Registration Rights Agreement
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of April 17, 2003, by and between IDT Media, Inc., a Delaware corporation (the “Company”), and Liberty IDTMED, Inc., a Delaware corporation (the “Investor”).
WHEREAS, the Company and the Investor have entered into a Subscription Agreement, dated as of the date hereof (the “Subscription Agreement”), pursuant to which the Investor purchased and the Company sold to Investor 88.235 shares (the “Investor Securities”) of the Class A Common Stock, par value $0.01 per share, of the Company (the “Class A Common Stock”); and
WHEREAS, the Subscription Agreement provides that the Company and Investor shall enter into this Agreement contemporaneously with the execution and delivery of the Subscription Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
Section 1 Definitions. (a) For the purposes of this Agreement:
“Act” means the Securities Act of 1933, as amended.
“Affiliate” means, with respect to any person, any other person directly or indirectly controlling, controlled by or under common control with the first such person.
“Closing” and “Closing Date” mean the date of the Closing of the Initial Public Offering, as such term is defined below.
“Holder” means a holder of Registrable Securities.
“Initial Public Offering” means the completion of the first sale of any common equity securities of the Company, whether primary or secondary, pursuant to a widely dispersed, underwritten public offering (in or outside the United States) whereby such common equity securities are thereafter traded on a national securities exchange or on the Nasdaq Stock Market.
“Initially Issued Number” means the total number of Investor Securities issued to the Investor at the closing of the purchase and sale of the Liberty Securities, as defined by the Subscription Agreement, as appropriately adjusted for stock splits, stock dividends, reverse stock splits and other similar events affecting the Class A Common Stock.
“person” means any individual, partnership, corporation, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or agency or political subdivision thereof, or other entity.
“register, “ “registered” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement.
“Registrable Securities” means (A) the Investor Securities, (B) any other shares of Class A Common Stock issued to a Holder by the Company, including without limitation any shares of Class A Common Stock issued pursuant to Section 4.2 of the Subscription Agreement, (C) any shares of Class A Common Stock issued to a Holder or one of its affiliates in respect of any shares of the capital stock of IDT Corporation or any subsidiary of IDT Corporation beneficially owned by such Holder (by stock dividend, share exchange or otherwise); and (D) any shares of Class A Common Stock issued in respect of any such shares (by stock split, stock dividend, reclassification, recapitalization, or otherwise ); provided, however, that such securities shall cease to be Registrable Securities when and to the extent that (i) such securities have been sold pursuant to an effective registration statement under the Act, (ii) such securities have become eligible for resale pursuant to Rule 144(k) of the Act (or any similar provision then in force) or (iii) such securities have ceased to be outstanding.
(b) Capitalized terms used and not otherwise defined in this Agreement have the meanings ascribed to them in the Subscription Agreement.
Section 2 Registration Rights.
2.1.(a) Registration Upon Demand. At any time on or after the date that is 18 months after the Closing Date, one or more Holders that in the aggregate beneficially own at least 20% of the Registrable Securities may make a demand that the Company effect the registration of all or part of such Holders’ Registrable Securities (a “Demand Registration”). Upon receipt of a valid request for a Demand Registration, the Company shall promptly, and in any event no later than 15 days after such receipt, notify all other Holders of the making of such demand and shall use its reasonable efforts to register under the Act as expeditiously as may be practicable the Registrable Securities which Holders have requested the Company to register in accordance with this Section 2.1. Notwithstanding the foregoing, the Company shall only be required to effect a registration if the number of Registrable Securities that the Company shall have been requested to register shall, in the aggregate, (i) represent at least 50% of the Initially Issued Number or (ii) represent all of the Registrable Securities then held by all Holders. The Holders shall together have the right to two Demand Registrations pursuant to this Section 2.1(a), provided, however, that no more than one such Demand Registration may be requested in any 12 month period.
(b) Effective Registration Statement. A registration requested pursuant to Section 2.1 (a) hereof shall not be deemed to have been effected (i) if a registration statement with respect thereto has not been declared effective by the Securities and Exchange Commission (“SEC”), (ii) if after it has become effective and prior to the date ninety (90) days after the effective date, such registration is materially interfered with by any stop order, injunction or similar order or requirement of the SEC or other governmental agency or court for any reason not attributable to the fault of any of the Holders, or (iii) the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived,
other than by reason of a failure on the part of a Holder to perform its obligations under such underwriting agreement.
(c) Piggyback Registration. At any time on or after the date that is 18 months after the Closing Date, if the Company proposes to file a registration statement under the Act with respect to an offering of its equity securities for its own account or for the account of another person or entity (other than a registration statement on Form S-4 or S-8 (or any substitute forms that may be adopted by the SEC)), the Company shall give written notice of such proposed filing to the Holders at the address set forth in the share register of the Company as soon as reasonably practicable (but in no event less than 7 business days before the anticipated filing date), undertaking to provide each Holder the opportunity to register on the same terms and conditions such amount of Registrable Securities as such Holder may request (a “Piggyback Registration”). Each Holder will have 5 business days after receipt of any such notice to notify the Company as to whether it wishes to participate in a Piggyback Registration (which notice shall not be deemed to be a request for a Demand Registration). If the registration statement is filed on behalf of a person or entity other than the Company, the Company will use its reasonable best efforts to have the Registrable Securities that the Holders wish to sell included in the registration statement. If the Company or the person or entity for whose account such offering is being made shall determine in its sole discretion not to register or to delay the proposed offering, the Company may, at its election, provide written notice of such determination to the Holders and (i) in the case of a determination not to effect the proposed offering, shall thereupon be relieved of the obligation to register such Registrable Securities in connection therewith and (ii) in the case of a determination to delay a proposed offering, shall thereupon be permitted to delay registering such Registrable Securities for the same period as the delay in respect of the proposed offering.