Compliance with Laws. Except as otherwise expressly disclosed in
the Current IDT Reports, the business of IDT Parent has not been, and is not
being,

 

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conducted in violation of any Applicable Law, except for violations or possible
violations that, individually or in the aggregate, would not be reasonably
expected to have a Material Adverse Effect. Except as otherwise expressly
disclosed in the Current IDT Reports, no investigation or review by any
Governmental Entity with respect to IDT Parent or any of its subsidiaries is
pending or, to the knowledge of the executive officers of each of IDT Parent and
each IDT Subsidiary, threatened, nor has any Governmental Entity indicated an
intention to conduct the same, except for those the outcome of which are not,
individually or in the aggregate, reasonably likely to have a Material Adverse
Effect.

 

Section 5.09 Permits and Licenses. IDT Parent and its subsidiaries have obtained
all governmental permits, licenses, franchises and authorizations required for
IDT Parent and its subsidiaries to conduct their respective businesses as
currently conducted, except as otherwise expressly disclosed in the Current IDT
Reports and except for those the failure of which to be obtained would not have
a Material Adverse Effect.

 

Section 5.10 Intellectual Property, etc. Except as otherwise expressly disclosed
in the Current IDT Reports, IDT Parent and its subsidiaries have taken all
reasonable efforts to ensure that they have, and have no reason to believe that
they do not have, all right, title and interest in, or a valid and binding
license to use, all IDT Intellectual Property (as hereinafter defined). IDT
Parent and its subsidiaries (i) have not defaulted in any material respect under
any license to use any IDT Intellectual Property, (ii) are not the subject of
any proceeding or litigation for infringement of any third party intellectual
property, except for the proceedings disclosed in IDT Reports filed and publicly
available prior to the date hereof, which proceedings IDT Parent believes are
without merit, and (iii) have no knowledge of circumstances that would be
reasonably expected to cause the loss or impairment of any IDT Intellectual
Property, other than a default, proceeding, litigation, loss or impairment that
is not having or would not be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect. IDT Parent and its subsidiaries have
from time to time received correspondence from third parties alleging that
intellectual property rights purportedly owned by said third parties have been
violated by IDT Parent or its subsidiaries. IDT Parent and its subsidiaries have
also received correspondence asserting that a license may be necessary to avoid
alleged violation of third party rights, none of which assertions or allegations
has had or would be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect, except as otherwise expressly disclosed in
the Current IDT Reports. For purposes of this Agreement, “IDT Intellectual
Property” means patents and patent rights, trademark and trademark rights,
tradenames and tradename rights, service marks and service mark rights,
copyrights and copyright rights, trade secret and trade secret rights, and other
intellectual property rights, and all pending applications for and registration
of any of the foregoing that are used in the conduct of the business of IDT
Parent or its subsidiaries as presently conducted.

 

Section 5.11 Private Offering. Based, in part, on LMC Animal Planet’s
representations in Sections 4.07 and 4.08, the offer and sale of the
Consideration Shares is exempt from the registration and prospectus delivery
requirements of the Securities

 

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Act. Neither IDT Parent, nor anyone acting on its behalf, has offered or sold or
will offer or sell any securities, or has taken or will take any other action
(including, without limitation, any offering of any securities of IDT Parent)
under circumstances that would require, under the Securities Act, the
integration of such offering with the offering and sale of the Consideration
Shares, that would subject the issuance of the Consideration Shares to the
registration provisions of the Securities Act.

 

Section 5.12 Business Combination Statutes. None of LMC Animal Planet, IDT
Parent or any of their respective “affiliates” and “associates” (as such terms
are defined in Section 203 of the DGCL or any comparable business combination
statute of any applicable jurisdiction) shall as a result of the execution of
this Agreement or consummation of the Mergers, be subject to any of the
restrictions of Section 203 of the DGCL, or any similar provisions of Applicable
Law with respect to IDT Parent or any of IDT Parent’s direct or indirect
subsidiaries, any of the shares of which are publicly traded.

 

Section 5.13 Conducted Own Diligence. Each of IDT Parent and each IDT Subsidiary
represents, warrants, acknowledges and agrees that it has conducted its own
investigation and due diligence of each of NTOP and Net2Phone and their
respective businesses, assets, capital structure, results or operations,
financial condition and prospects and in entering into this Agreement has not
relied on any statements or information, whether oral or written, made or
furnished by LMC Animal Planet or any of its Affiliates to IDT Parent or any of
its directors, officers, employees or other Representatives (as such term is
defined in Section 6.03) with respect to NTOP or Net2Phone (other than the
representations and warranties made by LMC Animal Planet in Section 4.03(a)).

 

ARTICLE VI

COVENANTS

 

Section 6.01 NYSE Listing. IDT Parent will use its commercially reasonable
efforts to cause the Consideration Shares to be listed on the NYSE upon the
issuance of such shares pursuant to the Mergers.

 

Section 6.02 Commercially Reasonable Efforts to Close; Preparation and Mailing
of Information Statement.

 

(a) (i) Upon the terms and subject to the conditions of this Agreement, the
parties will in good faith use all commercially reasonably efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable consistent with Applicable Law to consummate and
make effective in the most expeditious manner practicable the Mergers in
accordance with the terms of this Agreement, including, without limitation,
preparing and filing as promptly as practicable an appropriate Filing of a
Notification and Report Form (each, an “HSR Filing”) pursuant to the HSR Act and
taking all other actions necessary, proper or advisable to cause any applicable
waiting period under the HSR Act to expire or be terminated as soon as
practicable. The parties hereby agree to cooperate in all respects with each
other

 

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in connection with the preparation and submission of any HSR Filing, and, if any
objections are asserted with respect to the Mergers under the HSR Act, each of
the parties agrees to use its reasonable best efforts to resolve any such
objection; provided, however, that no party shall be required to take any action
requiring, or enter into any settlement, undertaking or other agreement with a
Governmental Authority that requires, such party to hold separate (including by
establishing a trust or otherwise) or sell or otherwise dispose of any of its
assets, businesses or interests.

 

(b) Without limiting the generality of the foregoing, as promptly as practicable
after the execution of this Agreement IDT Parent shall prepare and file with the
SEC a preliminary information statement on Schedule 14C relating to the
Shareholder Consent (together with any amendments thereof or supplements
thereto, the “Information Statement”). IDT Parent will notify LMC Animal Planet
promptly of the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments of or supplements to the
Information Statement and will supply LMC Animal Planet with any correspondence
between IDT Parent or its Representatives and the SEC or its staff with respect
to the Information Statement. IDT Parent shall cause the Information Statement
to comply in all material respects with all Applicable Law. IDT Parent promptly
will advise LMC Animal Planet when the Information Statement has been cleared
for distribution by the SEC (or the 10-calendar day waiting period prescribed by
Rule 14c-5(a) has expired without comment from the SEC or its staff). As
promptly as practicable after receipt of such clearance (or the expiration of
such waiting period), IDT Parent will mail the Information Statement to its
shareholders.

 

(c) If at any time following the mailing of the Information Statement to IDT
Parent’s shareholders, IDT Parent determines that any amendment or supplement is
necessary to prevent the Information Statement from containing any untrue
statement of a material fact or omitting to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading, IDT Parent shall take
such action as may be necessary to cure such untrue statement or omission and
ensure that the requirements of Regulation 14C and other Applicable Law are
complied with in order for the Shareholder Consent to be valid and effective as
of the Closing Date and for the Consideration Shares to be validly issued in
compliance with Applicable Law.

 

Section 6.03 Confidentiality. Unless otherwise agreed to in writing by the
parties hereto, each party hereto will, and will cause its Affiliates,
directors, officers, managers, employees and agents (such Affiliates and other
persons being collectively referred to as “Representatives”), to (i) keep all
Confidential Information of the other parties hereto confidential and not
disclose or reveal any such Confidential Information to any person other than
those Representatives who are participating in effecting the Mergers or who
otherwise need to know such Confidential Information, (ii) use such Confidential
Information only in connection with consummating the transactions contemplated
hereby and enforcing their respective rights hereunder, and (iii) not use
Confidential Information in any manner detrimental to the other parties hereto.
In the event that a party hereto (the “Disclosing Party”) is requested pursuant
to, or required by, Applicable Law or by legal process to disclose any
Confidential Information of

 

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another party hereto (a “Protected Party”), such Disclosing Party shall provide
the Protected Party with prompt notice of such request(s) so that the Protected
Party may seek an appropriate protective order. The obligations of the parties
hereunder with respect to Confidential Information that (a) is disclosed to a
third party with the Protected Party’s written approval, (b) is required to be
produced under order of a court of competent jurisdiction or other similar
requirements of a Governmental Entity, or (c) is required to be disclosed by
Applicable Law, will, subject in the case of clauses (b) and (c) above to the
disclosing party’s compliance with the preceding sentence, cease to the extent
of the disclosure so consented to or required, except to the extent otherwise
provided by the terms of such consent or covered by a protective order. If a
Disclosing Party uses a degree of care to prevent disclosure of the Confidential
Information that is at least as great as the care it normally takes to preserve
its own information of a similar nature, it will not be liable for any
disclosure that occurs despite the exercise of that degree of care, and in no
event will such Disclosing Party be liable for any indirect, punitive, special,
consequential or incidental damages unless such disclosure resulted from its
willful misconduct or gross negligence, in which event it will be liable in
damages for the lost profits of the Protected Party resulting directly and
solely from such disclosure. In the event this Agreement is terminated, each
party will, if so requested by another party hereto, promptly return or destroy
all of the Confidential Information of the requesting party, including all
copies, reproductions, summaries, analyses or extracts thereof or based thereon
in the possession of its Representatives; provided, however, that no party will
be required to return or cause to be returned summaries, analyses or extracts
prepared by it or its Representatives, but will destroy (or cause to be
destroyed) the same upon request of another party hereto. The confidentiality
obligations of the parties contained in this Section 6.03 shall survive until
the third anniversary of the date of this Agreement. For purposes of this
Section 6.03, “Confidential Information” with respect any party hereto means all
confidential and proprietary information about such party and its subsidiaries
that is furnished by it or its Representatives to another party hereto or its
Representatives, regardless of the manner in which it is furnished, in
connection with the transactions contemplated hereby. “Confidential Information”
does not include, however, information which (1) has been or in the future is
published or is now or in the future is otherwise in the public domain through
no fault of any party hereto or its Representatives, (2) was available to any
other party hereto or its Representatives on a non-confidential basis prior to
its disclosure by the disclosing party, (3) becomes available to another party
hereto or its Representatives on a non-confidential basis from a person other
than a party hereto or its Representatives, who is not otherwise bound by a
confidentiality agreement with the party to which the information relates, or
such party’s Representatives, or is not otherwise prohibited from transmitting
the information to another party or its Representatives, (4) is independently
developed by another party hereto or its Representatives through persons who
have not had, either directly or indirectly, access to or knowledge of such
information or (5) is required to be publicly disclosed by a party or its
Representatives pursuant to Applicable Laws.

 

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Section 6.04 Transfer Limitations; 1933 Act Legend.

 

(a) Each certificate representing Consideration Shares shall bear a legend
substantially in the following form:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
SUCH SHARES ARE REGISTERED UNDER THE ACT OR, EXCEPT AS OTHERWISE PERMITTED
PURSUANT TO RULE 144 UNDER THE ACT OR ANOTHER EXEMPTION FROM REGISTRATION UNDER
THE ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IDT CORPORATION IS
OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

(b) The foregoing legend shall be removed from the certificates representing any
Consideration Shares, at the request of the holder thereof, at such time as (i)
such shares are sold pursuant to an effective registration statement or pursuant
to Rule 144 under the Securities Act, (ii) such shares become eligible for
resale pursuant to Rule 144(k), or (iii) an opinion of counsel reasonably
satisfactory to IDT Parent is obtained to the effect that such legend is not
required.

 

Section 6.05 Confidentiality of Agreement. Unless otherwise required by
Applicable Law or as may be required in connection with the defense of a lawsuit
or other legal proceeding against a party, each party shall not disclose to any
other person (other than its Representatives) the existence or terms of this
Agreement.

 

Section 6.06 Notification of Certain Matters. Between the date hereof and the
Closing Date, each party will give prompt notice in writing to the other parties
of: (i) any information that indicates that any of its representations or
warranties contained herein was not true and correct as of the date hereof or
will not be true and correct as of the Closing Date, (ii) the occurrence of any
event which will result, or has a reasonable prospect of resulting in, the
failure of any condition specified in Article 3, and (iii) any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with the transactions contemplated by this
Agreement or by the Registration Rights Agreement or that such transactions
otherwise may violate the rights of or confer remedies upon such third party.

 

Section 6.07 NTOP.

 

(a) Each of IDT Parent, IDT Domestic-Union, LLC, a Delaware limited liability
company and a subsidiary of IDT Parent (“IDT D-U”), and IDT Investments, Inc., a
Nevada corporation and a subsidiary of IDT Parent (“IDT Investments” and
together with IDT D-U, the “IDT Members”), hereby consents to and waives any and
all rights it may have with respect to the transfer of Seller Subsidiaries Stock
in the Mergers and the resultant transfer of all of the indirect interests of
Liberty Parent and LMC Animal Planet in NTOP and Net2Phone, pursuant to (i) the
Second Amended and Restated Limited Liability Company Agreement of NTOP
Holdings, LLC, dated as of October 19, 2001 (the “NTOP LLC Agreement”),
including, without limitation, pursuant to Section 9.2 thereof, and (ii) the
NTOP Holdings, LLC Right of First Offer

 

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Agreement, dated as of January 6, 2003, as amended by Amendment No. 1 thereto,
dated as of December 1, 2004, by and among IDT Parent, the IDT Members, Liberty
Parent, Liberty N2P, Liberty N2P II and NTOP (the “NTOP ROFR Agreement”),
including, without limitation, pursuant to Section 2.1(a) thereof.

 

(b) Each of the parties to the NTOP LLC Agreement agrees to forebear from
exercising any rights such party may have pursuant to Section 10.1(a)(i) of NTOP
LLC Agreement and/or pursuant to the NTOP ROFR Agreement, in each case, until
the earlier of the consummation of the transactions contemplated hereby or the
termination of this Agreement.

 

Section 6.08 Rule 144. IDT Parent agrees to file all reports and any definitive
proxy or information statements required to be filed by it with the SEC pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, for so long as any
shares of IDT Parent Class B Common Stock received by LMC Animal Planet pursuant
to the terms of this Agreement (including, without limitation, pursuant to
Section 9.06) constitute “restricted securities” within the meaning of Rule 144
under the Securities Act.

 

Section 6.09 Asset Maintenance.

 

(a) LMC Animal Planet hereby agrees that, from the Closing through the earlier
to occur of (i) the third anniversary of the Closing Date or (ii) the assumption
by Liberty Parent of LMC Animal Planet’s indemnification obligations under
Section 9.02 with respect to the representations and warranties of LMC Animal
Planet contained in Section 4.02 and the first four sentences of Section 4.03(a)
(such period, the “Maintenance Period”), LMC Animal Planet will hold assets
having a fair market value at least equal to the lesser of (A) the then-fair
market value of the Consideration Shares (as the same shall be appropriately
adjusted to reflect any dividend, distribution, recapitalization, stock split or
combination, or similar event with respect to or affecting the IDT Parent Class
B Common Stock following the Closing Date), and (B) the product of $15.83
multiplied by the number of Consideration Shares received at the Closing.

 

(b) For purposes of this Section 6.09, the fair market value of an asset (other
than cash) means the price at which a willing seller would sell, and a willing
buyer would buy, such asset in an arms’-length auction transaction, having full
knowledge of the facts (including any liabilities relating to such asset);
provided, however, that the fair market value of any asset that consists of
marketable securities which are listed on the NYSE or quoted on the Nasdaq
National Market shall be equal to the product of (x) the number of such
marketable securities multiplied by (y) the weighted average (based on trading
volume) of the daily closing prices (as of 4:00 p.m. eastern time) per share or
unit of such marketable securities as reported on the NYSE or quoted on the
Nasdaq National Market, as applicable (and in either case, as published in the
Wall Street Journal, or if not published therein or incorrectly published
therein, in another authoritative source selected by LMC Animal Planet), for the
twenty consecutive trading days ending on the second trading day prior to the
date on which such fair market value determination is made.

 

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ARTICLE VII

TAX MATTERS

 

Section 7.01 Tax Definitions. The following terms, as used in this Article 7,
have the following meanings:

 

“Affiliate” means, with respect to any person or entity, any other person or
entity directly or indirectly controlling, controlled by or under common control
with the first such person or entity.

 

“Combined Tax” means any income or franchise Tax payable to any state, local or
foreign taxing jurisdiction with respect to any Return that includes any of the
Seller Subsidiaries and is filed on, or will be filed on, an affiliated,
consolidated, combined or unitary basis.

 

“Control” means the ownership of stock possessing at least 80% of the total
combined voting power of all classes of stock entitled to vote and at least 80%
of the total number of shares of each other class of stock of the corporation.

 

“Federal Tax” means any Tax with respect to any Return that includes any of the
Seller Subsidiaries and is filed on, or will be filed on, a consolidated basis
pursuant to Section 1501 of the Code.

 

“Final Determination” means (i) any final determination of liability in respect
of a Tax that, under Applicable Law, is not subject to further appeal, review or
modification through proceedings or otherwise (including the expiration of a
statute of limitations or a period for the filing of claims for refunds, amended
Returns or appeals from adverse determinations), including a “determination” as
defined in Section 1313(a) of the Code or execution of an Internal Revenue
Service Form 870AD or (ii) the payment of Tax by IDT Parent, LMC Animal Planet
or any of their respective Affiliates, whichever is responsible for payment of
such Tax under Applicable Law, with respect to any item disallowed or adjusted
by a Taxing Authority (as defined below), provided that such responsible party
determines that no action should be taken to recoup such payment and the other
party agrees.

 

“Pre-Closing Tax Period” means any Tax period ending on or before the Closing
Date; and, with respect to a Tax period that begins on or before the Closing
Date and ends thereafter, the portion of such Tax period ending on the Closing
Date.

 

“Returns” means all returns, statements, reports, and forms (including estimated
tax or information returns and reports) relating to, or required to be filed in
connection with, any Taxes.

 

“Tax” means (i) any tax, governmental fee or other like assessment or charge of
any kind whatsoever (including, but not limited to, withholding on amounts paid
to or by any person), together with any interest, penalty, addition to tax or
additional amount imposed by any Governmental Entity (a “Taxing Authority”)
responsible for the imposition of any such tax (domestic or foreign), and any
liability for any of the

 

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foregoing as transferee, (ii) in the case of any of the Seller Subsidiaries,
liability for the payment of any amount of the type described in clause (i) as a
result of having been before the Closing Date a member of an affiliated,
consolidated, combined or unitary group, and (iii) liability of any of the
Seller Subsidiaries for the payment of any amount as a result of being a party
to any Tax Sharing Agreement (other than this Agreement) before the Closing
Date.

 

“Tax Sharing Agreements” means all existing agreements or arrangements (whether
or not written) binding any of the Seller Subsidiaries that provide for the
allocation, apportionment, sharing or assignment of any Tax liability or
benefit.

 

“Treasury Regulations” means the regulations promulgated under the Code in
effect on the date hereof and the corresponding sections of any regulations
subsequently issued that amend or supersede such regulations.

 

Section 7.02 Tax Representations. LMC Animal Planet represents and warrants to
IDT Parent that:

 

(a) Filing and Payment. All material Returns required to be filed with any
Taxing Authority with respect to any Pre-Closing Tax Period by or on behalf of
any of the Seller Subsidiaries have, to the extent required to be filed on or
before the date hereof (taking into account any extension of time within which
to file), been filed when due in accordance with all Applicable Laws, and such
Returns were true and complete in all material respects. All material Taxes due
and payable by any of the Seller Subsidiaries have been timely paid, or withheld
and remitted to the appropriate Taxing Authority. There are no Liens on any of
the assets of any of the Seller Subsidiaries that arose in connection with any
failure (or alleged failure) to pay any Tax (except for Liens that arise by
operation of law for Taxes not yet due and payable).

 

(b) Procedure and Compliance. There is no claim, audit, action, suit, proceeding
or investigation now pending or threatened against or with respect to any of the
Seller Subsidiaries in respect of any Tax. All deficiencies or assessments
asserted against any of the Seller Subsidiaries by any Taxing Authority have
been paid or fully and finally settled.

 

(c) Consolidation and Similar Arrangements. None of the Seller Subsidiaries has
been a member of an affiliated, consolidated, combined or unitary group other
than one of which Liberty Parent was the common parent. None of the Seller
Subsidiaries has entered into any agreement or arrangement with any Taxing
Authority with regard to the Tax liability of any of the Seller Subsidiaries
affecting any Tax period for which the applicable statute of limitations, after
giving effect to extensions or waivers, has not expired.

 

(d) Statute of Limitations. None of the Seller Subsidiaries has waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.

 

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(e) Section 355 Matters. None of the Seller Subsidiaries has constituted either
a “distributing corporation” or a “controlled corporation” in a distribution of
stock qualifying for tax-free treatment under Section 355 of the Code (x) in the
two years prior to the date of this Agreement or (y) in a distribution which
could otherwise constitute part of a “plan” or “series of related transactions”
(within the meaning of Section 355(e) of the Code) in conjunction with the
transactions contemplated by this Agreement.

 

Section 7.03 Covenants.

 

(a) All Returns required to be filed by LMC Animal Planet or any of its
Affiliates on or after the Closing Date with respect to each of the Seller
Subsidiaries with respect to any Pre-Closing Tax Period (i) will be filed when
due in accordance with all Applicable Laws and (ii) will be true and complete in
all material respects.

 

(b) LMC Animal Planet shall cause Liberty Parent to include each of the Seller
Subsidiaries in its consolidated Federal Tax Return and in any Combined Tax
Return through the close of business on the Closing Date.

 

(c) Neither LMC Animal Planet nor any of its Affiliates will take any position
on any federal, state, local or foreign income or franchise Return, or take any
other Tax reporting position that is inconsistent with the treatment of each of
the Mergers as a reorganization within the meaning of Section 368(a) of the
Code, unless otherwise required by a Final Determination.

 

Section 7.04 Tax Sharing. Any and all existing Tax Sharing Agreements (other
than this Agreement) shall be terminated with respect to each of the Seller
Subsidiaries as of the Closing Date, and after the Closing Date, none of the
Seller Subsidiaries shall have any further rights or liabilities thereunder.

 

Section 7.05 Cooperation On Tax Matters.

 

(a) IDT Parent and LMC Animal Planet shall cooperate fully, as and to the extent
reasonably requested by the other party, in connection with the preparation and
filing of any Return, and any audit, litigation or other proceeding with respect
to Taxes. Such cooperation shall include the retention and (upon the other
party’s request) the provision of records and information which are reasonably
relevant to any such audit, litigation or other proceeding and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. IDT Parent and LMC Animal Planet
agree (i) to retain all books and records with respect to Tax matters pertinent
to each of the Seller Subsidiaries relating to any Pre-Closing Tax Period, and
to abide by all record retention agreements entered into with any Taxing
Authority, and (ii) to give the other party reasonable written notice prior to
destroying or discarding any such books and records and, if the other party so
requests, IDT Parent or LMC Animal Planet, as the case may be, shall allow the
other party to take possession of such books and records.

 

(b) IDT Parent and LMC Animal Planet further agree, upon request, to use all
reasonable efforts to obtain any certificate or other document from any
Governmental

 

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Entity or any other person as may be necessary to mitigate, reduce or eliminate
any Tax that could be imposed (including but not limited to with respect to the
transactions contemplated hereby).

 

Section 7.06 Tax Indemnification.

 

(a) LMC Animal Planet hereby indemnifies IDT Parent and its Affiliates (each a
“Purchaser Indemnitee”) against and agrees to hold each Purchaser Indemnitee
harmless from any (w) Tax of any of the Seller Subsidiaries described in clause
(i) of the definition of Tax related to a Pre-Closing Tax Period, (x) Tax
described in clause (ii) or (iii) of the definition of Tax, (y) Tax of any of
the Seller Subsidiaries resulting from a breach of the provisions of Section
7.02, Section 7.03 or Section 7.04 and (z) liabilities, costs, expenses
(including, without limitation, reasonable expenses of investigation and
attorneys’ fees and expenses), losses, damages, assessments, settlements or
judgments arising out of or incident to the imposition, assessment or assertion
of any Tax described in clause (w), (x) or (y) above, (the sum of clauses (w),
(x), (y) and (z) being referred to herein as a “Purchaser Loss”); provided,
however, that LMC Animal Planet shall not have any indemnity obligation under
this Section 7.06(a) in the event such Purchaser Loss results from a breach by
IDT Parent or any of its Affiliates of any of the representations and warranties
contained in Section 7.08(a) or the covenants contained in Section 7.08(b).

 

(b) For purposes of this Section 7.06, in the case of any Taxes that are imposed
on a periodic basis and are payable for a Tax period that includes (but does not
end on) the Closing Date, the portion of such Tax related to the portion of such
Tax period ending on and including the Closing Date shall (x) in the case of any
Taxes other than gross receipts, sales or use Taxes and Taxes based upon or
related to income, be deemed to be the amount of such Tax for the entire Tax
period multiplied by a fraction the numerator of which is the number of days in
the Tax period ending on and including the Closing Date and the denominator of
which is the number of days in the entire Tax period, and (y) in the case of any
Tax based upon or related to income and any gross receipts, sales or use Tax, be
deemed equal to the amount which would be payable if the relevant Tax period
ended on and included the Closing Date. All determinations necessary to give
effect to the allocation set forth in the foregoing clause (y) shall be made in
a manner consistent with prior practice of LMC Animal Planet.

 

(c) Not later than 5 days after receipt by LMC Animal Planet of written notice
from Purchaser Indemnitee stating that any Purchaser Loss has been incurred by a
Purchaser Indemnitee and the amount thereof and of the indemnity payment
requested, LMC Animal Planet shall discharge its obligation to indemnify the
Purchaser Indemnitee against such Purchaser Loss by paying to Purchaser
Indemnitee an amount equal to the amount of such Purchaser Loss. The payment by
a Purchaser Indemnitee of any Purchaser Loss shall not relieve LMC Animal Planet
of its obligations under this Section 7.06.

 

(d) Purchaser Indemnitee shall give prompt notice to LMC Animal Planet of any
Purchaser Loss or the assertion of any claim, or the commencement of any suit,

 

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action or proceeding in respect of which indemnity may be sought under this
Section 7.06 which Purchaser Indemnitee deems to be within the ambit of this
Section 7.06 (specifying with reasonable particularity the basis therefor) and
will give LMC Animal Planet such information with respect thereto as LMC Animal
Planet may reasonably request. LMC Animal Planet may, at its own expense,
participate in and upon notice to Purchaser Indemnitee, assume the defense of
any such suit, action or proceeding (including any Tax audit) in so far as it
relates to the Purchaser Loss; provided that (x) counsel for LMC Animal Planet
is reasonably satisfactory to Purchaser Indemnitee, (y) LMC Animal Planet shall
thereafter consult with Purchaser Indemnitee upon Purchaser Indemnitee’s
reasonable request for such consultation from time to time with respect to such
suit, action or proceeding (including any Tax audit) and (z) LMC Animal Planet
shall not, without Purchaser Indemnitee’s consent, agree to any settlement with
respect to any Purchaser Loss if such settlement could adversely affect the Tax
liability of Purchaser Indemnitee or any of its Affiliates. If LMC Animal Planet
assumes such defense, (i) Purchaser Indemnitee shall have the right (but not the
duty) to participate in the defense thereof and to employ counsel, at its own
expense, separate from the counsel employed by LMC Animal Planet and (ii) LMC
Animal Planet shall not assert that the Purchaser Loss, or any portion thereof,
with respect to which Purchaser Indemnitee seeks indemnification is not within
the ambit of this Section 7.06. If LMC Animal Planet elects not to assume such
defense, Purchaser Indemnitee may pay, compromise or contest the Purchaser Loss
at issue. LMC Animal Planet shall be liable for the reasonable fees and expenses
of counsel employed by Purchaser Indemnitee for any period during which LMC
Animal Planet has not assumed the defense thereof. Whether or not LMC Animal
Planet chooses to defend or prosecute any claim, all of the parties hereto shall
cooperate in the defense or prosecution thereof.

 

(e) LMC Animal Planet shall not be liable under this Section 7.06 with respect
to any Purchaser Loss resulting from a claim or demand the defense of which LMC
Animal Planet was not offered the opportunity to assume as provided under
Section 7.06(d) to the extent LMC Animal Planet’s liability under this Section
7.06 is materially adversely affected as a result thereof. No investigation by
IDT Parent or any of its Affiliates at or prior to the Closing Date shall
relieve LMC Animal Planet of any liability hereunder.

 

(f) Any claim of any Purchaser Indemnitee under this Section 7.06 may be made
and enforced by IDT Parent on behalf of such Purchaser Indemnitee.

 

Section 7.07 Purchase Price Adjustment. Any amount paid by LMC Animal Planet or
IDT Parent under this Article 7 or 9 will be treated as an adjustment to the
consideration delivered in the Mergers unless a Final Determination or change in
Applicable Law (including a revenue ruling or other similar pronouncement)
causes any such amount not to constitute an adjustment to the consideration
delivered in the Mergers for any applicable Tax purposes.

 

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Section 7.08 IDT Parent Representations, Warranties and Covenants.

 

(a) Representations and Warranties. IDT Parent represents and warrants to LMC
Animal Planet that:

 

(i) Each of the IDT Subsidiaries is a corporation for U.S. federal income tax
purposes and is wholly owned directly by IDT Parent.

 

(ii) IDT Parent and its Affiliates have no plan or intention to cause any of the
Surviving Entities to issue additional shares of their capital stock that would
result in IDT Parent losing Control of any of the Surviving Entities.

 

(iii) Each of the IDT Subsidiaries is a newly formed corporation formed solely
for the purpose of engaging in its respective Merger and has engaged in no
business activity or operations of any kind other than in connection with its
formation and this Agreement. At no time prior to the Effective Time of its
respective Merger will any IDT Subsidiary have had any assets (other than
nominal assets contributed upon its formation, which assets will be transferred
to the Surviving Entity in its respective Merger). Except for obligations or
liabilities incurred in connection with the transactions contemplated by this
Agreement, none of the IDT Subsidiaries has incurred, directly or indirectly,
any obligations or liabilities.

 

(iv) Neither IDT Parent, nor any person related to IDT Parent within the meaning
of Section 1.368-1(e)(3) of the Treasury Regulations, has any plan or intention
to redeem, purchase, exchange or otherwise acquire any of the Consideration
Shares issued in the Mergers, either directly or through any partnership or
other transaction, agreement or arrangement with any other person, other than
pursuant to open market purchases as part of a general stock buy back program in
which the sellers are anonymous.

 

(v) As part of the same plan as the Mergers, IDT Parent or a member of IDT
Parent’s qualified group of corporations (as defined in Treasury Regulations
Section 1.368-1(d)(4)(ii)) will continue each of the Seller Subsidiaries’
“historic business” or use a “significant portion” of each of the Seller
Subsidiaries’ “historic business assets” in a business, as such terms are
defined in Treasury Regulations Section 1.368-1(d)(2) and (3).

 

(vi) IDT Parent and its Affiliates have no plan or intention to cause any of the
Surviving Entities to: (A) liquidate; (B) merge with or into another corporation
or entity; or (C) sell, exchange or otherwise dispose of any of its assets,
except for transfers of assets described in Treasury Regulations Section
1.368-2(k).

 

(vii) IDT Parent and its Affiliates have no plan or intention to sell, exchange
or otherwise dispose of any of the capital stock of any of the Surviving
Entities, except for transfers of capital stock described in Treasury
Regulations Section 1.368-2(k).

 

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(viii) IDT Parent has no plan or intention to: (A) liquidate; (B) merge with or
into another corporation or entity; or (C) sell or otherwise dispose of all or
substantially all of its assets.

 

(ix) Each of IDT Parent and each IDT Subsidiary will pay its expenses, if any,
incurred in connection with the Mergers.

 

(x) There is no intercorporate indebtedness existing between IDT Parent (or any
of its Affiliates) and any of the Seller Subsidiaries that was issued, acquired
or will be settled at a discount.

 

(xi) Neither IDT Parent nor any of the IDT Subsidiaries is an investment company
as defined in Section 368(a)(2)(F)(iii) and (iv) of the Code.

 

(xii) Neither IDT Parent nor any of the IDT Subsidiaries is under the
jurisdiction of a court in a case under Title 11 of the United States Code, or a
receivership, foreclosure, or similar proceeding in a federal or state court.

 

(b) Covenants.

 

(i) IDT Parent and its Affiliates will comply with all record-keeping and
reporting requirements applicable to the Mergers set forth in Treasury
Regulation Section 1.368-3.

 

(ii) Neither IDT Parent nor any of its Affiliates will take any position on any
federal, state, local or foreign income or franchise Return, or take any other
Tax reporting position that is inconsistent with the treatment of each of the
Mergers as a reorganization within the meaning of Section 368(a) of the Code,
unless otherwise required by a Final Determination.

 

(iii) Neither IDT Parent nor any of its Affiliates will take or cause to be
taken any action as part of the same plan as the Mergers that would reasonably
be expected to cause any of the Mergers to fail to qualify as a reorganization
within the meaning of Section 368(a) of the Code.

 

(iv) Neither IDT Parent nor any of its Affiliates (including, after the Closing,
the Surviving Entities) shall effect or engage in any transactions or other
actions (other than the actions contemplated by this Agreement) relating to any
Surviving Entity out of the ordinary course of business on the Closing Date.

 

Section 7.09 Transfer Taxes. One-half of all transfer Taxes and fees (including
any penalties and interest) incurred in connection with transactions
contemplated by this Agreement shall be paid by LMC Animal Planet, and one-half
of all transfer Taxes and fees (including any penalties and interest) incurred
in connection with transactions contemplated by this Agreement shall be paid by
IDT Parent, in each case, when due. LMC Animal Planet will, at its own expense,
file (or cause its Affiliates to file) all necessary Returns and other
documentation with respect to all such Taxes and fees, and,

 

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if required by Applicable Law, IDT Parent will, and will cause its Affiliates
to, join in the execution of any such Returns and other documentation.

 

Section 7.10 Survival. Notwithstanding anything in this Agreement to the
contrary, (a) the representations and warranties of the parties contained in
this Article 7 shall survive for the full period of all applicable statutes of
limitations (giving effect to any waiver, mitigation or extension thereof), and
(b) the covenants and agreements of the parties in this Article 7 will survive
the Closing without limitation unless otherwise contemplated by their terms.

 

ARTICLE VIII

EMPLOYEE BENEFIT PLANS

 

Section 8.01 Employee Benefit Plans Representations. LMC Animal Planet
represents and warrants to IDT Parent that the transactions contemplated by this
Agreement are not transactions described in Section 4063 or 4069 of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), and none of the
Surviving Entities nor any of their respective Affiliates will have or be
subject to any liability under Title IV of ERISA with respect to any plan
sponsored, maintained or contributed to by any person under “common control”
with any Seller Subsidiary prior to the Effective Time of the Merger to which
such Seller Subsidiary is party, within the meaning of Section 4001(a)(14) of
ERISA.

 

ARTICLE IX

INDEMNIFICATION

 

Section 9.01 Indemnification by each of IDT Parent and each IDT Subsidiary. Each
of IDT Parent and each IDT Subsidiary covenants and agrees, jointly and
severally, to defend, indemnify and save and hold harmless LMC Animal Planet,
together with its shareholders, partners, trustees, beneficial owners, attorneys
and Representatives from and against any and all losses, costs, expenses,
liabilities, claims or legal damages (including, without limitation, reasonable
fees and disbursements of counsel and accountants and other costs and expenses
incident to any actual or threatened claim, suit, action or proceeding, whether
incurred in connection with a claim against LMC Animal Planet or a Seller
Subsidiary, or a third party claim) arising out of or resulting from (i) any
inaccuracy in or breach of any representation or warranty made by IDT Parent or
any IDT Subsidiary in this Agreement or in any writing delivered pursuant to
this Agreement (other than in respect of any representation or warranty made
pursuant to Article 7, as to which this Section 9.01 shall not apply), and (ii)
the failure of IDT Parent or any IDT Subsidiary to perform or observe fully any
covenant, agreement or provisions to be performed or observed by it pursuant to
this Agreement (other than any covenant, agreement or provision made pursuant to
Article 7 of this Agreement, as to which this Section 9.01 shall not apply);
provided, that the indemnity agreement contained in this Section 9.01 shall not
apply to amounts paid in settlement of any such loss, claims, damage, liability
or action if such settlement is effected without the consent of IDT Parent
(which consent shall not be unreasonably withheld). Notwithstanding anything to
the contrary contained herein, IDT Parent and the IDT Subsidiaries shall not be
liable for

 

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any indemnification payments pursuant to this Section 9.01 in the aggregate in
excess of $60 million; provided, however, that there shall be no limitation on
indemnification amounts payable by IDT Parent or any IDT Subsidiary pursuant to
this Section 9.01 for any breach of the representations and warranties contained
in Sections 5.02 (c), (d) and (f).

 

Section 9.02 Indemnification by LMC Animal Planet. LMC Animal Planet covenants
and agrees to defend, indemnify and save and hold harmless IDT Parent and each
IDT Subsidiary, together with their respective shareholders, partners, trustees,
beneficial owners, attorneys and Representatives from and against any and all
losses, costs, expenses, liabilities, claims or legal damages (including,
without limitation, reasonable fees and disbursements of counsel and accountants
and other costs and expenses incident to any actual or threatened claim, suit,
action or proceeding, whether incurred in connection with a claim against IDT
Parent or an IDT Subsidiary, or a third party claim), arising out of or
resulting from (i) any inaccuracy in or breach of any representation or warranty
made by LMC Animal Planet in this Agreement or in any writing delivered pursuant
to this Agreement (other than in respect of any representation, warranty made
pursuant to Article 7, as to which this Section 9.02 shall not apply), and (ii)
the failure of LMC Animal Planet to perform or observe fully any covenant,
agreement or provisions to be performed or observed by it pursuant to this
Agreement (other than any covenant, agreement or provision made pursuant to
Article 7 of this Agreement, as to which this Section 9.02 shall not apply);
provided, that the indemnity agreement contained in this Section 9.02 shall not
apply to amounts paid in settlement of any such loss, claims, damage, liability
or action if such settlement is effected without the consent of LMC Animal
Planet (which consent shall not be unreasonably withheld). Notwithstanding
anything to the contrary contained herein, LMC Animal Planet shall not be liable
for any indemnification payments pursuant to this Section 9.02 in the aggregate
in excess of $60 million; provided, however, that there shall be no limitation
on indemnification amounts payable by LMC Animal Planet pursuant to this Section
9.02 for any breach of the representations and warranties contained in Section
4.02, the first four sentences of Section 4.03(a) and Article 8.

 

Section 9.03 Procedure. Each party or person entitled to be indemnified pursuant
to this Article 9 (each, an “Indemnified Person”) shall notify each other party
to this Agreement in writing of any action against such Indemnified Person in
respect of which such other party (each, an “Indemnifying Person”) is or may be
obligated to provide indemnification on account of this Article 9, promptly
after the receipt of notice of such action. The failure of any Indemnified
Person so to notify an Indemnifying Person of any such action shall not relieve
such Indemnifying Person from any liability which it may have to such
Indemnified Person, except to the extent such Indemnifying Person shall have
been materially prejudiced by the failure of such Indemnified Person so to
notify it, pursuant to this Section 9.03. In case any such action shall be
brought against any Indemnified Person and it shall notify the Indemnifying
Persons of the commencement thereof, the Indemnifying Persons shall be entitled
to participate in the defense thereof and, to the extent that the Indemnifying
Persons may wish to assume the defense thereof, with counsel reasonably
satisfactory to such Indemnified Person, and after notice to such Indemnified
Person of their election so to assume the defense thereof,

 

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the Indemnifying Persons will not be liable to such Indemnified Person under
this Article 9 for any legal or other expense subsequently incurred by such
Indemnified Person in connection with the defense thereof; provided, however,
that (i) if the Indemnifying Persons shall elect not to assume the defense of
such claim or action or (ii) if the Indemnified Person reasonably determines (x)
that there may be a conflict between the positions of the Indemnifying Persons
and of the Indemnified Person in defending such claim or action or (y) that
there may be legal defenses available to such Indemnified Person different from
or in addition to those available to the Indemnifying Persons, then separate
counsel for the Indemnified Person shall be entitled to participate in and
conduct the defense, in the case of (i) and (ii)(x), or such different defenses,
in the case of (ii)(y), and the Indemnifying Persons shall be liable for any
reasonable legal or other expenses incurred by the Indemnified Person in
connection therewith.

 

Section 9.04 Exclusivity of Remedy. The indemnification provisions set forth in
Articles 7 and 9 are the sole and exclusive remedy for breach of any and all
representations and warranties contained in this Agreement; provided, however,
that the foregoing indemnification provisions are in addition to, and not in
derogation of, any statutory, equitable, or common law remedy any party may have
for breach of any and all covenants and agreements contained in this Agreement.
Notwithstanding anything in this Agreement to the contrary, neither LMC Animal
Planet or any Seller Subsidiary, on the one hand, nor IDT Parent or any IDT
Subsidiary, on the other hand, shall be liable to the other for any indirect,
punitive, special, consequential or incidental damages under any provision of
this Agreement or for any indirect, punitive, special, consequential or
incidental damages arising out of any act or failure to act hereunder, even if
such party has been advised of or has foreseen the possibility of such damages.

 

Section 9.05 Certain Limitations. The indemnification obligations of the parties
hereto with respect to claims asserted for any breach of a representation or
warranty set forth in Article 4 or 5 prior to expiration of the survival period
applicable to such representation or warranty shall survive until such claims
are finally adjudicated or otherwise resolved.

 

Section 9.06 Method of Payment for Certain Indemnification Payments. Any
indemnification payments to be made by IDT Parent or an IDT Subsidiary pursuant
to Article 9 shall be made by delivering shares of IDT Parent Class B Common
Stock. Any shares of IDT Parent Class B Common Stock to be delivered pursuant to
this Section 9.06 shall be valued based on the weighted average (based on
trading volume) of the daily closing prices (as of 4:00 p.m. eastern time) per
share of IDT Parent Class B Common Stock as reported on the NYSE (as published
in the Wall Street Journal, or if not published therein or incorrectly published
therein, in another authoritative source mutually selected by IDT Parent and LMC
Animal Planet) for the twenty consecutive trading days ending on the second
trading day prior to the date on which such indemnification payment is made by
IDT Parent or an IDT Subsidiary. All such shares of IDT Parent Class B Common
Stock so delivered pursuant to this Section 9.06 shall be duly authorized, fully
paid, and non-assessable, shall be issued in compliance with all Applicable Law
and not be subject to any Liens and shall be treated as Registrable

 

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Securities (as defined in the Registration Rights Agreement) for all purposes
under the Registration Rights Agreement.

 

ARTICLE X

TERMINATION

 

Section 10.01 Termination.

 

(a) This Agreement may be terminated and the Mergers may be abandoned at any
time prior to the Effective Time of the Mergers: (i) by mutual written agreement
of LMC Animal Planet and IDT Parent, at any time prior to the Closing Date, or
(ii) by LMC Animal Planet or IDT Parent if the Closing has not occurred on or
prior to February 28, 2005 (the “Outside Date”), or if any Governmental Entity
shall have issued a nonappealable final order, decree or ruling or taken any
other action having the effect of permanently restraining, enjoining or
otherwise prohibiting the Mergers; provided, that the right to terminate this
Agreement pursuant to the foregoing clause (ii) shall not be available to any
party whose breach of a representation or warranty or failure to fulfill any
agreement or obligation under this Agreement was the cause of or resulted in the
failure of the Closing to occur by the Outside Date. Any party desiring to
terminate this Agreement pursuant to this Section 10.01(a) shall promptly give
notice of such termination to the other parties hereto.

 

(b) If this Agreement is terminated as permitted by Section 10.01(a), such
termination shall be without liability of any party to this Agreement (or its
Representatives) to any other party to this Agreement (or its Representatives),
except with respect to any losses (excluding consequential, indirect, special or
incidental damages) that a party (or its Representatives) may incur or suffer as
a result of another party’s breach of this Agreement, including, without
limitation, (i) any willful failure of the breaching party to fulfill a
condition to the performance of the obligations of the non-breaching party, (ii)
any failure by the breaching party to perform a covenant made by it in this
Agreement or (iii) any breach by the breaching party of any of its
representations or warranties contained herein. The provisions of Sections 6.03,
6.05, 11.03 and 11.13 and this Article 10 shall survive any termination of this
Agreement.

 

ARTICLE XI

MISCELLANEOUS

 

Section 11.01 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. This Agreement may not be assigned by any party hereto
without the prior written consent of the other parties hereto and the attempted
or purported assignment shall be void. Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties hereto or
their respective successors and permitted assigns, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

 

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Section 11.02 Survival. Except as expressly provided otherwise herein, and
subject to Section 7.10, (i) the representations and warranties of the parties
set forth in this Agreement, other than the representations and warranties set
forth in Section 5.02(f) which shall survive the Closing indefinitely, shall
survive the Closing for a period of three years after the Closing Date, and (ii)
the covenants and agreements of the parties set forth in this Agreement shall
survive the Closing indefinitely.

 

Section 11.03 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without giving effect to
principles of conflicts of law thereof.

 

Section 11.04 Counterparts; Effectiveness. 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. Signature
pages from separate identical counterparts may be combined with the same effect
as if the parties signing such signature page had signed the same counterpart.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.

 

Section 11.05 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 11.06 Notices. Unless otherwise provided herein, 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 or to such other
parties as may be designated by written notice by the parties hereto, provided
that any notice of change of address shall be deemed effective only upon
receipt:

 

If to IDT Parent or any IDT Subsidiary, to:

 

IDT Corporation

520 Broad Street

Newark, New Jersey 07102

Attn: Ely Tendler, Esq.

Telephone: (973) 438-3616

Fax: (973) 438-1616

 

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[Name of applicable IDT Subsidiary]

c/o IDT Corporation

520 Broad Street

Newark, New Jersey 07102

Attn: Ely Tendler, Esq.

Telephone: (973) 438-3616

Fax: (973) 438-1616

 

with a copy to:

 

Mound, Cotton, Wollan & Greengrass

One Battery Park Plaza

New York, New York 1004

Attn: Thomas R. Weinberger

Telephone: (212) 804-4260

Fax: (212) 344-8066

 

If to LMC Animal Planet, to:

 

LMC Animal Planet, Inc.

c/o Liberty Media Corporation

12300 Liberty Boulevard

Englewood, Colorado 80112

Attn: Charles Y. Tanabe

Telephone: (720) 875-5400

Fax: (720) 875-5858

 

with a copy to:

 

Baker Botts, L.L.P.

30 Rockefeller Plaza

New York, New York 10112-4998

Attn: Robert W. Murray Jr.

Telephone: (212) 408-2500

Fax: (212) 408-2501

 

If to any Seller Subsidiary, to:

 

[Name of applicable Seller Subsidiary]

c/o Liberty Media Corporation

12300 Liberty Boulevard

Englewood, Colorado 80112

Attn: Charles Y. Tanabe

Telephone: (720) 875-5400

Fax: (720) 875-5858

 

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with a copy to:

 

Baker Botts, L.L.P.

30 Rockefeller Plaza

New York, New York 10112-4998

Attn: Robert W. Murray Jr.

Telephone: (212) 408-2500

Fax: (212) 408-2501

 

Section 11.07 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 or either retroactively or prospectively),
only with the written consent of each of LMC Animal Planet and IDT Parent. Any
amendment or waiver effected in accordance with this Section 11.07 shall be
binding upon each party to this Agreement.

 

Section 11.08 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 11.09 Entire Agreement. This Agreement (and the Exhibits and Schedules
hereto) and the Registration Rights Agreement constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements, understanding and discussions among the parties with respect
thereto.

 

Section 11.10 Specific Enforcement. The parties hereto agree that irreparable
harm would occur in the event that any provision of this Agreement were not
performed in accordance with its specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof, this being in addition to any other remedy to
which the parties are entitled at law or in equity.

 

Section 11.11 Expenses. Except as otherwise expressly set forth in this
Agreement, all costs and expenses incurred in connection with this Agreement
shall be paid by the party incurring such cost or expense.

 

Section 11.12 Further Assurances. At and after the Effective Time of each
Merger, the officers of the Surviving Entity of such Merger will be authorized
to execute and deliver, in the name and on behalf of the Seller Subsidiary party
to such Merger or the IDT Subsidiary party to such Merger, any deeds, bills of
sale, assignments or assurances and to take and do, in the name and on behalf of
such Seller Subsidiary or such IDT Subsidiary, any other actions and things to
vest, perfect or confirm of record or otherwise in such Surviving Entity any and
all right, title and interest in, to and under any of the rights, properties or
assets of such Seller Subsidiary or such IDT Subsidiary acquired or to be
acquired by such Surviving Entity as a result of, or in connection with, such
Merger.

 

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Section 11.13 Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES ITS RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT AND THE REGISTRATION RIGHTS AGREEMENT. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING,
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION 11.13 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 MODIFICATION 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.

 

Section 11.14 Third Party Beneficiaries. Except as otherwise expressly set forth
in this Agreement, this Agreement is not intended to confer any rights or
remedies upon any person other than the parties hereto.

 

[Signature page immediately follows.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed.

 

LMC ANIMAL PLANET, INC.

     

IDT CORPORATION

By:

 

/s/ Albert Rosenthaler

     

By:

 

/s/ Ira A. Greenstein

Name:

 

Albert Rosenthaler

     

Name:

 

Ira A. Greenstein

Title:

 

Senior Vice President

     

Title:

 

President

LIBERTY N2P, INC.

     

IDT LMC-N2P ACQUISITION I, INC.

By:

 

/s/ Albert Rosenthaler

     

By:

 

/s/ Ira A. Greenstein

Name:

 

Albert Rosenthaler

     

Name:

 

Ira A. Greenstein

Title:

 

Senior Vice President

     

Title:

 

Authorized Signatory

LIBERTY N2P II, INC.

     

IDT LMC-N2P ACQUISITION II, INC.

By:

 

/s/ Albert Rosenthaler

     

By:

 

/s/ Ira A. Greenstein

Name:

 

Albert Rosenthaler

     

Name:

 

Ira A. Greenstein

Title:

 

Senior Vice President

     

Title:

 

Authorized Signatory

LIBERTY N2P III, INC.

     

IDT LMC-N2P ACQUISITION III, INC.

By:

 

/s/ Albert Rosenthaler

     

By:

 

/s/ Ira A. Greenstein

Name:

 

Albert Rosenthaler

     

Name:

 

Ira A. Greenstein

Title:

 

Senior Vice President

     

Title:

 

Authorized Signatory

 

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--------------------------------------------------------------------------------

And solely for purposes of Section 6.07:

 

LIBERTY MEDIA CORPORATION

By:

 

/s/ Albert Rosenthaler

Name:

 

Albert Rosenthaler

Title:

 

Senior Vice President

IDT DOMESTIC-UNION, LLC By: IDT Domestic Telecom, Inc.,        Managing Member

By:

 

/s/ Norman Rosenberg

Name:

 

Norman Rosenberg

Title:

 

Chief Financial Officer

IDT INVESTMENTS, INC.

By:

 

/s/ Gil Boosidan

Name:

 

Gil Boosidan

Title:

 

Treasurer

NTOP HOLDINGS, LLC

By:

 

/s/ Anthony S. Davidson

Name:

 

Anthony S. Davidson

Title:

 

Manager