Assignment Agreement - IDT Corp. and Net2Phone Inc.



                             ASSIGNMENT AGREEMENT

     This Assignment Agreement (this "Agreement") is made as of May 7, 1999 (the
"Effective Date"), by and between IDT Corporation, a Delaware corporation with
its principal place of business at 190 Main Street, Hackensack, New Jersey 07601
("Assignor"), and Net2Phone, Inc., a Delaware corporation with its principal
place of business at 171 Main Street, Hackensack, New Jersey 07601 ("Assignee")
(hereinafter referred to collectively as the "Parties" and individually as a
"Party").

                                    RECITALS

     WHEREAS, Assignor has heretofore irrevocably transferred and assigned to
Assignee all of its rights, title and interest, on a worldwide basis, including,
without limitation, all intellectual property rights and moral rights, in and to
certain proprietary products, patent applications and proprietary information
set forth herein (excluding any trademark rights) as part of its initial and
original capital contribution in Assignee, and the Parties wish to memorialize
such transfer and assignment in this Agreement;

     WHEREAS, Assignor desires and agrees  to irrevocably assign to Assignee as
of the Effective Date all of its rights, title and interest, on a worldwide
basis, including, without limitation, all intellectual property rights and moral
rights, in and to certain proprietary products, patent applications and
proprietary information, as set forth herein, that otherwise have not been
transferred and assigned to Assignee prior to the Effective Date, as well as
certain trademark rights as set forth herein;

     WHEREAS, except for any ownership interest already held by Assignee,
Assignor is the sole owner of all rights, title and interest, including, without
limitation, all intellectual property rights, in and to such proprietary
products, patents, trademarks, proprietary information and  proprietary business
information; and, with respect to the trademarks, Assignee is a successor to a
portion of the business of the Assignor to which these trademarks pertain;

     WHEREAS, Assignor has agreed to irrevocably assign to Assignee all of its
rights, title and interest on a worldwide basis, including, without limitation,
all intellectual property rights and moral rights, in and to certain non-
proprietary products set forth herein to the full extent that Assignor has a
license for such rights and subject to and contingent upon Assignor having the
right and necessary consents to assign such license;

     WHEREAS, Assignor is a licensee of certain rights in and to such non-
proprietary products;

     WHEREAS, Assignor has agreed to license to Assignee certain rights in and
to certain proprietary business information relating to the business operations
of Assignee and the combined business operations of Assignor and Assignee; and

     WHEREAS, to enable Assignor to continue its current use of certain
proprietary products, Assignee is willing to grant to Assignor a license back to
certain rights in such proprietary products as set forth herein;

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:


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                                   AGREEMENT

1.   DEFINITIONS

For the purposes of this Agreement, the following terms will have the meanings
ascribed to them as follows:

     1.1  "Assigned Property" means the Proprietary Products, Proprietary
          Information, Third Party Products, Trademarks and Patents.

     1.2  "Patents" means the patent applications set forth in Exhibit C.

     1.3  "Price" means a one-time payment of one dollar (US$1).

     1.4  "Proprietary Business Information" means any confidential or
          proprietary information, know-how, or trade secret described or
          comprised in or relating to the general business operations of
          Assignee, excluding Proprietary Information (but including, without
          limitation, access to the carrier minutes report manager, call costing
          and payments settlement system and similar databases to the extent
          related to and appropriate for the operation of Assignee's business),
          that exists as of the Effective Date or that is subsequently provided
          by Assignor to Assignee at its sole discretion, and that is not in the
          public domain or regularly disclosed by Assignor to third parties
          without confidentiality restrictions.

     1.5  "Proprietary Information" means any confidential or proprietary
          information, know-how, or trade secret described or comprised in or
          relating to the Assigned Property that is not in the public domain or
          regularly disclosed by Assignee to third parties without
          confidentiality restrictions.

     1.6  "Proprietary Products" means the products set forth in Exhibit A,
          including, without limitation, all user manuals, reference manuals and
          other documentation and materials relating thereto; and any derivative
          works, foreign language versions, fixes, upgrades, updates,
          enhancements, new versions or previous versions thereof.

     1.7  "Trademarks" means the product marks and logos set forth in Exhibit D
          and all rights and goodwill associated therewith.

     1.8  "Third Party Products" means a mutually agreed upon subset of products
          selected by the Parties from among the products set forth in Exhibit B
          (and such additional similar products as the Parties may mutually
          agree), including, without limitation, any software and firmware
          relating thereto; all user manuals, reference manuals and other
          documentation and materials relating thereto; and any derivative
          works, foreign language versions, fixes, upgrades, updates,
          enhancements, new versions or previous versions thereof provided by
          the third-party licensor of such products to Assignor.

2.  ASSIGNMENT

Assignor hereby irrevocably assigns, conveys, sells, grants and transfers and
agrees to assign, convey, sell, grant and transfer to Assignee the following
rights (collectively, the "Rights"):

     2.1  Proprietary Products.  Subject to the terms and conditions of this
          --------------------                                              
          Agreement, Assignor hereby irrevocably assigns, conveys, sells, grants
          and transfers and agrees to assign, convey, sell, grant


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          and transfer to Assignee, its successors and assigns all of its
          rights, title and interest of every kind and character throughout the
          world in and to the Proprietary Products to the full extent of its
          ownership or interest therein; including, without limitation, all
          federal, state, foreign, statutory and common law and other rights in
          patents, copyrights, moral rights, trademarks, trade secrets, know-
          how, design rights and all other intellectual property and proprietary
          rights therein; all domestic and foreign intellectual property
          applications and registrations therefor (and all divisions,
          continuations, continuations-in-part, reexaminations, substitutions,
          reissues, extensions, and renewals of such applications and
          registrations, and the right to apply for any of the foregoing); all
          goodwill associated therewith; all rights to causes of action and
          remedies related thereto (including, without limitation, the right to
          sue for past, present or future infringement, misappropriation or
          violation of rights related to the foregoing); and any and all other
          rights and interests arising out of, in connection with or in relation
          to the Proprietary Products. Upon Assignee's reasonable request,
          Assignor will promptly take such actions, including, without
          limitation, the prompt execution and delivery of documents in
          recordable form, as may be reasonably necessary to vest, secure,
          perfect, protect or enforce the rights and interests of Assignee in
          and to the Proprietary Products.

     2.2  Proprietary Information.  Subject to the terms and conditions of this
          -----------------------                                              
          Agreement, Assignor hereby irrevocably assigns, conveys, sells, grants
          and transfers and agrees to assign, convey, sell, grant and transfer
          to Assignee, its successors and assigns all of its rights, title and
          interest of every kind and character throughout the world, including
          moral rights, in and to the Proprietary Information to the full extent
          of its ownership or interest therein; including, without limitation,
          all intellectual property and proprietary rights therein, all goodwill
          associated therewith, all rights to causes of action and remedies
          related thereto (including, without limitation, the right to sue for
          past, present or future infringement, misappropriation or violation of
          rights related to the foregoing), and any and all other rights and
          interests arising out of, in connection with or in relation to the
          Proprietary Information.

     2.3  Third Party Products.  Subject to the terms and conditions of this
          --------------------                                              
          Agreement, and subject to and contingent upon Assignor obtaining any
          necessary and applicable third party consents, Assignor hereby
          irrevocably assigns, conveys, sells, grants and transfers and agrees
          to assign, convey, sell, grant and transfer to Assignee, its
          successors and assigns all rights, title and interest of every kind
          and character throughout the world, including moral rights, in and to
          the Third Party Products and any license agreements related thereto to
          the full extent of Assignor's rights or interest therein (if any).
          Upon Assignee's request, Assignor will promptly take such actions,
          including, without limitation, the prompt execution and delivery of
          documents in recordable form, as may be reasonably necessary to vest,
          secure, perfect, protect or enforce the rights and interests of
          Assignee in and to the Third Party Products and any license agreements
          related thereto.

     2.4  Patents.  Subject to the terms and conditions of this Agreement, 
          -------                  
          Assignor hereby irrevocably assigns, conveys, sells, grants and
          transfers and agrees to assign, convey, sell, grant and transfer to
          Assignee, its successors and assigns all of its rights, title and
          interest of every kind and character throughout the world, including
          moral rights, in and to the Patents to the full extent of its
          ownership or interest therein; including, without limitation, all
          domestic and foreign patent applications and registrations therefor
          (and all patents that issue therefrom and all divisions,
          continuations, continuations-in-part, reexaminations, substitutions,
          reissues, extensions, and renewals of such applications, registrations
          and patents, and the right to apply for any of the foregoing); all
          goodwill associated therewith; all rights to causes of action and
          remedies related thereto (including, without limitation, the right to
          sue for past, present or future infringement, 


                                       3

 
          misappropriation or violation of rights related to the foregoing); and
          any and all other rights and interests arising out of, in connection
          with or in relation to the Patents. Upon Assignee's request, Assignor
          will promptly take such actions, including, without limitation, the
          prompt execution and delivery of documents in recordable form, as may
          be reasonably necessary to vest, secure, perfect, protect or enforce
          the rights and interests of Assignee in and to the Patents.

     2.5  Trademarks.  Subject to the terms and conditions of this Agreement,
          ----------                                                         
          Assignor hereby irrevocably assigns, conveys, sells, grants and
          transfers and agrees to assign, convey, sell, grant and transfer to
          Assignee, its successors and assigns all of its rights, title and
          interest of every kind and character throughout the world, including
          moral rights, in and to the Trademarks to the full extent of its
          ownership or interest therein; including, without limitation, all
          federal, state, foreign, statutory and common law and other rights;
          all domestic and foreign trademark applications and registrations
          therefor (and all extensions and renewals of such applications and
          registrations, and the right to apply for any of the foregoing); all
          goodwill associated therewith symbolized by the Trademarks and the
          portion of the business of the Assignor to which the Trademarks
          pertain; all rights to causes of action and remedies related thereto
          (including, without limitation, the right to sue for past, present or
          future infringement, misappropriation or violation of rights related
          to the foregoing); and any and all other rights and interests arising
          out of, in connection with or in relation to the Trademarks. The
          Parties agree to have executed and file the confirmatory assignment
          with respect to the Trademarks attached hereto as Exhibit F. Upon
          Assignee's request, Assignor will promptly take such other actions,
          including, without limitation, the prompt execution and delivery of
          documents in recordable form, as may be reasonably necessary to vest,
          secure, perfect, protect or enforce the rights and interests of
          Assignee in and to the Trademarks.

     2.6  Further Assurances For Third Party Products.  Assignor and Assignee 
          -------------------------------------------                
          will use their respective reasonable best efforts to obtain any
          consent, approval or amendment required to novate and/or assign the
          Third Party Products; provided, however, that, except for filing and
                                --------  -------
          other administrative charges, Assignee shall not be obligated to pay
          any consideration therefor to the third party from whom such consents,
          approvals and amendments are requested. In the event and to the extent
          that Assignee and Assignor are unable to obtain any such required
          consent, approval or amendment, or if any attempted assignment would
          be ineffective or would adversely affect the rights of Assignor with
          respect to any Third Party Product so that Assignee would not in fact
          receive all the rights with respect to such Third Party Product,
          Assignor and Assignee will cooperate (to the extent permitted by law
          or the terms of any applicable agreement) in a mutually agreeable
          arrangement under which Assignee would, to the extent possible and
          permissible under any applicable agreement, obtain the benefits and
          assume the obligations with respect to such Third Party Product, in
          accordance with this Agreement, including sub-contracting, sub-
          licensing, or sub-leasing to Assignee, or under which Assignor would
          enforce for the benefit of Assignee, with Assignee assuming Assignor's
          obligations, any and all rights of Assignor against a third party
          thereto. Assignor shall, without further consideration therefor, pay
          and remit to Assignee promptly all monies, rights and other
          considerations received in respect to Assignee's performance of such
          obligations and Assignee shall remit to Assignor (or pay directly) all
          amounts due with respect to such Third Party Products to such third
          parties. If and when any such consent shall be obtained or such Third
          Party Product shall otherwise become assignable or able to be novated,
          Assignor shall promptly assign and novate all of its rights and
          obligations thereunder to Assignee without payment of further
          consideration and Assignee shall, without the payment of any further
          consideration therefor, assume such rights and obligations and
          Assignor shall be relieved of any and all liability hereunder.


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3.  LICENSE

        3.1  Subject to the terms and conditions of this Agreement, Assignor
             hereby grants and agrees to grant to Assignee a worldwide, royalty-
             free, fully paid up, perpetual, irrevocable, nonexclusive,
             transferable right and license (with the right to sublicense) to
             copy and use Proprietary Business Information for the purposes of
             conducting Assignee's business; provided, however, Assignee takes
             such steps as are reasonably necessary to protect Assignor's rights
             in the Proprietary Business Information, including by providing the
             same protection that Assignor affords to Proprietary Business
             Information and by treating Proprietary Business Information as
             confidential information, if appropriate.

        3.2  Subject to the terms and conditions of this Agreement, Assignee
             hereby grants and agrees to grant to Assignor a worldwide, royalty-
             free, fully paid up, perpetual, irrevocable, non-exclusive license
             to use the products identified in Exhibit E only for internal use
             by and for Assignor. Assignor will not assign, sublicense, resell,
             rent, distribute or provide service-bureau timesharing or related
             services with respect to the products identified in Exhibit E or
             the license granted in this Section 3.2 .

4.   PAYMENT

        As payment for the assignment of Rights and the license granted pursuant
to Sections 2 and 3, Assignee will pay to Assignor the Price, the receipt and
full satisfaction of which is hereby acknowledged by the Parties.

5.   REPRESENTATIONS AND WARRANTIES

UNLESS EXPLICITLY STATED OTHERWISE IN THIS AGREEMENT, THE ASSIGNED PROPERTY,
PRODUCTS IN EXHIBIT E, AND PROPRIETARY BUSINESS INFORMATION ARE PROVIDED "AS IS"
AND THE PARTIES HEREBY DISCLAIM ALL WARRANTIES OF ANY KIND WITH RESPECT TO ANY
OF THE ASSIGNED PROPERTY, PRODUCTS IN EXHIBIT E OR PROPRIETARY BUSINESS
INFORMATION, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

6.   LIMITATION OF LIABILITY

IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL,
SPECIAL, INDIRECT, EXEMPLARY OR PUNITIVE DAMAGES, OR DAMAGES FOR ANY LOSS OF
PROFITS, REVENUE OR BUSINESS, EVEN IF SUCH PARTY IS NOTIFIED OF THE POSSIBILITY
OF SUCH DAMAGES.  The Parties acknowledge that the limitation of liability in
this Section 6 and the allocation of risk that it implements is an essential
element of the bargain agreed to by the Parties, without which the Parties would
not have entered into this Agreement.

7.   GENERAL

        7.1  This Agreement, and all disputes, claims or controversies arising
             under or relating to this Agreement or the breach, termination or
             validity hereof, or any transaction contemplated hereby shall be
             governed by and settled in accordance with the procedures terms and
             conditions set forth in the applicable dispute resolution
             provisions of the Separation Agreement to be signed between the
             Parties in May or June of 1999.


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        7.2  If either Party commences any action or proceeding against the
             other Party to enforce this Agreement or any of such Party's rights
             hereunder, the prevailing Party will be entitled to its reasonable
             expenses related to such action or proceeding, including reasonable
             attorneys' and expert fees.

        7.3  No delay, failure or waiver by either Party to exercise any right
             or remedy under this Agreement, and no partial or single exercise,
             will operate to limit, preclude, cancel, waive or otherwise affect
             such right or remedy, nor will any single or partial exercise
             limit, preclude, impair or waive any further exercise of such right
             or remedy or the exercise of any other right or remedy.

        7.4  If any provision of this Agreement is determined to be invalid or
             unenforceable, the validity or enforceability of the other
             provisions or of this Agreement as a whole will not be affected;
             and, in such event, such provision will be changed and interpreted
             so as best to accomplish the objectives of such provision within
             the limits of applicable law or applicable court decision.

        7.5  Except as provided in Section 7.1, this Agreement, including any
             exhibit(s) hereto which are incorporated herein by this reference,
             serves to document formally the entire understanding between the
             Parties relating to the subject matter hereof, and supersedes and
             replaces any prior or contemporaneous agreements, negotiations or
             understandings (whether oral or written), relating generally to the
             same subject matter. No amendment or modification of any provision
             of this Agreement will be effective unless in writing and signed by
             a duly authorized signatory of the Party against which enforcement
             of the amendment or modification is sought.


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          IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives as of the Effective Date.

IDT CORPORATION                               NET2PHONE, INC.

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By:  /s/ Steve Brown                          By:  /s/ Ilan Slasky              
    ------------------------------                ------------------------------
Name (Print):  Steve Brown                    Name (Print):  Ilan Slansky       
              --------------------                          --------------------
Title:  Chief Financial Officer               Title:  Chief Financial Officer   
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