GENERAL ELECTRIC CAPITAL CORP, SC 13D, 1999-08-09

GENERAL ELECTRIC CAPITAL CORP
SC 13D, 1999-08-09
PERSONAL CREDIT INSTITUTIONS

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. ___)*

NET2PHONE, INC.

(Name of Issuer)

Common Stock, par value $.01 per share

(Title of Class of Securities)

64108N106

(CUSIP Number)

Nancy E. Barton, Esq.
General Electric Capital Corporation
260 Long Ridge Road
Stamford, Connecticut 06927
(203) 357-4000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)

July 29, 1999

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of (S)(S)240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [ ].

NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See (S)240.13d-7(d) for other
parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>

SCHEDULE 13D

- -----------------------
CUSIP NO. 64108N106
- -----------------------

- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)

GE Capital Equity Investments, Inc. 06-1268495
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3

- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8

OWNED BY 2,322,333
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
1,280,833
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11

2,267,581
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
24.0%**
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
CO
- ------------------------------------------------------------------------------

** Represents the Reporting Person's ownership percentage of the outstanding
shares of Common Stock of the Issuer. The Reporting Person's ownership
percentage of the aggregate outstanding shares of Commons Stock and Class A
Stock of the Issuer is 5.5%. The foregoing percentages are based on the number
of shares of Common Stock and Class A Stock outstanding as of July 29, 1999 as
reported in the Issuer's Form S-1/A dated as of July 29, 1999.
<PAGE>

SCHEDULE 13D

- -----------------------
CUSIP No. 64108N106
- -----------------------

- ------------------------------------------------------------------------------
NAME OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)

GENERAL Electric Capital Corporation 13-1500700
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3

OWNED BY 2,322,333
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
1,280,833
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11

SCHEDULE 13D

- -----------------------
CUSIP No. 64108N106
- -----------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)

National Broadcasting Company, Inc. 14-1682529
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3

- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7

0
-----------------------------------------------------------
NUMBER OF SHARED VOTING POWER
SHARES 8
BENEFICIALLY
OWNED BY 2,322,333
EACH -----------------------------------------------------------
REPORTING SOLE DISPOSITIVE POWER
PERSON 9
WITH
1,041,500
-----------------------------------------------------------
SHARED DISPOSITIVE POWER
10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11

SCHEDULE 13D

National Broadcasting Company Holding, Inc. 13-3448662
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3

- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
Not Applicable
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7

Disclaimed (See 11 below)
-----------------------------------------------------------
NUMBER OF SHARED VOTING POWER
SHARES 8
BENEFICIALLY
OWNED BY 0
EACH -----------------------------------------------------------
REPORTING SOLE DISPOSITIVE POWER
PERSON 9
WITH
Disclaimed (See 11 below)
-----------------------------------------------------------
SHARED DISPOSITIVE POWER
10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
Beneficial ownership of all shares disclaimed by National Broadcasting
Company Holding, Inc.
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Not Applicable (See 11 above)
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
CO
- ------------------------------------------------------------------------------
<PAGE>

SCHEDULE 13D

General Electric Capital Services, Inc. 06-1095035
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3

Disclaimed (See 11 below)
-----------------------------------------------------------
NUMBER OF SHARED VOTING POWER
SHARES 8
BENEFICIALLY
OWNED BY 0
EACH -----------------------------------------------------------
REPORTING SOLE DISPOSITIVE POWER
PERSON 9
WITH
Disclaimed (See 11 below)
-----------------------------------------------------------
SHARED DISPOSITIVE POWER
10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
Beneficial ownership of all shares desclaimed by General Electric
Capital Services Inc.
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Not Applicable (See 11 above)
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
CO
- ------------------------------------------------------------------------------
<PAGE>

SCHEDULE 13D

- -----------------------
CUSIP No. 64108N106
- -----------------------

- ------------------------------------------------------------------------------
NAME OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)

General Electric Company 14-0689340
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3

Disclaimed (See 11 below)
-----------------------------------------------------------
SHARED VOTING POWER
NUMBER OF 8
SHARES
BENEFICIALLY 0
OWNED BY -----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
REPORTING 9
PERSON
WITH Disclaimed (See 11 below)
-----------------------------------------------------------
SHARED DISPOSITIVE POWER
10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11

Beneficial ownership of all shares disclaimed by General Electric
Company
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Not Applicable (See 11 above)
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
CO
- ------------------------------------------------------------------------------
<PAGE>

SCHEDULE 13D

Snap! LLC 74-2883162
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3

305,248
-----------------------------------------------------------
NUMBER OF SHARED VOTING POWER
SHARES 8
BENEFICIALLY
OWNED BY 0
EACH -----------------------------------------------------------
REPORTING SOLE DISPOSITIVE POWER
PERSON 9

305,248
-----------------------------------------------------------
SHARED DISPOSITIVE POWER
10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11

305,248
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
2.8% **
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------

** Represents the Reporting Person's ownership percentage of the outstanding
shares of Common Stock of the Issuer. The Reporting Person's ownership
percentage of the aggregate outstanding shares of Commons Stock and Class A
Stock of the Issuer is 0.6%. The foregoing percentages are based on the number
of shares of Common Stock and Class A Stock outstanding as of July 29, 1999 as
reported in the Issuer's Form S-1/A dated as of July 29, 1999.

<PAGE>

ITEM 1. SECURITY AND ISSUER.

This Schedule 13D relates to the Common Stock, par value $.01 per share
(the "Common Stock"), of Net2Phone, Inc., a Delaware corporation (the "Issuer").
The principal executive offices of the Issuer are located at 171 Main Street,
Hackensack, New Jersey 07601.

ITEM 2. IDENTITY AND BACKGROUND.

This statement is filed by GE Capital Equity Investments, Inc. ("GECEI"),
for and on behalf of itself, National Broadcasting Company, Inc. ("NEC"),
National Broadcasting Company Holding, Inc. ("NBCH"), General Electric Capital
Corporation ("GE Capital"), General Electric Capital Services, Inc. ("GECS"),
General Electric Company ("GE") and Snap! LLC ("Snap"). NBC is a wholly-owned
subsidiary of NBCH. GECEI is a wholly-owned subsidiary of GE Capital; GE
Capital is a subsidiary of GECS; and GECS and NBCH are wholly-owned subsidiaries
of GE. Snap is primarily owned by NBC and CNET, Inc. ("CNET"), and NBC appoints
a majority of the Board of Managers of Snap. GECEI, NBC, NBCH, GE Capital,
GECS, GE and Snap are referred to herein collectively as the "Reporting
Persons". An agreement among the Reporting Persons with respect to the filing
of this statement is attached hereto as Exhibit 3.

GECEI is a Delaware corporation with its principal executive offices
located at 120 Long Ridge Road, Stamford, Connecticut 06927. The principal
business activities of GECEI are the making, managing and disposing of
investments in private and public companies. NBC is a Delaware corporation with
its principal executive offices located at 30 Rockefeller Plaza, New York, New
York 10112. The principal business activities of NBC are the operation of
television and cable broadcast networks and television stations. NBCH is a
Delaware corporation with its principal executive offices located at 30
Rockefeller Plaza, New York, New York 10112. The principal business activities
of NBCH are the ownership of television and cable broadcast network and
television station operations. Snap is a Delaware limited liability company
with its principal executive offices at 1 Beach Street, San Francisco,
California 94133. The principal business activities of Snap are the developing
and providing of web-based tools that help users access, navigate and
personalize the resources of the Internet. GE Capital is a New York corporation
with its principal executive offices located at 260 Long Ridge Road, Stamford,
Connecticut 06927. GE Capital, together with its affiliates, operates
primarily in the financing industry and, to a lesser degree, in the life
insurance and property/casualty insurance industries. GECS is a Delaware
corporation with its principal executive offices located at 260 Long Ridge Road,
Stamford, Connecticut 06927. GECS is a holding company which owns all the
common stock of GE Capital and other subsidiaries. GE is a New York corporation
with its principal executive offices located at 3135 Easton Turnpike, Fairfield,
Connecticut 06431. GE engages in providing a wide variety of industrial,
commercial and consumer products and services.

The name, business address, present principal occupation or employment, and
citizenship of each director and executive officer of GECEI, NBC, NBCH, GE
Capital, GECS, GE and Snap are set forth on Schedules A, B, C, D, E, F and G
attached hereto, respectively.

Except as set forth on Schedule H hereto, during the last five years none
of the Reporting Persons nor, to the best of their knowledge, any of their
directors or executive officers, has been (i) convicted of any criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgement, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to federal or state securities laws or finding
any violation with respect to such laws.

ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

On May 13, 1999, the Issuer and GECEI entered into a Series A Subscription
Agreement (the "Subscription Agreement") providing for the purchase on that day
by GECEI of 750,000 shares of Series A Preferred Stock (the "Series A Preferred
Stock") from the Issuer, and warrants to purchase 15,000 shares of Common Stock,
for an aggregate purchase price of $7,500,000. The source of funds used to
purchase the shares and the warrants was the working capital of GECEI.

On June 18, 1999, Snap, GECEI and the Issuer entered into a Stock Transfer
Agreement (the "Transfer Agreement") providing for the purchase on that day by
Snap from GECEI of 100,000 shares of Series A Preferred Stock and warrants to
purchase 2,000 shares of Common Stock, for an aggregate purchase price of
<PAGE>

$1,000,000. A copy of the Transfer Agreement is attached hereto as Exhibit 3.
The source of funds used to purchase the shares and the warrants was the working
capital of Snap.

After the consummation of the transactions contemplated by the Subscription
Agreement and the Transfer Agreement, the Issuer engaged in a three-for-one
stock split of its Class A Common Stock, par value $.01 per share (the "Class A
Stock") and Common Stock. After the stock split, GECEI held 650,000 shares of
Series A Preferred Stock convertible into 1,950,000 shares of Class A Stock and
warrants to purchase 39,000 shares of Common Stock, and Snap held 100,000 shares
of Series A Preferred Stock convertible into 300,000 shares of Class A Stock and
warrants to purchase 6,000 shares of Common Stock.

Pursuant to the Certificate of Incorporation of the Issuer, as amended (the
"Certificate"), giving effect to the Issuer's stock split described above, each
share of Series A Preferred Stock is convertible into three shares of Class A
Common Stock. Also pursuant to the Certificate, each share of Class A Stock is
convertible, at any time and at the option of the holder thereof, into one fully
paid and nonassessable share of Common Stock. Each share of Class A Stock
entitles the holder thereof to two (2) votes on all matters to be voted on by
the stockholders of the Issuer. Each share of Common Stock entitles the holder
thereof to one (1) vote on all matters to be voted on by the stockholders of the
Issuer. In all other respects, the Class A Stock and the Common Stock have the
same rights and privileges and rank equally, share ratably and are identical in
respects as to all matters, including rights of liquidation.

The shares of Series A Preferred Stock were converted into Class A Stock
upon the consummation of the Issuer's initial public offering. In addition, each
of GECEI and Snap elected to exercise their warrants to purchase Common Stock.
GECEI elected to purchase all 39,000 of the warrant shares it held for cash, of
which 16,500 shares are allocated to NBC. Snap elected to purchase all of its
warrant shares by exercise of its cashless exercise right, leaving Snap with
5,248 shares of Common Stock. In addition, GECEI purchased $5.0 million of
Common Stock at $15 per share, or 333,333 shares of Common Stock, at the initial
public offering. The source of funds used to purchase the shares was the working
capital of GECEI. Of these shares, 133,333 are allocated to GECEI, and 200,000
are allocated to NBC. All shares purchased by GECEI and NBC are being issued in
the name of GECEI.

ITEM 4. PURPOSE OF THE TRANSACTION.

GECEI, NBC and Snap acquired the shares of Common Stock of the Issuer as an
investment and hold them in the ordinary course of business and not with the
purpose or effect of changing the control of the Issuer.

Each of GECEI, NBC and Snap intends to review its investment on a regular
basis and as a result thereof may at any time or from time to time, acquire
additional securities of the Issuer or dispose of all or a portion of any
securities of the Issuer in the open market or otherwise. Any such acquisition
or disposition would be made in compliance with all applicable laws and
regulations.

Pursuant to the Subscription Agreement, so long as GECEI, its affiliates
and beneficial owners (the "GE Investors") hold a majority of the Class A Stock
originally purchased under the Subscription Agreement, the GE Investors will be
entitled to nominate, and the Issuer and its directors shall use their best
efforts to secure the election of a person to serve as a director of the Issuer.
In lieu of electing a director, the GE Investors may select a representative to
attend all meetings of the Issuer's board of directors in a nonvoting observer
capacity.

Although the foregoing represents the range of activities presently
contemplated by the Reporting Persons with respect to the Issuer, it should be
noted that the possible activities of the Reporting Persons are subject to
change at any time.

Except as set forth above, none of the Reporting Persons has any present
plans or proposals which related to or would result in any of the actions
described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.

ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.

(a) The responses of the Reporting Persons to Rows (11) through (13) of
the cover pages of this statement on Schedule 13D are incorporated herein by
reference. As of the date hereof, GECEI and NBC beneficially own in the
aggregate 2,627,581 shares of Common Stock of the Issuer, (i) representing
approximately 24.0% of the outstanding shares of Common Stock of the Issuer
(based on the number of shares of Common
<PAGE>

Stock outstanding as of July 29, 1999 as reported in the Issuer's Form S-1/A
dated as of July 29, 1999) and (ii) representing approximately 5.5% of the
combined outstanding shares of Common Stock and Class A Stock of the Issuer
(based on the number of shares of Common Stock and Class A Stock outstanding as
of July 29, 1999 as reported in the Issuer's Form S-1/A dated as of July 29,
1999).

As of the date hereof, Snap beneficially owns in the aggregate 305,248
shares of Common Stock of the Issuer, (i) representing approximately 2.8% of the
outstanding shares of Common Stock of the Issuer (based on the number of shares
of Common Stock outstanding as of July 29, 1999 as reported in the Issuer's Form
S-1/A dated as of July 29, 1999) and (ii) representing approximately 0.6% of the
combined outstanding shares of Common Stock and Class A Stock of the Issuer
(based on the number of shares of Common Stock and Class A Stock outstanding as
of July 29, 1999 as reported in the Issuer's Form S-1/A dated as of July 29,
1999).

Except as disclosed in this Item 5(a), none of the Reporting Persons nor,
to the best of their knowledge, any of their directors or executive officers,
beneficially owns any shares of Common Stock of the Issuer.

(b) The responses of the Reporting Persons to (i) Rows (7) through (10) of
the cover pages of this statement on Schedule 13D and (ii) Item 5(a) hereof are
incorporated herein by reference. As further described in Item 6, GECEI and NBC
have entered into an arrangement with respect to the voting and disposition of
the Class A Stock and Common Stock acquired under the Purchase Agreement and
acquired upon the exercise of the warrants acquired under the Purchase
Agreement.

Except as disclosed in this Item 5(b), none of the Reporting Persons, nor
to the best of their knowledge, any of their directors or executive officers,
presently has the power to vote or to direct the vote or to dispose or direct
the disposition of any of the shares of Common Stock of the Issuer which they
may be deemed to beneficially own.

(c) Except as disclosed in Item 3 hereof, none of the Reporting Persons
nor, to the best of their knowledge, any of their directors or executive
officers, has effected any transaction in the common stock of the Issuer during
the past 60 days.

(d) Not applicable.

(e) Not applicable.

Neither the filing of this Schedule 13D or any amendment thereto, nor
anything contained herein is intended as, or should be construed as, an
admission that GE Capital, GECS or GE is the "beneficial owner" of any shares of
Common Stock.

ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.

The responses to Items 3 and 4 are incorporated herein by reference.

GECEI and NBC have entered into an oral agreement with respect to the
shares of Common Stock acquired under the Purchase Agreement, the warrants and
the directed stock offering. Pursuant to the arrangement, GECEI and NBC have
agreed, with respect to the shares to share voting power with respect to all of
such shares and to allocate sole dispositive power in the manner set forth on
the cover pages of this filing.

Except as disclosed in this Item 6, none of the Reporting Persons, nor, to
the best of their knowledge, any of their directors or executive officers, are
parties to any contract, arrangement, understanding or relationship (legal or
otherwise) with respect to the securities of the Issuer.
<PAGE>

ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.

Exhibit
No. Description of Exhibit
- ------- ----------------------
1 Series A Subscription Agreement, dated as of May 13, 1999, by and
between Net2Phone, Inc. and GE Capital Equity Investments, Inc.

2 Stock Transfer Agreement by and among Net2Phone, Inc., GE Capital
Equity Investments, Inc. and Snap! LLC, dated June 18, 1999.

3 Joint Filing Agreement by and among GE Capital Equity Investments,
Inc., General Electric Capital Corporation, General Electric Capital
Services, Inc., General Electric Company, National Broadcasting
Company, Inc., National Broadcasting Company Holding, Inc. and Snap!
LLC, dated August 9, 1999.

4 Power of Attorney appointing Michael E. Pralle as agent and attorney-
in-fact for General Electric Company.

5 Power of Attorney appointing Michael E. Pralle as agent and attorney-
in-fact for General Electric Capital Services, Inc.
<PAGE>

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.

Dated: August 9, 1999

GE CAPITAL EQUITY INVESTMENTS, INC.

By: /s/ Michael B. Pralle
-------------------------------------------
Name: Michael E. Pralle
Title: President

GENERAL ELECTRIC CAPITAL CORPORATION

By: /s/ Michael B. Pralle
-------------------------------------------
Name: Michael E. Pralle
Title: Vice President

GENERAL ELECTRIC CAPITAL SERVICES, INC.

By: /s/ Michael B. Pralle
-------------------------------------------
Name: Michael E. Pralle
Title: Attorney-in-Fact

GENERAL ELECTRIC COMPANY

By: /s/ Michael B. Pralle
-------------------------------------------
Name: Michael E. Pralle
Title: Attorney-in-Fact

NATIONAL BROADCASTING COMPANY, INC.

By: /s/ Thomas A. Rogers
-------------------------------------------
Name: Thomas A. Rogers
Title: Executive Vice President

NATIONAL BROADCASTING COMPANY HOLDING, INC.

By: /s/ Thomas A. Rogers
-------------------------------------------
Name: Thomas A. Rogers
Title: Executive Vice President

SNAP! LLC

By: /s/ Andrew P. Hyde
-------------------------------------------
Name: Andrew P. Hyde
Title: Chief Financial Officer
<PAGE>

SCHEDULE A TO SCHEDULE 13D

Filed by GE Capital Equity Investments, Inc.

GE CAPITAL EQUITY INVESTMENTS, INC.
DIRECTORS AND OFFICERS

<TABLE>
<CAPTION>
PRESENT PRESENT
BUSINESS PRINCIPAL
NAME ADDRESS OCCUPATION

DIRECTORS
<S> <C> <C>
Michael E. Pralle GE Capital Equity President, Chairman of the
Investments, Inc. Board
120 Long Ridge Road
Stamford, CT 06927

OFFICERS

Michael E. Pralle GE Capital Equity President, Chairman of the
Investments, Inc. Board
120 Long Ridge Road
Stamford, CT 06927

Jonathan K. Sprole GE Capital Equity Senior Vice President,
Investments, Inc. General Counsel & Secretary
120 Long Ridge Road
Stamford, CT 06927

Paul Licursi GE Capital Equity Vice President, - Finance &
Investments, Inc. Treasure
120 Long Ridge Road
Stamford, CT 06927

Joeseph Swezey GE Capital Equity Vice President - Controller
Investments, Inc.
120 Long Ridge Road
Stamford, CT 06927

Barbara J. Gould GE Capital Equity Senior Vice President,
Investments, Inc. Associate General Counsel
120 Long Ridge Road and Assistant Secretary
Stamford, CT 06927

Bryant Cohen GE Capital Equity Vice President - Taxes
Investments, Inc.
120 Long Ridge Road
Stamford, CT 06927
</TABLE>

Each person listed above is a citizen of the United States of America.
<PAGE>

SCHEDULE B TO SCHEDULE 13D

Filed by General Electric Capital Corporation

GENERAL ELECTRIC CAPITAL CORPORATION

BOARD OF DIRECTORS

Nigel D. T. Andrews
Executive Vice President
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: Great Britain

Nancy E. Barton
Senior Vice President, General Counsel
and Secretary
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

James R. Bunt
Vice President and Treasurer
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431
Citizenship: U.S.A.

David L. Calhoun
President and Chief Executive Officer
Employers Reinsurance Corporation
5200 Metcalf
Overland Park, KS 66201
Citizenship: U.S.A.

David M. Cote
President and Chief Executive Officer
GE Appliances
Appliance Park
Louisville, KY 40225
Citizenship: U.S.A.

Dennis D. Dammerman
Vice Chairman and Executive Officer
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431
Citizenship: U.S.A.

Benjamin W. Heineman, Jr.
Senior Vice President,
General Counsel and Secretary
General Electric Company
<PAGE>

3135 Easton Turnpike
Fairfield, CT 06431
Citizenship: U.S.A.

Jeffrey R. Immelt
President and Chief Executive Officer
GE Medical Systems
3000 N. Grandview Blvd.
Waukesha, WI 53188
Citizenship: U.S.A.

W. James McNerney, Jr.
President and Chief Executive Officer
GE Aircraft Engines
One Neumann Way
Cincinnati, OH 45215-6301
Citizenship: U.S.A.

John H. Myers
Chairman and President
GE Investment Corporation
3003 Summer Street
Stamford, CT 06904
Citizenship: U.S.A.

Robert L. Nardelli
President and Chief Executive Officer
GE Power Systems
One River Road
Schenectady, NY 12345
Citizenship: U.S.A.

Denis J. Nayden
President and Chief Operating Officer
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

Michael A. Neal
Executive Vice President
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

James A. Parke
Senior Vice President, Finance
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.
<PAGE>

Gary M. Reiner
Senior Vice President and Chief Information Officer
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431
Citizenship: U.S.A.

John M. Samuels
Vice President and Senior Counsel,
Corporate Taxes
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431
Citizenship: U.S.A.

Keith S. Sherin
Senior Vice President and Chief Financial Officer
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431
Citizenship: U.S.A.

Edward D. Stewart
Executive Vice President
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

John F. Welch, Jr.
Chairman and Chief Executive Officer
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431
Citizenship: U.S.A.

EXECUTIVE OFFICERS

Denis J. Nayden
President and Chief Executive Officer
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

Nigel D. T. Andrews
Executive Vice President
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: Great Britain
<PAGE>

Michael A. Neal
Executive Vice President
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

James A. Parke
Executive Vice President and Chief Financial Officer
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

Edward D. Stewart
Executive Vice President
General Electric Capital Corporation
1600 Summer Street
Stamford, CT 06927
Citizenship: U.S.A.

Nancy E. Barton
Senior Vice President,
General Counsel and Secretary
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

Stephen M. Bennett
Senior Vice President, E-Business
General Electric Capital Corporation
777-C Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

James A. Colica
Senior Vice President and Manager
Global Risk Management
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

Richard D'Avino
Senior Vice President, Taxes
General Electric Capital Corporation
777 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.
<PAGE>

Michael D. Fraizer
Senior Vice President
Insurance/Investment Products
General Electric Capital Corporation
6604 West Broad Street
Taylor Building
Richmond, VA 23230
Citizenship: U.S.A.

Robert L. Lewis
Senior Vice President and General Manager
Structured Finance Group
General Electric Capital Corporation
120 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

Marc J. Saperstein
Senior Vice President, Human Resources
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

Jeffrey S. Werner
Senior Vice President, Corporate Treasury
and Global Funding Operation
General Electric Capital Corporation
201 High Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.
<PAGE>

SCHEDULE C TO SCHEDULE 13D

Filed by General Electric Capital Services, Inc.

DIRECTORS

Nigel D. T. Andrews
Executive Vice President
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: Great Britain

Nancy E. Barton
Senior Vice President, General Counsel
and Secretary
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

James R. Bunt
Vice President and Treasurer
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431
Citizenship: U.S.A.

David L. Calhoun
President and Chief Executive Officer
Employers Reinsurance Corporation
5200 Metcalf
Overland Park, KS 66201
Citizenship: U.S.A.

David M. Cote
President and Chief Executive Officer
GE Appliances
Appliance Park
Louisville, KY 40225
Citizenship: U.S.A.

Dennis D. Dammerman
Vice Chairman and Executive Officer
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431
Citizenship: U.S.A.
<PAGE>

Benjamin W. Heineman, Jr.
Senior Vice President,
General Counsel and Secretary
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431
Citizenship: U.S.A.

Jeffrey R. Immelt
President and Chief Executive Officer
GE Medical Systems
3000 N. Grandview Blvd.
Waukesha, WI 53188
Citizenship: U.S.A.

W. James McNerney, Jr.
President and Chief Executive Officer
GE Aircraft Engines
One Neumann Way
Cincinnati, OH 45215-6301
Citizenship: U.S.A.

John H. Myers
Chairman and President
GE Investment Corporation
3003 Summer Street
Stamford, CT 06904
Citizenship: U.S.A.

Robert L. Nardelli
President and Chief Executive Officer
GE Power Systems
One River Road
Schenectady, NY 12345
Citizenship: U.S.A.

Denis J. Nayden
President and Chief Operating Officer
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

Michael A. Neal
Executive Vice President
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.
<PAGE>

James A. Parke
Senior Vice President, Finance
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

Gary M. Reiner
Senior Vice President and Chief Information Officer
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431
Citizenship: U.S.A.

John M. Samuels
Vice President and Senior Counsel,
Corporate Taxes
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431
Citizenship: U.S.A.

Keith S. Sherin
Senior Vice President and Chief Financial Officer
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431
Citizenship: U.S.A.

Edward D. Stewart
Executive Vice President
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

John F. Welch, Jr.
Chairman and Chief Executive Officer
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431
Citizenship: U.S.A.

EXECUTIVE OFFICERS

Dennis D. Dammerman
Chairman and Chief Executive Officer
General Electric Capital Services, Inc.
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.
<PAGE>

Denis J. Nayden
President
General Electric Capital Services, Inc.
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

Nigel D. T. Andrews
Executive Vice President
General Electric Capital Services, Inc.
260 Long Ridge Road
Stamford, CT 06927
Citizenship: Great Britain

David L. Calhoun
President and Chief Executive Officer
Employers Reinsurance Corporation
5200 Metcalf
Overland Park, KS 66201
Citizenship: U.S.A.

Michael A. Neal
Executive Vice President
General Electric Capital Services, Inc.
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

James A. Parke
Executive Vice President and Chief Financial Officer
General Electric Capital Services, Inc.
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

Edward D. Stewart
Executive Vice President
General Electric Capital Services, Inc.
1600 Summer Street
Stamford, CT 06927
Citizenship: U.S.A.

Nancy E. Barton
Senior Vice President, General Counsel and Secretary
General Electric Capital Services, Inc.
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.
<PAGE>

Stephen M. Bennett
Senior Vice President, E-Business
General Electric Capital Corporation
777-C Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

James A. Colica
Senior Vice President and Manager
Global Risk Management
General Electric Capital Services, Inc.
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

Richard D'Avino
Senior Vice President, Taxes
General Electric Capital Services, Inc.
777 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

Marc J. Saperstein
Senior Vice President, Human Resources
General Electric Capital Services, Inc.
260 Long Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.

Jeffrey S. Werner
Senior Vice President, Corporate Treasury
and Global Funding Operation
General Electric Capital Services, Inc.
201 High Ridge Road
Stamford, CT 06927
Citizenship: U.S.A.
<PAGE>

SCHEDULE D TO SCHEDULE 13D

Filed by General Electric Company
<TABLE>
<CAPTION>

DIRECTORS
PRESENT PRESENT
NAME BUSINESS ADDRESS PRINCIPAL OCCUPATION
<S> <C> <C>
J.I.Cash, Jr. Harvard Business School Professor of Business
Baker Library 187 Administration-Graduate
Soldiers Field School of Business
Boston, MA 02163 Administration, Harvard
University

S.S. Cathcart 222 Wisconsin Avenue Retired Chairman,
Suite 103 Illinois Tool Works
Lake Forest, IL 60045

D.D. Dammerman General Electric Company Vice Chairman of the Board
3135 Easton Turnpike and Executive Officer,
Fairfield, CT 06431 General Electric Company;
Chairmanand Chief
Executive Officer, General
Electric Capital Services,
Inc.

P. Fresco Fiat SpA Chairman of the Board,
via Nizza 250 Fiat SpA
10126 Torino, Italy

A. M. Fudge Kraft Foods, Inc. Executive Vice President
555 South Broadway
Tarrytown, NY 10591

C.X. Gonzalez Kimberly-Clark de Mexico, Chairman of the Board
S.A. de C.V. and Chief Executive
Jose Luis Lagrange 103, Officer,
Tercero Piso Kimberly-Clark de Mexico,
Colonia Los Morales S.A. de C.V.
Mexico, D.F. 11510, Mexico

A. Jung Avon Products, Inc. President and Chief
1345 Avenue of the Americas Operating Officer,
New York, NY 10105 Avon Products, Inc.

K.G. Langone Invemed Associates, Inc. Chairman, President and
375 Park Avenue Chief Executive Officer,
New York, NY 10152 Invemed Associates, Inc.

G.G. Michelson Federated Department Stores Former Member of the
151 West 34th Street Board of Directors,
New York, NY 10001 Federated Department
Stores
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C>
S. Nunn King & Spalding Partner, King & Spalding
191 Peachtree Street, N.E.
Atlanta, Georgia 30303

J.D. Opie General Electric Company Vice Chairman of the
3135 Easton Turnpike Board and Executive
Fairfield, CT 06431 Officer, General Electric
Company

R.S. Penske Penske Corporation Chairman of the Board
13400 Outer Drive, West and President, Penske
Detroit, MI 48239-4001 Corporation

F.H.T. Rhodes Cornell University President Emeritus
3104 Snee Building Cornell University
Ithaca, NY 14853

A.C. Sigler Champion International Retired Chairman of the
Corporation Board and CEO
1 Champion Plaza and former Director,
Stamford, CT 06921 Champion International
Corporation

D.A. Warner III J. P. Morgan & Co., Inc. Chairman of the Board,
& Morgan Guaranty Trust Co. President, and Chief
60 Wall Street Executive Officer,
New York, NY 10260 J.P. Morgan & Co.
Incorporated and Morgan
Guaranty Trust Company

J.F. Welch, Jr. General Electric Company Chairman of the Board
3135 Easton Turnpike and Chief Executive
Fairfield, CT 06431 Officer, General Electric
Company

CITIZENSHIP

C. X. Gonzalez Mexico
P. Fresco Italy
Andrea Jung Canada
All Others U.S.A.

EXECUTIVE OFFICERS

PRESENT PRESENT
NAME BUSINESS ADDRESS PRINCIPAL OCCUPATION

J.F. Welch, Jr. General Electric Company Chairman of the Board and
3135 Easton Turnpike Chief Executive Officer
Fairfield, CT 06431
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C>
P.D. Ameen General Electric Company Vice President and
3135 Easton Turnpike Comptroller
Fairfield, CT 06431

J.R. Bunt General Electric Company Vice President and
3135 Easton Turnpike Treasurer
Fairfield, CT 06431

D.L. Calhoun General Electric Company Senior Vice President -
Nela Park GE Lighting
Cleveland, OH 44122

W.J. Conaty General Electric Company Senior Vice President -
3135 Easton Turnpike Human Resources
Fairfield, CT 06431

D.M. Cote General Electric Company Senior Vice President -
3135 Easton Turnpike GE Appliances
Fairfield, CT 06431

D.D. Dammerman General Electric Company Vice Chairman of the Board
3135 Easton Turnpike and Executive Officer,
Fairfield, CT 06431 General Electric Company;
Chairman and Chief
Executive Officer, General
Electric Capital Services,
Inc.

L.S. Edelheit General Electric Company Senior Vice President -
P. O. Box 8 Corporate Research
Schenectady, NY 12301 and Development

B.W. Heineman, Jr. General Electric Company Senior Vice President -
3135 Easton Turnpike General Counsel and
Fairfield, CT 06431 Secretary

J.R. Immelt General Electric Company Senior Vice President -
P.O. Box 414 GE Medical Systems
Milwaukee, WI 53201

G.S. Malm General Electric Company Senior Vice President -
3135 Easton Turnpike Asia
Fairfield, CT 06431

W.J. McNerney, Jr. General Electric Company Senior Vice President -
1 Neumann Way GE Aircraft Engines
Cincinnati, OH 05215

R.L. Nardelli General Electric Company Senior Vice President -
1 River Road GE Power Systems
Schenectady, NY 12345

R.W. Nelson General Electric Company Vice President -

</TABLE>
<PAGE>

<TABLE>

<S> <C> <C>
3135 Easton Turnpike and Executive Officer
Fairfield, CT 06431

G.M. Reiner General Electric Company Senior Vice President -
3135 Easton Turnpike Chief Information Officer
Fairfield, CT 06431

J.G. Rice General Electric Company Vice President -
2901 East Lake Road GE Transportation Systems
Erie, PA 16531

G.L. Rogers General Electric Company Senior Vice President -
1 Plastics Avenue GE Plastics
Pittsfield, MA 01201

K.S. Sherin General Electric Company Senior Vice President -
3135 Easton Turnpike Finance and Chief Financial
Fairfield, CT 06431 Officer

L.G. Trotter General Electric Company Senior Vice President -
41 Woodford Avenue GE Industrial Systems
Plainville, CT 06062

CITIZENSHIP

G. S. Malm Sweden
All Others U.S.A.
</TABLE>
<PAGE>

SCHEDULE E TO SCHEDULE 13D

Filed by National Broadcasting Company, Inc.

NATIONAL BROADCASTING COMPANY, INC.
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
PRESENT PRESENT
NAME BUSINESS ADDRESS PRINCIPAL OCCUPATION
DIRECTORS
<S> <C> <C>
S.S. Cathcart 222 Wisconsin Avenue Retired Chairman,
Suite 103 Illinois Tool Works
Lake Forest, IL 60045

Andrea Jung Avon Products, Inc. President and Chief
1345 Avenue of the Americas Operating Officer,
New York, NY 10105 Avon Products, Inc.

G.G. Michelson Federated Department Stores Former Member of the
151 West 34th Street Board of Directors,
New York, NY 10001 Federated Department Stores

E. F. Murphy General Electric Company Vice Chairman of the
3135 Easton Turnpike Board and Executive
Fairfield, CT 06431 Officer, General Electric
Company

S. Nunn King & Spalding Partner, King & Spalding
191 Peachtree Street, N.E.
Atlanta, Georgia 30303

J.D. Opie General Electric Company Vice Chairman of the
3135 Easton Turnpike Board and Executive
Fairfield, CT 06431 Officer, General Electric
Company

R.S. Penske Penske Corporation Chairman of the Board
13400 Outer Drive, West and President, Penske
Detroit, MI 48239-4001 Corporation

F.H.T. Rhodes Cornell University President Emeritus
3104 Snee Building Cornell University
Ithaca, NY 14853

A.C. Sigler Champion International Retired Chairman of the
Corporation Board and CEO
1 Champion Plaza and former Director,
Stamford, CT 06921 Champion International
Corporation
</TABLE>
<PAGE>

<TABLE>

<S> <C> <C>
D.A. Warner III J. P. Morgan & Co., Inc. Chairman of the Board,
& Morgan Guaranty Trust Co. President, and Chief
60 Wall Street Executive Officer,
New York, NY 10260 J.P. Morgan & Co.
Incorporated and Morgan
Guaranty Trust Company

J.F. Welch, Jr. General Electric Company Chairman of the Board
3135 Easton Turnpike and Chief Executive
Fairfield, CT 06431 Officer, General Electric
Company

EXECUTIVE OFFICERS

John F. Welch Jr. National Broadcasting Chairman
Company, Inc.
3135 Easton Turnpike
Fairfield, CT 06431

Robert C. Wright National Broadcasting Chief Executive
Company, Inc. Officer & President
30 Rockefeller Plaza
New York, NY 10112

Mark Begor National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112

William Bolster CNBC, Inc. Executive Vice
2200 Fletcher Ave. President
Fort Lee, NJ 07024

Richard Cotton National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112

Duncan Ebersol National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112

Randel A. Falco National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112

Andrew Lack National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112
</TABLE>
<PAGE>

<TABLE>

<S> <C> <C>
Donald Ohlmeyer National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112

Thomas Rogers National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112

Scott Sassa National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112

Edward Scanlon National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112

Patrick Wallace National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112

Kassie Canter National Broadcasting Senior Vice President
Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
</TABLE>

Each person listed above is a citizen of the United States of America except
Andrea Jung, who is a citizen of Canada.
<PAGE>

SCHEDULE F TO SCHEDULE 13

Filed by National Broadcasting Company Holding, Inc.

NATIONAL BROADCASTING COMPANY HOLDING, INC.
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>

PRESENT PRESENT
NAME BUSINESS ADDRESS PRINCIPAL OCCUPATION

DIRECTORS
<S> <C> <C>
S.S. Cathcart 222 Wisconsin Avenue Retired Chairman,
Suite 103 Illinois Tool Works
Lake Forest, IL 60045

Andrea Jung Avon Products, Inc. President and Chief
1345 Avenue of the Americas Operating Officer,
New York, NY 10105 Avon Products, Inc.

G.G. Michelson Federated Department Stores Former Member of the
151 West 34th Street Board of Directors,
New York, NY 10001 Federated Department
Stores

E. F. Murphy General Electric Company Vice Chairman of the
3135 Easton Turnpike Board and Executive
Fairfield, CT 06431 Officer, General Electric
Company

S. Nunn King & Spalding Partner, King & Spalding
191 Peachtree Street, N.E.
Atlanta, Georgia 30303

J.D. Opie General Electric Company Vice Chairman of the
3135 Easton Turnpike Board and Executive
Fairfield, CT 06431 Officer, General Electric
Company

R.S. Penske Penske Corporation Chairman of the Board
13400 Outer Drive, West and President, Penske
Detroit, MI 48239-4001 Corporation

F.H.T. Rhodes Cornell University President Emeritus
3104 Snee Building Cornell University
Ithaca, NY 14853

A.C. Sigler Champion International Retired Chairman of the
Corporation Board and CEO
1 Champion Plaza and former Director,
Stamford, CT 06921 Champion International
Corporation
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C>
D.A. Warner III J. P. Morgan & Co., Inc. Chairman of the Board,
& Morgan Guaranty Trust Co. President, and Chief
60 Wall Street Executive Officer,
New York, NY 10260 J.P. Morgan & Co.
Incorporated and Morgan
Guaranty Trust Company

J.F. Welch, Jr. General Electric Company Chairman of the Board
3135 Easton Turnpike and Chief Executive
Fairfield, CT 06431 Officer, General Electric
Company

EXECUTIVE OFFICERS

Robert C. Wright National Broadcasting Chief Executive
Company, Inc. Officer & President
30 Rockefeller Plaza
New York, NY 10112

Thomas Rogers National Broadcasting Executive Vice President
Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
</TABLE>

Each person listed above is a citizen of the United States of America except
Andrea Jung, who is a citizen of Canada.
<PAGE>

SCHEDULE G TO SCHEDULE 13D

Filed by Snap! LLC

SNAP! LLC
DIRECTORS AND OFFICERS

DIRECTORS

<TABLE>
<CAPTION>
PRESENT PRESENT
NAME BUSINESS ADDRESS PRINCIPAL OCCUPATION

MANAGERS
<S> <C> <C>
Mark Begor National Broadcasting Company, Manager
Inc.
30 Rockefeller Plaza
New York, NY 10112

Randel A. Falco National Broadcasting Company, Manager
Inc.
30 Rockefeller Plaza
New York, NY 10112

Thomas Rogers National Broadcasting Company, Manager
Inc.
30 Rockefeller Plaza
New York, NY 10112

Scott Sassa National Broadcasting Company, Manager
Inc.
30 Rockefeller Plaza
New York, NY 10112

Martin Yudkovitz National Broadcasting Company, Manager
Inc.
30 Rockefeller Plaza
New York, NY 10112

Shelby Bonnie CNET, Inc. Manager
150 Chestnut Street
San Francisco, CA 94111

Thomas Melcher CNET, Inc. Manager
150 Chestnut Street
San Francisco, CA 94111

Halsey Minor CNET, Inc. Manager
150 Chestnut Street
San Francisco, CA 94111
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C>
Douglas Woodrum CNET, Inc. Manager
150 Chestnut Street
San Francisco, CA 94111

OFFICERS

Halsey Minor Snap! LLC President and
One Beach Street CEO
San Francisco, CA 94111

Edmond Sanctis Snap! LLC Vice President
One Beach Street and COO
San Francisco, CA 94111

Andrew Hyde Snap! LLC Treasurer and
One Beach Street CFO
San Francisco, CA 94111
</TABLE>

Each person listed above is a citizen of the United States of America.
<PAGE>

SCHEDULE H TO SCHEDULE 13D

Item 2(d). GE CONVICTIONS WITHIN THE PAST FIVE YEARS

Her Majesty's Inspectorate of Pollution v. IGE Medical Systems Limited
(St. Albans Magistrates Court, St. Albans, Hertsfordshire, England, Case No.
04/00320181)

In April, 1994, GEMS' U.K. subsidiary, IGE Medical Systems Limited
(IGEMS) discovered the loss of a radioactive barium source at the Radlett,
England facility. The lost source, used to calibrate nuclear camera detectors,
emits a very low level of radiation. IGEMS immediately reported the loss as
required by the U.K. Radioactive Substances Act. An ensuing investigation,
conducted in cooperation with government authorities, failed to locate the
source. On July 21, 1994, Her Majesty's Inspectorate of Pollution (HMIP)
charged IGEMS with violating the Radioactive Substances Act by failing to comply
with a condition of registration. The Act provides that a registrant like
IGEMS, which "does not comply with a limitation or condition subject to which
(it) is so registered ... shall be guilty of (a criminal) offense." Condition 7
of IGEMS' registration states that it "shall so far as is reasonably practicable
prevent ... loss of any registered source."

At the beginning of trial on February 24, 1995, IGEMS entered a guilty
plea and agreed to pay of fine of (Pounds)5,000 and assessed costs of
(Pounds)5,754. The prosecutor's presentation focused primarily on the 1991
change in internal IGEMS procedures and, in particular, the source logging
procedure. The prosecutor complimented IGEMS' investigation and efforts to
locate the source and advised the court that IGEMS had no previous violations of
the Radioactive Substances Act. He also told the court that the Radlett plant
had been highlighted as an exemplary facility to HIMP inspectors as part of
their training. In mitigation, IGEMS emphasized the significant infrastructure
and expense undertaken by IGEMS to provide security for radiation sources and
the significant effort and expense incurred in attempting to locate the missing
source.

Except for the foregoing, GE has not and, to the best of GE's
knowledge, none of the directors and executive officers of GE has been, during
the last five years, convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).

Item 2(e).

GE has not and, to the best of GE's knowledge, none of the directors
and executive officers of GE has been, during the last five years, a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree, or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
- ------- ----------------------
<S> <C>
1 Series A Subscription Agreement, dated as of May 13, 1999, by and between Net2Phone, Inc. and GE
Capital Equity Investments, Inc.

2 Stock Transfer Agreement by and among Net2Phone, Inc., GE Capital Equity Investments, Inc. and
Snap! LLC, dated June 18, 1999.

3 Joint Filing Agreement by and among GE Capital Equity Investments, Inc., General Electric Capital
Corporation, General Electric Capital Services, Inc., General Electric Company, National Broadcasting
Company, Inc., National Broadcasting Company Holding, Inc. and Snap! LLC, dated August 9, 1999.

4 Power of Attorney appointing Michael E. Pralle as agent and attorney-in-fact for General Electric
Company.

5 Power of Attorney appointing Michael E. Pralle as agent and attorney-in-fact for General Electric
Capital Services, Inc.
</TABLE>

<PAGE>

Exhibit 1

SERIES A SUBSCRIPTION AGREEMENT
-------------------------------

SUBSCRIPTION Agreement (this "Agreement"), dated as of May 13, 1999,
---------
between Net2Phone, Inc., a Delaware corporation (the "Company"), and those
-------
investors listed on Schedule A hereto (each an "Investor" and jointly the
--------
"Investors").
- ----------

WHEREAS, the Company seeks to raise up to $30 million through the
issuance and sale of Series A Preferred and Warrants (each as defined below)
(the "Private Placement");
-----------------

WHEREAS, the Investors desire to participate in the Private Placement;

WHEREAS, the Company is a subsidiary of IDT Corporation, a Delaware
corporation ("IDT");
---

WHEREAS, the transactions contemplated by IDT's tender offer (the

"Tender Offer") to repurchase its 8.75% Senior Notes due 2006 (the "Notes"),
- ------------- -----
which Tender Offer included a consent solicitation (a "Consent Solicitation")
--------------------
with respect to IDT's indenture pertaining to the Notes (the "Indenture"), have
---------
been consummated, including the Refinancing (as defined in the Tender Offer);

WHEREAS, certain of the Investors operate as "venture capital
operating companies" as defined in the Department of Labor Regulations, Section
2510.3-101(d) (the "VCOC Investors") and must, in order to maintain such status,
--------------
have direct contractual rights to participate substantially in, or substantially
influence the conduct of the management of, the Company; and

WHEREAS, upon the terms and subject to the conditions of this
Agreement, the Investors desire to purchase shares of Series A Convertible
Preferred Stock of the Company, par value $.01 per share (the "Series A
--------
Preferred"), and Warrants (the "Warrants") to purchase shares of Common Stock of
- --------- --------
the Company, par value $.01 per share (the "Common Stock"), and the Company
------------
desires to sell shares of Series A Preferred and Warrants to the Investors.

NOW, THEREFORE, the Company and the Investors hereby agree as follows:

1.1. Subscription for Series A Preferred. Upon the terms and subject to
-----------------------------------
the conditions of this Agreement, the Company hereby agrees to issue and sell
and each of the Investors hereby agrees to purchase from the Company (i) the
total number of shares of Series A Preferred (the "Investor Shares"), at a price
---------------
of $10 per share of Series A Preferred and (ii) the total number of Warrants
(the "Investor Warrants"), each as specified opposite such Investor's name on
-----------------
Schedule A hereto. The Company and the Investors hereby acknowledge and agree
that for United States federal, state and local income tax purposes the purchase
price of each of the
<PAGE>

Warrants and the Series A Preferred shall be the amount as mutually agreed to by
the Company and the Investors within sixty (60) days of the Closing. The Company
and the Investors agree to use the foregoing purchase price for all income tax
purposes with respect to this transaction.

1.2. Issuance of Series A Preferred Shares and Warrants; Execution of
----------------------------------------------------------------
Additional Agreements. At the Closing (as hereinafter defined):
- ---------------------
(a) Each Investor will pay or tender to the Company cash in
immediately available funds in the amount representing the aggregate purchase
price for the number of Investor Shares and Investor Warrants purchased by such
Investor (the "Purchase Price").
--------------
(b) The Company shall issue and deliver to each Investor a share
certificate or certificates representing the Investor Shares acquired hereunder
by such Investor, which certificate or certificates shall be registered in such
Investor's name or such name as such Investor designates and shall be in the
form to be agreed by the parties.

(c) The Company and the Investors shall execute and deliver the
Registration Rights Agreement relating to the shares of Common Stock underlying
the Investor Shares and the Investor Warrants substantially in the form attached
as Exhibit A hereto (the "Registration Rights Agreement").
--------- -----------------------------

(d) The Company and the Investors shall execute and deliver the Co-
Sale Agreement relating to the potential sales of Common Stock, Investor Shares
and Investor Warrants substantially in the form attached as Exhibit B hereto
---------
(the "Co-Sale Agreement").
-----------------

(e) The Company shall issue and deliver to each Investor a warrant
certificate representing the Investor Warrants issuable to such Investor, which
certificate shall be registered in the Investor's name or in such name as such
Investor designates and shall be substantially in the form attached as Exhibit C
---------
hereto (each, a "Warrant Certificate" and collectively, the "Warrant
------------------- -------
Certificates").
- ------------

(f) The Company, IDT, Clifford Sobel, the Investor and each of the
other Investors which have simultaneously entered into Series A Subscription
Agreements with the Company shall execute and deliver a Stockholders Agreement
(the "Stockholders Agreement") substantially in the form attached as Exhibit D
---------------------- ---------
hereto.

(g) The Company shall have authorized the Investor Shares, which
Investor Shares shall have the rights, preferences and terms set forth in the
Amended and Restated Certificate of Incorporation attached as Exhibit E hereto
---------
(the "Amended and Amended and Restated Certificate of Incorporation" and,
-------------------------------------------------------------
together with the Registration Rights Agreement, the Co-Sale Agreement, the
Warrant Certificate, the Stockholders Agreement, the Separation Agreement by and
between IDT and the Company, the Assignment Agreement by and between IDT and the
Company, the IDT Services Agreement by and between the Company and IDT, the
Net2Phone Services Agreement by and between the Company and IDT, the
Internet/Telecommunications Agreement by and between the Company and IDT, the
Joint Marketing Agreement by and between the Company and IDT, the Tax Sharing
and

2
<PAGE>

Indemnification Agreement by and between the Company and IDT, the Assignment and
Assumption Agreement by and between the Company and IDT, the Company's 1999
Stock Option and Incentive Plan and Clifford M. Sobel's employment agreement
with the Company, as amended (the "Sobel Agreement") are hereinafter
collectively referred to as the "Additional Agreements").;
---------------------

1.3. Closing. The issuance and delivery of the Investor Shares and
-------
Investor Warrants by the Company to the Investors and the delivery of the
Purchase Price to the Company (the "Closing"), will take place at the offices of
-------
Morrison & Foerster LLP, 1290 Avenue of the Americas, New York, New York, at
10:00 A.M. on May 13, 1999, or at such other time and place as the Company and
the Investors may agree orally or in writing.

2. Representations, Warranties and Acknowledgments of the Investors.
----------------------------------------------------------------

Each Investor hereby represents, warrants and acknowledges to the
Company, severally and not jointly, as follows:

2.1. Receipt of Agreements; Access to Information. The Investor has
--------------------------------------------
received and reviewed this Agreement, the Additional Agreements and the
Confidential Executive Summary, dated February 2, 1999 (as updated, the
"Memorandum") prepared and distributed by Hambrecht & Quist, LLC (the "Placement
---------- ---------
Agent"). The Company has provided the Investor with the opportunity to ask
- -----
questions of and to receive answers from representatives of the Company
concerning the Company and an investment in the Investor Shares and the Investor
Warrants.

2.2. No Registration of Shares. The Investor is aware that the Investor
-------------------------
Shares, the Investor Warrants and, when and if issued, the Common Shares
underlying the Investor Shares and the Investor Warrants (the Investor Shares,
the Investor Warrants and underlying Common Shares are collectively referred to
herein as the "Securities"), have not been registered under the Securities Act
----------
of 1933, as amended (the "Act"), that such offer and sale are intended to be
---
exempt from registration under the Act and the rules promulgated thereunder by
the Securities and Exchange Commission (the "SEC"), and that the Securities
---
cannot be sold, assigned, transferred, or otherwise disposed of unless they are
subsequently registered under the Act or an exemption from such registration is
available. The Investor is also aware that sales or transfers of the Securities
are further restricted by state securities laws and the provisions of this
Agreement and that the certificates for the Securities will bear appropriate
legends restricting their transfer pursuant to applicable laws, this Agreement
and the Additional Agreements.

2.3. Suitability of Investment.
-------------------------

(a) The Investor understands that there is no established market for
the Securities;

(b) The Investor is acquiring the Securities for its own account, or
for the account of another "accredited investor" who is an affiliate of the
Investor and who can make all of the representations contained herein, for
investment purposes only and not with a view to the resale or distribution
thereof;

3
<PAGE>

(c) The Investor has not and will not, directly or indirectly, offer,
sell, transfer, assign, exchange or otherwise dispose of all or any part of the
Securities, except in accordance with applicable federal and state securities
laws and the provisions of this Agreement or the Additional Agreements as long
as such documents remain in effect;

(d) The Investor has such knowledge and experience in financial,
business and tax matters that the Investor is capable of evaluating the merits
and risks relating to the Investor's investment in the Securities and making an
investment decision with respect to the Company;

(e) To the full satisfaction of the Investor, the Investor has been
given the opportunity to obtain information and documents relating to the
Company and to ask questions of and receive answers from representatives of the
Company concerning the Company and the investment in the Securities;

(f) Neither the Investor nor any of its affiliates has engaged in any
activity that would be deemed a "general solicitation" under the provisions of
Regulation D.

(g) The Investor has such knowledge and experience in financial or
business matters that it can, and it has, adequately analyzed the risks of an
investment in the Securities and it has determined the Securities are a suitable
investment for the Investor and that the Investor is able at this time, and in
the foreseeable future, to bear the economic risk of a total loss of its
investment in the Company;

(h) The Investor is aware that there are substantial risks incident
to an investment in the Securities, including, without limitation, those
summarized under "Risk Factors" in the Memorandum; and

(i) The Investor is an "accredited investor" within the meaning of
Rule 501 of Regulation D of the Act as presently in effect and is either
purchasing for its own account or for the account of another "accredited
investor", and any accounts for which the Investor is acting are each able to
bear the economic risks of this investment. For each Investor subject to ERISA
(as defined below), if the Investor is acquiring the Securities as a fiduciary
or agent for another investor's account, the Investor has sole investment and
voting discretion with respect to such account and has full power to make the
acknowledgments, representations and agreements contained herein on behalf of
such account.

2.4. Authorization. All action on the part of the Investor necessary for
-------------
the authorization, execution and delivery of this Agreement and the Shareholders
Agreement and the Registration Rights Agreement and for the performance of all
obligations of the Investor hereunder and thereunder has been taken. This
Agreement has been, and the Shareholders Agreement and the Registration Rights
Agreement will be, duly executed and delivered by the Investor and will
constitute valid and legally binding obligations of the Investor, enforceable in
accordance with their respective terms, subject to (i) the laws of bankruptcy
and the laws affecting creditors' rights generally, and (ii) the availability of
equitable remedies, and (iii) the fact that such Investor's indemnification
obligations under this Agreement and the Registration Rights Agreement may be
unenforceable on the grounds of public policy.

4
<PAGE>

3. Representations, Warranties and Acknowledgments of the Company.
--------------------------------------------------------------

The Company hereby represents, warrants and acknowledges to the
Investors as follows:

3.1. Organization, Good Standing and Qualification. The Company is a
---------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
own and operate its assets and properties, to carry on its Internet telephony
business and such other businesses as presently conducted or as currently
proposed to be conducted by the Company (the "Business"), to execute and deliver
this Agreement and the Additional Agreements and to issue and sell the
Securities pursuant to this Agreement. The Company possesses all governmental
and other permits, licenses and other authorizations to own its properties as
now owned and to conduct its Business, except where the failure to possess such
governmental and other permits, licenses and other authorizations would not have
a material adverse effect on the business, assets, financial condition, results
of operations or properties of the Company (a "Material Adverse Effect"). The
-----------------------
Company is duly qualified to transact business and is in good standing in each
jurisdiction wherein the properties owned or leased or the business transacted
by the Company makes such qualification to do business as a foreign corporation
necessary, except for such jurisdictions in which the failure to so qualify
would not have a Material Adverse Effect. The Company has no subsidiaries or
affiliated company (other than IDT and its subsidiaries) and does not presently
own or control, directly or indirectly, any interest in any corporation,
association or other business entity.

3.2. Capitalization. The authorized capital of the Company consists of:
--------------

(a) Capital Stock. 120,000,000 shares of capital stock, including
-------------
95,000,000 shares of Common Stock, 1,032,000 shares of which are issued and
outstanding prior to the Closing, 3,200,000 shares of which are reserved for
issuance upon conversion of the Investor Shares and Investor Warrants, 60,000
shares of which are reserved for issuance to Hambrecht & Quist LLC pursuant to
the terms of an engagement letter and 1,680,000 shares of which are reserved for
issuance upon the exercise of options that have been or may be granted under the
Company's stock option and incentive plans, and 15,000,000 shares of Class A
Stock, par value $.01 per share, 3,000,000 shares of which are reserved for
issuance upon conversion of the Investor Shares, 9,288,000 shares of which are
issued and outstanding prior to the Closing.

(b) Preferred Stock. 10,000,000 shares of preferred stock, 3,150,000
---------------
of which have been designated as Series A Preferred, par value $.01 per share,
none of which is issued or outstanding prior to the Closing. There are no other
shares of preferred stock authorized, issued or outstanding.

(c) Rights. Except for (i) up to 1,680,000 shares of Common Stock
------
which may be issued upon the exercise of options that have been or may be
granted under the Company's stock option and incentive plans, (ii) shares that
may be issuable to Clifford Sobel pursuant to the Sobel Agreement and (iii) the
Investor Shares and Investor Warrants to be issued hereunder, there are not
outstanding any options, warrants, subscriptions, rights (including conversion
or preemptive rights or first refusal rights) or agreements for the purchase or
acquisition from the Company of any shares of the Company's capital stock or
securities

5
<PAGE>

convertible into its capital stock. Except as set forth on Schedule 3.2(c)
hereof, no stock plan, stock purchase, stock option or other agreement or
understanding between the Company and any holder of any equity securities or
rights to purchase equity securities provides for acceleration or other changes
in the vesting provisions or other terms of such agreement or understanding as
the result of any merger, consolidated sale of stock or assets, change in
control or any other transaction(s) by the Company. The pro forma, post Series A
Preferred and Warrant Capitalization Table attached hereto as Exhibit H is
complete and correct as of the date of this Agreement.

(d) Treasury Stock. The Company does not hold any shares of its
--------------
capital stock in its treasury.

3.3. Subsidiaries. The Company does not own or control any equity security
------------
or other interest of any other corporation, limited partnership or other
business entity. The Company is not a participant in any joint venture,
partnership or similar arrangement.

3.4. Authorization. All corporate action on the part of the Company and
-------------
its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement and the Additional Agreements and
transactions contemplated hereby and thereby, the performance of all obligations
of the Company hereunder and thereunder and the authorization, issuance and
delivery of the Series A Preferred and the Warrants being sold hereunder, and
the authorization of the Common Stock issuable upon exercise or exchange of the
Warrants (the "Warrant Shares") and the Class A Stock issuable upon conversion
--------------
of the Series A Preferred (the "Conversion Shares"), have been taken or will be
-----------------
taken prior to the Closing, and this Agreement and the Additional Agreements
will be duly executed by the Company, and will constitute valid and legally
binding obligations of the Company, enforceable in accordance with its and their
terms, subject to (i) the laws of bankruptcy and the laws affecting creditors'
rights generally, (ii) the availability of equitable remedies and (iii) the fact
that the Company's indemnification obligations under the Registration Rights
Agreement may be unenforceable on the grounds of public policy.

3.5. Valid Issuance of Series A Preferred and Common Stock, Warrants and
-------------------------------------------------------------------
Warrant Shares. (a) The Series A Preferred and Warrants, when issued, sold and
- --------------
delivered in accordance with the terms hereof for the consideration herein, and
the Warrant Shares, when issued and paid for in accordance with the terms of the
Warrants, will be duly and validly issued, fully paid and nonassessable and free
of any liens or encumbrances, except such as may be created or suffered by the
Investor, will be in compliance with all applicable state and federal securities
laws and will have the rights, preferences and privileges described in the
Amended and Restated Certificate of Incorporation attached as Exhibit E.

(b) The outstanding shares of Common Stock have been duly and validly
authorized and issued and are fully paid and nonassessable, were not issued in
contravention of any preemptive right or right of first refusal, and have been
issued, sold and delivered by the Company in compliance with the applicable
federal and state securities laws. The Conversion Shares and Warrant Shares have
been duly and validly reserved and, when issued and paid for in

6
<PAGE>

compliance with the provisions of this Agreement, the Amended and Restated
Certificate of Incorporation and the Warrants will be validly issued, fully
paid and nonassessable.

(c) Subject to the accuracy of the Investors' representations in
Section 2 hereof and the compliance of the Investors with all applicable
restrictions on transferability, the offer, sale and issuance of the Series A
Preferred and the Warrants by the Company in conformity with the terms of this
Agreement, the Warrant Shares to be issued in accordance with the terms of the
Warrants and the issuance of the Conversion Shares, constitute transactions
exempt from the registration requirements of Section 5 of the Act.

(d) Except for shares that may be issuable pursuant to the Sobel
Agreement, neither the offer nor the issuance or sale of the Warrant Shares or
the Conversion Shares constitutes or will constitute an event, under any capital
stock or convertible security or any anti-dilution or similar provision of any
agreement or instrument to which the Company is a party or by which it is bound
or affected, which shall either increase the number of shares or units of
capital stock issuable upon conversion of any securities or upon exercise of any
warrant or right to subscribe to or purchase any stock or similar security, or
decrease the consideration per share or unit of capital stock to be received by
the Company upon such conversion or exercise.

(e) The options granted under the Company's stock option and
incentive plans have been duly authorized and validly issued and were issued in
compliance with the applicable federal and state securities laws. The sole stock
option and incentive plan of the Company is the 1999 Stock Option Plan.

(f) The Conversion Shares and the Warrants have been duly authorized
and reserved for issuance upon the conversion of the Series A Preferred or
exercise of the Warrants, as the case may be.

3.6. Consents.
--------

(a) No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, regional,
state or local governmental authority or any third party on the part of the
Company is required in connection with the execution and delivery of this
Agreement and the Additional Agreements, and the consummation of the
transactions contemplated hereby, except for filings, if any, required pursuant
to applicable state securities or Blue Sky laws, which filings will be made
within the required statutory or regulatory periods, and any filing pursuant to
Regulation D of the SEC, which filing, if made, will be effected within 15 days
of the Closing.

(b) The Company is not in violation of any applicable statute, rule,
regulation, order or restriction of any domestic or foreign government or any
instrumentality or agency thereof in respect of the conduct of its Business or
the ownership of its properties which violation would have a Material Adverse
Effect. To the best of the Company's knowledge, IDT is not in violation of any
applicable statute, rule, regulation, order or restriction of any domestic or
foreign government or any instrumentality or agency thereof affecting the
Business, which violation would have a Material Adverse Effect. The Company has
all franchises, permits, licenses and

7
<PAGE>

any similar authority necessary for the conduct of its Business, the lack of
which would not have a Material Adverse Effect.

3.7. Litigation. Except as set forth on Schedule 3.7, there is no action,
----------
suit, claim, proceeding or investigation pending or, to the Company's knowledge,
currently threatened against the Company or the Business, nor is the Company
aware of any event or circumstances that it expects to form the basis for such
an action, suit, claim, proceeding or investigation. The foregoing includes,
without limitation, actions pending or threatened (or any basis therefor known
to the Company) involving the prior employment of any of the Company's, or to
the Company's knowledge IDT's, employees, their use in connection with the
Business of any information or techniques allegedly proprietary to any of their
former employers, or their obligations under any agreements with prior
employers. The Company is not a party or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality that would have a Material Adverse Effect. There is no action,
suit, proceeding or investigation by the Company currently pending or which the
Company intends to initiate.

3.8. Non-Disclosure and Non-Competition Agreements. Each key employee and
---------------------------------------------
officer of the Company has executed a Non-Disclosure and Non-Competition
Agreement with the Company or with IDT which was subsequently assigned to the
Company in the form of Exhibit F attached hereto. No such key employee or
officer of the Company has excluded works or inventions made prior to his
employment with the Company pursuant to such employee's or officer's Non-
Disclosure and Non-Competition Agreement.

3.9. Intellectual Property.
---------------------

(a) The Company hereby refers the Investors to Schedule 3.9(a), as
well as all information included in the risk factors of the draft Registration
Statement, on Form S-1, dated as of May 4, 1999 (as the same may be amended, the
"Registration Statement"), which Schedule and risk factors modify all
representations made in this Section 3.9. A copy of the risk factors is annexed
hereto as Exhibit J. Except as set forth on Schedule 3.9(a), the Company has no
knowledge of any infringement by it or IDT of any third-party patents,
trademarks, service marks, trade names, copyrights, trade secrets, information
and other proprietary rights and processes necessary for the Business
(collectively, the "Intellectual Property Rights"). Except as set forth on
Schedule 3.9(a), the Company is not aware of any obligation to make any payments
by way of royalties, fees or otherwise to any owner or licensor of, or other
claimant to, any patent, trademark, service mark, trade name, copyright, trade
secret, information or other proprietary right, with respect to the use thereof,
or in connection with the conduct of the Business or otherwise other than
royalties, fees or other payments (i) that would not have a Material Adverse
Effect, (ii) arising from the purchase of "off the shelf" or standard products,
or (iii) that are paid or payable in connection with strategic relationships,
partnering agreements, bundling agreements, web linking agreements, agency
agreements, affiliation agreements or other similar business arrangements in the
ordinary course of the Business (excluding any such arrangements or agreements
that involve licenses or rights to technology used in the Company's generally
available product and service offerings). Except as set forth on Schedule
3.9(a), the

8
<PAGE>

Company is not aware of any third party that is infringing upon or violating any
of the Company's Intellectual Property Rights. The Company does not believe it
is necessary to utilize any patented inventions or trade secrets of any of its
employees made prior to their employment by the Company, except for patented
inventions or trade secrets that have been assigned to the Company. Since the
Company's organization, the Company and IDT, taken together, have taken
reasonable security measures to protect the secrecy, confidentiality and value
of the Company's trade secrets (except where the failure to do so would not have
a Material Adverse Effect).

(b) The Company has registered the URL addresses of the
"net2phone.com" and "EZSurf.com" web sites (the "Web Sites") with the
appropriate organizations. The Company has not received any written
communication from any person that any Web Site is in violation of any law, rule
or regulation or in conflict with any patent, trademark, service mark, trade
name, copyright, trade secret, trade dress, license or other proprietary right
with respect thereto.

3.10. Compliance with Other Instruments. The Company is not in violation
---------------------------------
of any provision of its Certificate of Incorporation or Bylaws, each as amended
to date, or, to the Company's knowledge, in violation or default of any
provision of any instrument, judgment, order, writ, decree or contract to which
it is a party or by which it is bound or any provision of federal or state
statute, rule or regulation applicable to the Company, which violation or
default would have a Material Adverse Effect. The execution, delivery, and
performance of and compliance with this Agreement, and the Additional
Agreements, and the issuance and sale of the Series A Preferred and the Warrants
pursuant hereto and of the Conversion Shares pursuant to the Certificate of
Incorporation and the Warrant Shares, will not, with or without the passage of
time or giving of notice, result in any such material violation, or be in
conflict with or constitute a default under any such term, or result in the
creation of any mortgage, pledge, lien, encumbrance or charge upon any of the
properties or assets of the Company or the suspension, revocation, impairment,
forfeiture or nonrenewal of any permit, license, authorization or approval
applicable to the Company, its business or operations or any of its assets or
properties.

3.11. Disclosure. The Company has provided each Investor with true and
----------
complete copies of all documents and information requested by such Investor in
its due diligence review of the Company. Neither this Agreement, the Schedules
and Exhibits attached hereto, the Additional Agreements nor any certificate or
other document to be delivered by the Company at or prior to the Closing
contains or will contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements herein or therein, in
light of the circumstances under which they were made, not misleading as of the
date hereof and thereof. Notwithstanding the foregoing, the Registration
Statement provided to each of the Investors was prepared by the management of
the Company in a good faith effort to describe the Company's presently proposed
business and products and the markets therefor. The assumptions applied in
preparing the Registration Statement appeared reasonable to management as of the
date thereof and as of the date hereof. No representations have been made to
the Investors as to the timing of the filing of the Registration Statement.
There are no facts which (individually or in the aggregate) would have a
Material Adverse Effect that have not been set forth in this Agreement,

9
<PAGE>

the Schedules and Exhibits attached hereto, the Additional Agreements or in
other documents delivered to the Investors or their attorneys or agents in
connection herewith.

3.12. Agreements; Actions.
-------------------

(a) The Company has not (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to any class or series
of its capital stock, (ii) made any material loans or advances to any person,
other than in the ordinary course of business, (iii) sold, exchanged or
otherwise disposed of any material assets, or rights, other than in the ordinary
course of business, or (iv) incurred any indebtedness for money borrowed or any
other liabilities (other than with respect to indebtedness and other obligations
incurred in the ordinary course of business or as disclosed in the Financial
Statements (as defined below)) individually in excess of $50,000 or in the
aggregate in excess of $100,000.

(b) There are no agreements, understandings, instruments, contracts,
proposed transactions, judgments, orders, writs or decrees to which the Company
is a party or to its knowledge by which it is bound which may involve (i)
obligations (contingent or otherwise) of, or payments to, the Company in excess
of $25,000 (other than obligations of, or payments to, the Company arising from
purchase or sale agreements entered into in the ordinary course of business),
(ii) the license of any patent, copyright, trade secret or other proprietary
right to or from the Company (other than licenses arising from the purchase of
"off the shelf" or other standard products), (iii) provisions restricting or
affecting the development, manufacture or distribution of the Company's products
or services, or (iv) indemnification by the Company with respect to
infringements of proprietary rights (other than indemnification obligations
arising from agreements entered into in the ordinary course of business).

(c) The Company has not engaged in the past three (3) months in any
discussion (i) with any representative of any corporation or corporations
regarding the consolidation or merger of the Company with or into any such
corporation or corporations, (ii) with any corporation, partnership, association
or other business entity or any individual regarding the sale, conveyance or
disposition of all or substantially all of the assets of the Company, or a
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company is disposed of, or (iii) regarding any
other form of acquisition, dissolution or winding up of the Company.

(d) The Company and IDT have entered into each of the agreements
between such entities as described in Section 1.2(g) (the "Intercompany
Agreements").

3.13. Title to Property and Assets. The Company has good and marketable
----------------------------
title to its properties and assets, and has good title to all its leasehold
interests, in each case subject to no mortgage, pledge, lien, lease, encumbrance
or charge, other than (i) the lien of current taxes not yet due and payable, and
(ii) possible liens and encumbrances which do not in any case materially detract
from the value of the properties subject thereof or which would have a
Materially Adverse Effect. All facilities, machinery, equipment, fixtures and
other properties owned, leased or used by the Company are in good operating
condition and repair, are reasonably fit and useable for the purposes for which
they are being used and are adequate and sufficient for

10
<PAGE>

the Business.

3.14. Financial Statements. The Company has delivered to each Investor its
--------------------
audited consolidated financial statements (balance sheet, statement of
operations, statement of stockholders' deficit and statement of cash flows) for
the fiscal years ended July 31, 1997 and July 31, 1998 (the "Balance Sheet
-------------
Date"), its unaudited balance sheet as at January 31, 1999 and unaudited
- ----
statements of income, cash flow and stockholders' equity for the six-month
period ending on January 31, 1999 (the "Statement Date") (together, the
--------------
"Financial Statements"). The Financial Statements are complete and correct in
- ---------------------
all material respects and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods indicated. The balance sheets included in the Financial Statements
accurately set forth and fairly present the financial condition and operating
results of the Company as of the dates thereof and reflect all material
liabilities, contingent or otherwise, of the Company as of such dates, and the
statements of operations included in the Financial Statements accurately present
the operating results of the Company during the periods indicated therein.
Since the Balance Sheet Date, there has been no event which could have a
Material Adverse Effect.

3.15. Labor Agreements and Actions; Employees. The Company is not bound by
---------------------------------------
or subject to any agreement with any labor union, and no labor union has
requested or, to the Company's knowledge, has sought to represent any of the
employees of the Company. There is no strike or other labor dispute involving
the Company or the Business pending or, to the Company's knowledge, threatened,
that would have a Material Adverse Effect. The Company is not aware of any labor
organization activity involving the employees of the Company or otherwise
affecting the Business. To the Company's knowledge, no employee, officer or
consultant of the Company is in violation of any term of employment contract,
patent disclosure agreement or any other contract or agreement, or any judgment,
decree or order of any court or administrative agency, relating to the
relationship of any such employee, officer or consultant with the Company or any
other party because of the nature of the Business; nor, to the Company's
knowledge, has any such employee, officer, or consultant received notice or
communication of such a violation. The Company is not aware that any officer or
Key Employee (as defined below), or that any group of Key Employees, intends to
terminate their employment with the Company, nor does the Company have a present
intention to terminate the employment of any of the foregoing. Subject to
general principles related to wrongful termination of employees or other
applicable laws, the employment of each officer and employee of the Company is
terminable at the will of the Company. The carrying on of the Business by the
employees of the Company will not, to the best of the Company's knowledge,
conflict with or result in a breach of the terms, conditions or provisions of,
or constitute a default under, any contract, covenant or instrument under which
any such employees are now obligated. No employee of the Company has been
granted the right to continued employment by the Company or to any material
compensation following termination of employment with the Company. For

11
<PAGE>

purposes of this Agreement, "Key Employee" shall mean each of Clifford M. Sobel,
------------
Howard S. Balter, Ilan Slasky, David Greenblatt and H. Jeff Goldberg.

3.16. Insurance. The Company carries, or is covered by, insurance with
---------
companies the Company reasonably believes to be responsible and in such amounts
and covering such risks as the Company reasonably believes to be adequate for
the conduct of its Business and the value of its properties.

3.17. Employee Benefit Plans. Except as set forth in Schedule 3.17, the
----------------------
Company does not have any Employee Benefit Plan as defined in the Employee
Retirement Income Security Act of 1974, as amended to date ("ERISA"). The
-----
Company has no material liability with respect to any Employee Benefit Plan
(including, without limitation, any unfunded liability or any accumulated
funding deficiency) or any material liability to the Pension Benefit Guaranty
Corporation or under Title IV of ERISA with respect to a multi-employer pension
benefit plan, nor would the Company have any such liability if any such plan
were terminated or if the Company withdrew, in whole or in part, from any multi-
employer plan.

3.18. Investment Company. The Company is not, and, after giving effect to
------------------
the same and issuance of the Securities, will not be, an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.

3.19. Solvency. After giving effect to the transactions contemplated by
--------
this Agreement, (i) the fair market value of the Company's assets will be in
excess of the total amount of its liabilities (including, without limitation,
contingent liabilities); (ii) the present fair saleable value of the Company's
assets is greater than its probable liability on its existing debts as such
debts become absolute and matured; and (iii) the Company will be able to pay its
debts (including, without limitation, contingent debts and other commitments) as
they mature.

3.20. Obligations of Management. Each Key Employee of the Company is
-------------------------
currently devoting one hundred percent (100%) of his or her business time to the
conduct of the Business. The Company is not aware that any Key Employee of the
Company is planning to work less than full time at the Company in the future. No
officer or key employee is currently working, or, to the Company's knowledge,
plans to work for a competitive enterprise, whether or not such officer or key
employee is or will be compensated by such enterprise.

3.21. Interested Party Transactions: Obligations to Related Parties.
--------------------------------------------------------------
Except as disclosed on Schedule 3.21 hereto, no officer, director or shareholder
of the Company or any Affiliate (as this term is defined in Rule 405 of the SEC
under the Act) of any such Person or the Company has or has had, either directly
or indirectly, (i) an interest in any Person which (1) furnishes or sells
services or products which are furnished or sold or are proposed to be furnished
or sold by the Company or (2) purchases from or sells or furnishes to the
Company any goods or services, or (ii) a beneficial interest in any transaction,
contract or agreement to which the Company is a party or by which it may be
bound or affected. There are no obligations of the Company to officers,
directors, stockholders, or employees of the Company other than for
indemnification, payment of salary for services rendered, reimbursement for
reasonable expenses incurred on behalf of the Company and for other standard
employee benefits made generally

12
<PAGE>

available to all employees. Except as may be disclosed in the Financial
Statements, the Company is not a guarantor or indemnitor of any indebtedness of
any other Person.

3.22. Tax Returns and Payments. The Company has timely filed all tax
------------------------
returns (federal, state and local) required to be filed by it. All taxes shown
to be due and payable on such returns, any assessments imposed, and to the
Company's knowledge all other taxes due and payable by the Company on or before
the Closing have been paid or will be paid prior to the time they become
delinquent. The Company has not been advised (i) that any of its returns,
federal, state or other, have been or are being audited as of the date hereof,
or (ii) of any deficiency in assessment or proposed judgment to its federal,
state or other taxes. The Company has no knowledge of any liability of any tax
to be imposed upon its properties or assets as of the date of this Agreement
that is not adequately provided for. The Company has not executed any waiver of
any statute of limitations on the assessment or calculation of any tax or
governmental charge. The Company has withheld or collected from each payment
made to each of its employees the amount of all taxes required to be withheld or
collected therefrom.

3.23. Registration Rights. The Company is presently not under any
-------------------
obligation, and has not granted any rights, to register any of the Company's
presently outstanding securities or any of its securities that may hereafter be
issued.

3.24. Changes. Since the Balance Sheet Date, there has not been:
-------

(a) Any change in the assets, liabilities, financial condition or
operations of the Company from that reflected in the Financial Statements, other
than changes in the ordinary course of business, none of which individually or
in the aggregate has had or is reasonably expected to have a Material Adverse
Effect;

(b) Any resignation or termination of any Key Employee, and the
Company does not know of the impending resignation or termination of employment
of any such Key Employee;

(c) Any material change, except in the ordinary course of business,
in the contingent obligations of the Company by way of guaranty, endorsement,
indemnity, warranty or otherwise;

(d) Any cancellation, compromise or waiver by the Company of a
valuable right or of a material debt owed to it;

(e) Any direct or indirect loans made by the Company to any
stockholder, employee, officer or director of the Company, other than advances
made in the ordinary course of business;

(f) Any material change in any compensation arrangement or agreement
with any employee, officer, director or stockholder other than the Sobel
Agreement;

13
<PAGE>

(g) Any declaration or payment of any dividend or other distribution
of the assets of the Company or any purchase or redemption of any of its
outstanding capital stock;

(h) Any sale, transfer or lease of the assets of the Company, except
in the ordinary course of business and as provided in the Intercompany
Agreements;

(i) Any physical damage, destruction or loss (whether or not covered
by insurance) which individually or in the aggregate has had or is reasonably
expected to have a Material Adverse Effect;

(j) Any issuance or sale of any shares of the capital stock or other
securities of the Company or grant of any options with respect thereto, or any
modification of any of the capital stock of the Company other than pursuant to
the transactions contemplated hereby, the engagement letter with the Placement
Agreement and the Sobel Agreement;

(k) Any mortgage, pledge or lien incurred with respect to any of the
assets of the Company;

(l) Any other event or condition of any character that, either
individually or in the aggregate, has had or is reasonably likely to have a
Material Adverse Effect.

3.25. Computer System.
---------------

(a) To the Company's knowledge, each of the computer software
programs developed by the Company that are listed on Schedule 3.25 hereto (the
"Fully Operational Software") is operational in all material respects and
--------------------------
functions substantially in accordance with its specifications, if any, or, if no
written specifications exist, in the manner for which such software was designed
in order to support the Company's business operations and product and service
offerings; and both source code and object code versions thereof are in the
Company's possession and control.

(b) To the Company's knowledge, the computer systems and software
owned or licensed by the Company (including without limitation the Fully
Operational Software) are able to accurately process date data, including but
not limited to calculating, comparing and sequencing from, into and between the
twentieth century (through year 1999), the year 2000 and the twenty-first
century, including leap year calculations. Notwithstanding the foregoing, the
Company is conducting a review of its systems and the Fully Operational Software
in connection with year 2000 compliance as described in the Registration
Statement, which summary has been reviewed, and is understood, by the Investors.

3.26. Minute Books. The minute books of the Company provided to the
------------
Investors contain a summary of all material, scheduled meetings of directors and
stockholders since the time of incorporation, and fairly and accurately reflect,
in all material respects, all matters and transactions referred to in such
minute books.

14
<PAGE>

3.27. Real Property Holding Corporation. The Company is not a real
---------------------------------
property holding corporation within the meaning of Section 8979(c)(2) of the
Code and any regulations promulgated thereunder.

3.28. Health and Safety Laws. To its knowledge, the Company is not in
----------------------
violation of any applicable statute, law or regulation relating to occupational
health and safety, and to its knowledge, no material expenditures are or will be
required in order to comply with any such existing statute, law or regulation.

3.29. Environmental Matters.
---------------------
(a) No hazardous material, hazardous substance or toxic substance as
defined in applicable environmental laws, rules and regulations ("Hazardous
---------
Materials") (i) has been released, stored, generated, used, treated, deposited
- ---------
or disposed of on or under or is located on or under any real property currently
or previously owned or leased by the Company, (ii) is presently maintained,
used, generated, or permitted to remain in place by the Company in violation of
any applicable law, (iii) is required by applicable law to be removed, treated
or mitigated by the Company, given the nature of its present condition,
location, nature, material or maintenance, or (iv) is of a type, location,
material, nature or condition which requires special notification to third
parties by the Company under applicable law.

(b) To the Company's knowledge, the Company and IDT have maintained
their properties and assets and conducted their Business in accordance with all
federal, state and local statutes, laws, rules and regulations pertaining to
conversation and protection of the environment and the release, treatment,
discharge, use, handling, storage, production and disposal of Hazardous
Materials.

(c) No written notice, citation, summons or order has been received
by the Company or IDT and no written notice has been received by the Company or
IDT of any pending or threatened investigation or review by any governmental or
other entity, with respect to (i) any alleged violation by the Company or IDT of
any environmental statute, ordinance, rule, regulation or order of any
governmental entity, or (ii) any alleged failure by the Company or IDT to have
any environmental permit, certificate, license, approval, registration or
authorization required in connection with its business, or (iii) any use,
possession, generation, treatment, storage, recycling, transportation, release
or disposal by or on behalf of the Company or IDT of any Hazardous Material.

3.30. D&O Insurance. The Company shall obtain directors' and officers'
-------------
liability insurance and such other policies of insurance approved from time to
time by the Board of Directors, issued by insurers of recognized standing and
responsibility, with such coverage and in such amounts as are customary in the
case of companies of established reputation engaged in the same or similar
business and similarly situated.

15
<PAGE>

3.31. Material Agreements.
-------------------

(a) Set forth on Schedule 3.31(a) is a complete list of all
agreements, contracts, leases, licenses, instruments and commitments (oral or
written) to which the Company is a party or is bound that, individually or in
the aggregate, are material to the business, assets, financial condition,
results of operation or properties of the Company ("Material Agreements").
-------------------
(b) The Company, and to the best of the Company's knowledge IDT,
have not materially breached, nor does the Company have any knowledge of any
claim or threat that the Company, or to the best of the Company's knowledge IDT,
have breached, any term or condition of (i) any Material Agreement, or (ii) any
other agreement, contract, lease, license, instrument or commitment that,
individually or in the aggregate, would have a Material Adverse Effect. Each
Material Agreement is in full force and effect, and, to the Company's knowledge,
no other party to such Material Agreement is in default thereunder. Except as
set forth on Schedule 3.31(b), the Company is not a party to any agreement that
materially restricts its ability to market or sell any of its products (whether
by territorial restriction or otherwise).

4. Covenants of the Company. The Company hereby covenants and agrees as
------------------------
follows:

(a) Basic Financial Information. So long as any Investor holds
---------------------------
shares of Series A Preferred, the Company will furnish such Investor with (i) an
annual budget at least 45 days prior to the beginning of each fiscal year (which
budget may be revised at the discretion of the Board of Directors), (ii)
quarterly financial statements (including balance sheet, statement of
operations, statement of stockholders' deficit and statement of cash flows)
within 45 days of the end of each quarter, all in a form which shall be
reasonably acceptable to the Investors, and (iii) within 90 days following each
fiscal year end, financial statements audited by an accounting firm of national
recognition selected by the Board of Directors. In addition, beginning with the
first calendar month following the six month anniversary of the Closing, the
Company will provide the Investors with monthly budget forecasts. The Investor
hereby agrees to keep such information confidential, will not disclose it to any
third parties except to its affiliates, beneficial owners and its and their
respective advisors and will disclose it to its employees only on a need-to-know
basis, except as necessary for such Investor to enforce its rights under this
Agreement or any of the Additional Agreements, or pursuant to a subpoena or
otherwise pursuant to any legal process or as otherwise required by law.

(b) Inspection Rights. So long as any Investor holds at least
-----------------
twenty percent (20%) of the then outstanding shares of Series A Preferred, the
Company shall permit such Investor, its representatives and advisors inspection
rights during normal business hours upon prior written request to the Company.
Such inspection rights shall not apply to information the Company reasonably
determines to be confidential. The term "inspection rights," as used in this
Section shall include, but be limited to the right of the Investor and its
representatives and advisors to visit and inspect any of the properties of the
Company or any of its subsidiaries, and to discuss the affairs, finances and
accounts of the Company or any of its subsidiaries with its officers, and to
review such information as is reasonably requested all at such times as may be
reasonably requested.

16
<PAGE>

(c) Termination of Information Rights. The Investors' rights pursuant
---------------------------------
to paragraphs (a) and (b) of this Section shall terminate upon the consummation
of a Qualifying Public Offering, as defined in the Amended and Restated
Certificate of Incorporation. All other rights of the Investors pursuant to this
Section 4 shall survive the consummation of a Qualifying Public Offering.

(d) Right to Elect Directors.
------------------------

(i) For so long as the Investors who are affiliates of Softbank
(the "Softbank Investors") hold a majority of the Series A Preferred
------------------
originally purchased pursuant to their respective Subscription Agreements
or the shares of Class A Stock into which such Series A Preferred are
convertible, the Softbank Investors will be entitled to nominate, and the
Company and the directors of the Company shall use their best efforts to
secure the election of, a person to serve as a director of the Company (the
"Softbank Director"). The Softbank Director shall have the right to serve
-----------------
on the Company's Compensation Committee or Audit Committee. Once the
Softbank Investors no longer hold any of the shares of Series A Preferred
originally purchased pursuant to their respective Subscription Agreements,
they shall use their best efforts to secure the immediate resignation of
the Softbank Director. From the Closing until the earlier to occur of
either (1) 45 days from the Closing or (2) three business days before such
time as the Company prints a preliminary prospectus or "red herring" in
connection with a Qualifying Public Offering, the Softbank Investors may
choose to have a second observer pursuant to Section 4(i) hereof in lieu of
causing the election of the Softbank Director as provided herein.

(ii) For so long as GE Capital Equity Investments Inc., its
affiliates or beneficial owners (collectively, the "GE Investors") hold a
------------
majority of the Series A Preferred originally purchased pursuant to their
respective Subscription Agreements or the shares of Class A Stock into
which such Series A Preferred are convertible, the GE Investors will be
entitled to nominate, and the Company and the directors of the Company
shall use their best efforts to secure the election of, a person to serve
as a director of the Company (the "GE Director"). The GE Director shall
-----------
have the right to serve on either the Company's Compensation Committee or
Audit Committee; provided, however, that such right shall only apply to the
committee upon which the Softbank Director shall choose not to serve. Once
the GE Investors no longer hold any of the Series A Preferred originally
purchased pursuant to their respective Subscription Agreements, they shall
use their best efforts to secure the immediate resignation of the GE
Director. From the Closing until the earlier to occur of either (1) 45 days
from the Closing or (2) three business days before such time as the Company
prints a preliminary prospectus or "red herring" in connection with a
Qualifying Public Offering, the GE Investors may choose to have a second
observer pursuant to Section 4(i) hereof in lieu of causing the election of
the GE Director as provided herein.

(e) Board Composition. Following the Closing, the Board shall
-----------------
consist of between five and eleven members, two of which shall be elected by the
Series A Preferred Stock

17
<PAGE>

voting as a separate class (the "Series A Directors"), which Series A Directors
shall be the Softbank Director and GE Director. At least one director, if the
number of directors is five or less, and at least two directors, if the number
of directors is greater than six, shall be an outside director mutually
acceptable to the other Board members.

(f) Board Meetings. Board of Directors meetings shall be held
--------------
quarterly until such time as the Board determines that quarterly meetings are
not required or until the Series A Preferred is no longer outstanding. The
Company will reimburse the Series A Directors for the customary and reasonable
expenses in attending Board meetings.

(g) Committees. The Board of Directors will establish a Compensation
----------
Committee to recommend management compensation, the Company benefit plan, and
general options plans for approval by the Board of Directors. The Board of
Directors will also establish an Audit Committee.

(h) Technical Advisory Committee. Within 45 days from the date
----------------------------
hereof, the Board of Directors will establish a Technical Advisory Committee to
advise the board and make recommendations with respect to various technical
aspects of the Company's current and proposed products and service offerings.
For so long as America Online, Inc., its affiliates or beneficial owners
(collectively, the "AOL Investors") hold any of the Series A Preferred
originally purchased pursuant to this Agreement, a representative of the AOL
Investors will be entitled to serve as a non-Director member of the Technical
Advisory Committee; provided, however, that the AOL Investor's representative
-------- -------
must treat as strictly confidential any and all nonpublic information relating
to the Company obtained as a result of serving as a member of this committee.

(i) Right to Observer. In addition to the Softbank Investors' and GE
-----------------
Investors' representation on the Company's board of directors, from the Closing
until the later to occur of (i) such time as the Softbank Investors, GE
Investors or AOL Investors, as the case may be, no longer hold a majority of the
Series A Preferred originally purchased pursuant to their respective
Subscription Agreements or the shares of Class A Stock into which such Series A
Preferred are convertible, or (ii) the consummation of a Qualifying Public
Offering, as defined in the Amended and Restated Certificate of Incorporation, a
representative of the Softbank Investors, the GE Investors and AOL Investors may
attend all meetings of the Company's board of directors in a nonvoting observer
capacity and the Company shall notify such observer of the date, place, and time
of such meetings; provided, however, the Softbank Investors or GE Investors may
-------- -------
each elect to have a second observer pursuant to this Section 4(i) in lieu of
their respective directors as provided in Section 4(d) hereof.

(j) VCOC Investors.
--------------

(i) A representative of the VCOC Investors shall be entitled to
consult with and advise the management of the Company on significant
business issues, including management's proposed annual and quarterly
operation plans, and the Company hereby agrees to meet with such
representative of the VCOC Investors within thirty days after the end of
each fiscal quarter at the Company's headquarters at a

18
<PAGE>

mutually agreeable time for such consultation and advice and to review the
Company's progress in achieving said plans.

(ii) A representative of the VCOC Investors may examine the books
and records of the Company and inspect its facilities and request
information at reasonable times and intervals concerning the general status
of the Company's financial condition and operations; provided that access
--------
to confidential proprietary information and facilities need not be provided
except to the extent such confidential information is provided to all other
Investors.

(k) Confidential Information. Any and all directors, observers and
------------------------
VCOC Investors or representatives obtaining information from the Company
pursuant to their respective rights under paragraphs (d), (e) or (f) of this
Section 4 hereby agree to keep confidential all information they obtain related
to the Company deemed sensitive or confidential by the Company in its reasonable
discretion, and shall execute and be bound by a confidentiality and non-
disclosure agreement relating to all information to which they have access as a
result of serving in such capacity.

(l) Legal Fees and Expenses. The Company shall pay or reimburse
-----------------------
Investors for the reasonable fees and expenses of their counsel incurred in
connection with the review and negotiation of this Agreement and the Additional
Agreements, and all other documentation necessary to consummate the transactions
contemplated hereby, and all reasonable fees and expenses of such counsel
incurred in connection with its legal due diligence investigation of the Company
and its business prospects, whether or not the transactions contemplated hereby
are consummated; provided, however, that such reimbursement amount shall not
-------- -------
exceed $20,000 for Cooley Godward LLP, counsel for Softbank and H&Q, and shall
not exceed $10,000 for Paul, Hastings, Janofsky & Walker LLP, counsel for the GE
Investors.

(m) Use of Proceeds. The Company shall use the proceeds from the
---------------
sale of the Series A Preferred and Warrants for the general working capital
needs of the Company. The Company will not use the proceeds from the sale of the
Series A Preferred and Warrants to pay any principal outstanding on the note
between the Company and IDT, a copy of which is attached hereto as Exhibit I.
Notwithstanding the foregoing, the Company will pay to IDT the sum of $8 million
out of the proceeds of the offering to repay IDT for payments made by IDT on
behalf of the Company to Netscape in the amount of $7 million and to IBM in the
amount of $1 million.

(n) The Netscape Agreement. The Company will in good faith
----------------------
renegotiate with Netscape Communications Corporation ("Netscape") certain
limited portions of the agreement entered into by and between the Company and
Netscape, dated February __, 1999 (the "Netscape Agreement"), in order to
provide Netscape with (i) access to and greater control over those customers of
the Company who became customers of the Company as a result of the transactions
contemplated by the Netscape Agreement and (ii) greater economic opportunity to
cross-sell Netscape or AOL products and services to those customers of the
Company who

19
<PAGE>

became customers of the Company as a result of the transactions contemplated by
the Netscape Agreement.

5. Rights of First Refusal
-----------------------

5.1. Subsequent Offerings. Each Investor shall have a right of first
--------------------
refusal to purchase its pro rata share of all Equity Securities, as defined
below, that the Company may, from time to time, propose to sell and issue after
the date of this Agreement, other than the Equity Securities excluded by Section
5.6 hereof. Each Investor's pro rata share is equal to the ratio of (i) the
number of shares of the Company's Common Stock (including all Conversion Shares
and Warrant Shares) which such Investor is deemed to be a holder immediately
prior to the issuance of such Equity Securities to (ii) the total number of
shares of the Company's outstanding Common Stock (including all Conversion
Shares and Warrant Shares) immediately prior to the issuance of the Equity
Securities. As used in this Section 5, the term "Equity Securities" shall mean
(1) any Common Stock, Preferred Stock or other security of the Company, (2) any
security carrying any warrant convertible, with or without consideration, into
any Common Stock, Preferred Stock or other security (including any option to
purchase such a convertible security), (3) any security carrying any warrant or
right to subscribe to or purchase any Common Stock, Preferred Stock or other
security or (4) any such warrant or right.

5.2. Exercise of Rights. If the Company proposes to issue any Equity
------------------
Securities, it shall give each Investor written notice of its intention,
describing the Equity Securities, the price and the terms and conditions upon
which the Company proposes to issue the same. Each Investor shall have fifteen
(15) days after receipt of such notice to agree to purchase its pro rata share
of the Equity Securities for the price and upon the terms and conditions
specified in the notice by giving written notice to the Company and stating
therein the quantity of Equity Securities to be purchased. Notwithstanding the
foregoing, the Company shall not be required to offer or sell such Equity
Securities to any Investor who would cause the Company to be in violation of
applicable federal securities laws by virtue of such offer or sale.

5.3. Issuance of Equity Securities to Other Person. If not all of the
---------------------------------------------
Investors elect to purchase their pro rata share of the Equity Securities, then
the Company shall promptly notify in writing the Investors who do so elect and
shall offer such Investors the right to acquire such unsubscribed shares. The
Investors shall have five (5) days after receipt of such notice to notify the
Company of its election to purchase all or a portion thereof of the unsubscribed
shares. If the Investors fail to exercise in full the rights of first refusal,
the Company shall have ninety (90) days thereafter to sell the Equity Securities
in respect of which the Investor's rights were not exercised, at a price and
upon general terms and conditions materially no more favorable to the purchasers
thereof than specified in the Company's notice to the Investors pursuant to
Section 5.2 hereof. If the Company has not sold such Equity Securities within
ninety (90) days of the notice provided pursuant to Section 5.2, the Company
shall not thereafter issue or sell any Equity Securities, without first offering
such securities to the Investors in the manner provided above.

5.4. Termination and Waiver of Rights of First Refusal. The rights of
-------------------------------------------------
first refusal established by this Section 5 shall not apply to, and shall
terminate upon the earlier of (i) a

20
<PAGE>

Qualifying Public Offering, as defined in the Amended and Restated Certificate
of Incorporation or (ii) an Acquisition or Asset transfer as defined in the
Amended and Restated Certificate of Incorporation. The rights of first refusal
established by this Section 5 may be amended, or any provision waived with the
written consent of the Investors holding a majority of the Registrable
Securities, as defined in the Registration Rights Agreement, held by all
Investors, or as permitted by Section 5.6; provided, however, that
-------- -------
no amendment or waiver shall be effective without the affirmative vote or
written consent of holders owning in the aggregate 66-2/3% or more of the Series
A Preferred then outstanding.

5.5. Transfer of Rights of First Refusal. The rights of first refusal of
-----------------------------------
each Investor under this Section 5 may be transferred to the permitted
transferees as governed by the Registration Rights Agreement, subject to the
same restrictions, as any transfer of registration rights pursuant to the
Registration Rights Agreement.

5.6. Excluded Securities. The rights of first refusal established by this
-------------------
Section 5 shall have no application to any of the following Equity Securities:

(a) up to an aggregate amount of 1,680,000 shares of Common Stock and
an additional 10-15% of the Company that will be set aside for the issuance of
employee stock options at the Qualified Public Offering (and/or options,
warrants or other Common Stock purchase rights issued pursuant to such options,
warrants or other rights) issued or to be issued after the Original Issue Date
(as defined in the Company's Amended and Restated Certificate of Incorporation)
to employees, officers or directors of, or consultants or advisors to the
Company or any subsidiary, pursuant to stock purchase or stock option plans or
other arrangements that are approved by the Board of Directors including the
representatives designated by the holders of the Series A Preferred.

(b) stock issued pursuant to any rights or agreements outstanding as
of the date of this Agreement; options and warrants outstanding as of the date
of this Agreement; and stock issued after the date of this Agreement pursuant to
any such rights or agreements outstanding as of the date of this Agreement;
provided that the rights of first refusal established by this Section 5 shall
not be applied with respect to the initial sale or grant by the Company of such
rights or agreements.

(c) any Equity Securities issued for consideration other than cash
pursuant to a merger, consolidation, acquisition or similar business combination
approved by the Board of Directors including the representatives designated by
the holders of the Series A Preferred;

(d) shares of Common Stock issued in connection with any stock split,
stock dividend or recapitalization by the Company;

(e) shares of Common Stock issued upon conversion of the Series A
Preferred or exercise of the Warrants;

(f) any Equity Securities issued pursuant to any equipment leasing or
loan arrangement, or debt financing from a bank or similar financial or lending
institution approved

21
<PAGE>

by the Board of Directors including the representatives designated by the
holders of the Series A Preferred;

(g) any Equity Securities that are issued by the Company pursuant to
a registration statement file under the Securities Act, including in a
Qualifying Public Offering, as defined in the Amended and Restated Certificate
of Incorporation; and

(h) the sale of the balance of the authorized Series A Preferred and
Warrants pursuant to Section 1.4.

6. Conditions of the Investor's Obligations at Closing. The obligations of the
---------------------------------------------------
Investor to pay the Purchase Price for the Investor Shares and the Investor
Warrants to the Company is absolute, subject to the fulfillment or waiver at or
before the Closing of each of the following conditions by the Company, any or
all of which may be waived by the Investor:

(a) Representations and Warranties. The representations and
------------------------------
warranties of the Company contained in Section 3 hereof shall be true and
correct at and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of the
Closing.

(b) Performance. The Company shall have performed and complied with
-----------
all agreements, obligations, covenants and conditions contained in this
Agreement and the Additional Agreements that are required to be performed or
complied with by the Company at or before the Closing.

(c) Delivery of the Memorandum. The Placement Agent shall have
--------------------------
delivered to the Investor a copy of the Memorandum.

(d) Resolutions. The Company shall have delivered to the Investor a
-----------
certified copy of the resolutions of the Board of Directors of the Company
authorizing the transactions contemplated hereby.

(e) Certificate. The Investor shall have received a certificate,
-----------
dated as of the Closing, executed by an executive of the Company and stating
that the conditions set forth in clauses (a) and (b) above have been satisfied.

(f) Amended and Restated Certificate of Incorporation. The Company
-------------------------------------------------
shall have adopted resolutions setting forth the terms of the Investor Shares as
set forth in the Amended and Restated Certificate of Incorporation and shall
have filed the Amended and Restated Certificate of Incorporation with the
Delaware Secretary of State.

(g) Opinion of Morrison & Foerster LLP. Morrison & Foerster LLP,
----------------------------------
counsel to the Company, shall deliver an opinion addressed to the Investors,
dated the date of the Closing, substantially in the form attached as Exhibit G.

22
<PAGE>

(h) Other Agreements. The Additional Agreements shall have been
----------------
executed and delivered by the parties thereto.

(i) Force Majeure. Subsequent to the execution and delivery of this
-------------
Agreement, there shall not have occurred any of the following: (i) a suspension
of trading in securities generally on the Nasdaq National Market by the SEC, by
such exchange or by any other regulatory body or governmental authority having
jurisdiction, (ii) a declaration of a banking moratorium by federal or state
authorities of the United States or (iii) an escalation of a national emergency
or war by the United States which, in any such case, would have a Material
Adverse Effect.

(j) Consents, Permits and Waivers. The Company shall have obtained
-----------------------------
any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the
Additional Agreements.

(k) Indemnification. The bylaws of the Company provide for the
---------------
indemnification of directors to the fullest extent permitted by Delaware law.

(l) Minimum Purchase. All of the Series A Preferred and all of the
----------------
Warrants shall be purchased on the Closing Date.

7. Conditions of the Company's Obligations at Closing. The obligations of the
--------------------------------------------------
Company are subject to the fulfillment or waiver at or before the Closing of
each of the following conditions:

(a) Representations and Warranties. The representations and warranties of
------------------------------
the Investor contained in Section 2 hereof shall be true and correct at and as
of the Closing with the same effect as though such representations and
warranties had been made at and as of the date of the Closing.

(b) Performance. The Investor shall have performed and complied with all
-----------
agreements, obligations and conditions in this Agreement that are required
to be performed or complied with by such Investor at or before the Closing.

(c) Other Agreements. The Registration Rights Agreement and the
----------------
Shareholders Agreement have been executed and delivered by the parties thereto.

8. Transfer Limitations: 1933 Act Legend.
-------------------------------------
(a) Unless sold pursuant to an effective registration statement, each
certificate representing Securities shall bear a legend substantially in the
following form:

23
<PAGE>

otherwise permitted pursuant to Rule 144 under the Act or another
exemption from registration under the Act or an opinion of
counsel reasonably satisfactory to the Company is obtained to the
effect that such registration is not required and are subject to
transfer restrictions as set forth in a Subscription Agreement,
dated May __, 1999, and the operative agreements entered into in
connection therewith, copies of which may be obtained from the
Company."

The foregoing legend, if necessary, shall be removed from the
certificates representing any Series A Preferred, Warrant, Warrant Shares and
Conversion Shares, at the request of the holder thereof, at such time as (i)
they are sold pursuant to an effective registration statement, (ii) they become
eligible for resale pursuant to Rule 144(k) under the Act or another provision
of Rule 144 of the Act pursuant to which all or a portion of such underlying
Common Shares could be sold in a single transaction, or (iii) an opinion of
counsel reasonably satisfactory to the Company is obtained to the effect that
the proposed transfer is exempt from the Act. The transfer agent for the
Securities will issue new Securities without the legend upon receipt of a
certificate from the Investor stating that the Securities have been registered
or transferred pursuant to an effective registration statement under the Act or
can be sold in reliance upon Rule 144 or the Company has received an opinion of
counsel reasonably satisfactory to the Company to the effect that the proposed
transfer is exempt from the Act.

9. Indemnification.
---------------

9.1. Company Indemnification. The Company covenants and agrees to defend,
-----------------------
indemnify and save and hold harmless each Investor, together with its officers,
directors, partners, shareholders, employees, trustees, affiliates (within the
meaning of Rule 405 of the SEC under the Act), beneficial owners, attorneys and
representatives, from and against any and all losses, costs, expenses,
liabilities, claims or legal damages (including, without limitation, reasonable
fees and disbursements of counsel and accountants and other costs and expenses
incident to any actual or threatened claim, suit, action or proceeding, whether
incurred in connection with a claim against the Company or a third party claim)
(collectively, "Investor Losses") up to the amount of such Investor's original
---------------
investment in the Private Placement (as set forth on Schedule A hereto) arising
out of or resulting from: (i) any inaccuracy in or breach of any
representation, warranty, covenant or agreement made by the Company in this
Agreement, any Additional Agreement or in any writing delivered pursuant to this
Agreement or at the Closing; (ii) the failure of the Company to perform or
observe fully any covenant, agreement or provision to be performed or observed
by it pursuant to this Agreement or any Additional Agreement; or (iii) any
actual or threatened claim, suit, action or proceeding arising out of or
resulting from the conduct by the Company of its Business or operations, or the
Company's occupancy or use of its properties or assets, on or prior to the
Closing Date; other than, with respect to an Investor. Investor Losses
resulting directly from the gross negligence or willful misconduct of such
Investor or any of its respective officers, directors, employees, or any
affiliate within the meaning of Rule 405 of the SEC under the Act are not
covered under this Section 9.1; provided, however, that, if and to the extent
-------- -------
that such indemnification is

24
<PAGE>

unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of such indemnified liability which shall be
permissible under applicable laws.

9.2. Investor Indemnification. Each Investor covenants and agrees,
------------------------
severally and not jointly, to defend, indemnify and save and hold harmless the
Company, together with its officers, directors, partners, shareholders,
employees, trustees, affiliates (within the meaning of Rule 405 of the SEC under
the Act), attorneys and representatives, from and against any and all losses,
costs, expenses, liabilities, claims or legal damages (including, without
limitation, reasonable fees and disbursements of counsel and accountants and
other costs and expenses incident to any actual or threatened claim, suit,
action or proceeding, whether incurred in connection with a claim against any
such Investor or a third party claim) (collectively, "Company Losses"), up to
--------------
the amount of such Investor's original investment in the Private Placement (as
set forth in Schedule A hereto) arising out of or resulting from: (i) any
inaccuracy in or breach of any representation, warranty, covenant or agreement
made by the Investor in this Agreement, any Additional Agreement or in any
writing delivered pursuant to this Agreement or at the Closing; or (ii) the
failure of the Investor to perform or observe fully any covenant, agreement or
provision to be performed or observed by it pursuant to this Agreement or any
Additional Agreement. Company Losses resulting directly from the gross
negligence or willful misconduct of the Company or any of its respective
officers, directors, employees, or any affiliate within the meaning of Rule 405
of the SEC under the Act are not covered under this Section 9.2; provided,
--------
however, that, if and to
- -------
the extent that such indemnification is unenforceable for any reason, the
Investor shall make the maximum contribution to the payment and satisfaction of
such indemnified liability which shall be permissible under applicable laws.

9.3. Procedure. Each party entitled to be indemnified pursuant to Section
---------
9.1 and 9.2 (each, an "Indemnified Party") shall notify the other party in
-----------------
writing of any action against such Indemnified Party in respect of which the
other party is or may be obligated to provide indemnification on account of
Section 9.1 or 9.2, promptly after the receipt of notice or knowledge of the
commencement thereof. The omission of any Indemnified Party so to notify the
other party of any such action shall not relieve such other party from any
liability which it may have to such Indemnified Party except to the extent the
other party shall have been materially prejudiced by the omission of such
Indemnified Party so to notify it, pursuant to this Section 9.3. In case any
such action shall be brought against any Indemnified Party and it shall notify
the other party of the commencement thereof, the other party shall be entitled
to participate therein and, to the extent that such other party may wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
Indemnified Party, and after notice from it to such Indemnified Party of its
election so to assume the defense thereof, the other party will not be liable to
such Indemnified Party under Section 9.1 or 9.2 for any legal or other expense
subsequently incurred by such Indemnified Party in connection with the defense
thereof nor for any settlement thereof entered into without the consent of the
other party; provided, however, that (i) if the other party shall elect not to
-------- -------
assume the defense of such claim or action or (ii) if the Indemnified Party
reasonably determines (x) that there may be a conflict between the positions of
the other party and of the Indemnified Party in defending such claim or action
or (y) that there may be legal defenses available to such Indemnified Party
different from or in addition to those

25
<PAGE>

available to the other party, then separate counsel for the Indemnified Party
shall be entitled to participate in and conduct the defense, in the case of (i)
and (ii)(x), or such different defenses, in the case of (ii)(y), and the other
party shall be liable for any reasonable legal or other expenses incurred by the
Indemnified Party in connection with the defense.

9.4. Indemnification Non-Exclusive. The foregoing indemnification
-----------------------------
provisions are in addition to, and not in derogation of, any statutory,
equitable or common-law remedy any party may have for breach of representation,
warranty, covenant or agreement.

10. Miscellaneous.
-------------

10.1. Survival of Warranties. The representations and warranties set forth
----------------------
in Sections 2 and 3 hereof and the covenants contained in Section 4 hereof shall
survive indefinitely.

10.2. Successors and Assigns. This Agreement may not be assigned by any
----------------------
Investor or the Company without the prior written consent of the other party
hereto; provided, however, that this Agreement may be transferred by any
-------- -------
Investor to one or more of its affiliates or beneficial owners, or to any other
Investor. Nothing in this Agreement, express or implied, is intended to confer
upon any party, other than the parties hereto or their respective successors and
permitted assigns, any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this Agreement.

10.3. Governing Law; Submission to Jurisdiction. This Agreement shall be
-----------------------------------------
governed by and construed in accordance with the laws of the State of New York,
without regard to the conflict of law provisions. Each of the Company and the
Investor hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York State
court sitting in New York City for purposes of all legal proceedings arising out
of or relating to this Agreement and the transactions contemplated hereby. Each
of the Company and the Investor irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.

10.4. Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed an original, and all of which together shall be deemed
to constitute one and the same instrument.

10.5. Captions and Headings. The captions and headings used in this
---------------------
Agreement are for convenience only and are not to be considered in construing or
interpreting this Agreement.

10.6. Notices. Unless otherwise provided, any notice or other
-------
communication required or permitted to be given or effected under this Agreement
shall be in writing and shall be deemed effective upon personal or facsimile
delivery to the party to be notified or three business days after deposit with
an internationally recognized courier service, delivery fees prepaid, and
addressed to the party to be notified at the following respective addresses, or
at such

26
<PAGE>

other addresses as may be designated by written notice; provided that any notice
of change of address shall be deemed effective only upon receipt:

If to the Company: Net2Phone, Inc.
171 Main Street
Hackensack, NJ 07601
Attn: Ilan Slasky
Fax: 201-907-5351

with a copy to: IDT Corporation
190 Main Street
Hackensack, NJ 07601
Attn: Joyce Mason
Fax: 201-928-2952

and a copy to: Morrison & Foerster LLP
1290 Avenue of the Americas
New York, NY 10104
Attn: Ira Greenstein
Fax: (212) 468-7900

If to the Investors: Notice shall be sent to the person and address
indicated on signature page hereof.

with a copy to: Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Road
Palo Alto, CA 94306-2155
Attn: Eric Jensen
Fax: 650-857-0663

and a copy to: Paul, Hastings, Janofsky & Walker LLP
555 S. Flower Street
Los Angeles, CA 90071-2371
Attn: Siobhan M. Burke
Fax: (213) 627-0705

and a copy to: NBC Multimedia, Inc.
c/o National Broadcasting Company
30 Rockefeller Plaza
New York, New York 10012
Attn: Vice President, Law, Corporate
Transactions Group
Fax: (212) 977-7165

27
<PAGE>

10.7. Finder's Fee. Each of the Company, on the one hand, and the
------------
Investor, on the other hand, severally represents and warrants to the other
party hereto that neither it nor any of its officers, directors, general
partners, agents, employees or affiliates, has engaged or authorized any broker
or finder, other than the Placement Agent (the costs and expenses of which shall
be paid by the Company), to act, directly or indirectly, on its behalf, in
connection with the transactions contemplated by this Agreement, or has
consented to or acquiesced in anyone so acting, and it knows of no claim by any
person for compensation from it for so acting or of any basis for such a claim.
The provisions of this Section 10.7 shall survive any termination of this
Agreement. Each party hereto further agrees to indemnify each other party for
any claims, losses or expenses incurred by such other party as a result of the
representation in this Section 10.7 being untrue.

10.8. Amendments and Waivers. Except as provided in Section 10.13, any
----------------------
term of this Agreement may be amended, and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of each of the
Company and Investors holding at least a majority of the Series A Preferred;
provided, however, that no amendment or waiver shall be effective without the
- -------- -------
affirmative vote or written consent of holders owning in the aggregate 66-2/3%
or more of the Series A Preferred then outstanding. Any amendment or waiver
effected in accordance with this Section 10.8 shall be binding upon each holder
of any Securities purchased under this Agreement at the time outstanding, each
future holder of all such Securities, and the other parties to this Agreement.

10.9. Severability. If one or more provisions of this Agreement are held
------------
to be unenforceable under applicable law, such provisions shall be excluded from
this Agreement and the balance of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

10.10. Entire Agreement. This Agreement (and the Exhibits hereto) and the
----------------
Additional Agreements constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements,
understandings and discussions between them, and all documents delivered by or
on behalf of the Company to the Investor and its agents and representatives,
with respect to such subject matter.

10.11. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

10.12. Publicity. None of the Company, IDT or any Investor shall issue,
---------
publish or disseminate or cause to be issued, published or disseminated any
press release or public communication relating to this Agreement or any
Additional Agreement or any of the transactions contemplated herein or therein
using the name or any trade mark, logo, tradename, trade dress or other
intellectual property or otherwise referring to any Investor or any affiliate or
beneficial owner of an Investor, the Company or IDT, as the case may be, without
the prior written consent of such other party.

28
<PAGE>

10.13. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES ITS RIGHTS TO
--------------------
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT, THE ADDITIONAL AGREEMENTS, THE SERIES A PREFERRED, THE WARRANTS, THE
CONVERSION SHARES OR THE WARRANT SHARES, OR THE SUBJECT MATTER HEREOF OR
THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND
ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
THIS SECTION 10.13 HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND
THESE PROVISIONS SHALL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO
HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR
MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT. IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL (WITHOUT A JURY) BY
THE COURT.

29
<PAGE>

IN WITNESS WHEREOF, the Investor has executed this Agreement on the
day and year first above written.

NET2PHONE, INC. INVESTOR:

By: /s/ Howard Balter By:
----------------------- ---------------------------
Name: Howard Balter Name:
Title: CEO Title:

Name:
-------------------------
IDT CORPORATION Address:
-------------------------
Title:
------------------------
Telephone No.
-----------------
By: /s/ Joyce J. Mason Fax No.
------------------------- -----------------------
Name: Joyce J. Mason Date:
Title: Senior V.P., Secretary, -------------------------
General Counsel

30
<PAGE>

IN WITNESS WHEREOF, the Investor has executed this Agreement on the
day and year first above written.

NET2PHONE, INC. INVESTOR:
SOFTBANK TECHNOLOGY VENTURES IV LP
By: STV IV LLC its General Partner

By: By: /s/ Gary Rieschel
------------------------ ---------------------------------
Name: Name: Gary Rieschel
Title: Title: Executive Managing Member

Name:
---------------------------------
IDT CORPORATION Address:
------------------------------
Title:
--------------------------------
Telephone No.
-------------------------
By: Fax No.
------------------------ -------------------------------
Name: Date:
Title: ---------------------------------

SOFTBANK TECHNOLOGY ADVISORS FUND LP
By: STV IV LLC, its General Partner

By: /s/ Gary Rieschel
---------------------------------
Name: Gary Rieschel
Title: Executive Managing Member

31
<PAGE>

IN WITNESS WHEREOF, the Investor has executed this Agreement on the
day and year first above written.

NET2PHONE, INC. INVESTOR:
GE CAPITAL EQUITY INVESTMENTS, INC.

By: By: /s/ Tony J. Pantuso
------------------------ ---------------------------------
Name: Name: Tony J. Pantuso
Title: Title: Sr. V.P. GE Equity
Investments, Inc.

Name: Tony J. Pantuso
---------------------------------
IDT CORPORATION Address: 120 Long Ridge Road
------------------------------
Title: SVP
By: --------------------------------
------------------------ Telephone No. 203-357-6577
Name: -------------------------
Title: Fax No.
-------------------------------
Date: 5/13/99
---------------------------------

<PAGE>

IN WITNESS WHEREOF, the Investor has executed this Agreement on the
day and year first above written.

NET2PHONE, INC. INVESTOR: AMERICA ONLINE, INC.

By: By: /s/ Ronald Peele
------------------------ ---------------------------------
Name: Name: Ronald Peele
Title: Title: VP/AOL Investments

Name:
---------------------------------
IDT CORPORATION Address:
------------------------------
Title:
--------------------------------
Telephone No.
------------------------
By: Fax No.
------------------------ -------------------------------
Name: Date:
Title: ---------------------------------

<PAGE>

IN WITNESS WHEREOF, the Investor has executed this Agreement on the
day and year first above written.

NET2PHONE, INC. ACCESS TECHNOLOGY PARTNERS, L.P.
By: ACCESS TECHNOLOGY MANAGEMENT, L.L.C.
Its: General Partner

By: By: H&Q VENTURE MANAGEMENT, L.L.C.
------------------------ Its: Managing Member
Name:
Title: By: /s/ Robert N. Savoie
--------------------------------------
Name: Robert N. Savoie
Title: Tax Director, Attorney-in-Fact

Name:
--------------------------------------
IDT CORPORATION Address:
-----------------------------------
Title:
-------------------------------------
Telephone No.
------------------------------
By: Fax No.
------------------------ ------------------------------------
Name: Date:
Title: --------------------------------------

<PAGE>

IN WITNESS WHEREOF, the Investor has executed this Agreement on the
day and year first above written.

NET2PHONE, INC. ACCESS TECHNOLOGY PARTNERS
BROKERS FUND, L.P.

By: By: H&Q VENTURE MANAGEMENT, L.L.C.
------------------------ Its: General Partner
Name:
Title: By: /s/ Robert N. Savoie
--------------------------------------
Name: Robert N. Savoie
Title: Tax Director, Attorney-in-Fact

<PAGE>

IN WITNESS WHEREOF, the Investor has executed this Agreement on the
day and year first above written.

NET2PHONE, INC. INVESTOR:

HAMBRECHT & QUIST CALIFORNIA

By: By: /s/ Robert N. Savoie
------------------------ ----------------------------------------
Name: Its: Tax Director, Attorney-in-Fact
Title:

Name:
---------------------------------------
IDT CORPORATION Address:
------------------------------------
Title:
--------------------------------------
Telephone No.
-------------------------------
By: Fax No.
------------------------ -------------------------------------
Name: Date:
Title: ---------------------------------------

<PAGE>

IN WITNESS WHEREOF, the Investor has executed this Agreement on the
day and year first above written.

NET2PHONE, INC. INVESTOR:

HAMBRECHT & QUIST EMPLOYEE VENTURE
FUND, L.P.
By:
--------------------------
Name: By: H&Q VENTURE MANAGEMENT, L.L.C.
Title: Its: General Partner

By: /s/ Robert N. Savoie
------------------------------
Its: Tax Director, Attorney-in-Fact

Name:
-----------------------------------
IDT CORPORATION Address:
--------------------------------
Title:
----------------------------------
Telephone No.
---------------------------
By: Fax No.
-------------------------- ---------------------------------
Name: Date:
Title: -----------------------------------

37
<PAGE>

IN WITNESS WHEREOF, the Investor has executed this Agreement on the
day and year first above written.

NET2PHONE, INC. INVESTOR:

By: By: /s/ Mark J. Zanoli
------------------------ ---------------------------------
Name: Name:
Title: Title:

Name: Mark J. Zanoli
IDT CORPORATION ---------------------------------
Address: 124 Meadow Crest Ln.
------------------------------
By: Title: Managing Director
------------------------ --------------------------------
Name: Telephone No. 415-439-3451
Title: -------------------------
Fax No. 415-439-3131
-------------------------------
Date: 5/17/99
---------------------------------

<PAGE>

IN WITNESS WHEREOF, the Investor has executed this Agreement on the
day and year first above written.

NET2PHONE, INC. INVESTOR:

By: By: /s/ Daniel H. Rimer
------------------------ ---------------------------------
Name: Name: Daniel H. Rimer
Title: Title: Managing Director, IRG

Name: Daniel H. Rimer
IDT CORPORATION ---------------------------------
Address: One Bush St.
------------------------------
By: Title: Managing Director
------------------------ --------------------------------
Name: Telephone No. 415-439-3425
Title: -------------------------
Fax No. 415-439-3041
-------------------------------
Date: 5/14/99
---------------------------------

<PAGE>
IN WITNESS WHEREOF, the Investor has executed this Agreement on the
day and year first above written.

NET2PHONE, INC. INVESTOR:

By: By: /s/ David Golden
-------------------------- ---------------------------
Name: Name: David Golden
Title: Title: Managing Director

Name: David Golden
IDT CORPORATION ----------------------------------
Address: 1 Bond St., SF, CA 94104
-------------------------------
Title: Managing Director
---------------------------------
Telephone No. 415-439-3205
By: --------------------------
-------------------------- Fax No. 415-439-3146
Name: --------------------------------
Title: Date: 5/17/99
----------------------------------

<PAGE>

IN WITNESS WHEREOF, the Investor has executed this Agreement on the
day and year first above written.

NET2PHONE, INC. INVESTOR:

By: By: /s/ Norman D. Colbert
------------------------- ---------------------------------------
Name: Name: Norman D. Colbert
Title: Title: Principal

Name: Norman D. Colbert
IDT CORPORATION --------------------------------------
Address: 1920 Leavenworth St., SF, CA 94133
-----------------------------------
Title: Principal
-------------------------------------
Telephone No. 415-673-6564
By: ------------------------------
------------------------- Fax No. 415-439-3808
Name: ------------------------------------
Title: Date: 5/17/99
--------------------------------------

<PAGE>

IN WITNESS WHEREOF, the Investor has executed this Agreement on the day and
year first above written.

NET2PHONE,INC. INVESTOR:

By: By: /s/ Daniel H. Case III
------------------------- ---------------------------------
Name: Name:
Title: Title:

Name: Daniel H. Case III
-------------------------------
IDT CORPORATION Address: 200 Walnut St.
----------------------------
Title: Chairman and CEO
------------------------------
Telephone No. 415-439-3631
-----------------------
By: Fax No. 415-439-3263
------------------------- -----------------------------
Name: Date: 5/14/99
Title: -------------------------------

<PAGE>

IN WITNESS WHEREOF, the Investor has executed this Agreement on the
day and year first above written.

NET2PHONE, INC. INVESTOR:

By: By: /s/ Timothy W. Baughman
-------------------------------- -----------------------------------
Name: Name: Timothy W. Baughman
Title: Title: Principal

Name: Timothy W. Baughman
IDT CORPORATION ----------------------------------
Address: 35 Crest Rd., Ross, GA 94957
-------------------------------
Title: Principal
---------------------------------
Telephone No. 415-439-3373
By: --------------------------
-------------------------------- Fax No. 415-439-3131
Name: --------------------------------
Title: Date: 5/17/99
----------------------------------

<PAGE>

IN WITNESS WHEREOF, the Investor has executed this Agreement on the day and
year first above written.

NET2PHONE, INC. INVESTOR:
ABS EMPLOYEES' VENTURE FUND
LIMITED PARTNERSHIP

By: By: /s/ M.A. Shattuck III
---------------------------- --------------------------------------
Name: Name: M.A. Shattuck III
Title: Title: President of Alex. Brown
Investments, Inc. and GP of the
Partnership

Name:
------------------------------------
IDT CORPORATION Address:
---------------------------------
Title:
-----------------------------------
Telephone No.
----------------------------
By: Fax No.
---------------------------- ----------------------------------
Name: Date:
Title ------------------------------------

<PAGE>

Exhibit 2

SERIES A STOCK TRANSFER AGREEMENT
---------------------------------

STOCK TRANSFER Agreement (this "Agreement"), dated as of June 18,
---------
1999, among Net2Phone, Inc., a Delaware corporation (the "Company"), GE Capital
-------
Equity Investments, Inc., a Delaware corporation ("GE Capital"), and Snap! LLC,
----------
a Delaware limited liability company ("Snap").
----

WHEREAS, the Company has raised up to $31.4 million through the
issuance and sale of Series A Preferred and Warrants (each as defined below)
(the "Private Placement");
------------------

WHEREAS, GE Capital purchased 750,000 shares of Series A Preferred and
Warrants for 15,000 shares of Common Stock (as defined below) for aggregate
consideration of $7,500,000 in the Private Placement pursuant to a Subscription
Agreement dated as of May 13, 1999 (the "Series A Subscription Agreement");
-------------------------------

WHEREAS, upon the terms and subject to the conditions of this
Agreement, Snap desires to purchase shares of Series A Convertible Preferred
Stock of the Company, par value $.01 per share (the "Series A Preferred"), and
------------------
Warrants (the "Warrants") to purchase shares of Common Stock of the Company, par
--------
value $.01 per share (the "Common Stock"), and GE Capital desires to sell shares
------------
of Series A Preferred and Warrants to Snap; and

WHEREAS, Snap is an affiliate of GE Capital;

NOW, THEREFORE, the Company, GE Capital and Snap hereby agree as
follows:

1.1. Sale and Purchase of the Series A Preferred and the Warrants. Upon
------------------------------------------------------------
the terms and subject to the conditions of this Agreement, GE Capital hereby
agrees to sell, and Snap hereby agrees to purchase, (i) 100,000 shares of Series
A Preferred (the "Snap Shares") and (ii) Warrants to purchase 2,000 shares of
-----------
Common Stock (the "Snap Warrant"). The Company acknowledges, consents and
------------
agrees to such sale and purchase of the Snap Shares and the Snap Warrant.

1.2. Closing of the Sale and Purchase. At the Closing (as hereinafter
--------------------------------
defined):

(a) Snap will pay or tender to GE Capital cash in immediately
available funds in the amount of $1,000,000 (one million), representing the
aggregate purchase price for the Snap Shares and the Snap Warrants (the
"Purchase Price").
--------------

(b) GE Capital will deliver to the Company for cancellation the share
certificate representing the Series A Preferred acquired by GE Capital pursuant
to the Series A Subscription Agreement.
<PAGE>

(c) The Company shall issue and deliver to GE Capital a new share
certificate for 650,000 shares of Series A Preferred Stock, in a form
substantially similar to the original share certificate and which shall be
registered in GE Capital's name.

(d) The Company shall issue and deliver to Snap a share certificate
for 100,000 shares of Series A Preferred Stock, in a form substantially similar
to GE Capital's original share certificate and which shall be registered in
Snap's name.

(e) The Company and Snap shall execute and deliver a counterpart to
Registration Rights Agreement relating to the shares of Common Stock underlying
the Snap Shares and the Snap Warrant substantially in the form attached as
Exhibit A hereto (the "Registration Rights Agreement").
- --------- -----------------------------

(f) The Company and Snap shall execute and deliver a counterpart to
the Co-Sale Agreement relating to the potential sales of Common Stock, the Snap
Shares and the Snap Warrant substantially in the form attached as Exhibit B
---------
hereto (the "Co-Sale Agreement").
-----------------

(g) The Company shall issue and deliver to each of GE Capital and
Snap a warrant certificate representing the Warrants issuable to each of GE
Capital and Snap, which certificates shall be registered in each of GE Capital's
and Snap's name and shall be substantially in the form attached as Exhibit C
hereto (each, a "Warrant Certificate" and collectively, the "Warrant
------------------- -------
Certificates").
- ------------

(h) The Company and Snap shall execute and deliver a counterpart to
the Stockholders Agreement (the "Stockholders Agreement" and, together with the
----------------------
Registration Rights Agreement and the Co-Sale Agreement, the "Additional
----------
Agreements") substantially in the form attached as Exhibit D hereto.
- ---------- ---------

1.3. Closing. The issuance and delivery of the share certificates and the
-------
Warrant Certificates by the Company to GE Capital and Snap and the delivery of
the Purchase Price to GE Capital (the "Closing"), will take place at the
-------
offices of Morrison & Foerster LLP, 1290 Avenue of the Americas, New York, New
York, at 10:00 A.M. on June 18, 1999, or at such other time and place as the
Company, GE Capital and Snap may agree orally or in writing.

2. Representations, Warranties and Acknowledgments of Snap.
-------------------------------------------------------

Snap hereby represents, warrants and acknowledges to GE Capital and
the Company as follows:

2.1. Receipt of Agreements; Access to Information. Snap has received and
--------------------------------------------
reviewed this Agreement, the Additional Agreements and the Confidential
Executive Summary, dated February 2, 1999 (as updated, the "Memorandum")
----------
prepared and distributed by Hambrecht & Quist, LLC (the "Placement Agent") as
---------------

well as the Series A subscription Agreement and the schedules and exhibits
attached thereto. The Company has provided Snap with the opportunity to ask
questions of and to receive answers from representatives of the Company
concerning the Company and an investment in the Snap Shares and the Snap
Warrants.
<PAGE>

2.2. No Registration of Shares. Snap is aware that the Snap Shares, the
-------------------------
Snap Warrants and, when and if issued, the Common Shares underlying the Snap
Shares and the Snap Warrants (the Snap Shares, the Snap Warrants and underlying
Common Shares are collectively referred to herein as the "Securities"), have not
----------
been registered under the Securities Act of 1933, as amended (the "Act"), that
---
such offer and sale are intended to be exempt from registration under the Act
and the rules promulgated thereunder by the Securities and Exchange Commission
(the "SEC"), and that the Securities cannot be sold, assigned, transferred, or
---
otherwise disposed of unless they are subsequently registered under the Act or
an exemption from such registration is available. Snap is also aware that sales
or transfers of the Securities are further restricted by state securities laws
and the provisions of this Agreement and that the certificates for the
Securities will bear appropriate legends restricting their transfer pursuant to
applicable laws, this Agreement and the Additional Agreements.

2.3. Suitability of Investment.
-------------------------

(a) Snap understands that there is no established market for the
Securities;

(b) Snap is acquiring the Securities for its own account for
investment purposes only and not with a view to the resale or distribution
thereof;

(c) Snap has not and will not, directly or indirectly, offer, sell,
transfer, assign, exchange or otherwise dispose of all or any part of the
Securities, except in accordance with applicable federal and state securities
laws and the provisions of this Agreement or the Additional Agreements as long
as such documents remain in effect;

(d) Snap has such knowledge and experience in financial, business
and tax matters that Snap is capable of evaluating the merits and risks relating
to Snap's investment in the Securities and making an investment decision with
respect to the Company;

(e) To the full satisfaction of Snap, Snap has been given the
opportunity to obtain information and documents relating to the Company and to
ask questions of and receive answers from representatives of the Company
concerning the Company and the investment in the Securities;

(f) Snap has not engaged in any activity that would be deemed a
"general solicitation" under the provisions of Regulation D.

(g) Snap has such knowledge and experience in financial or business
matters that it can, and it has, adequately analyzed the risks of an investment
in the Securities and it has determined the Securities are a suitable investment
for Snap and that Snap is able at this time, and in the foreseeable future, to
bear the economic risk of a total loss of its investment in the Company;

(h) Snap is aware that there are substantial risks incident to an
investment in the Securities, including, without limitation, those summarized
under "Risk Factors" in the Memorandum; and
<PAGE>

(i) Snap is an "accredited investor" within the meaning of Rule 501
of Regulation D of the Act as presently in effect and is either purchasing for
its own account or for the account of another "accredited investor", and any
accounts for which the Investor is acting are each able to bear the economic
risks of this investment.

2.4. Authorization. All action on the part of Snap necessary for the
-------------
authorization, execution and delivery of this Agreement and the Shareholders
Agreement and the Registration Rights Agreement and for the performance of all
obligations of Snap hereunder and thereunder has been taken. This Agreement has
been, and the Shareholders Agreement and the Registration Rights Agreement will
be, duly executed and delivered by Snap and will constitute valid and legally
binding obligations of Snap, enforceable in accordance with their respective
terms, subject to (i) the laws of bankruptcy and the laws affecting creditors'
rights generally, and (ii) the availability of equitable remedies, and (iii) the
fact that Snap's indemnification obligations under this Agreement and the
Registration Rights Agreement may be unenforceable on the grounds of public
policy.

3. Representations, Warranties and Acknowledgments of GE Capital.
-------------------------------------------------------------

3.1 Authorization. All action on the part of GE Capital necessary for
-------------
the authorization, execution and delivery of this Agreement and for the
performance of all obligations of GE Capital hereunder and thereunder has been
taken. This Agreement has been duly executed and delivered by GE Capital and
will constitute valid and legally binding obligations of GE Capital, enforceable
in accordance with their respective terms, subject to (i) the laws of bankruptcy
and the laws affecting creditors' rights generally, and (ii) the availability of
equitable remedies.

4. Covenants of the Company. The Company hereby covenants and agrees as
------------------------
follows:

(a) Basic Financial Information. So long as Snap holds shares of
---------------------------
Series A Preferred, the Company will furnish Snap with (i) an annual budget at
least 45 days prior to the beginning of each fiscal year (which budget may be
revised at the discretion of the Board of Directors), (ii) quarterly financial
statements (including balance sheet, statement of operations, statement of
stockholders' deficit and statement of cash flows) within 45 days of the end of
each quarter, all in a form which shall be reasonably acceptable to the
Investors, and (iii) within 90 days following each fiscal year end, financial
statements audited by an accounting firm of national recognition selected by the
Board of Directors. In addition, beginning with the first calendar month
following the six month anniversary of the Closing, the Company will provide
Snap with monthly budget forecasts. Snap hereby agrees to keep such information
confidential, will not disclose it to any third parties except to its
affiliates, beneficial owners and its and their respective advisors and will
disclose it to its employees only on a need-to-know basis, except as necessary
for Snap to enforce its rights under this Agreement or any of the Additional
<PAGE>

Agreements, or pursuant to a subpoena or otherwise pursuant to any legal process
or as otherwise required by law.

(b) Termination of Information Rights. Snap's rights pursuant to
---------------------------------
paragraphs (a) and (b) of this Section shall terminate upon the consummation of
a Qualifying Public Offering, as defined in the Amended and Restated Certificate
of Incorporation.

(c) Rights of First Refusal. GE Capital hereby partially assigns
-----------------------
Snap its right of first refusal to purchase additional equity securities of the
Company, as set forth in Section 5 of the Series A Subscription Agreement, in
proportion to the number of Series A Shares purchased by Snap hereunder divided
by the number of Series A Shares purchased by GE Capital under the Series A
Subscription Agreement.

5. Transfer Limitations: 1933 Act Legend.
-------------------------------------

(a) Unless sold pursuant to an effective registration statement,
each certificate representing Securities shall bear a legend substantially in
the following form:

"The shares represented by this certificate have
not been registered under the United States
Securities Act of 1933, as amended (the "Act"),
and may not be offered, sold or otherwise
transferred, pledged or hypothecated unless and
until such shares are registered under the Act or,
except as otherwise permitted pursuant to Rule 144
under the Act or another exemption from registration
under the Act or an opinion of counsel reasonably
satisfactory to the Company is obtained to the
effect that such registration is not required and
are subject to transfer restrictions as set forth
in a Subscription Agreement, dated May 13, 1999,
and the operative agreements entered into in
connection therewith, copies of which may be obtained
from the Company."

statement, (ii) they become eligible for resale pursuant to Rule 144(k) under
the Act or another provision of Rule 144 of the Act pursuant to which all or a
portion of such underlying Common Shares could be sold in a single transaction,
or (iii) an opinion of counsel reasonably satisfactory to the Company is
obtained to the effect that the proposed transfer is exempt from the Act. The
transfer agent for the Securities will issue new Securities without the legend
upon receipt of a certificate from the Investor stating that the Securities have
been registered or transferred pursuant to an effective registration statement
under the Act or can be sold in reliance upon Rule 144 or the Company has
received an opinion of counsel reasonably satisfactory to the Company to the
effect that the proposed transfer is exempt from the Act.

6. Indemnification. GE Capital hereby partially assigns Snap its right of
---------------
indemnification from the Company, as set forth in Section 9.1 of the Series A
Subscription Agreement, including, without limitation, with respect to any
breach by the Company of any representation, warranty, covenant or agreement
contained in the Series A Subscription Agreement, and Snap hereby partially
assumes from GE Capital its indemnification obligations to the Company, as set
forth in Section 9.2 of the Series A Subscription Agreement, each in proportion
to the number of Series A Shares purchased by Snap hereunder divided by the
number of Series A Shares purchased by GE Capital under the Series A
Subscription Agreement.

7. Miscellaneous.
-------------

7.1. Survival of Warranties. The representations and warranties set forth
----------------------
in Sections 2 and 3 hereof and the covenants contained in Section 4 hereof shall
survive indefinitely.

7.2. Successors and Assigns. This Agreement may not be assigned by Snap,
----------------------
GE Capital or the Company without the prior written consent of the other party
hereto; provided, however, that this Agreement may be transferred by Snap to one
-------- -------
or more of its affiliates or beneficial owners, or to any investor under the
Series A Subscription Agreement. Nothing in this Agreement, express or implied,
is intended to confer upon any party, other than the parties hereto or their
respective successors and permitted assigns, any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement.

7.3. Governing Law; Submission to Jurisdiction. This Agreement shall be
-----------------------------------------
governed by and construed in accordance with the laws of the State of New York,
without regard to the conflict of law provisions. Each of the Company, Snap and
GE Capital hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York State
court sitting in New York City for purposes of all legal proceedings arising out
of or relating to this Agreement and the transactions contemplated hereby. Each
of the Company, Snap and GE Capital irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.

7.4. Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed an original, and all of which together shall be deemed
to constitute one and the same instrument.

7.5. Captions and Headings. The captions and headings used in this
---------------------
Agreement are for convenience only and are not to be considered in construing or
interpreting this Agreement.
<PAGE>

7.6. Notices. Unless otherwise provided, any notice or other
-------
communication required or permitted to be given or effected under this Agreement
shall be in writing and shall be deemed effective upon personal or facsimile
delivery to the party to be notified or three business days after deposit with
an internationally recognized courier service, delivery fees prepaid, and
addressed to the party to be notified at the following respective addresses, or
at such other addresses as may be designated by written notice; provided that
any notice of change of address shall be deemed effective only upon receipt:

If to the Company: Net2Phone, Inc.
171 Main Street
Hackensack, NJ 07601
Attn: Ilan Slasky
Fax: 201-907-5351

with a copy to: IDT Corporation
190 Main Street
Hackensack, NJ 07601
Attn: Joyce Mason
Fax: 201-928-2952

and a copy to: Morrison & Foerster LLP
1290 Avenue of the Americas
New York, NY 10104
Attn: Ira Greenstein
Fax: (212) 468-7900

If to Snap: Snap! LLC
1 Beach Street
San Francisco, CA 94133
Attn: Steve Spinner
Fax: (415) 392-9064

and a copy to: NBC Multimedia, Inc.
c/o National Broadcasting Company
30 Rockefeller Plaza
New York, New York 10012
Attn: Vice President, Law, Corporate
Transactions Group
Fax: (212) 977-7165

If to GE Capital: GE Capital Equity Investments, Inc.
120 Long Ridge Road
Stamford, CT 06927
Attn: Christine Kim
Fax: (203) 357-3057
<PAGE>

and a copy to: Paul, Hastings, Janofsky & Walker LLP
555 S. Flower Street
Los Angeles, CA 90071-2371
Attn: Siobhan M. Burke
Fax: (213) 627-0705

7.7. Finder's Fee. Each of the Company, on the one hand, and GE Capital
------------
and Snap, on the other hand, severally represents and warrants to the other
party hereto that neither it nor any of its officers, directors, general
partners, agents, employees or affiliates, has engaged or authorized any broker
or finder, other than the Placement Agent (the costs and expenses of which shall
be paid by the Company), to act, directly or indirectly, on its behalf, in
connection with the transactions contemplated by this Agreement, or has
consented to or acquiesced in anyone so acting, and it knows of no claim by any
person for compensation from it for so acting or of any basis for such a claim.
The provisions of this Section 7.7 shall survive any termination of this
Agreement. Each party hereto further agrees to indemnify each other party for
any claims, losses or expenses incurred by such other party as a result of the
representation in this Section 7.7 being untrue.

7.8. Amendments and Waivers. Any term of this Agreement may be amended,
----------------------
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of each of the Company, Snap and GE Capital. Any
amendment or waiver effected in accordance with this Section 7.8 shall be
binding upon each holder of any Securities purchased under this Agreement at the
time outstanding, each future holder of all such Securities, and the other
parties to this Agreement.

7.9. Severability. If one or more provisions of this Agreement are held
------------
to be unenforceable under applicable law, such provisions shall be excluded from
this Agreement and the balance of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

7.10. Entire Agreement. This Agreement and the Additional Agreements
----------------
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements, understandings and discussions
between them, and all documents delivered by or on behalf of the Company to Snap
and its agents and representatives, with respect to such subject matter.

7.11. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

7.12. Publicity. None of the Company, GE Capital or Snap shall issue,
---------
publish or disseminate or cause to be issued, published or disseminated any
press release or public communication relating to this Agreement or any
Additional Agreement or any of the transactions contemplated herein or therein
using the name or any trade mark, logo, tradename, trade dress or other
intellectual property or otherwise referring to the Company, GE Capital, Snap or
any

<PAGE>

affiliate or beneficial owner of Snap, the Company or GE Capital as the case may
be, without the prior written consent of such other party.

7.13. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES ITS RIGHTS
--------------------
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT, THE ADDITIONAL AGREEMENTS, THE SERIES A PREFERRED, THE WARRANTS,
THE CONVERSION SHARES OR THE WARRANT SHARES, OR THE SUBJECT MATTER HEREOF OR
THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND
ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
THIS SECTION 7.13 HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND
THESE PROVISIONS SHALL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO
HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR
MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT. IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL (WITHOUT A JURY) BY
THE COURT.
<PAGE>

IN WITNESS WHEREOF, the Company, GE Capital and Snap have each
executed this Agreement on the day and year first above written.

NET2PHONE, INC. SNAP! LLC:

By: /s/ Howard Balter By: /s/ Andrew P. Hyde
-------------------------- ---------------------------
Name: Howard Balter Name: Andrew P. Hyde
Title: CEO Title: Chief Financial Officer

Name: /s/ Andrew P. Hyde
GE CAPITAL EQUITY INVESTMENTS, INC. ----------------------------------
Address: One Beach Street, SF, CA 94133
-------------------------------
Title: CFO
---------------------------------
Telephone No. 415-875-7930
By: /s/ Jeff Coats --------------------------
------------------------------ Fax No. 415-392-9186
Name: Jeff Coats --------------------------------
Title: Managing Director Date:
----------------------------------

[SIGNATURE PAGE TO THE SERIES A STOCK TRANSFER AGREEMENT]

<PAGE>

Exhibit 3

JOINT FILING AGREEMENT

This will confirm the agreement by and among all the undersigned that
the Schedule 13D filed on or about this date and any amendments thereto with
respect to beneficial ownership by the undersigned of shares of the Common
Stock, par value $0.01 per share, of Net2Phone, Inc. is being filed on behalf of
each of the undersigned in accordance with Rule 13d-1(k)(1) under the Securities
Exchange Act of 1934. This agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

Dated: August 9, 1999

GE CAPITAL EQUITY INVESTMENTS, INC.

By: /s/ Michael E. Pralle
-------------------------------------
Name: Michael E. Pralle
Title: President

GENERAL ELECTRIC CAPITAL CORPORATION

By: /s/ Michael E. Pralle
--------------------------------------
Name: Michael E. Pralle
Title: Vice President

GENERAL ELECTRIC CAPITAL SERVICES, INC.

By: /s/ Michael E. Pralle
--------------------------------------
Name: Michael E. Pralle
Title: Attorney-in-Fact
<PAGE>

GENERAL ELECTRIC COMPANY

By: /s/ Michael E. Pralle
---------------------------------------------
Name: Michael E. Pralle
Title: Attorney-in-Fact

NATIONAL BROADCASTING COMPANY, INC.

By: /s/ Thomas A. Rogers
---------------------------------------------
Name: Thomas A. Rogers
Title: Executive Vice President

NATIONAL BROADCASTING COMPANY HOLDING, INC.

By: /s/ Thomas A. Rogers
---------------------------------------------
Name: Thomas A. Rogers
Title: Executive Vice President

SNAP! LLC

By: /s/ Andrew P. Hyde
---------------------------------------------
Name: Andrew P. Hyde
Title: Chief Financial Officer

<PAGE>

Exhibit 4

POWER OF ATTORNEY

The undersigned, General Electric Company, a New York corporation
(hereinafter referred to as the "Corporation") does hereby make, constitute and
appoint the persons listed below as the Corporation's true and lawful agent and
attorney-in-fact (hereinafter referred to as the "Attorney") to act either
together or alone in the name and on behalf of the Corporation for and with
respect to the matters hereinafter described.

Name of Attorney: Joan C. Amble
Nancy E. Barton
Jeffrey S. Werner
Michael A. Gaudino
J. Gordon Smith
Michael E. Pralle
Paul J. Licursi

Each Attorney shall have the power and authority to do the following:

To execute and deliver any Schedule 13D, Schedule 13G or Forms 3, 4,
and 5 or any amendments thereto required to be filed with the
Securities and Exchange Commission under the Securities Exchange Act
of 1934 on behalf of the Corporation with regard to any securities
owned by General Electric Capital Services, Inc., General Electric
Capital Corporation or any of their subsidiaries.

And, in connection with the foregoing, to execute and deliver all
documents, acknowledgments, consents and other agreements and to take such
further action as may be necessary or convenient for the Corporation in order to
more effectively carry out the intent and purpose of the foregoing.

Agreements, commitments, documents, instruments, and other writings
executed by the Attorney in accordance with the terms hereof shall be binding
upon the Corporation without attestation and without affixation of the seal of
the Corporation. The Power of Attorney conferred hereby shall not be delegable
by any Attorney. The Attorney shall serve without compensation for acting in
the capacity of agent and attorney-in-fact hereunder.
<PAGE>

Unless sooner revoked by the Corporation, this Power of Attorney shall be
governed under the laws of the State of New York and the authority of the
Attorney hereunder shall terminate on March 31, 2000.

IN WITNESS WHEREOF, the Corporation has caused this Power of Attorney to be
executed, attested and its corporate seal to be affixed pursuant to authority
granted by the Corporation's board of directors, as of the 30th day of April,
1998.

General Electric Company

By: /s/ Philip D. Ameen
------------------------------------------
Philip D. Ameen, Vice President

Attest:

/s/ Robert E. Healing
- ------------------------------------------
Robert E. Healing, Attesting Secretary

<PAGE>

Exhibit 5

POWER OF ATTORNEY

The undersigned, General Electric Capital Services, Inc., a Delaware
corporation (hereinafter referred to as the "Corporation") does hereby make,
constitute and appoint the persons listed below as the Corporation's true and
lawful agent and attorney-in-fact (hereinafter referred to as the "Attorney") to
act either together or alone in the name and on behalf of the Corporation for
and with respect to the matters hereinafter described.

Name of Attorney: Michael A. Gaudino
J. Gordon Smith
Michael E. Pralle
Paul J. Licursi

Each Attorney shall have the power and authority to do the following:

To execute and deliver any Schedule 13D, Schedule 13G or Forms 3, 4,
and 5 or any amendments thereto required to be filed with the
Securities and Exchange Commission under the Securities Exchange Act
of 1934 on behalf of the Corporation with regard to any securities
owned by the Corporation, General Electric Capital Corporation or any
of their subsidiaries.

General Electric Capital Services, Inc.

By: /s/ Nancy E. Barton
----------------------------------------------
Nancy E. Barton, Senior Vice President

Attest:

/s/ Brian T. McAnaney
- --------------------------------------
Brian T. McAnaney, Assistant Secretary