Exhibit 10.3
 
 

TAX SEPARATION AGREEMENT

This TAX SEPARATION AGREEMENT (this “Agreement”) is dated as of September 14,
2009, by and between IDT Corporation, a Delaware corporation (“IDT”), and CTM
Media Holdings, Inc., a Delaware corporation (“CTM”).

WHEREAS, as of the date hereof, IDT is the common parent of an affiliated group
of domestic corporations within the meaning of Section 1504(a) of the Code, and
the members of the affiliated group have heretofore joined in filing
consolidated federal income Tax returns (the “Affiliated Group”);

WHEREAS, on or prior to the Distribution Date and effective as of the Effective
Time, IDT will contribute to CTM (the “Contribution”) all of the outstanding
stock of (i) CTM Media Group, Inc., a New York corporation, (ii) Beltway
Acquisition Corporation d/b/a WMET, a Delaware corporation, (iii) IDT Local
Media, Inc., a Delaware corporation and (iv) IDT Internet Mobile Group, Inc., a
Delaware corporation, which holds all of IDT’s interests in Idea and Design
Works LLC.

WHEREAS, following the Contribution, IDT intends to effect a spinoff of CTM (and
the business units held thereby) whereby IDT will distribute to the holders of
IDT Common Stock all of the outstanding shares of CTM Common Stock at the rate
of (i) one (1) share of CTM Class A common stock for every three (3) shares of
IDT common stock, (ii) one (1) share of CTM Class C common stock for every three
(3) shares of IDT Class A common stock, and (iii) one (1) share of CTM Class B
common stock for every three (3) shares of IDT Class B common stock, each
outstanding as of the Record Date (the “Distribution”, and together with the
Contribution, the “Spinoff”).

WHEREAS, for United States federal income tax purposes, it is intended that the
Contribution will qualify as tax-free under Section 351 of the Code and that the
Spinoff will qualify as tax-free under Section 355 of the Code;

WHEREAS, as a result of the Spinoff, the Parties desire to enter into this Tax
Separation Agreement to provide for certain Tax matters, including the
assignment of responsibility for the preparation and filing of Tax Returns, the
payment of and indemnification for Taxes, entitlement to refunds of Taxes, and
the prosecution and defense of any Tax controversies;

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the Parties hereby agree as follows:

ARTICLE I. DEFINITIONS

SECTION 1.1. General. Capitalized terms used in this Agreement and not defined
herein shall have the meanings that such terms have in the Separation Agreement.
As used in this Agreement, the following terms shall have the following
meanings:

“Affiliated Group” shall have the meaning specified in the preamble.

“Agreement” shall have the meaning specified in the preamble.
 
 
 
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“Business Day” shall mean a day which is not a Saturday, Sunday or a day on
which banks in New York City are authorized or required by law to close.

“Closing of the Books Method” shall mean the apportionment of items between
portions of a taxable period based on a closing of the books and records on the
Distribution Date (as if the Distribution Date was the end of the taxable
period), provided that any items not susceptible to such apportionment (such as
real or personal property taxes imposed on a periodic basis) shall be
apportioned on the basis of elapsed days during the relevant portion of the
taxable period.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Confidentiality Agreement” shall mean any agreement pursuant to which the
parties named therein have agreed to terms under which they were permitted to
review certain financial information relating to CTM or the CTM Business.

“Combined Group” shall mean a combined, unitary, or consolidated tax group that
includes IDT or any of its subsidiaries, not including CTM or any of its
subsidiaries, on the one hand, and CTM or any of its subsidiaries.

“Consolidated Return” shall mean any Tax Return relating to Income Taxes filed
pursuant to Section 1502 of the Code, or any comparable combined, consolidated,
or unitary group Tax Return relating to Income Taxes filed under state or local
tax law which, in each case, includes IDT and at least one subsidiary.

“Contribution” shall have the meaning set forth in the preamble.

“CTM” shall have the meaning set forth in the preamble.

“CTM Common Stock” shall mean CTM’s (i) Class A common stock, (ii)  Class B
common stock, and (iii) Class C common stock, each par value $0.01 per share.

“Distribution” shall have the meaning set forth in the preamble.

“Final Determination” shall mean the final resolution of liability for any Tax
for any taxable period, including any related interest or penalties, by or as a
result of: (i) a final and unappealable decision, judgment, decree or other
order by any court of competent jurisdiction; (ii) a closing agreement or
accepted offer in compromise under Section 7121 or 7122 of the Code, or
comparable agreement under the laws of other jurisdictions which resolves the
entire Tax liability for any taxable period; or (iii) any allowance of a refund
or credit in respect of an overpayment of Tax, but only after the expiration of
all periods during which such refund may be recovered by the jurisdiction
imposing the Tax.

“IDT” shall have the meaning specified in the preamble.

“IDT Common Stock” shall mean IDT’s (i) common stock, (ii) Class A common stock,
and (iii) Class B common stock, each par value $0.01 per share.

“Income Tax” shall mean any income, franchise or similar Taxes imposed on (or
measured by) net income or net profits.

“Income Tax Returns” shall mean all Tax Returns relating to Income Taxes.
 
 
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“Indemnification Tax Benefit” shall have the meaning specified in Section
2.4(b).

“Indemnified Tax” shall have the meaning specified in Section 2.4(b).

                 “IRS” shall mean the Internal Revenue Service.

“Other Tax” shall mean any Tax other than an Income Tax.

“Party” shall mean either IDT or CTM, as the case maybe.

“Payment Period” shall have the meaning specified in Section 2.4(c).

“Proceeding” shall mean any audit, examination or other proceeding brought by a
Taxing Authority with respect to Taxes.

“Refund” shall have the meaning specified in Section 2.2.

“Retained Liabilities” shall have the meaning specified in the Separation
Agreement.

“Retained Liability Payment” shall have the meaning specified in Section 2.5.

“Retained Liability Tax Benefit” shall have the meaning specified in Section
2.5.

“Separation Agreement” shall have the meaning specified in the preamble.

           “Straddle Period” shall mean any taxable period commencing prior to,
and ending after, the Distribution Date.

“Tax” or “Taxes” shall mean any federal, state, local or foreign income, gross
receipts, property, sales, use, license, excise, franchise, employment, payroll,
withholding, alternative or add on minimum, ad valorem, transfer or excise tax,
or any other tax, custom, duty, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest or penalty, imposed by
any Taxing Authority.

“Taxing Authority” shall mean any governmental authority (whether United States
or non-United States, and including, any state, municipality, political
subdivision or governmental agency) responsible for the imposition of any Tax.

“Tax Returns” shall mean all reports or returns (including information returns
and amended returns) required to be filed or that may be filed for any period
with any Taxing Authority in connection with any Tax or Taxes (whether domestic
or foreign).

SECTION 1.2. References; Interpretation. References in this Agreement to any
gender include references to all genders, and references to the singular include
references to the plural and vice versa. The words “include,” “includes” and
“including” when used in this Agreement shall be deemed to be followed by the
phrase “without limitation.” Unless the context otherwise requires, references
in this Agreement to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, such
Agreement. Unless the context otherwise requires, the words “hereof,” “hereby”
and “herein” and words of similar meaning when used in this Agreement refer to
this Agreement in its entirety and not to any particular Article, Section or
provision of this Agreement.
 
 
 
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ARTICLE II. ALLOCATION OF TAX LIABILITIES

SECTION 2.1. Indemnity.

(a)           Without duplication, IDT shall indemnify CTM from all liability
for (i) Taxes of CTM or any of its subsidiaries or relating to the CTM Business
with respect to taxable periods ending on or before the Distribution Date, (ii)
Taxes of CTM or any of its subsidiaries or relating to the CTM Business for any
Straddle Period, but only to the extent attributable to the portion of the
Straddle Period ending on or before the Distribution Date, and (iii) Taxes of
any member of the Affiliated Group or any Combined Group, other than CTM or any
of its subsidiaries, for any taxable period. Taxes for a Straddle Period shall
be apportioned in accordance with the Closing of the Books Method.

(b)           CTM shall indemnify IDT from all liability for Taxes of CTM or its
subsidiaries or relating to the CTM Business accruing after the Distribution
Date under the Closing of the Books Method, including the portion of any
Straddle Period beginning on the Distribution Date.

SECTION 2.2. Refunds.

(a)           Subject to Section 3.5, if a Party receives a refund, offset,
credit, or other benefit (including interest received thereon) (a “Refund”) of
Tax which the other Party would have been obligated to indemnify had the Refund
been a payment, then the Party receiving the Refund shall promptly pay the
amount of the Refund to the other Party, less reasonable costs and expenses
incurred in connection with such Refund, including any Taxes on such Refund or
interest thereon (net of any tax benefit actually realized for paying over such
Refund).

(b)           Each Party shall, if reasonably requested by the other Party,
cause the relevant entity to file for and use its reasonable best efforts to
obtain and expedite the receipt of any Refund to which such requesting Party is
entitled under this Section 2.2.

SECTION 2.3. Contests.

(a)           In the case of any Proceeding that relates to Taxes for which IDT
is responsible under Section 2.1, IDT shall have the right to control, in its
sole discretion, the conduct of such Proceeding. Subject to the foregoing, CTM
shall have the right to participate jointly in any Proceeding if the
consequences of the resolution of such Proceeding could reasonably be expected
to affect the tax liability of CTM for any tax period to the extent such tax
liability of CTM is not subject to an indemnification by IDT hereunder.

(b)           In the case of any Proceeding that relates to Taxes for which CTM
is responsible under Section 2.1, CTM shall have the sole right to control the
conduct of such Proceeding. Subject to the foregoing, IDT shall have the right
to participate jointly in any Proceeding if the consequences of the resolution
of such Proceeding could reasonably be expected to affect the tax liability of
IDT for any tax period to the extent such tax liability of IDT is not subject to
an indemnification by CTM hereunder.

(c)           In the case of any Proceeding that relates to a Straddle Period of
CTM or the CTM Business, the parties shall use reasonable efforts to cause such
Proceeding to be bifurcated between the period ending on the Distribution Date
and the period beginning after the Distribution Date. If the parties are able to
cause the audit to be so bifurcated, then Sections 2.3(a) and (b) shall govern
the control of such Proceedings. To the extent that the parties are unable to
cause such bifurcation, IDT and CTM shall jointly control such Proceeding.
 
 
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(d)           After the Distribution Date, each Party shall promptly notify the
other Party in writing upon receipt of written notice of the commencement of any
Proceeding or of any demand or claim upon it, which, if determined adversely,
would be grounds for indemnification from such other Party pursuant to Section
2.1 or could reasonably be expected to have an adverse Tax effect on the other
Party. The failure of one Party to promptly forward such notification in
accordance with the immediately preceding sentence shall not relieve the other
Party of any obligation under this Agreement, except to the extent that the
failure to promptly forward such notification actually prejudices the ability of
the other Party to contest such Proceeding. Each Party shall, on a timely basis,
keep the other Party informed of all developments in the Proceeding and provide
such other Party with copies of all pleadings, briefs, orders, and other
correspondence pertaining thereto.

SECTION 2.4. Treatment of Payments; After Tax Basis.

(a)           IDT and CTM agree to treat any indemnification payments (other
than payments of interest pursuant to Section 2.4(c)) pursuant to this
Agreement, including any payments made pursuant to Section 2.5, as either a
capital contribution or a distribution, as the case may be, between IDT and CTM
occurring immediately prior to the Distribution, and to challenge in good faith
any other characterization of such payments by any Taxing Authority. If,
notwithstanding such good faith efforts, the receipt or accrual of any such
payment (other than payments of interest pursuant to Section 2.4(c)) results in
taxable income to the indemnified Party, such payment shall be increased so
that, after the payment of any Taxes with respect to the payment, the
indemnified Party shall have realized the same net amount it would have realized
had the payment not resulted in taxable income.

(b)           To the extent that any liability for Taxes that is subject to
indemnification under Section 2.1 (an “Indemnified Tax”) gives rise to an
Indemnification Tax Benefit to the indemnified Party in any taxable period, the
indemnified Party will promptly remit to the indemnifying Party the amount of
any such Indemnification Tax Benefit actually realized. For purposes of this
Agreement, “Indemnification Tax Benefit” means a reduction in the amount of
Taxes that are required to be paid or increase in refund due, whether resulting
from a deduction, from reduced gain or increased loss from disposition of an
asset, or otherwise. For purposes of this Agreement, an indemnified Party will
be deemed to have actually realized an Indemnification Tax Benefit at the time
the amount of Taxes such indemnified Party is required to pay is reduced or the
amount of any refund due is increased. The amount of any Indemnification Tax
Benefit in this Section 2.4(b) shall be calculated by comparing (i) the
indemnified Party’s actual Tax liability taking into account any Indemnified Tax
with (ii) what the indemnified Party’s Tax liability would have been without
taking into account any Indemnified Tax. If, pursuant to this Agreement, the
indemnified Party makes a remittance to the indemnifying Party of any
Indemnification Tax Benefit and all or part of such
Indemnification Tax Benefit is subsequently disallowed, the indemnifying Party
will promptly pay to the indemnified Party that portion of such remittance equal
to the portion of the Indemnification Tax Benefit that is disallowed.

(c)           Payments made pursuant to this Agreement that are not made within
the period prescribed in this Agreement or, if no period is prescribed, within
thirty (30) days after demand for payment is made (the “Payment Period”) shall
bear interest for the period from and including the date immediately following
the last date of the Payment Period through and including the date of payment at
a rate equal to the monthly average of the “prime rate” as published in the Wall
Street Journal, compounded semi-annually. Such interest will be payable at the
same time as the payment to which it relates and shall be calculated on the
basis of a year of 365 days and the actual number of days for which due;
provided, however, that this provision for interest shall not be construed to
give the Party responsible for such payment the right to defer payment beyond
the due date hereunder.
 
 
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SECTION 2.5. Retained Liabilities. To the extent that any payments made by IDT
in respect of the Retained Liabilities (a “Retained Liability Payment”) gives
rise to a Retained Liability Tax Benefit to CTM in any taxable period, CTM will
promptly remit to IDT the amount of any such Retained Liability Tax Benefit
actually realized. For purposes of this Agreement, “Retained Liability Tax
Benefit” means a reduction in the amount of Taxes that are required to be paid
or increase in refund due, whether resulting from a deduction, credit, increased
basis, or otherwise. For purposes of this Agreement, CTM will be deemed to have
actually realized a Retained Liability Tax Benefit at the time the amount of
Taxes CTM is required to pay is reduced or the amount of any refund due is
increased. The amount of any Retained Liability Tax Benefit in this Section 2.5
shall be calculated by comparing (i) CTM’s actual Tax liability taking into
account any Retained Liability Payment with (ii) what CTM’s Tax liability would
have been without taking into account any Retained Liability Payment. If,
pursuant to this Agreement, CTM makes a remittance to IDT of any Retained
Liability Tax Benefit and all or part of such Retained Liability Tax Benefit is
subsequently disallowed, IDT will promptly pay to CTM that portion of such
remittance equal to the portion of the Retained Liability Tax Benefit that is
disallowed.

SECTION 2.6. Transfer Taxes. Notwithstanding anything to the contrary herein,
IDT shall bear any and all stamp, duty, transfer, sales and use or similar Taxes
incurred in connection with the Spinoff.

ARTICLE III. RETURNS AND TAXES ATTRIBUTABLE TO CTM

SECTION 3.1. IDT’s Responsibility for the Preparation of Tax Returns and for the
Payment of Taxes.

(a)           IDT shall prepare and file or cause to be prepared and filed all
Tax Returns of CTM or any of its subsidiaries or relating to the CTM Business
that are due on or before the Distribution Date (taking into account any valid
extensions thereof), all Income Tax Returns relating to taxable periods ending
on or before the Distribution Date and all Income Tax Returns of the Affiliated
Group or any Combined Group.

(b)           To the extent that CTM or any of its subsidiaries or the CTM
Business is included in any Consolidated Return for a taxable period that
includes the Distribution Date, IDT shall include in such Consolidated Return
the results of CTM and the CTM Business on the basis of the Closing of the Books
Method. To the extent permitted by law or administrative practice with respect
to other Income Tax Returns, the taxable period relating to CTM or the CTM
Business shall be treated as ending on the Distribution Date, and if the taxable
period does not, in fact, end on the Distribution Date, the Parties shall
apportion all tax items between the portions of the taxable period before and
after the Distribution Date on the Closing of the Books Method.

SECTION 3.2. CTM’s Responsibility for the Preparation of Tax Returns and for the
Payment of Taxes. CTM shall prepare and file or cause to be prepared and filed
all Tax Returns relating to Other Taxes of CTM or any of its subsidiaries or the
CTM Business that have not been filed before the Distribution Date. CTM shall
prepare and file or cause to be prepared and filed all Income Tax Returns
relating to taxable periods of CTM and its subsidiaries after the Distribution
Date, except for Income Tax Returns of the Affiliated Group or any Combined
Group and Income Tax Returns of CTM for any Straddle Period as described in
Sections 3.1 and 3.3.

SECTION 3.3. Responsibility for the Preparation of Straddle Period Income Tax
Returns and for the Payment of Straddle Period Income Taxes. IDT shall prepare
and file or cause to be prepared and filed all Income Tax Returns of CTM for any
Straddle Period. All such Income Tax Returns that are to be prepared and filed
by IDT pursuant to this paragraph shall be submitted to CTM not later than
thirty (30) days prior to the due date for filing of such Tax Returns (or if
such due date is within forty-five (45) days following the Distribution Date, as
promptly as practicable following the Distribution Date). CTM shall have the
right to review such Tax Returns and to review all work papers and procedures
used to prepare any such Tax Return. If CTM, within ten (10) Business Days after
delivery of any such Tax Return, notifies IDT in writing that it objects to any
of the items in such Tax Return, IDT and CTM shall attempt in good faith to
resolve the dispute and, if they are unable to do so, the disputed items shall
be resolved (within a reasonable time, taking into account the deadline for
filing such Tax Return) by an internationally recognized independent accounting
firm chosen by both IDT and CTM. Upon resolution of all such items, the relevant
Straddle Period Tax Return shall be filed on that basis. The costs, fees and
expenses of such accounting firm shall be borne equally by IDT and CTM.
 
 
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SECTION 3.4. Manner of Preparation. All Income Tax Returns filed on or after the
Distribution Date shall be prepared and filed on a timely basis (including
pursuant to extensions) by the Party responsible for such filing under this
Agreement. In the absence of a Final Determination to the contrary, a
controlling change in law or circumstances, or accounting method changes
pursuant to applications that are approved by the Internal Revenue Service, all
Income Tax Returns of CTM for tax periods commencing prior to the Distribution
Date shall be prepared on a basis consistent with the elections, accounting
methods, conventions, assumptions and principles of taxation used with respect
to the CTM Business for the most recent taxable periods for which Tax Returns of
the Affiliated Group have been filed.

SECTION 3.5. Carrybacks. CTM agrees and will cause its subsidiaries not to carry
back any net operating losses, capital losses or credits for any taxable period
ending after the Distribution Date to a taxable period, or portion thereof,
ending on or before the Distribution Date. To the extent that CTM or any of its
subsidiaries is required by applicable law to carry back any such net operating
losses, capital losses or credits, any refund of Taxes attributable to such
carryback shall be for IDT’s account.

SECTION 3.6. Retention of Records; Cooperation; Access.

(a)           IDT and CTM shall, and shall cause each of their subsidiaries to
retain adequate records, documents, accounting data and other information
(including computer data) necessary for the preparation and filing of all Tax
Returns required to be filed by IDT or CTM and for any Tax matter covered by
this Agreement, including any Proceeding relating to such Tax Returns or to any
Taxes payable by IDT or CTM or any of their subsidiaries.

(b)           Subject to the provisions of Section 3.8, IDT and CTM shall
reasonably cooperate with one another in a timely manner with respect to any Tax
matter covered by this Agreement, including any Proceeding described in Section
2.3. IDT and CTM shall, and shall cause each of their subsidiaries to, cooperate
and provide reasonable access to (i) all records, documents, accounting data and
other information (including computer data) necessary for the preparation and
filing of all Tax Returns required to be filed by IDT or CTM and for any
Proceeding relating to such Tax Returns or to any Taxes payable by IDT or CTM
and (ii) its personnel and premises, for the purpose of the preparation, review
or audit of such Tax Returns, or in connection with any Tax matter covered by
this Agreement, including any Proceeding described in Section 2.3 as reasonably
requested by either IDT or CTM. The Party requesting or otherwise entitled to
any books, records, information, officers or employees pursuant to this Section
3.6(b) shall bear all reasonable out-of-pocket costs and expenses (except
reimbursement of salaries, employee benefits and general overhead) incurred in
connection with providing such books, records, information, officers or
employees; provided, however, that any costs (including but not limited to
attorneys’ fees and expenses) arising from the requested Party’s failure to
cooperate under this Section 3.6(b) shall be payable by such Party.

(c)           The obligations set forth above in Sections 3.6(a) and 3.6(b)
shall continue until the longer of (i) the time of a Final Determination or (ii)
expiration of all applicable statutes of limitations, to which the records and
information relate. For purposes of the preceding sentence, each Party shall
assume that no applicable statute of limitations has expired unless such Party
has received notification or otherwise has actual knowledge that such statute of
limitations has expired.
 
 
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SECTION 3.7. Tax Treatment. The Parties intend that:

(A)           the Contribution will be qualified as a transaction in which IDT
and CTM recognize no income or gain for U.S. Federal income tax purposes
pursuant to Sections 351 and 1032 of the Code; and

(B)           the Distribution, and the Spinoff as a whole, will be qualified as
a (i) reorganization described in Sections 355(a) and 368(a)(1)(D) of the Code
and (ii) transaction in which the stock distributed thereby is “qualified
property” for purposes of Sections 355(d), 355(e) and 361(c) of the Code as a
transaction in which IDT, CTM and the stockholders of IDT recognize no income or
gain for U.S. Federal income tax purposes pursuant to Sections 355, 361 and 1032
of the Code. For the avoidance of doubt, recognition of income or gain by IDT or
CTM as a result of taking into account intercompany items or excess loss
accounts pursuant to the Treasury Regulations promulgated pursuant to Section
1502 of the Code shall not mean that the Spinoff does not have tax-free status.

SECTION 3.8. Confidentiality; Ownership of Information; Privileged Information.
The provisions of Article X of the Separation Agreement relating to
confidentiality of information, ownership of information, privileged information
and related matters shall apply with equal force to any records and information
prepared and/or shared by and among the Parties in carrying out the intent of
this Agreement.

ARTICLE IV. MISCELLANEOUS

SECTION 4.1. Complete Agreement; Construction. This Agreement shall constitute
the entire agreement between the Parties with respect to the subject matter
hereof and shall supersede all previous negotiations, commitments and writings
with respect to such subject matter, including, without limitation, any tax
sharing agreement previously entered into by the Parties.

SECTION 4.2. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
both Parties.

SECTION 4.3. Survival of Agreements. Except as otherwise contemplated by this
Agreement, all covenants and agreements of the Parties contained in this
Agreement shall survive the Distribution Date.

SECTION 4.4. Notices. All notices and other communications hereunder shall be in
writing and hand delivered or mailed by registered or certified mail (return
receipt requested) or sent by any means of electronic message transmission with
delivery confirmed (by voice or otherwise) to the Parties at the following
addresses (or at such other addresses for a Party as shall be specified by like
notice) and will be deemed given on the date on which such notice is received:

To IDT:

IDT Corporation
550 Broad Street
Newark New Jersey 07102
Fax: 973-438-1010
Attention: Bill Pereira

               With copies to:

IDT Corporation
550 Broad Street
Newark New Jersey 07102
Fax: 973-438-1456
Attention: Legal Department
 
 
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               To CTM:

CTM Media Group, Inc.
11 Largo Drive South
Stamford, CT 06907
Fax: 203-724-2397
Attention: Marc E. Knoller

SECTION 4.5. Waivers. The failure of any Party to require strict performance by
the other Party of any provision in this Agreement will not waive or diminish
that Party’s right to demand strict performance thereafter of that or any other
provision hereof.

SECTION 4.6. Amendments. This Agreement may not be modified or amended except by
an agreement in writing signed by the Parties hereto.

SECTION 4.7. Assignment. This Agreement shall not be assignable, in whole or in
part, directly or indirectly, by any Party hereto without the prior written
consent of the other Party hereto, and any attempt to assign any rights or
obligations arising under this Agreement without such consent shall be void.

SECTION 4.8. Successors and Assigns. The provisions to this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the Parties and
their respective successors and permitted assigns.

SECTION 4.9. Additional Members. Any new members of the Affiliated Group shall
automatically become a Party to this Agreement upon becoming members.

SECTION 4.10. Third Party Beneficiaries. This Agreement is solely for the
benefit of the Parties hereto and should not be deemed to confer upon third
parties any remedy, claim, liability, reimbursement, claim of action or other
right in excess of those existing without reference to this Agreement.

SECTION 4.11. Title and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.

SECTION 4.12. Exhibits. The Exhibits to this Agreement shall be construed with
and as an integral part of this Agreement to the same extent as if the same had
been set forth verbatim herein.

SECTION 4.13. Governing Law; Jurisdiction. This Agreement shall be construed in
accordance with, and governed by, the laws of the State of New Jersey, without
regard to the conflicts of law rules of such state. Each of the Parties (a)
consents to submit itself to the personal jurisdiction of the courts of the
State of New Jersey or any federal court with subject matter jurisdiction
located in the District of New Jersey (and any appeals court therefrom) in the
event any dispute arises out of this Agreement or any Ancillary Agreement or any
transaction contemplated hereby or thereby, (b) agrees that it will not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any such court, and (c) agrees that it will not bring any action
relating to this Agreement or any Ancillary Agreement or any transaction
contemplated hereby or thereby in any court other than such courts.
 
 
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SECTION 4.14. Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be affected or
impaired thereby. The Parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions,
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.

         
CTM MEDIA HOLDINGS, INC.
   
By:
 
/s/ Marc E. Knoller
   
Name:
 
Marc E. Knoller
   
Title:
 
CEO
 
IDT CORPORATION
   
By:
 
/s/ Bill Pereira
   
Name:
 
Bill Pereira
   
Title:
 
CFO

 
 
 
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