Exhibit
10.2


 


TRANSITION
SERVICES AGREEMENT


 


THIS
TRANSITION SERVICES AGREEMENT, dated as of June 1, 2016 (this “Agreement”), is entered into by and between
Zedge, Inc., a Delaware corporation (“Zedge”), and IDT Corporation, a Delaware corporation (“IDT”).
For purposes of this Agreement, “Party” or “Parties” shall mean either Zedge or IDT, individually or collectively.


 


BACKGROUND


 


WHEREAS,
IDT is executing a spin-off of its equity interest in Zedge (which, prior to the date hereof, was a majority-owned subsidiary
of IDT), to IDT’s stockholders, and has agreed to provide certain corporate, tax and accounting support, administrative
and other services to Zedge on the terms and conditions set forth herein.


 


NOW
THEREFORE, in consideration of the foregoing, the mutual agreements contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:


 


AGREEMENT


 


1.
Representations and Warranties.


 


As
an inducement to enter into this Agreement, Zedge and IDT each hereby represents and warrants to the other as follows:


 


(a)
It is an entity duly organized, validly existing and in good standing under the laws of the state of Delaware.  Such
Party has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and
to consummate the transactions contemplated hereby.  The execution and delivery by such Party of this Agreement, the
performance by such Party of its obligations hereunder and the consummation by such Party of the transactions contemplated hereby
have been duly authorized by all requisite corporate action on the part of such Party.


 


(b)
The execution and delivery by such Party of this Agreement, the performance by such Party of its obligations hereunder and the
consummation by such Party of the transactions contemplated hereby do not and will not (i) violate, conflict with or result in
the breach of any provision of the certificate of incorporation or bylaws of such Party, (ii) conflict with or violate any law
or governmental order applicable to such Party, or (iii) conflict with, or result in any breach of, constitute a default (or event
which, with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give
to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, any note, bond, mortgage
or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which such
Party is a party, which would adversely affect the ability of such Party to carry out its obligations under, and to consummate
the transactions contemplated by, this Agreement. 


 


2.
Provision and Term of Services; Termination.


 


(a)
IDT agrees to provide, directly or via one or more of its affiliates, to Zedge the services (collectively, the “Services”)
as set forth on each Schedule A that is appended hereto from time to time.  The Services shall be provided in accordance
with the terms and provisions of this Agreement and the applicable Schedule A.  


 


(b)
IDT shall, and where appropriate shall ensure that any officer, employee, agent or sub-contractor providing Services on behalf
of IDT shall, use reasonable care, skill and diligence in providing the Services.


 


(c)
IDT shall maintain accurate records and accounts of all transactions relating to the Services performed by it or its affiliates
pursuant to this Agreement.  Such records and accounts shall be maintained separately from IDT’s own records and
accounts and shall reflect such information as would normally be examined by an independent accountant in performing a complete
audit pursuant to U.S. generally accepted auditing standards for the purpose of certifying financial statements, and to permit
verification thereof by governmental agencies.  Zedge shall have the right to inspect and copy, upon reasonable notice
and at reasonable intervals during IDT’s regular office hours, the separate records and accounts maintained by IDT relating
to the Services.


 






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(d)
All of the Services shall be provided during the term of this Agreement.  The term of this Agreement shall commence
on the date hereof and continue until the twelve (12) month anniversary of the date hereof, and shall automatically renew for
additional six-month terms unless, no later than ninety (90) days prior to the end of the then-current term of this Agreement,
IDT or Zedge notifies the other of its intent to terminate this Agreement, in which case this Agreement shall terminate effective
as of the end of the then-current term, provided that certain Services may terminate earlier as set forth on an applicable Schedule
A.  Except as may be expressly set forth in a specific Schedule A to the contrary, any Service being provided hereunder
may be terminated by either Party, effective on a six (6) month or annual anniversary of the date hereof, upon not less than sixty
(60) days’ prior written notice provided that there are no break-up costs (including reasonable commitments made to or in
respect of personnel or third parties due to the requirement to provide the Services and prepaid expenses related to the Services,
or costs related to terminating such commitments) incurred by IDT as a result of such termination unless Zedge agrees to be solely
responsible for such costs.


  


(e)
In the event of a termination of this Agreement, all outstanding sums due hereunder shall be paid immediately following the date
of termination and any rights or obligations to which any of the Parties may be entitled or be subject prior to its termination
shall remain in full force and effect. IDT shall cooperate fully in the transition back to Zedge of any and all matters related
to the terminated Services such that Zedge shall not be prejudiced by such termination (but IDT shall not be required to bear
any out-of-pocket costs for such transition unless Zedge shall agree to reimburse it for the same).


 


3.
Compensation for Services.


 


(a)
Zedge shall pay IDT for the Services in accordance with the fee schedule or fee structure or calculation methodology set forth
on an applicable Schedule A.


 


(b)
Unless otherwise specified on a Schedule A, such fees shall be paid by Zedge within thirty (30) days of the delivery of an appropriate
invoice related thereto (which, unless otherwise provided for in a Schedule A, shall be issued no more frequently than monthly).  Such
invoice must comply with all applicable tax requirements and separately describe the amount for fees, expenses and value added
tax, if any.  Failure to provide an invoice for fees for any given month shall not be deemed a waiver of such fees,
and such fees may be included, without prejudice, in a later invoice delivered to Zedge.


 


(c)
If not specified on the applicable Schedule A, the fees payable for a specific Service shall be equal to the actual costs of IDT
in providing such Service, including a reasonable and good faith allocation of overhead expenses of IDT, which shall include an
implied profit margin thereon not to exceed three percent (3%).  Upon request of Zedge, IDT shall deliver to Zedge,
on a monthly basis, such reasonable and relevant information and supporting documentation with respect to the actual allocation
of each of IDT’s employees delivering the actual Service.


 


(d)
Unless otherwise specified on a Schedule A, Zedge shall reimburse IDT for third-party, out-of-pocket, incidental travel, lodging
and food expenses incurred by IDT in providing the Services in accordance with IDT’s customary travel policy.  Such
reimbursement shall be within thirty (30) days of receipt of an invoice from IDT for such incidental expenses accompanied by such
additional documentation reasonably required by Zedge to verify the amount of the expense and that such expense was incurred in
connection with providing the Services.


 


(e)
All amounts payable by Zedge to IDT shall be paid by wire transfer in accordance with the wire transfer instructions provided
by IDT to Zedge from time to time.


  






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4.
Force Majeure.


  


The
obligation of IDT to provide Services shall be suspended during the period and to the extent that IDT is prevented or hindered
from complying therewith by any law or governmental order, rule, regulation or direction, whether domestic or foreign, or by any
cause beyond the reasonable control of IDT, including, but not limited to, acts of nature, strikes, lock outs and other labor
and industrial disputes and disturbances, civil disturbances, accidents, acts of terrorism, acts of war or conditions arising
out of or attributable to war (whether declared or undeclared), shortage of necessary equipment, materials or labor, or restrictions
thereon or limitations upon the use thereof, and delays in transportation.  In such event, IDT shall give notice of
suspension as soon as reasonably practicable to Zedge stating the date and extent of such suspension and the cause thereof and
IDT’s best estimate of the date on which it will be able to resume the performance of its obligations.  In addition,
IDT will use commercially reasonable efforts during any such suspension to keep Zedge informed as to the progress of removal of
the cause of such suspension.  IDT shall resume the performance of such obligations as soon as reasonably practicable
after the removal of the cause and IDT shall so notify Zedge.  Zedge shall not be liable for payment of fees for any
Service for the period in which such Service could not be provided pursuant to this Section 4.


 


5.
Compliance with Law.


 


IDT
and Zedge shall undertake to provide and utilize the Services in accordance with and adhere to all laws and governmental rules,
regulations and orders applicable at the place where Services are rendered, including without limitation, data protection regulations.


 


6.
Confidentiality.


 


(a)
Each Party agrees to hold in confidence, and to use reasonable efforts to cause its employees, representatives and affiliates
performing Services to hold in confidence (at least to the extent that such Party keeps its own confidential information in confidence,
but in no event less than commercially reasonable given the nature of the confidential information), all confidential information
concerning the other Party and its affiliates furnished to or obtained by such Party in the course of providing the Services (except
to the extent that such information has been (i) in the public domain through no fault of such Party or (ii) lawfully acquired
on a non-confidential basis by such Party from sources other than Zedge); and shall not disclose or release any such confidential
information to any person, except its employees, representatives and agents who have a need to know such information in connection
with such Party’s performance under this Agreement, unless (A) such disclosure or release is compelled by the judicial or
administrative process or (B) in the opinion of counsel to IDT, such disclosure or release is necessary pursuant to requirements
of law or the requirements of any governmental entity including, without limitation, disclosure requirements under the Securities
Act of 1933 or the Securities Exchange Act of 1934, in each case as amended.


 


(b)
Each Party shall supervise its personnel and establish systems to assure that Zedge’s information is made available to such
Party’s employees on an “as needed” basis only.  Each Party shall use such information only for purposes
of providing the Services and for no other purpose.  In particular, the department of a Party providing the Services
shall in no way make any information concerning Zedge available to any other management or operational department or division
of such Party or to personnel associated with such divisions or departments except to the extent approved in writing by the other
Party.


 


7.
Indemnification.  


 


(a)
Zedge and its affiliates, officers, directors, employees, agents, successors and assigns shall be indemnified and held harmless
by IDT for and against any and all liabilities, losses, diminution in value, damages (excluding special, incidental, punitive,
indirect and consequential damages), claims, costs and expenses, interest, awards, judgments and penalties (including attorneys’
and consultants’ fees and expenses) actually suffered or incurred by them (including any action brought or otherwise initiated
by any of them), arising out of or resulting from:


 


(i)
the breach of any representation or warranty made by IDT contained in this Agreement;


 


(ii)
the breach of any covenant or agreement by IDT contained in this Agreement;


 


(iii)
the gross negligence, fraud, willful defaults or willful misconduct of IDT or any of its employees, agents, contractors, successors,
assigns or affiliates; and


 






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(iv)
the enforcement of the indemnification rights of Zedge and its affiliates provided for in this Agreement.


 


(b)
IDT and its affiliates, officers, directors, employees, agents, successors and assigns shall be indemnified and held harmless
by Zedge for and against any and all liabilities, losses, diminution in value, damages (excluding special, incidental, punitive,
indirect and consequential damages), claims, costs and expenses, interest, awards, judgments and penalties (including attorneys’
and consultants’ fees and expenses) actually suffered or incurred by them (including any action brought or otherwise initiated
by any of them), arising out of or resulting from:


 


(i)
the breach of any representation or warranty made by Zedge contained in this Agreement;


 


(ii)
the breach of any covenant or agreement by Zedge contained in this Agreement;


 


(iii)
the gross negligence, fraud, willful defaults or willful misconduct of Zedge; and


 


(iv)
the enforcement of the indemnification rights of IDT and its affiliates provided for in this Agreement.


  


8.
Liability.


 


Neither
Party nor its affiliates shall have any liability whatsoever to any other Party for any error, act or omission in connection with
the Services to be rendered by IDT to Zedge hereunder in excess of the Liability Limitation, unless any such error, act or omission
derives from the willful misconduct or gross negligence of such Party (or its affiliates).  IN NO EVENT SHALL EITHER
PARTY (OR AFFILIATE THEREOF) BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT
LIMITATION, LOSS OF PROFITS, REVENUES OR DATA), WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE,
WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.  THE LIABILITY OF A PARTY (AND ITS AFFILIATES)
FOR DAMAGES OR ALLEGED DAMAGES HEREUNDER, WHETHER IN CONTRACT, TORT OR ANY OTHER LEGAL THEORY, IS LIMITED TO, AND WILL NOT EXCEED,
THE OTHER PARTY’S DIRECT DAMAGES. EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE PARTIES DISCLAIM ALL WARRANTIES WITH RESPECT
TO THE SERVICES, INCLUDING ALL WARRANTIES AS TO SUITABILITY OR FITNESS FOR A SPECIFIC PURPOSE.


 


As
used herein, the term “Liability Limitation” shall mean, (i) all fees for Services billed hereunder during the term
of this Agreement up to the date on which such determination is made, plus (ii) without duplication, the anticipated fees for
Services to be paid during the six (6) month period (starting on the date hereof or a six (6) month or annual anniversary thereof)
during which such determination is made. 


 


9.
Notices.


 


Any
legal notice, demand or other communication required or permitted to be given by any provision of this Agreement (each a “Notice”)
shall be in writing and shall be deemed to have been properly given or served only if addressed to a Party at its address set
forth on Schedule A attached hereto, and if delivered (i) by hand, (ii) by certified mail, return receipt requested, (iii) by
overnight commercial carrier, (iv) by facsimile transmission with confirmation of receipt or (v) by email.  All such
communications shall be deemed to have been properly given or served (i) if by hand, when received, (ii) if by mail, on the date
of receipt or of refusal to accept shown on the return receipt, (iii) if by overnight commercial carrier, on the date that is
one (1) business day after the date upon which the same shall have been delivered to such overnight commercial carrier, addressed
to the recipient, with all shipping charges prepaid, provided that the same is actually received (or refused) by the recipient
in the ordinary course (iv) if by facsimile, on the date sent with transmission confirmed and (v) if by email, on the date such
email is received by such party.


 


10.
No Third Party Beneficiaries.


  


This
Agreement shall be binding upon and inure solely to the benefit of the Parties and their permitted successors and assigns, and
IDT and Zedge shall be entitled to enforce its respective rights under this Agreement against the other Party. Zedge
may not assign this Agreement without the prior written consent of IDT.


 






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11.
Governing Law.


 


This
Agreement shall be governed by, and construed in accordance with the laws of the state of New Jersey.  The Parties submit
to the jurisdiction of any state or federal court sitting in New Jersey for the purpose of any suit, action or proceeding arising
out of this Agreement.


 


12.
Dispute Resolution.


 


It
is the intention of the Parties that IDT shall act in the best interests of Zedge.  If, in the course of providing or
arranging for Services hereunder, IDT identifies a conflict of interest that would lead a reasonable person to conclude that IDT
cannot act in the best interests of Zedge while also acting in the best interests of IDT, such conflict shall immediately be reported
to Zedge so that it may be addressed without prejudice to either Party.


 


Zedge
and IDT shall each use good faith efforts to resolve any disputes arising out of this Agreement within fifteen (15) days of receipt
of a Party’s written notice of a dispute.  All disputes under this Agreement shall be referred to the Chief Financial
Officer (or the most senior financial executive of a Party) or his/her designee of each of IDT and Zedge.  The executives
shall meet as required for the purpose of resolving any pending dispute referred to them under this Agreement and shall consider
the disputes in the order such disputes are brought before them.  In the event that such executives are unable to resolve
a dispute within thirty (30) business days (or such longer period as the executives may mutually determine), they shall submit
the matter to binding arbitration according to the rules of the American Arbitration Association for commercial disputes.  The
arbitration shall be conducted by one arbitrator, expert in matters relating to commercial law, mutually selected by the Parties.
If the Parties fail to mutually agree upon one arbitrator within ten (10) days of submission of the dispute to arbitration, one
will be appointed in accordance with the commercial rules and practices of the American Arbitration Association.  Any
award, order or judgment pursuant to such arbitration shall be deemed final and binding and may be enforced in any court of competent
jurisdiction.  The Parties agree that the arbitrator shall only have the power and authority to make awards and issue
orders as expressly permitted herein and shall not, in any event, make any award that provides for punitive damages.  The
schedule and rules for the arbitration proceedings shall be as set by the arbitrator and the arbitration proceedings shall be
held in Newark, New Jersey. Each Party shall bear its own costs of participating in the arbitration proceedings.


 


13.
Entire Agreement.


  


This
Agreement and the Schedules hereto set forth all of the promises, covenants, agreements, conditions, and undertakings between
the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written.  The Schedules to this Agreement constitute an integral
part of this Agreement.


 


14.
Binding.


 


This
Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.


 


15.
Waiver.


 


No
provision of this Agreement may be waived except by an instrument in writing signed by the Party sought to be charged with the
effect of such waiver.  The failure of a Party to this Agreement to assert a right or exercise a remedy hereunder shall
not waive such right or remedy or any future rights or remedies.


 


16.
Status; Other Activities.


 


(a)
For purposes of this Agreement, IDT is, and will be deemed to be, an independent contractor only and not an agent, joint venturer,
partner, or representative of Zedge.  Neither IDT nor a Zedge may create any obligations or responsibilities on behalf
of or in the name of the other Party.


 


(b)
Notwithstanding the amount of time, or percentage of business hours, spent by any employee of IDT in the provision of Services
hereunder, no such employee shall, by reason of such provision, become an employee of, or have any direct rights against, Zedge,
or be deemed to have any relationship with Zedge other than as a provider of Services hereunder.


 






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(c)
Nothing in this Agreement shall limit or restrict the right of any Party, or its affiliates, directors, officers or employees
to engage in any other business or devote their time and attention in part to the management or other aspects of any other business,
whether of a similar nature, or to limit or restrict the right of such parties to engage in any other business or to render services
of any kind to any corporation, firm, individual, trust or association.


 


17.
Amendment.


 


This
Agreement may not be amended or modified except by an instrument in writing signed by the Parties.


 


18.
Severability.


  


This
Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the
validity or enforceability of this Agreement or of any other term or provision hereof.  Furthermore, in lieu of any
such invalid or unenforceable term or provision, the Parties intend that there shall be added as a part of this Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be valid and enforceable, so as to effect the original intent
of the Parties to the greatest extent possible.


 


19.
Counterparts.


 


This
Agreement may be executed in one or more counterparts, and by the Parties in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.


 


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IN
WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first written above.


 





	ZEDGE,
    INC.	 
	 	     	 
	By:	/s/
Jonathan Reich	 
		Jonathan
    Reich	 
		Chief
    Financial Officer	 


 





	IDT
    CORPORATION	 
	 	     	 
	By:	/s/
Marcelo Fischer	 
		Marcelo
    Fischer	 
		Senior
    Vice President of Finance	 


 






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[FORM
OF SCHEDULE A]


 


	Start Date:	[INSERT
    DATE]


 


	Term:	 

        



 


[Exception
to early termination provision:]


 


Description
of Service: [DESCRIBE]. This includes, but is not limited to, the following service elements:


 


	 	•	 	[INSERT
    ELEMENTS]


 


Fee
(other than allocated cost basis):


 


Zedge
Contacts:


 


[INSERT
CONTACTS]


 


Acknowledgement:


 





	ZEDGE, INC.	 	IDT COPORATION:
	 	     	 	 	                
	By:	 	 	By:	 
	Name:	 	 	Name:	 
	Title:	 	 	Title:	 




 


 


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