Document:

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.

 

    	 	1	 

     

    

 

(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.

  

    	 	2	 

     

    

 

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

 

    	 	3	 

     

    

 

(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.

 

    	 	4	 

     

    

 

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.

 

    	 	5	 

     

    

 

(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.

 

[The
remainder of page intentionally left blank]

 

    	 	6	 

     

    

 

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	 

 

    	 	7	 

     

    

 

[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:	 

 

 

8Exhibit
10.3

 

TAX SEPARATION AGREEMENT

 

This
TAX SEPARATION AGREEMENT (this “Agreement”) is dated as of June 1, 2016, by and between IDT Corporation, a Delaware
corporation (“IDT”), and Zedge, Inc., a Delaware corporation (“Zedge”; and together with IDT, the “Parties,
and each individually, a “Party”).

 

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,
IDT intends to effect a spinoff of Zedge whereby IDT will distribute to the holders of IDT Common Stock of all of the outstanding
shares of Zedge Common Stock held by IDT at the rate of (i) one (1) share of Zedge Class A Common Stock for every three (3) shares
of IDT Class A Common Stock and (ii) one (1) share of Zedge Class B Common Stock for every three (3) shares of IDT Class B Common
Stock, each outstanding as of the Record Date (the “Spinoff ”);

 

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

 

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 and Distribution Agreement between the Parties of even date herewith. 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.

 

“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.

 

“Combined
Group” shall mean a combined, unitary, or consolidated tax group that includes IDT or any of its subsidiaries, not including
Zedge 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.

 

“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
Class A Common Stock” means the outstanding shares of Class A common stock, $0.01 par value per share, of IDT.

 

“IDT
Class B Common Stock” means the outstanding shares of Class B common stock, $0.01 par value per share, of IDT.

 

“IDT
Common Stock” means the IDT Class A Common Stock and the IDT Class B Common Stock.

 

“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.

 

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

 

    	 	2	 

     

    

 

“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.

 

“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.

 

“Spin-Off
Taxes” shall mean all Taxes attributable to the failure of the Spinoff to have tax free status.

 

“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).

 

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

 

    	 	3	 

     

    

 

“Zedge
Class A Common Stock” means the outstanding shares of Class A common stock, $0.01 par value per share, of Zedge.

 

“Zedge
Class B Common Stock” means the outstanding shares of Class B common stock, $0.01 par value per share, of SCPI.

 

“Zedge
Common Stock” means the Zedge Class A Common Stock and the Zedge Class B Common Stock.

 

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.

 

ARTICLE
II. ALLOCATION OF TAX ASSETS AND LIABILITIES

 

SECTION
2.1. Indemnity.

 

(a)     Without
duplication, IDT shall indemnify Zedge from all liability for (i) Taxes of Zedge or any of its subsidiaries or relating to the
Zedge Business with respect to taxable periods ending on or before the Distribution Date, (ii) Taxes of Zedge or any of its subsidiaries
or relating to the Zedge Business for any Straddle Period, but only to the extent attributable to the portion of the Straddle
Period ending on the Distribution Date, (iii) Taxes of any member of the Affiliated Group or any Combined Group, other than Zedge
or any of its subsidiaries, for any taxable period, and (iv) Spin-Off Taxes. Taxes for a Straddle Period shall be apportioned
in accordance with the Closing of the Books Method. Notwithstanding the foregoing, Zedge shall be responsible for, and IDT shall
have no obligation to indemnify Zedge for any Tax liability of Zedge resulting from a Proceeding related to any Tax Returns that
relate solely to Zedge and its subsidiaries (i.e. not a consolidated return with other members of the IDT Consolidated Group)
regardless of whether such Tax Return relates to a period prior to or following the Distribution Date or a Straddle Period.

 

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

 

    	 	4	 

     

    

 

(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, Zedge shall have the right to participate jointly,
at its own expense, in any Proceeding if the consequences of the resolution of such Proceeding could reasonably be expected to
affect the tax liability of Zedge for any tax period to the extent such tax liability of Zedge is not subject to an indemnification
by IDT hereunder.

 

(b)     In
the case of any Proceeding that relates to Taxes for which Zedge is responsible under Section 2.1, Zedge shall have the sole right
to control the conduct of such Proceeding. Subject to the foregoing, IDT shall have the right to participate jointly, at its own
expense, 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 Zedge
hereunder.

 

(c)     In
the case of any Proceeding that relates to a Straddle Period of Zedge or the Zedge 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 Zedge shall
jointly control such Proceeding.

 

(d)     After
the Distribution Date, each Party shall within 15 days 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 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 forward such notification within
the time frame prescribed herein 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.

 

    	 	5	 

     

    

 

SECTION
2.4. Treatment of Payments; After Tax Basis.

 

(a)     IDT
and Zedge 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 Zedge 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.

 

    	 	6	 

     

    

 

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 Zedge in any taxable period, Zedge 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, Zedge will be deemed
to have actually realized a Retained Liability Tax Benefit at the time the amount of Taxes Zedge 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) Zedge’s actual Tax liability taking into account any Retained Liability Payment with (ii) what Zedge’s
Tax liability would have been without taking into account any Retained Liability Payment. If, pursuant to this Agreement, Zedge
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 Zedge 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 or the Distribution.

 

SECTION
2.7. Tax Assets. All tax assets, including operating losses, capital losses and credits, attributed to Zedge’s assets or
operations, in existence as of the effective date of the Spinoff shall remain with Zedge for Zedge to utilize in its discretion
and in accordance with the terms hereof. IDT shall not have right or access to any such tax assets, and Zedge shall not have any
right or access to any tax assets of IDT or any other member of IDT’s Affiliated Group (other than Zedge and its subsidiaries.

 

ARTICLE
III. RETURNS AND TAXES ATTRIBUTABLE TO ZEDGE

 

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 Zedge or any of its subsidiaries or relating to the
Zedge 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.

 

    	 	7	 

     

    

 

(b)     To
the extent that Zedge or any of its subsidiaries or the Zedge 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 Zedge and the Zedge 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 Zedge or the Zedge 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. Zedge’s Responsibility for the Preparation of Tax Returns and for the Payment of Taxes. Zedge shall prepare and file
or cause to be prepared and filed all Tax Returns relating to Other Taxes of Zedge or any of its subsidiaries or the Zedge Business
that have not been filed before the Distribution Date. Zedge shall prepare and file or cause to be prepared and filed all Income
Tax Returns relating to taxable periods of Zedge 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 Zedge 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 Zedge 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 Zedge not later than
thirty (30) days prior to the due date for filing of such Tax Returns (including extensions of time to file) (or if such due date
is within forty-five (45) days following the Distribution Date, as promptly as practicable following the Distribution Date). Zedge
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 Zedge, 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 Zedge 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 Zedge. 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 Zedge.

 

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 extensions of time to file) 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 Zedge 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 Zedge Business for the most recent taxable periods for which Tax Returns of
the Affiliated Group have been filed.

 

    	 	8	 

     

    

 

SECTION
3.5. Carrybacks. Zedge agrees and will cause its subsidiaries not to carry back any net operating losses, capital losses or credits
attributable to an entity that was included in a consolidated or combined group with IDT 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 Zedge
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 Zedge’s account.

 

SECTION
3.6. Retention of Records; Cooperation; Access.

 

(a)     IDT
and Zedge 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 Zedge 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 Zedge or any of their subsidiaries.

 

(b)     Subject
to the provisions of Section 3.8, IDT and Zedge 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 Zedge 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 Zedge and for any Proceeding relating to such Tax Returns or to any Taxes payable by IDT or Zedge 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 Zedge. 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.

 

    	 	9	 

     

    

 

SECTION
3.7. Tax Treatment. The Parties intend that:

 

(A)     the
Spinoff as a whole, will qualify as (i) a reorganization described in Sections 355(a) and 368(a)(1)(D) of the Code and (ii) a
transaction in which the stock distributed thereby is “qualified property” for purposes of Sections 355(d), 355(e)
and 361(c) of the Code, in which IDT, Zedge 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 Zedge 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

520
Broad Street

Newark
New Jersey 07102

Fax:
973-438-1010

Attention:
Marcelo Fischer

 

    	 	10	 

     

    

 

With
copies to:

 

IDT
Corporation

520
Broad Street

Newark
New Jersey 07102

Fax:
973-438-1456

Attention:
Legal Department

 

To
Zedge:

 

Zedge,
Inc.

22
Cortlandt Street

14th
Floor, New York, NY 10007

Fax:
973-453-8200

Attention:
Jonathan Reich

 

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.

 

    	 	11	 

     

    

 

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.

 

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.

 

[Remainder
of page intentionally left blank]

 

    	 	12	 

     

    

 

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

 

	 	ZEDGE,
    INC.
	 	 	 
	 	By:	/s/
    Jonathan Reich
	 	 	Jonathan
    Reich
	 	 	Chief
    Financial Officer
	 	 	 
	 	IDT
    CORPORATION
	 	 	 
	 	By:
    	/s/
    Marcelo Fischer
	 	 	Marcelo
    Fischer
	 		Senior
    Vice President of Finance

 

 

13

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