| Structure of Transaction; Consideration: |
Liberty
will acquire from IDT all outstanding equity interests of IDT Media
not
currently owned by Liberty (the “IDT Media Equity Interests”) in exchange
for consideration consisting of (a) 17,237,568 shares of Class
B common
stock of IDT and 7,500 shares of common stock of IDT Telecom, Inc.
owned
by Liberty (in each case subject to appropriate adjustment for
stock
dividends, splits, combinations, recapitalizations and any other
similar
transactions that may occur between the date of this Term Sheet
and the
consummation of the proposed transaction (the “Closing” and the date on
which the Closing occurs, the “Closing Date”)), (b) all of the shares of
IDT Media Ventures, Inc. and IDT Investments, Inc. received by
Liberty as
an equity distribution from IDT Media as subsequently provided
in this
Term Sheet, (c) $186 million in cash (subject to adjustment as
described
below under “Adjustment of Additional Cash Consideration”) to be paid by
Liberty to IDT (the “Additional Cash Consideration”) and (d) the payment
of the Contingent Amount, if any, in the manner described under
“Contingent Purchase Price” below. This transaction will be treated as a
taxable purchase of the IDT Media Equity Interests by Liberty using
cash
and the redemption of IDT, IDT Telecom, IDT Media Ventures and
IDT
Investments shares held by Liberty as of the Closing. Prior to the
Closing, IDT will cause IDT Media and its U.S. subsidiaries to
effect the
restructuring steps (the “Restructuring”) set forth in the side letter
executed by IDT and Liberty on the date hereof. On the Closing
Date, cash
and cash equivalents in an amount equal to $74,163,000 (as adjusted
as
described under “Conduct of Business Pending Closing” below, the “Cash
Repayment Amount”) will be used to repay intercompany debt of IDTE and its
subsidiaries to IDT and the balance of any such intercompany debt
will be
contributed to the capital of IDTE by
IDT.
|
|
Ownership
of
IDTE:
|
On
the Closing Date, IDT Media will own all of the outstanding equity
interests of IDT Entertainment, Inc. or any successor entity resulting
from the Restructuring (“IDTE”)
and will own no other assets and have no liabilities other than
those that
would be properly included on the consolidated balance sheet of
IDTE and
its subsidiaries prepared in accordance with generally accepted
accounting
principles in the U.S., as consistently applied in accordance with
the
past practices of IDT Media (“GAAP”).
As of the Closing Date, there will not be outstanding any obligations
with
respect to any restricted shares, options to acquire shares and
similar
equity-based awards (including “phantom” equity) granted to employees or
otherwise or plans to grant any of the foregoing of IDT Media or
any of
its subsidiaries other than Mainframe Entertainment, Inc. (“Mainframe”).
Following the Closing Date, further funding requirements of IDT
Media and
its subsidiaries will be funded by indebtedness from third parties
or from
Liberty or its subsidiaries.
|
| Adjustment of Additional Cash Consideration: |
The
amount of Additional Cash Consideration will be subject to increase
or
decrease, as the case may be, to reflect (a) that on the Closing
Date, and
giving effect to the repayment to IDT of intercompany indebtedness
referenced in “Structure of the Transaction; Consideration” above, IDT
Media and its subsidiaries will have no long-term liabilities that
would
be required to be reflected on a balance sheet of IDT Media and
its
subsidiaries prepared in accordance with GAAP, other than the debt
for
borrowed money and obligations under capital leases of IDT Media
and its
subsidiaries (including the current portion of such obligations)
in an
amount equal to $91,904,000 principal outstanding under: (i) the
Credit,
Security, Guaranty and Pledge Agreement dated as of April 22, 2005,
among
Anchor Bay Entertainment, Inc., as Borrower, the guarantors referred
to
therein, IDTE, the lenders referred to therein and JPMorgan Chase
Bank,
National Association, as Administrative Agent; (ii) the Credit,
Security,
Guaranty and Pledge Agreement dated as of December 1, 2005, among
IDTE
Animation Slate, LLC, as Borrower, the guarantors referred to therein,
IDTE, the lenders referred to therein and JPMorgan Chase Bank,
National
Association, as Administrative Agent; (iii) the Master Lease Agreement
dated March 1, 2006, between AT&T Capital Services, as Lessor, and
IDTE, as Lessee; (iv) debt of Mainframe pursuant to its existing
debenture
and bank credit facility as disclosed by IDT to Liberty; and (v)
such
other credit facilities of IDTE and its subsidiaries approved by
Liberty,
and (b) that IDT Media and its subsidiaries will have Working Capital
(as
defined below) on the Closing Date in an amount equal to $55,838,000
(the
“Purchase Price Adjustments”).
|
|
Contingent
Purchase
Price:
|
As
additional consideration for the IDT Media Equity Interests, on
the
Closing Date IDT will be granted the right to receive a one-time
payment
in cash, Marketable Securities (as defined below) or a combination
thereof, at Liberty’s option, in an amount (the “Contingent Amount”) equal
to 25% of the excess, if any, of the Net Equity Value (as defined
below)
of IDT Media as of the Exercise Date (as defined below) over the
Base
Equity Value (as defined below).
|
|
Financial
Statements:
|
Attached
hereto as Exhibit
A
are copies of (a) the unaudited consolidated balance sheet of IDTE
and its
subsidiaries as of July 31, 2005, and the related unaudited consolidated
statements of income, shareholder equity and cash flows for the
twelve
months ended July 31, 2005, (b) the audited consolidated balance
sheet of
the Credit Group (as defined below) as of July 31, 2005, and the
related
audited consolidated statements of income, retained earnings and
cash
flows for the twelve months ended July 31, 2005 (including the
notes
thereto and other financial information contained therein), certified
in
each case by Ernst & Young, the independent certified public
accountants for IDTE and its subsidiaries (the “Credit
Group Financial Statements”),
(c) the unaudited balance sheet of IDTE and its subsidiaries as
of January
31, 2006 and the related unaudited statements of income, retained
earnings
and cash flows for IDTE and its subsidiaries for the period from
August 1,
2005, through January 31, 2006 and (d) the unaudited balance sheet
of IDTE
and its subsidiaries as of March 31, 2006 (the “Interim
Balance Sheet Date”)
and the related statements of income and retained earnings for
IDTE and
its subsidiaries for the period from August 1, 2005 to the Interim
Balance
Sheet Date ((c) and (d) the “Interim
Financial Statements”)
in each case prepared by or on behalf of IDT Media (such audited
and
unaudited financial statements, collectively, the “Financial
Statements”).
The term “Credit Group” means the following subsidiaries of IDTE: (i)
Anchor Bay Entertainment, Inc.; (ii) Manga Entertainment Limited;
and
(iii) IDT Entertainment Productions, Inc. (and the other entities
identified in note 1 to the Credit Group Financial Statements).
The
Financial Statements (A) conform to the books and records of IDTE
and its
subsidiaries in all material
respects,
|
| Accuracy of Information: |
IDT
has provided, and is continuing to provide, certain information
regarding
IDT Media, its subsidiaries and their respective businesses that
is
materially sufficient in order for Liberty to evaluate the appropriateness
of the Transaction. No such information provided by IDT contains
or will
contain any untrue statement of material fact or will omit to state
a
material fact necessary to make the statements therein, in light
of the
circumstances under which they were made, not misleading. In the
event of
IDT’s breach of this section, Liberty will be entitled to terminate
this
Term Sheet without any obligation or liability of any of the parties,
other than the payment by IDT of Liberty’s reasonable out-of-pocket
expenses up to an aggregate of $375,000.
|
|
Conduct
of
Business
Pending
Closing:
|
IDT
(i) represents and warrants that from and after the Interim Balance
Sheet
Date it has operated, and caused IDT Media and its subsidiaries
to
operate, the business of IDT Media and its subsidiaries, and (ii)
covenants and agrees that, absent Liberty’s prior written consent to the
contrary (which consent, in the case of clauses (i) through (t)
or (u)
(only insofar as such clause (u) relates to any matter contemplated
by
clauses (i) through (t)) below, will not be unreasonably withheld
or
delayed, and in the case of all other clauses, may be granted or
withheld
in Liberty’s sole discretion) from and after the date hereof to the
Closing Date it will operate, and cause IDT Media and its subsidiaries
to
operate, the business of IDT Media and its subsidiaries (including
in each
case without limitation the imposition of any liability or obligation
of
any kind, whether accrued, absolute, contingent, unliquidated or
otherwise
and whether due or to become due (including any liability for breach
of
contract, breach of warranty, torts, infringements, claims or lawsuits)
or
the disposition of any asset), in a manner consistent with the
ordinary
course of business consistent with past practices and in accordance
with,
and making the disbursements contemplated by, the interim operating
plan
of IDT Media attached hereto as Exhibit
C
(the “Interim
Operating Plan”),
and it has not and will not, and has caused and will cause IDT
Media and
its subsidiaries not to, do any of the following (except as otherwise
contemplated by the Interim Operating Plan or this Term
Sheet):
|
| (a) |
make
any changes to the charter, bylaws or similar governing documents
of IDT
Media or any of its subsidiaries;
|
| (b) |
issue
or sell any equity interest in, or rights to acquire or based upon
the
value of equity interests in, IDT Media or any of its subsidiaries
(“IDT
Media Equity Interests”);
|
| (c) |
redeem,
repurchase or otherwise reacquire any IDT Media Equity
Interests;
|
| (d) |
enter
into or modify any agreement or other arrangement between IDT Media
and
any of its subsidiaries, on the one hand, and IDT and any of its
subsidiaries (other than IDT Media and its subsidiaries), on the
other;
|
| (e) |
adopt
or authorize any plans providing for the issuance of IDT Media Equity
Interests;
|
| (f) |
make
any other changes to the capital structure of IDT Media or its
subsidiaries;
|
| (g) |
make
any filing under bankruptcy or insolvency laws, or permit any filing
made
under such laws by a third party to remain unopposed for longer than
sixty
(60) days;
|
| (h) |
enter
into or amend any arrangement restricting the ability of IDT Media
or its
subsidiaries (or purporting to restrict the ability of any equity
holder
of IDT Media) from conducting business in any manner or in any geographic
area except for geographic restrictions on VHS, DVD or theatrical
distribution in the ordinary course of business consistent with IDTE’s
past practices;
|
| (i) |
commence
or settle any legal action, arbitration or similar proceeding that
will or
could require the payment in excess of $200,000 or, in the case of
the
settlement of such an action, any continuing material liability on
the
part of IDT Media or its subsidiaries;
|
| (j) |
enter
into or amend any contracts or other agreements providing for the
payment
or receipt of consideration in excess of $300,000 other than contracts
contemplated by the Interim Operating
Plan;
|
| (k) |
terminate
the employment of any of Steve Brown, Morris Berger, Sam Abraham,
Janet
Healy, John Hyde, Jerry Davis, Neil Braun, Nick Foster or Chris McGurk
(each, individually, a “Key Person” and collectively, the “Key
Persons”)
or take, or fail to take, any action that would permit a Key Person
to
terminate his or her employment for “good reason” as specified in any
agreement relating to such Key Person’s
employment;
|
| (l) |
enter
into or modify any employment agreement;
|
| (m) |
enter
into or modify any lease of real property, terminate any lease of
real
property or extend the term or otherwise amend or modify any lease
of real
property, in each case where such lease would be for a term continuing
for
more than one year after consummation of the transactions contemplated
by
this Term Sheet or would involve gross lease payments in excess of
$200,000 annually or $500,000 in the
aggregate;
|
| (n) |
secure
any outstanding unsecured debt, provide any additional security for
any
outstanding secured debt or grant or suffer to exist any lien on
any
property (other than warehouse and materialmen’s liens and similar
statutory liens);
|
| (o) |
pay
or satisfy any claims except as expressly contemplated by the Interim
Operating Plan;
|
| (p) |
cancel
any debts or waive any tangible or intangible claims or rights except
as
expressly contemplated by the Interim Operating
Plan;
|
| (q) |
incur,
assume or become obligated with respect to any item of debt or other
long-term liability except as expressly contemplated by the Interim
Operating Plan (and any of which debts will be subject to the Purchase
Price Adjustments described above);
|
| (r) |
accelerate
or prepay any outstanding indebtedness;
|
| (s) |
make
any advance or loan to employees, directors or officers other than
customary and reasonable reimbursement of business expenses in a
manner
consistent with past practices or forgive any such loan previously
made;
|
| (t) |
make
any material change to tax or accounting practices or enter into
any
material agreement or settlement with any taxing authority;
or
|
| (u) |
enter
into any contract or arrangement to do any of the
foregoing.
|
|
Provisions
Relating to
Closing
Subsequent to
June
30, 2006
|
On
or before June 10, 2006, IDT will prepare and deliver to Liberty
a draft
supplemental interim operating plan for IDT Media for the period
from July
1, 2006 to July 31, 2006 prepared in a manner consistent with the
Interim
Operating Plan and with the five year business plan for IDT Media
previously provided by IDT to Liberty. Liberty and IDT will use
good faith
efforts to agree on the terms of a definitive supplemental interim
operating plan for such period (the “Supplemental Interim Operating Plan”)
on or before June 20, 2006. If IDT and Liberty agree upon the terms
of
such Supplemental Interim Operating Plan, and if the Closing does
not
occur on or before June 30, 2006 but does occur on or before the
Outside
Date, then (a) the Purchase Price Adjustments will be calculated
as if the
Closing Date were June 30, 2006 and (b) the parties will make further
adjustments to the Additional Cash Consideration to reflect that
Liberty
will be responsible for any operating cash shortfall (defined as
cash
expenditures less cash receipts) of IDT Media and its subsidiaries
during
the period from and including July 1, 2006 to and including the
Closing
Date, however funded, as a result of the operation of IDT Media
and its
subsidiaries (a “Supplemental Period Cash Shortfall Amount”) if such
operations are conducted in a manner consistent with the Supplemental
Interim Operating Plan. If IDT does not deliver a draft supplemental
interim operating plan for IDT Media on or before June 10, 2006
or if IDT
and Liberty do not agree on the terms of the Supplemental Interim
Operating Plan, and if the Closing does not occur on or before
June 30,
2006 but does occur on or before the Outside Date, then (x) the
Purchase
Price Adjustments will be calculated as if the Closing Date were
June 30,
2006 and (y) the parties will make further adjustments to the Additional
Cash Consideration to reflect that Liberty will be responsible
for 75% of
any Supplemental Period Cash Shortfall Amount and IDT will be responsible
for 25% of any Supplemental Period Cash Shortfall Amount. If the
failure
to consummate the Transaction prior to June 30, 2006 is the result
of the
breach of this Term Sheet or the definitive documents by Liberty,
Liberty
will be responsible for 100% of any Supplemental Period Cash Shortfall
Amount. Any such amounts will be treated as further adjustments
to the
Additional Cash Consideration or as repayment of intercompany debt
to
IDT.
|
| Conditions: |
The
obligations of each of the parties to effect the Transaction will
be
conditioned on:
|
| · |
the
absence of any injunctions or other legal prohibitions on the consummation
of the Transaction; and
|
| · |
the
receipt of required material governmental and third-party
approvals.
|
| · |
the
accuracy of IDT’s representations and warranties and the compliance with
IDT’s covenants under the agreement, except to the extent such
inaccuracies and such noncompliance have not had and are not reasonably
likely to have a Material Adverse Effect or a material adverse effect
on
the ability to consummate the
Transaction;
|
| · |
IDTE
or an appropriate subsidiary shall have entered into employment agreements
with Steve Brown, Morris Berger and Sam Abraham, in each case on
terms
substantially similar to those proposed by Liberty to
IDT;
|
| · |
If
requested by Liberty on or prior to the earlier of the Closing or
July 31,
2006, IDTE shall have exercised its option to extend the existing
employment agreement between IDTE and Nick Foster in accordance with
the
terms of such existing employment
agreement;
|
| · |
Required
waivers shall have been obtained from the lenders under the existing
credit facilities with respect to the transactions contemplated by
this
Term Sheet in form and substance reasonably acceptable to
Liberty;
|
| · |
The
obligation of IDTE to invest an aggregate of $6,519,000 in content
acquisitions and co-productions by June 10, 2006, in accordance with
the
terms of the Stock Purchase Agreement pursuant to which IDTE acquired
the
shares of Manga Entertainment Limited shall have been
satisfied;
|
| · |
The
loan agreement between IDT Netherlands, B.V., Puerto Rico Branch
(“IDT
Netherlands”) and Mainframe and the convertible note issued by Mainframe
pursuant thereto shall have been cancelled or assigned by IDT Netherlands
to a wholly owned subsidiary of IDTE organized outside of the United
States for no consideration (or such loan agreement has been treated
in
another manner reasonably acceptable to Liberty having the same economic
effect);
|
| · |
the
absence of any Material Adverse Effect since the date of this Term
Sheet,
other than any Material Adverse Effect affecting either the industry
of
developing, producing or distributing CG animated feature films or
live-action motion pictures for theatrical distribution or the industry
of
distributing content by VHS, DVD or other home video, in each case
as a
whole industry and in a manner not affecting IDT Media and its
subsidiaries disproportionately from other enterprises in such
industry.
|
| STARZ/IDTE Agreement: |
On
or prior to the Closing Date, Starz and IDTE will enter into an
agreement
having the terms substantially similar to those set forth in Exhibit
B
and other terms that are customary and reasonable for agreements
of this
type.
|
| Definitive Agreements: |
The
definitive agreements will be drafted by counsel for Liberty and
reasonably acceptable to IDT. The definitive agreements will contain
other
customary representations and warranties (subject to customary
qualifications, limitations and scheduled exceptions (which exceptions
will not be materially inconsistent with the materials reviewed
by Liberty
prior to the date of this Term Sheet), covenants, closing conditions
and
indemnities. In particular, the definitive documents will contain
representations and warranties regarding the following
matters:
|
| · |
organization
and qualification to do business
|
| · |
authorization
and validity of the definitive agreements
|
| · |
capitalization
|
| · |
accuracy
in all material respects of financial statements and the absence
of
undisclosed material liabilities of IDT Media and its
subsidiaries
|
| · |
approvals
and notices
|
| · |
conflicts
with material instruments binding IDT Media and its
subsidiaries
|
| · |
subsidiaries,
affiliates and investment securities of IDT
Media
|
| · |
absence
of certain material changes or events since the Interim Balance Sheet
Date
|
| · |
real
and personal property
|
| · |
legal
proceedings
|
| · |
material
licenses and regulatory requirements, and compliance in all material
respects with law
|
| · |
tax
matters (including an agreement to hire an appraiser to allocate
the total
purchase price, pursuant to Section 1060 of the Internal Revenue Code
(the “Code”), among the assets and liabilities acquired with the costs of
such appraisal to be paid one-half by each of Liberty and IDT) including
any tax sharing agreements, which tax representations will be similar
to
representations made in a transaction involving a sale of
stock
|
| · |
employee
matters
|
| · |
intellectual
property
|
| · |
material
agreements
|
| · |
affiliate
transactions
|
| · |
insurance
|
| Transition Services |
IDT
and its affiliates will provide (or arrange with third parties
to provide)
such transition services to IDT Media and its subsidiaries as the
parties
may mutually agree, such services to be furnished on a reasonably
allocated actual cost basis (and payable monthly) and may be terminated
upon at least 60 days’ prior written notice to
IDT.
|
| Post-Closing Covenants of Liberty: |
The
definitive agreements will contain the following post-Closing covenants
of
Liberty, which will apply until the earlier of the Exercise Date
or the
fifth anniversary of the Closing
Date:
|
| · |
Liberty
will use good faith commercially reasonable efforts to operate the
businesses of IDT Media and its subsidiaries in such a manner so
as to
maximize the value of IDT Media and its subsidiaries; provided, however,
that such covenant will not be deemed to create any obligation or
commitment on the part of Liberty or any of its affiliates to fund
or
authorize spending of funds for any such businesses in any particular
amounts and will not be deemed to require Liberty to proceed with
any
proposal or business plan to start or acquire any new business (including,
without limitation, a business engaged in the acquisition, development,
production and distribution of live-action motion pictures), to continue
or expand any existing business (including, without limitation, proceeding
with any currently contemplated CG animated feature film or
“greenlighting” any such film), or to take or refrain from taking any
action in connection with the operation of such businesses so long
as
Liberty acts commercially reasonable in good faith in making any
decision
with respect thereto;
|
| · |
Liberty
will cause one individual nominated by IDT to be elected to the board
of
directors of IDTE and, if requested, IDT Media, which nominee will
initially be Howard Jonas;
|
| · |
Liberty
will provide IDT with quarterly unaudited and annual audited consolidated
financial statements of IDT Media and its subsidiaries and copies
of such
other reports and materials as are prepared for the board of directors
of
IDT Media and IDTE;
|
| · |
Liberty
will not, and will not permit any of its affiliates (other than IDT
Media
or any subsidiary of IDT Media) to, make a loan to IDT Media or any
subsidiary of IDT Media at a rate of interest exceeding LIBOR plus
4% per
annum, compounded quarterly;
|
| · |
Liberty
will not, and will not permit any of its affiliates (other than IDT
Media
or any subsidiary of IDT Media) to, enter into any arrangement to
sell,
lease or otherwise transfer any property to, or purchase, lease or
otherwise acquire any property from, or provide services to or obtain
services from, or otherwise engage in any other transactions with,
IDT
Media or any of its subsidiaries, except for (i) transactions at
prices
and on terms and conditions not less favorable as a whole to IDT
Media and
its subsidiaries than could be obtained on an arm’s-length basis from
unrelated third parties, as determined by the board of directors
of IDT
Media in its reasonable judgment, (ii) transactions solely between
or
among IDT Media and its subsidiaries, (iii) loan transactions on
terms
permitted as described above, (iv) distributions by IDT Media with
respect
to its capital stock that consist solely of capital stock of IDT
Media or
that are taken into account in any subsequent determination of Net
Equity
Value for purposes of determining the Contingent Amount, (v) for
so long
as IDT Media is wholly owned by Liberty and any of its affiliates,
issuances by IDTE of its capital stock, and (vi) the agreement to
be
entered into by Starz and IDTE as contemplated by this Term Sheet;
and
|
| · |
IDT
will have reasonable access rights during normal business hours with
reasonable advance notice to the book and records and appropriate
personnel of IDT Media and its subsidiaries solely for the purpose
of and
to the extent necessary to confirm the accuracy of the calculation
of the
Contingent Amount.
|
| · |
Promptly
after the Closing, subject to the approval of the board of directors
of
Liberty, Liberty will establish an equity incentive plan for certain
employees of IDTE and its subsidiaries.
|
| Noncompetition and Nonsolicitation: |
From
the date of this Term Sheet and until the earlier of (i) the fifth
anniversary of the Closing Date and (ii) one year after the Exercise
Date,
IDT and its subsidiaries will not (a) engage in the business of
development, production or distribution of CG animated feature
films or
live-action motion pictures for theatrical distribution or the
distribution of content by VHS or DVD (except (X) by virtue of
the
ownership by IDT of IDT Media and its subsidiaries from the date
of this
Term Sheet to the Closing Date and (Y) for distribution of content
by VHS
or DVD targeted to ethnic markets in locations that are within
or similar
to the locations comprising the distribution network of IDT and
its
subsidiaries (other than IDT Media and its subsidiaries) on the
date of
this Term Sheet and that are not competitive with the existing
distribution network of the Anchor Bay Group as defined in the
Credit
Group Financial Statements) or (b) solicit for employment any employee
of
IDT Media or its subsidiaries, which restriction shall not include
general
solicitations not directed at a particular employee or class of
employees
of IDT Media or its subsidiaries.
|
| Outside Date: |
If
the Closing has not occurred on or before July 31, 2006 or such
other date
as Liberty and IDT may agree (the “Outside Date”), either party may
terminate the Transaction by written notice to the other, provided
that neither party may terminate the Transaction pursuant to this
sentence
if the failure of the Transaction to be consummated on or before
the
Outside Date resulted from a material breach of this Term Sheet
by such
party.
|
| Finders: |
Each
of Liberty, on the one hand, and IDT, on the other hand, will indemnify
the other for any broker’s fee or other type of finder’s fee for which the
originating party may be
responsible.
|
| Expenses: |
Except
as set forth herein, each party will pay all of its respective
costs and
expenses relating to the Transaction. Liberty and IDT will each
pay
one-half of any filing fees under the HSR
Act.
|
| Timing: |
The
parties will use reasonable good faith efforts to conclude the
negotiation
and execution of definitive documents, the receipt of required
or
desirable third party or governmental consents and the Closing,
all as
expeditiously as reasonably
appropriate.
|
| Confidentiality: |
This
Term Sheet, and any documents or information supplied by IDT in
connection
with the transaction contemplated hereby, is subject to the terms
of the
nondisclosure agreement entered into between Liberty and IDT dated
October
24, 2005.
|
| Governing Law and Venue: |
This
Term Sheet, and the other agreements to be entered into by the
parties,
shall be governed by, and construed and enforced in accordance
with, the
laws of the State of Delaware without regard to conflicts of law.
The
parties agree that should any suit, action or proceeding arising
out of
this Term Sheet, or any of the other agreements between the parties,
be
instituted by any party hereto, such suit, action or proceeding
shall be
instituted only in a court in the State of Delaware, and for such
purpose,
each of the parties consents to the in personam jurisdiction of
any court
in the State of Delaware and waives any objection to the venue
of any such
suit, action or proceeding.
|
| Publicity: |
The
parties shall consult with each other before issuing any press
release or
making any public statement with respect to this Term Sheet, or
the
transactions described herein, and no party shall issue any such
press
release or make any such public
statement without the prior written consent of the other party,
unless any
such disclosure is otherwise required by law (including applicable
regulations of the New York Stock Exchange and the NASDAQ National
Market). Promptly after the execution and delivery of this Term
Sheet, IDT
and Liberty will issue a joint press release in the form attached
as
Exhibit
D.
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| Assignment: |
This
Term Sheet is not transferable or assignable by either party; provided
that any party may assign its rights and obligations to a wholly-owned
subsidiary of such party; provided further,
however,
that such assignment shall not relieve the assigning party from
its
obligations hereunder.
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| WAIVER OF JURY TRIAL: |
TO
THE EXTENT PERMITTED UNDER APPLICABLE LAW, EACH PARTY ACKNOWLEDGES
AND
AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS TERM SHEET
AND THE
CONTEMPLATED DEFINITIVE DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED
AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY
AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF
OR
RELATING TO THIS TERM SHEET OR SUCH DEFINITIVE AGREEMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES
AND
ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (B)
EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS
WAIVER,
(C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH PARTY
HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY AMONG OTHER THINGS, THE
MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS
PARAGRAPH.
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