SC 13D

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

SCHEDULE 13D
Under the Securities Exchange Act of 1934

STAR TELECOMMUNICATIONS, INC.
(Name of Issuer)
  Common Stock, Par Value $0.01 Per Share
(Title of Class of Securities)
  854923109 (CUSIP Number)
  Joyce J. Mason, Esq.
General Counsel and Secretary
IDT Corporation
520 Broad Street
Newark, New Jersey 07102
(973) 438-1000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
  February 1, 2001 (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 that is the subject of this Schedule 13D, and is filing this schedule because of §§ 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 § 240.13d-7 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.

CUSIP No.  854923109    Page  2  of    11   Pages

1 NAME OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). IDT INVESTMENTS INC.
88-0469107

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a)  [   ]
(b)  [X]

3 SEC USE ONLY
  

4 SOURCE OF FUNDS (SEE INSTRUCTIONS) WC

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [  ]

6 CITIZENSHIP OR PLACE OF ORGANIZATION Nevada

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER	N/A
	8	SHARED VOTING POWER	15,006,236
	9	SOLE DISPOSITIVE POWER	N/A
	10	SHARED DISPOSITIVE POWER	15,006,236

11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 15,006,236

12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [  ]

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 21.1%

14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO

CUSIP No.  854923109    Page  3  of    11   Pages

1 NAME OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). IDT CORPORATION
22-3415036

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a)  [   ]
(b)  [X]

3 SEC USE ONLY
  

4 SOURCE OF FUNDS (SEE INSTRUCTIONS) N/A

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [  ]

6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER	N/A
	8	SHARED VOTING POWER	15,006,236
	9	SOLE DISPOSITIVE POWER	N/A
	10	SHARED DISPOSITIVE POWER	15,006,236

11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 15,006,236

12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [  ]

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 21.1%

14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO

CUSIP No.  854923109    Page  4  of    11   Pages

1 NAME OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). HOWARD S. JONAS

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a)  [   ]
(b)  [X]

3 SEC USE ONLY
  

4 SOURCE OF FUNDS (SEE INSTRUCTIONS) N/A

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [  ]

6 CITIZENSHIP OR PLACE OF ORGANIZATION United States

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER	N/A
	8	SHARED VOTING POWER	15,006,236
	9	SOLE DISPOSITIVE POWER	N/A
	10	SHARED DISPOSITIVE POWER	15,006,236

11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 15,006,236

12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [  ]

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 21.1%

14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN

Item 1.      Security and Issuer

                  This statement relates to shares of Common Stock, par value $0.001 per share (“Common Stock”), of STAR Telecommunications, Inc., a Delaware corporation (“STAR”). The principal executive offices of STAR are located at 223 East De La Guerra Street, Santa Barbara, California 93101.

Item 2.      Identity and Background

                  (a)-(b)    IDT Investments Inc. is a Nevada corporation (“IDT Investments”). IDT Investments is a holding company and a wholly owned subsidiary of IDT Corporation (“IDT”). The address of its principal office and principal place of business is 2325B Renaissance Drive, Las Vegas, Nevada 89119.

                   IDT is a Delaware corporation, which provides telecommunications and Internet services to wholesale and retail customers. The address of its principal office and principal place of business is 520 Broad Street, Newark, New Jersey 07102.

                   Howard S. Jonas is the Chief Executive Officer, Chairman of the Board of Directors and Treasurer of IDT. The address of his principal office and principal place of business is 520 Broad Street, Newark, New Jersey 07102.

                   (c)    The name, business address, and principal occupation of each executive officer and director of IDT Investments and IDT is set forth in Exhibits 1 and 2 hereto and incorporated herein by reference.

                   (d)    During the last five years, neither of the Reporting Persons, nor to the best of IDT Investments’ knowledge, any of IDT Investments’ directors or executive officers, nor to the best of IDT’s knowledge, any of IDT’s directors or executive officers has been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors).

                   (e)    During the last five years, neither of the Reporting Persons, nor to the best of IDT Investments’ knowledge, any of IDT Investments’ directors or executive officers, nor to the best of IDT’s knowledge, any of IDT’s directors or executive officers has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction resulting in 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, and which judgment, decree or final order was not subsequently vacated.

                   (f)    To the best of IDT Investments’ knowledge, each of the executive officers and directors of IDT Investments named in Exhibit 1 is a United States citizen.

                   To the best of IDT’s knowledge, each of the executive officers and directors of IDT named in Exhibit 2 is a United States citizen.

                   Howard S. Jonas is a United States citizen.

Item 3.      Source and Amount of Funds or Other Consideration

                   As described in Item 5(c) below, from January 18, 2001 to January 30, 2001, IDT Investments purchased through transactions in the open market an aggregate of 3,402,900 shares of Common Stock for an aggregate price of $1,981,694.70. On January 29, 2001 and January 30, 2001, IDT Investments sold through transactions in the open market an aggregate of 486,000 shares of Common Stock for an aggregate price of $308,021.32.

                   On February 1, 2001, STAR issued and sold to IDT Investments 2,398,082 shares of Common Stock at a purchase price of $0.417 per share.

Page 5 of 11

                   On February 7 , 2001, STAR and IDT Investments entered into an investment agreement (the “Investment Agreement”), pursuant to which IDT Investments purchased from STAR (i) 3,074,149 shares of Common Stock at a price of $0.417 per share and (ii) 3,227,856 shares of Common Stock at a price of $0.397 per share. The number of shares of Common Stock and the purchase price per share are subject to certain adjustments as described in Item 4 below.

                  Pursuant to the Investment Agreement, STAR also granted IDT Investments warrants to purchase 3,389,249 shares of Common Stock at a price per share equal to $0.833, subject to certain adjustments as described in Item 4 below (the “Warrants”). The Warrants may be exercised by IDT Investments in full or in part at any time on or before February 7, 2004.

                   The cash consideration paid by IDT Investments in each of the transactions was paid with funds from IDT Investments existing cash reserves.

                   The description of the Investment Agreement and Warrants throughout this Schedule 13D are qualified by reference to such Investment Agreement and Warrants, copies of which are filed as Exhibits 3 and 4 hereto and are incorporated herein by reference.

Item 4.      Purpose of Transaction

                   IDT Investments currently holds its interest in STAR for investment purposes.

                   Investment Agreement.  As described in Item 3, STAR and IDT Investments entered into the Investment Agreement pursuant to which IDT Investments purchased from STAR (i) 3,074,149 shares of Common Stock at a price of $0.417 per share and (ii) 3,227,856 shares of Common Stock at a price of $0.397 per share. STAR also granted IDT Investments Warrants to purchase 3,389,249 shares of Common Stock at a price per share equal to $0.833. The Warrants may be exercised by IDT Investments in full or in part at any time on or before February 7, 2004.

                   Pursuant to the Investment Agreement, the number of shares of Common Stock purchased by IDT Investments from STAR, and the price per share of Common Stock paid by IDT Investments to STAR, are subject to the following adjustments.

                   a.     In the event the Post Closing Market Price (as defined below) is less than $0.397 per share, STAR shall provide to IDT for no additional consideration the number of shares necessary to cause the average price per share for 3,227,856 of the shares of Common Stock purchased on February 7, 2001 for $0.397 per share and such additional shares to be not higher than the Post Closing Market Price.

                   The “Post Closing Market Price” means the multiple of (i) 95% and (ii) the lowest reported last sale price per share (rounded down to nearest 1/100 of a cent) in the regular trading session on the principal national securities exchange or inter-dealer quotation system on which the Common Stock is listed or admitted to trading, or if not listed or admitted to trading on any national securities exchange or inter-dealer quotation system, during the 30 days following February 7, 2001.

                   b.     Following the expiration and/or exercise of all or any portion of the warrants issued to Gotel Investments Ltd. in connection with the consummation of the Purchase Agreement and the related transactions between STAR and Gotel Investments Ltd. (the “Gotel Closing”), the following adjustments shall be made:

                        (i)    If the weighted average purchase price per share of Common Stock paid by Gotel Investments Ltd. to STAR in the Gotel Closing (the “Gotel Purchase Price”) is less than $0.417 per share,

Page 6 of 11

STAR shall provide to IDT for no additional consideration the number of shares necessary to cause the average price per share for 3,074,149 of the shares of Common Stock purchased on February 7, 2001 for $0.417 per share and such additional shares to be not higher than the Gotel Closing Price.

                         (ii)     If the Gotel Purchase Price is less than $0.397 per share, STAR shall provide to IDT for no additional consideration the number of shares necessary to cause the average price per share for 3,227,856 of the shares of Common Stock purchased on February 7, 2001 for $0.397 per share and such additional shares to be not higher than the Gotel Closing Price.

                   Pursuant to the Warrants, the number of shares of Common Stock IDT Investments is entitled to purchase pursuant to the Warrants (the “Warrant Shares”) and the exercise price of the Warrants are subject to the following adjustments.

                   a.     If at any time or from time to time, after February 7, 2001, STAR issues or sells, or is deemed to have issued or sold, any shares (“Additional Common Shares”) of its Common Stock (including, without limitation, pursuant to the Gotel Closing), then the exercise price in effect immediately prior to each such issuance shall be reduced, concurrently with such issue or sale, to a price equal to the quotient obtained by dividing: (A) the product of (x) such exercise price multiplied by (y) the total number of shares of Common Stock outstanding immediately prior to such issuance by (B) the total number of shares of Common Stock outstanding (including any shares of Common Stock deemed to have been issued) immediately after such issuance of the Additional Common Shares.

                   b.     The number of shares of Common Stock exercisable pursuant to the Warrants (the “Warrant Shares Number”) shall also be subject to adjustment if at any time or from time to time, after February 7, 2001, STAR shall issue or sell Additional Common Shares. In such event, the Warrant Shares Number in effect immediately prior to each such issuance shall be increased, concurrently with such issue or sale, to equal the sum (rounded up to the nearest whole number) obtained by multiplying: (A) 5% and (B) the total number of shares of Common Stock outstanding (including any shares of Common Stock deemed to have been issued) immediately after such issuance of the Additional Common Shares.

                   c.     In the event the Gotel Closing shall occur after the exercise of any of the Warrants, STAR shall adjust the number of Warrant Shares previously delivered to IDT Investments, as follows:

                        (i)     Immediately following the Gotel Closing, STAR shall issue and deliver to IDT Investments a share certificate representing shares of Common Stock equal to the number obtained by subtracting (x) the Warrant Shares delivered to IDT Investments from (y) the multiple of (i) the quotient of ((1) the number of Warrant Shares delivered divided by (2) the number of shares of Common Stock outstanding on the date the Warrant Shares were delivered (on a fully diluted basis)), by (ii) the number of shares of Common Stock outstanding immediately following the Gotel Closing (on a fully diluted basis).

                        (ii)     In the event the Gotel Purchase Price is less than the exercise price paid by IDT Investments then (in addition to any shares to be delivered pursuant to the previous clause) STAR promptly shall deliver to IDT Investments such number of shares of Common Stock as is necessary to cause the average price of all Warrant Shares (including any shares provided pursuant to the previous clause or this clause) to be not more than the Gotel Purchase Price.

                   Pursuant to the Investments Agreement, IDT Investments has agreed that until February 7, 2003, neither IDT Investments nor any of its affiliates (collectively, the “Restricted Group”) shall, directly or indirectly in any manner, acquire, offer or propose to acquire or agree to acquire (whether publicly or otherwise) Common Stock, any other capital stock of STAR or other securities of STAR entitled to vote generally in the election of directors of STAR or at any regular or special meeting of the stockholders of STAR (“Voting Stock”), or any direct or indirect rights, options or warrants of STAR to acquire any Voting Stock or any securities of STAR convertible or exercisable into or exchangeable for any of the foregoing (whether or not currently convertible, exercisable or

Page 7 of 11

exchangeable) (all of the foregoing, collectively, “Voting Securities”) (including without limitation “beneficial ownership” of any such securities, within the meaning set forth in Rule 13d-3 under the Exchange Act (“Beneficial Ownership”)), which acquisition would cause the Restricted Group Ownership Percentage (as defined below) to exceed 25.0% (other than an acquisition with the prior approval of a majority of the directors of the board of directors of STAR) (the “Standstill”). “Restricted Group Ownership Percentage” shall mean the aggregate percentage Beneficial Ownership by the members of the Restricted Group of STAR’s Voting Securities, in each case calculated in the manner set forth in Rule 13d-3 under the Exchange Act. These restrictions shall not prevent the Restricted Group from making a written acquisition proposal to the board of directors of STAR (or from publicly announcing the making of such a written proposal not less than eight business days after it has been made, if not previously made public by STAR) that is designed to compete with a definitive, bona fide written offer for not less than 50.1% of the capital stock or assets of STAR that has either been made in writing by a third party to the board of directors or has been publicly commenced by a third party through the launching of a tender offer or by other similar means (whether or not pursuant to an agreement with STAR), in any such event which offer was not directly or indirectly induced by any member of the Restricted Group.

                   IDT Investments and STAR are currently negotiating a proxy, pursuant to which the shares of Common Stock purchased by IDT Investments and the shares of Common Stock IDT Investments may acquire pursuant to the Warrants will be subject to a proxy in favor of Brett Messing, chief executive officer and chairman of STAR (the “Proxy”).

                   Registration Rights Agreement.   Pursuant to the registration rights agreement, dated February 7, 2001, between STAR and IDT Investments (the “Registration Rights Agreement”), STAR granted IDT Investments certain piggyback and demand registration rights under the Securities Act of 1933, as amended, for all shares of Common Stock (i) previously owned by IDT Investments, (ii) acquired by IDT Investments on February 1, 2001 and February 7, 2001, including any shares of Common Stock IDT Investments may receive pursuant to the adjustments described above, and (iii) that IDT Investments may acquire pursuant to the Warrants, including any shares of Common Stock IDT Investments may receive pursuant to the adjustments described above.

                   PT-1.   In connection with the investment in STAR, STAR, IDT and PT-1 Communications, Inc. (“PT-1”), a wholly-owned subsidiary of STAR, entered into an agreement, dated January 21, 2001 (the “PT-1 Letter Agreement”), pursuant to which IDT agreed to acquire certain assets and assume certain liabilities of PT-1 relating to its debit-card business.

                   The descriptions of the Investment Agreement, Warrant, Registration Rights Agreement and PT-1 Letter Agreement throughout this Schedule 13D are qualified by reference to such Investment Agreement, Warrant, Registration Rights Agreement and PT-1 Letter Agreement, copies of which are filed as Exhibits 3, 4, 5 and 6 hereto and are incorporated herein by reference.

                   Subject to the Standstill and Proxy described above, each of the Reporting Persons intends to continuously review their investment in STAR, and may in the future determine, either alone or as part of a group (i) to acquire additional securities of STAR, through open market purchases, private agreements or otherwise, (ii) to dispose of all or a portion of the securities of STAR owned by it or (iii) to take any other available course of action, which could involve one or more of the types of transactions or have one or more of the results described in paragraphs (a) - (j) of Item 4 of Schedule 13D. Notwithstanding anything contained herein, each of the Reporting Persons specifically reserves the right to change its intention with respect to any or all of such matters. Subject to the Standstill and Proxy described above, in reaching any decision as to its course of action (as well as to the specific elements thereof), each of the Reporting Persons currently expects that it would take into consideration a variety of factors, including, but not limited to, STAR’s business and prospects, other developments concerning STAR and its businesses generally, other business opportunities available to the Reporting Persons, developments with respect to the business of IDT, changes in law and government regulations, general economic conditions and money and stock market conditions, including the market price of the securities of STAR.

Page 8 of 11

                   Other than the transactions described above, the Reporting Persons have no plans or proposals with respect to STAR or its securities that relate to, or would result in, any of the transactions described in paragraphs (a) - (j) of Item 4 of Schedule 13D.

Item 5.      Interest in Securities of the Issuer

                   (a)     IDT Investments directly beneficially owns 11,616,987 shares of Common Stock and Warrants to purchase 3,389,249 shares of Common Stock, representing together approximately 21.1% of the outstanding shares of the Common Stock and approximately 21.1% of the voting power of STAR.

                   IDT does not directly beneficially own any shares of STAR. Through IDT Investments, IDT beneficially owns 11,616,987 shares of Common Stock and Warrants to purchase 3,389,249 shares of Common Stock, representing together approximately 21.1% of the outstanding shares of the Common Stock and approximately 21.1% of the voting power of STAR. IDT Investments is a wholly-owned subsidiary of IDT.

                   Howard S. Jonas does not directly beneficially own any shares of STAR. As of February 6, 2001, Mr. Jonas beneficially owned 9,892,488 shares of Class A Common Stock, par value $0.01 per share, of IDT, representing approximately 27.4% of the outstanding shares of IDT and approximately 53.1% of the combined voting power of IDT.

                   The filing of this 13D shall not be construed as an admission by the Reporting Persons that they are, for purposes of Section 13(d) of the Exchange Act, the beneficial owner of shares of STAR owned by other parties.

                   (b)     By virtue of his ownership of shares of IDT, representing approximately 53.1% of the combined voting power of IDT, Mr. Jonas has the power to direct IDT’s and IDT Investments’ power to vote, or dispose of, the shares of STAR owned by IDT Investments and IDT.

                   (c)     Except as described below and as previously described in Item 3 above, no transactions in the shares of Common Stock have been effected by the Reporting Persons or, to the best of IDT Investments’ knowledge, by any of the executive officers and directors of IDT Investments named in Exhibit 1, or, to the best of IDT’s knowledge, by any of the executive officers and directors of IDT named in Exhibit 2 during the past 60 days.

                   IDT Investments purchased through transactions in the open market an aggregate of 3,402,900 shares of Common Stock at the prices and on the dates set forth below:

Trade Date	Settle Date	Number of Shares	Price Per Share
01/18/01	01/23/01	2,260,000	$0.5289
01/19/01	01/24/01	656,900	$0.5927
01/29/01	02/01/01	49,300	$0.6384
01/30/01	02/02/01	436,700	$0.7035

                   IDT Investments sold through transactions in the open market an aggregate of 486,000 shares of Common Stock at the prices and on the dates set forth below:

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Trade Date	Settle Date	Number of Shares	Price Per Share
01/29/01	02/01/01	449,000	$0.6294
01/30/01	02/02/01	37,000	$0.6875

                  (d)     None.

                  (e)    Not Applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with respect to Securities of the Issuer

                   Except as described in this Item, in Item 3 and in Item 4 above, none of the Reporting Persons has any contracts, arrangements, understandings, or relationship (legal or otherwise) with respect to any securities of STAR.

                   As described in Items 3 and 4, (i) STAR and IDT Investments entered into the Investment Agreement and Registration Rights Agreement, (ii) STAR and IDT entered into the PT-1 Letter Agreement and (iii) STAR delivered IDT Investments Warrants, with respect to the Common Stock currently owned or to be acquired by the Reporting Persons.

Item 7. Material to be filed as Exhibits

Exhibit 1	Name, business address and principal occupation of each executive officer and director of IDT Investments.
Exhibit 2	Name, business address and principal occupation of each executive officer and director of IDT.
Exhibit 3	Investment Agreement, dated as of February 7, 2001, between STAR and IDT Investments.
Exhibit 4	Warrant No. W-1, dated as of February 7, 2001, executed by STAR in favor of IDT Investments.
Exhibit 5	Registration Rights Agreement, dated as of February 7, 2001, between STAR and IDT Investments.
Exhibit 6	PT-1 Letter Agreement, dated as of January 21, 2001, among STAR, IDT and PT-1.
Exhibit 7	Joint Filing Agreement, dated as of February 11, 2001, between IDT Investments, IDT and Howard S. Jonas.

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SIGNATURES

             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:  February 11, 2001	IDT INVESTMENTS INC.
	By:	/s/ Howard Millendorf
		Howard Millendorf President
	IDT CORPORATION
	By:	/s/ Howard S. Jonas
		Howard S. Jonas Chief Executive Officer and    Chairman of the Board of Directors
		/s/ Howard S. Jonas
		Howard S. Jonas

Page 11 of 11

EXHIBIT INDEX
Exhibit No.	Description
Exhibit 1	Name, business address and principal occupation of each executive officer and director of IDT Investments.
Exhibit 2	Name, business address and principal occupation of each executive officer and director of IDT.
Exhibit 3	Investment Agreement, dated as of February 7, 2001, between STAR and IDT Investments.
Exhibit 4	Warrant No. W-1, dated as of February 7, 2001, executed by STAR in favor of IDT Investments.
Exhibit 5	Registration Rights Agreement, dated as of February 7, 2001, between STAR and IDT Investments.
Exhibit 6	PT-1 Letter Agreement, dated as of January 21, 2001, among STAR, IDT and PT-1.
Exhibit 7	Joint Filing Agreement, dated as of February 11, 2001, between IDT Investments, IDT and Howard S. Jonas.

EX-99.1

                                                                       EXHIBIT 1


                       DIRECTORS AND EXECUTIVE OFFICERS OF
                   IDT INVESTMENTS INC. AS OF FEBRUARY 1, 2001

         The name, position, principal occupation and business address of each
executive officer and director of IDT Investments is set forth below.  Unless
otherwise indicated, each occupation set forth opposite an executive officer's
name refers to employment with IDT Investments.




Name                     Position                         Principal Occupation            Business Address
- ----                     --------                         --------------------            ----------------

                                                                                 
Howard Millendorf        President, Assistant             President, Assistant            c/o IDT Investments Inc.
                         Secretary and Director           Secretary and Director          2325B Renaissance Drive
                                                                                          Las Vegas, Nevada 89119

Jonathan Levy            Secretary, Treasurer and         Secretary, Treasurer and        c/o IDT Investments Inc.
                         Director                         Director                        2325B Renaissance Drive
                                                                                          Las Vegas, Nevada 89119

EX-99.2

                                                                       Exhibit 2



                       DIRECTORS AND EXECUTIVE OFFICERS OF
                     IDT CORPORATION AS OF FEBRUARY 1, 2001

         The name, position, principal occupation and business address of each
executive officer and director of IDT is set forth below. Unless otherwise
indicated, each occupation set forth opposite an executive officer's name refers
to employment with IDT.




Name                  Position                      Principal Occupation           Business Address
- ----                  --------                      --------------------           ----------------
                                                                          

Howard S. Jonas       Chief Executive Officer,      Chief Executive Officer,       c/o IDT Corporation
                      Chairman of the Board and     Chairman of the Board and      520 Broad Street
                      Treasurer                     Treasurer                      Newark, NJ 07102

Hal Brecher           Chief Operating Officer and   Chief Operating Officer and    c/o IDT Corporation
                      Director                      Director                       520 Broad Street
                                                                                   Newark, NJ 07102

James A. Courter      President and Vice Chairman   President and Vice Chairman    c/o IDT Corporation
                      of the Board                  of the Board                   520 Broad Street
                                                                                   Newark, NJ 07102

Stephen R. Brown      Chief Financial Officer and   Chief Financial Officer and    c/o IDT Corporation
                      Director                      Director                       520 Broad Street
                                                                                   Newark, NJ 07102

Joyce J. Mason        General Counsel, Senior       General Counsel, Senior Vice   c/o IDT Corporation
                      Vice President,  Secretary    President,  Secretary and      520 Broad Street
                      and Director                  Director                       Newark, NJ 07102

Marc E. Knoller       Senior Vice President and     Senior Vice President and      c/o IDT Corporation
                      Director                      Director                       520 Broad Street
                                                                                   Newark, NJ 07102

Moshe Kaganoff        Executive Vice President of   Executive Vice President of    c/o IDT Corporation
                      Strategic Planning and        Strategic Planning and         520 Broad Street
                      Director                      Director                       Newark, NJ 07102

Geoffrey Rochwarger   Executive Vice President of   Executive Vice President of    c/o IDT Corporation
                      Telecommunications and        Telecommunications and         520 Broad Street
                      Director                      Director                       Newark, NJ 07102

Michael Fischberger   Executive Vice President of   Executive Vice President of    c/o IDT Corporation
                      Operations                    Operations                     520 Broad Street
                                                                                   Newark, NJ 07102

Morris Lichtenstein   Executive Vice President of   Executive Vice President of    c/o IDT Corporation
                      Business Development          Business Development           520 Broad Street
                                                                                   Newark, NJ 07102









Name                  Position                      Principal Occupation           Business Address
- ----                  --------                      --------------------           ----------------
                                                                          

Charles H.F. Garner   Executive Vice President of   Executive Vice President of    c/o IDT Corporation
                      New Ventures                  New Ventures                   520 Broad Street
                                                                                   Newark, NJ 07102

Jonathan Levy         Executive Vice President of   Executive Vice President of    c/o IDT Corporation
                      Corporate Development         Corporate Development          520 Broad Street
                                                                                   Newark, NJ 07102

Meyer A. Berman       Director                      Sole Proprietor                M.A. Berman Company
                                                                                   433 Plaza Real
                                                                                   Suite 355
                                                                                   Boca Raton, FL 33432

J. Warren Blaker      Director                      Professor of Physics           Fairleigh Dickinson
                                                                                   University
                                                                                   Teaneck-Hackensack Campus
                                                                                   1000 River Road
                                                                                   Teaneck, NJ 07666

Denis A. Bovin        Director                      Vice Chairman -                Bear Stearns
                                                    Investment Banking             245 Park Avenue
                                                                                   28th Floor
                                                                                   New York, NY 10017

Saul K. Fenster       Director                      President of New Jersey        New Jersey Institute of
                                                    Institute of Technology        Technology
                                                                                   University Heights
                                                                                   323 Martin Luther King
                                                                                   Blvd.
                                                                                   Newark, NJ 07102

William A. Owens      Director                      Vice Chairman and CEO          Teledesic LLC
                                                                                   1445 120th NE
                                                                                   Bellevue, WA 98005

William F. Weld       Director                      General Partner                Leeds, Weld & Company
                                                                                   660 Madison Avenue
                                                                                   New York, NY 10021

EX-99.3

                                                                       EXHIBIT 3

                              INVESTMENT AGREEMENT

         INVESTMENT AGREEMENT (this "Agreement"), dated as of February 7, 2001,
between STAR Telecommunications, Inc., a Delaware corporation (the "Company"),
and IDT Investments Inc., a Nevada corporation ("IDT").

         WHEREAS, on February 1, 2001, the Company issued and sold 2,398,082
shares (the "Initial Shares") of Common Stock, par value $0.001 per share, of
the Company (the "Common Stock") to IDT at a price of $0.417 per share of Common
Stock.

         WHEREAS, IDT desires to purchase additional shares of Common Stock and
the Company desires to issue and sell additional shares of Common Stock to IDT,
upon the terms and subject to the conditions set forth in this Agreement; and

         WHEREAS, IDT desires to acquire warrants to purchase shares of Common
Stock and the Company desires to grant to IDT warrants to purchase shares of
Common Stock, subject to the conditions set forth in this Agreement.

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

Section 1. Subscription and Grant of Warrants
           -----------------------------------

         1.1. Subscription for Common Stock. Upon the terms and subject to the
conditions of this Agreement, the Company hereby agrees to issue and sell and
IDT hereby agrees to purchase from the Company (i) 3,074,149 shares of Common
Stock, at a price of $0.417 per share of Common Stock and (ii) 3,227,856 shares
of Common Stock, at a price of $0.397 per share of Common Stock (together, the
"Shares"), subject to post-closing adjustments as provided in Section 1.5.

         1.2. Grant of Warrants. At the Closing (as defined below) the Company
will deliver to IDT, in connection with purchase of the Shares, warrants, in the
form attached hereto as Annex A (the "Warrant Certificate"), to purchase (the
"Warrants") 3,389,249 shares of Common Stock, subject to adjustments as provided
by the terms of the Warrants, at a price per share equal to $0.833, subject to
adjustments as provided by the terms of the Warrants.

         1.3. Issuance of Common Stock; Delivery of Warrant Certificate;
Execution of Additional Agreements. At the Closing upon the terms and subject to
the conditions of this Agreement:

              (a) Against delivery of the share certificate(s) referred to in
clause (b) below, IDT will pay to the Company cash in immediately available
funds in the amount of $2,563,840, representing payment in full of the aggregate
purchase price for the Shares (the "Purchase Price"), subject to the
post-closing adjustments as provided in Section 1.5, to a bank account specified
by the Company not later than two Business Days prior




to the date of the Closing. "Business Day" for purposes of this Agreement means
a day other than a Saturday, Sunday or day on which banks in the States of
California or New York are authorized to close.

              (b) Against payment of the Purchase Price, the Company will issue
and deliver to IDT (i) a share certificate or certificates representing the
Shares and (ii) the Warrant Certificate representing the Warrants, each
registered in IDT's name.

              (c) The Company and IDT shall execute and deliver to each other
the Registration Rights Agreement relating to the Initial Shares, the Shares,
the shares of Common Stock to be issued pursuant the Warrants (the "Warrant
Shares") and other shares of Common Stock currently beneficially owned by IDT
and its affiliates, in the form attached as Annex B hereto (the "Registration
Rights Agreement").

         1.4. Closing. The issuance and delivery of the Shares by the Company to
IDT and the delivery of the Purchase Price by IDT to the Company (the
"Closing"), will take place at the offices of Sullivan & Cromwell, 125 Broad
Street, New York, New York, at 10:00 A.M. on February 7, 2001, subject to the
satisfaction or waiver of the conditions set forth in Sections 5 and 6, or at
such other time and place as the Company and IDT may agree orally or in writing.

         1.5. Post-Closing Adjustments.
              ------------------------

              (a) Closing Adjustments. In the event the Post Closing Market
Price (as defined below) is less than $0.397 per share, the Company shall
provide to IDT for no additional consideration the number of shares necessary to
cause the average price per share for the shares purchased pursuant to Section
1.1(ii) above and such additional shares to be not higher than the Post Closing
Market Price.

              The "Post Closing Market Price" shall mean the multiple of (i) 95%
and (ii) the lowest reported last sale price per share (rounded down to nearest
1/100 of a cent) in the regular trading session on the principal national
securities exchange or inter-dealer quotation system on which the Common Stock
is listed or admitted to trading, or if not listed or admitted to trading on any
national securities exchange or inter-dealer quotation system, during the 30
days following the date of the Closing.

              (b) Gotel Closing Adjustments. Upon consummation of the Purchase
Agreement and the related transactions between the Company and Gotel Investments
Ltd. (the "Gotel Signing"), the Company shall promptly provide IDT with a copy
of the transaction documents related to the Gotel Signing. Following the
expiration and/or exercise of all or any portion of the warrants issued to Gotel
Investments Ltd. in connection with the Gotel Signing (the "Gotel Closing"), the
following adjustments shall be made:


                                       2



              (i) If the weighted average purchase price per share of Common
         Stock paid by Gotel Investments Ltd. to the Company in the Gotel
         Closing (the "Gotel Purchase Price") is less than $0.417 per share, the
         Company shall provide IDT for no additional consideration the number of
         shares necessary to cause the average price per share for the shares
         purchased by IDT pursuant to Section 1.1(i) above and such additional
         shares to be not higher than the Gotel Purchase Price.

              (ii) If the Gotel Purchase Price is less than $0.397 per share,
         the Company shall provide IDT for no additional consideration the
         number of shares necessary to cause the average price per share for the
         shares purchased by IDT pursuant to Section 1.1(ii) above and such
         additional shares to be not higher than the Gotel Purchase Price.

         Section 2. Representations, Warranties and Acknowledgments of IDT. IDT
hereby represents, warrants and acknowledges to the Company, as follows:

         2.1. No Registration of Shares, Warrants and Warrant Shares. IDT is
aware that the Initial Shares, the Shares, the Warrants and Warrant Shares
(collectively, the "Investor 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
Investor Securities cannot be offered, sold, assigned, transferred, or otherwise
disposed of unless they are subsequently registered under the Act or an
exemption from such registration is available. IDT is also aware that sales or
transfers of the Investor Securities are further restricted by state securities
laws and that the certificates for the Investor Securities will bear appropriate
legends restricting their transfer pursuant to applicable laws.

         2.2. Suitability of Investment. (a) IDT is an "accredited investor"
within the meaning of Rule 501 of Regulation D of the Act as presently in effect
and is acquiring the Investor Securities for its own account, or for the account
of another "accredited investor" who is an affiliate of IDT 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;

              (b) IDT will not, directly or indirectly, offer, sell, transfer,
assign, exchange or otherwise dispose of all or any part of the Investor
Securities, except in accordance with applicable federal and state securities
laws, to the extent applicable, and the provisions of the Registration Rights
Agreement;

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


                                       3



              (d) IDT 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 Investor Securities; and

              (e) IDT is aware that there are substantial risks incident to an
investment in the Investor Securities, particularly in light of the Company's
current financial condition.

         2.3. Corporate Authority. IDT has all requisite corporate power and
authority and has or will have taken all corporate and other action necessary in
order to execute, deliver and perform its obligations under this Agreement and
the Registration Rights Agreement. Each of this Agreement and the Registration
Rights Agreement is a valid and binding agreement of IDT enforceable against it
in accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.

         Section 3. Representations, Warranties and Acknowledgments of the
Company. The Company hereby represents, warrants and acknowledges to IDT on the
date hereof and as of the date of the Closing as follows:

         3.1. Organization, Good Standing and Qualification. Each of the Company
and each of its "significant subsidiaries" (each an "STAR Subsidiary") within
the meaning of Rule 1-02(w) of Regulation S-X promulgated by the SEC, is a
corporation duly organized, validly existing and in good standing under the laws
of its respective jurisdiction of organization and has all requisite corporate
or similar power and authority to own, lease and operate its properties and
assets and to carry on its business as currently conducted. Each of the Company
and each STAR Subsidiary is qualified to do business and is in good standing as
a foreign corporation in each jurisdiction where the ownership, lease or
operation of its assets or properties or conduct of its business requires such
qualification, except where the failure to be so qualified or in good standing,
when taken together with all other such failures, is not reasonably likely to
have a Company Material Adverse Effect (as defined below).

         As used in this Agreement, the term "Company Material Adverse Effect"
means a material adverse effect on the financial condition, properties, assets,
business, results of operations or prospects of the Company and its subsidiaries
taken as a whole; provided, however, that any such effect resulting from any
change that affects companies in the telecommunications industry generally
(provided that the Company is not disproportionately impacted by such change),
shall not be considered when determining if a Company Material Adverse Effect
has occurred.

         3.2. Corporate Authority. The Company has all requisite corporate power
and authority and has taken all corporate action necessary in order to execute,
deliver and

                                       4



perform its obligations under this Agreement, the Registration Rights Agreement
and the Warrants (collectively, the "Equity Documents") and to consummate the
transactions contemplated hereby. The Company has duly executed and delivered
the Equity Documents. Each of the Equity Documents is a valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.

         3.3. Capital Structure. (a) The authorized capital stock of the Company
consists solely of 100,000,000 shares of Common Stock, $0.001 par value, of
which 61,482,980 shares were outstanding as of the close of business on the date
hereof, and 5,000,000 shares of Preferred Stock, $0.001 par value, of which no
shares are outstanding as of the close of business on the date hereof. All of
the outstanding shares of Common Stock have been duly authorized and are validly
issued, fully paid and nonassessable. The Investor Securities have been duly
authorized and, when (i) the Shares and Warrants are issued, delivered and paid
for in accordance with the terms of this Agreement, the Shares and Warrants will
be validly issued, fully paid and nonassessable, and the issuance thereof will
not have been subject to any preemptive rights or made in violation of any
Applicable Law and (ii) the Warrant Shares are issued, delivered and paid for in
accordance with the terms of the Warrants, the Warrant Shares will be validly
issued, fully paid and nonassessable, and the issuance thereof will not have
been subject to any preemptive rights or made in violation of any Applicable
Law. The term "Applicable Law" for purposes of this Agreement means (a) any
United States Federal, state or local law, statute, rule, regulation, order,
writ, injunction, judgment, decree or permit of any Governmental Entity (as
defined in Section 5.4) and (b) any rule or listing requirement of any
applicable national securities exchange or association or listing requirement of
any national securities exchange or association or SEC recognized trading market
on which securities issued by the Company are listed or quoted.

              (b) Except as otherwise contemplated by this Agreement or as set
forth on Schedule 3.3, as of the date of this Agreement, there are (i) no
outstanding options, warrants, agreements, conversion rights, exchange rights,
preemptive rights or other rights (whether contingent or not) to subscribe for,
purchase or acquire any issued or unissued shares of capital stock of the
Company or any subsidiary of the Company, (ii) no authorized or outstanding
stock appreciation, phantom stock, profit participation, or similar rights with
respect to the Company or any subsidiary of the Company, (iii) no rights,
contracts, commitments or arrangements (contingent or otherwise) obligating the
Company or any subsidiary of the Company to either (A) redeem, purchase or
otherwise acquire, or offer to purchase, redeem, or otherwise acquire, any
outstanding shares of, or any outstanding warrants or rights of any kind to
acquire any shares of, or any outstanding securities that are convertible into
or exchangeable for any shares of, capital stock of the Company, or (B) pay any
dividend or make any distribution in respect of any shares of, or any
outstanding securities that are convertible or exchangeable for any shares of,
capital stock of the Company, (iv) no agreements or arrangements under which


                                       5



the Company or any subsidiary of the Company is obligated to register the sale
of any of its securities under the Act (except as provided hereunder) and (v) no
restrictions upon, or Contracts (as defined in Section 5.5) or understandings of
the Company or any subsidiary of the Company, or, to the knowledge of the
Company, Contracts or understandings of any other person, with respect to, the
voting or transfer of any shares of capital stock of the Company or any
subsidiary of the Company. Except as set forth on Schedule 3.3, there are no
securities or instruments containing antidilution or similar provisions that
will be triggered by the consummation of the transactions contemplated by the
Equity Documents (collectively, the "Transactions"). Except as set forth on
Schedule 3.3, no party has any right of first refusal, right of first offer,
right of co-sale or other similar right regarding the Company's securities.
Except as set forth on Schedule 3.3, there are no provisions of the certificate
of incorporation or by-laws of the Company in each case, as amended through the
date hereof, no agreements to which the Company or any of its affiliates is a
party and no agreements by which the Company or any of its affiliates is bound,
that would (a) require the vote of the holders of more than a majority of the
voting power of the shares of the Company's issued and outstanding Common Stock
to take or prevent any corporate action, other than those matters requiring a
class vote under the Delaware General Corporation Law (the "DGCL"), or (b)
entitle any party to nominate or elect any director of the Company or require
any of the Company's stockholders to vote for any such nominee or other person
as a director of the Company. As used in this Agreement, the term "person" means
any individual, partnership, corporation, limited liability company, joint
venture, association, joint-stock company trust, unincorporated organization,
government or agency or political subdivision thereof, or other entity.

         3.4. No Violation; Consents. (a) Subject to the filing and consents
referred to in Section 3.4(b), the execution, delivery and performance by the
Company of each of the applicable Equity Documents and the consummation by the
Company of the Transactions do not and will not contravene any Applicable Law,
except for any such contravention that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect or
materially impair the benefit of IDT's investment hereunder or its ability to
exercise the Warrants. The execution, delivery and performance by the Company of
each of the applicable Equity Documents and the consummation of the Transactions
(i) will not (A) violate, result in a breach of or constitute (with or without
due notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under any Contract to which the
Company or any STAR Subsidiary is a party or by which the Company or any STAR
Subsidiary is bound or to which any of their respective assets is subject, or
(B) result in the creation or imposition of any mortgage, pledge, lien, security
interest, claim, restriction, charge or encumbrance of any kind ("Lien") upon
any of the assets of the Company or any STAR Subsidiary, except for any such
violations, breaches, defaults or Liens that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect and
(ii) will not conflict with or violate any provision of the Second Amended and
Restated Certificate of Incorporation or Bylaws of the Company currently in
effect or in effect as of the Closing.


                                       6



              (b) Except for (i) applicable filings, if any, required by
applicable federal and state securities laws and identified in Schedule 3.4(b)
hereto, and (ii) applicable filings, if any, required by the Federal
Communication Commission and state public utility commissions which, in each
case referred to in clauses (i) - (ii), shall be made on or prior to the date of
the Closing, and except as contemplated by the Warrants and the Registration
Rights Agreement, no consent, authorization or order of, or filing or
registration with, any Governmental Entity or other Person is required to be
obtained or made by the Company or any subsidiary of the Company for the
execution and delivery of the Equity Documents or the consummation by the
Company of the Transactions except where the failure to obtain such consents,
authorizations or orders, or make such filings or registrations, would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect or a material adverse effect on the ability of the
Company to consummate the Transactions or materially impair the benefit of IDT's
investment hereunder or its ability to exercise the Warrants.

         3.5. Company Reports; Financial Statements. (a) The Company has filed
all reports, registration statements and other filings, together with any
amendments or supplements required to be made with respect thereto, that it has
been required to file with the SEC under the Act and the Securities Exchange Act
of 1934, as amended (the "1934 Act"). As of the respective dates of their filing
with the SEC, the Company Reports complied in all material respects with the
applicable provisions of the Act and the 1934 Act and did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading. All reports,
registration statements and other filings filed by the Company with the SEC
since December 31, 1999 (including exhibits and any amendments thereto and
documents incorporated by reference therein) are referred to in this Agreement
as the "Company Reports".

              (b) Each of the consolidated balance sheets included in or
incorporated by reference into the Company Reports (including the related notes
and schedules) fairly presents in all material respects the consolidated
financial position of the Company and its subsidiaries as of the date of such
balance sheet and each of the consolidated statements of income, changes in
stockholders' equity, and cash flows included in or incorporated by reference
into the Company Reports (including any related notes and schedules) fairly
presents in all material respects the results of operations, cash flows, and
changes in stockholders' equity, as the case may be, of the Company and its
subsidiaries for the periods set forth in such statements (subject, in the case
of unaudited statements, to notes and normal year-end audit adjustments that,
except with respect to any adjustments to the value of any of the Company's
assets and the Company's accounts receivable, will not be material in amount or
effect), and in each case has been prepared in accordance with generally
accepted accounting principles consistently applied during the periods involved,
except as may be noted therein, and in compliance in all material respects with
the rules and regulations of the SEC.


                                       7



         3.6. Absence of Certain Changes. Except as disclosed in the Company
Reports filed and publicly available prior to the date hereof and except as set
forth on Schedule 3.6 hereto, since December 31, 1999 there has not been any
event or occurrence or any change in the financial condition, properties,
business or results of operations of the Company that has had or could
reasonably be expected to have a Company Material Adverse Effect.

         3.7. Compliance with Laws. Except as set forth in the Company Reports
filed and publicly available prior to the date hereof, the business of the
Company has not been, and is not being, conducted in violation of any Federal,
state, local or foreign law, statute, ordinance, rule, regulation, judgment,
order, injunction, decree, arbitration award, agency requirement, license or
permit of any Governmental Entity, except for violations or possible violations
that, individually or in the aggregate, would not be reasonably expected to have
a Company Material Adverse Effect or prevent or materially impair the ability of
the Company to consummate the Transactions. Except as set forth in the Company
Reports filed and publicly available prior to the date hereof, no investigation
or review by any Governmental Entity with respect to the Company or any
subsidiary of the Company is pending or, to the knowledge of the executive
officers of the Company, threatened, nor has any Governmental Entity indicated
an intention to conduct the same, except for those the outcome of which are not,
individually or in the aggregate, reasonably likely to have a Company Material
Adverse Effect or prevent or materially impair the ability of the Company to
consummate the Transactions.

         3.8. Private Offering. Based, in part, on IDT's representations in
Section 2, the offer and sale of the Investor Securities is exempt from the
registration and prospectus delivery requirements of the Act. Neither the
Company, nor anyone acting on behalf of it, has offered or sold or will offer or
sell any securities, or has taken or will take any other action (including,
without limitation, any offering of any securities of the Company under
circumstances that would require, under the Act, the integration of such
offering with the offering and sale of the Investor Securities), that would
subject the issuance of the Investor Securities to the registration provisions
of the Act.

         3.9. Litigation. Except as disclosed in the Company Reports filed and
publicly available prior to the date hereof, there are not any (a) outstanding
judgments against or affecting the Company or any of the STAR Subsidiaries, or
(b) proceedings pending or, to the knowledge of the Company, threatened against
or affecting the Company or any of the STAR Subsidiaries that (i) in any manner
challenge or seek to prevent, enjoin, alter or materially delay the Transactions
or materially impair the benefit of IDT's investment hereunder or its ability to
exercise the Warrants or (ii) if resolved adversely to the Company or any
subsidiary of the Company, would have, individually or in the aggregate, a
Company Material Adverse Effect or materially impair the benefit of IDT's
investment hereunder or its ability to exercise the Warrants.

         3.10. Permits and Licenses. The Company and the STAR Subsidiaries have
obtained all governmental permits, licenses, franchises and authorizations
required for the


                                       8



Company and its subsidiaries to conduct their respective businesses as currently
conducted, except for those the failure of which to be obtained would not have a
Company Material Adverse Effect or materially impair the benefit of IDT's
investment hereunder or its ability to exercise the Warrants.

         3.11. Liabilities. Except as disclosed in the Company Reports filed and
publicly available prior to the date hereof, and except as set forth on Schedule
3.11 hereof, there are no obligations or liabilities, whether or not accrued,
contingent or otherwise and whether or not required to be disclosed, or any
other facts or circumstances of which the officers of the Company has knowledge
that could result in any claims against, or obligations or liabilities of, the
Company or any of its Affiliates that could have, individually or in the
aggregate, a Company Material Adverse Effect or materially impair the benefit of
IDT's investment hereunder or its ability to exercise the Warrants.

         3.12. Business Combination Statutes. (a) The Company's Board of
Directors has taken all action necessary to approve this Agreement and the other
Equity Documents and the consummation of any of the Transactions for purposes of
Section 203 of the DGCL, so that the limitations set forth in Section 203 of the
DGCL shall not apply as a result of the delivery and execution of this Agreement
and the other Equity Documents and the consummation of any of the Transactions.

              (b) No other "fair price", "moratorium", "control share
acquisition" or other form of antitakeover statute or regulation applies to this
Agreement (each a "Takeover Statute"), any of the other Equity Documents or any
of the Transactions. The Company has no shareholder rights agreement or plan in
effect that causes or permits, or will cause or permit, stockholders to exercise
rights as a result of the existence or implementation of this Agreement, any of
the other Equity Documents, or any of the Transactions, and the Company has
issued no rights pursuant to any stockholder rights agreement or plan that have,
or would, become unredeemable or exercisable as a result of the execution,
delivery or performance of any of this Agreement or any of the other Equity
Documents or the consummation of any of the Transactions.

         Section 4. Covenants.

         4.1. Compliance with Conditions; Commercially Reasonable Efforts. (a)
The Company shall use all commercially reasonable efforts to cause all of the
obligations imposed upon it in this Agreement to be duly complied with, and to
cause the conditions precedent to the obligations of IDT to be satisfied. Upon
the terms and subject to the conditions of this Agreement, the Company will use
all commercially reasonable efforts to take, or cause to be taken, all action,
and to do, or cause to be done, all things necessary, proper or advisable
consistent with Applicable Law to consummate and make effective in the most
expeditious manner practicable the Transactions in accordance with the terms of
this Agreement.


                                       9



              (b) IDT shall use all commercially reasonable efforts to cause all
of the obligations imposed upon it in this Agreement to be duly complied with,
and to cause the conditions precedent to the obligations of the Company to be
satisfied. Upon the terms and subject to the conditions of this Agreement, IDT
will use all commercially reasonable efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary, proper or
advisable consistent with Applicable Law to consummate and make effective in the
most expeditious manner practicable the Transactions in accordance with the
terms of this Agreement. Nothing herein shall be construed to require IDT or any
of its Affiliates to divest or otherwise rearrange the composition of any assets
or agree to any conditions or requirements which are, or are reasonably likely
to be, materially adverse or burdensome to IDT or its Affiliates, as applicable.

         As used in this Agreement, the term "Affiliates" shall mean, with
respect to any person or entity, any other person or entity directly or
indirectly controlling, controlled by or under common control with the first
such person or entity.

         4.2. Consents and Approvals. (a) The Company (i) shall use all
commercially reasonable efforts to obtain all necessary consents, waivers,
authorizations and approvals of all Governmental Entities and of all other
persons required in connection with the execution, delivery and performance by
the Company of the Equity Documents or the consummation of the Transactions and
(ii) shall diligently assist and cooperate with IDT in preparing and filing all
documents required to be submitted by IDT to any Governmental Entity in
connection with the Transactions (which assistance and cooperation shall
include, without limitation, timely furnishing, upon written requests, to IDT
all information concerning the Company and the subsidiaries that counsel to IDT
reasonably determines is required to be included in such documents or would be
helpful in obtaining any such required consent, waiver, authorization or
approval). Nothing herein shall be construed to require the Company or any of
its Affiliates to divest or otherwise rearrange the composition of any assets or
agree to any conditions or requirements which are, or are reasonably likely to
be, materially adverse or burdensome to the Company or its Affiliates as
applicable.

              (b) IDT (i) shall use all commercially reasonable efforts to
obtain all necessary consents, waivers, authorizations and approvals of all
Governmental Entities and of all other persons required in connection with the
execution, delivery and performance by IDT of this Agreement or the consummation
of the Transactions and (ii) shall diligently assist and cooperate with the
Company in preparing and filing all documents required to be submitted by the
Company to any Governmental Entity in connection with such Transactions (which
assistance and cooperation shall include, without limitation, timely furnishing
to the Company all information concerning IDT that counsel to the Company
reasonably determines is required to be included in such documents or would be
helpful in obtaining any such required consent, waiver, authorization or
approval). Nothing herein shall be construed to require IDT or any of its
Affiliates to divest or otherwise rearrange the composition of any assets or
agree to any


                                       10



conditions or requirements which are, or are reasonably likely to be, materially
adverse or burdensome to IDT or its Affiliates, as applicable.

              (c) Notwithstanding clause (b) of this Section 4.2, the Company
acknowledges and agrees that IDT may elect to waive the condition in Section 5.4
with respect to one or more of the Governmental Entities from which it is
required to obtain a consent, waiver, authorization or approval with respect to
any of the Transactions, in which case the condition of the Company set forth in
Section 6.3 shall also be waived (without any action or consent on the part of
the Company) to the same extent with respect to the same Governmental Entities.
IDT and the Company shall continue to use all commercially reasonable efforts to
cooperate to obtain any and all such consents, waivers, authorizations and
approvals, as soon as reasonably practicable, thereafter, including if relevant
after Closing if the Closing occurs prior to the time IDT and the Company have
obtained all such consents, waivers, authorizations and approvals. If after
Closing, any such Governmental Entity issues an order, decree, judgment or
similar declaration declaring IDT's purchase of the Shares invalid or illegal,
IDT shall have the right to cause the Company, upon written notice, to
repurchase any or all such Shares at the Purchase Price. Any such repurchase
shall be completed within five Business Days after written notice has been
delivered by IDT to the Company.

         4.3. Listing of Initial Shares, Shares and Warrant Shares. The Company
shall cause the Initial Shares, Shares and Warrant Shares to be listed or
otherwise eligible for trading on the NASDAQ National Market System and any such
other national securities exchange that the Common Stock may from time to time
be listed or authorized to trade on.

         4.4. Future Issuances. For so long as IDT owns at least 5% of the
Common Stock, the Company hereby agrees not to issue any additional equity
capital, or securities convertible to, or otherwise exchangeable into, equity
capital of the Company, without the prior written approval of IDT; provided that
the issuance of any shares of Common Stock and any option to acquire shares of
Common Stock, at any time and from time to time, that is not senior in any
respect to the Shares and Warrant Shares shall be permitted.

         4.5. Restrictions of Further Acquisitions. (a) IDT covenants and agrees
that, except as otherwise permitted by the terms of this Agreement, until a
Release Date (as defined below) occurs, neither IDT nor any of its Affiliates
(collectively, the "Restricted Group") shall, directly or indirectly in any
manner, acquire, offer or propose to acquire or agree to acquire (whether
publicly or otherwise) Common Stock, any other capital stock of the Company or
other securities of the Company entitled to vote generally in the election of
directors of the Company or at any regular or special meeting of the
stockholders of the Company ("Voting Stock"), or any direct or indirect rights,
options or warrants of the Company to acquire any Voting Stock or any securities
of the Company convertible or exercisable into or exchangeable for any of the
foregoing (whether or not currently convertible, exercisable or exchangeable)
(all of the foregoing, collectively, "Voting Securities") (including without
limitation "beneficial ownership" of any such


                                       11


securities, within the meaning set forth in Rule 13d-3 under the Exchange Act
("Beneficial Ownership")), which acquisition would cause the Restricted Group
Ownership Percentage (as defined below) to exceed 25.0% (other than an
acquisition with the prior approval of a majority of the directors of the Board
of Directors of the Company). "Restricted Group Ownership Percentage" shall mean
the aggregate percentage Beneficial Ownership by the members of the Restricted
Group of the Company's Voting Securities, in each case calculated in the manner
set forth in Rule 13d-3 under the Exchange Act. "Release Date" shall mean
February 7, 2003.

                  (b) The restrictions set forth in clause (a) of this Section
4.5 shall not prevent the Restricted Group from making a written acquisition
proposal to the Board of Directors of the Company (or from publicly announcing
the making of such a written proposal not less than eight Business Days after it
has been made, if not previously made public by the Company) that is designed to
compete with a definitive, bona fide written offer for not less than 50.1% of
the capital stock or assets of the Company that has either been made in writing
by a third party to the Board of Directors or has been publicly commenced by a
third party through the launching of a tender offer or by other similar means
(whether or not pursuant to an agreement with the Company), in any such event
which offer was not directly or indirectly induced by any member of the
Restricted Group.

         4.6. Stockholder Approval. The Company will take, in accordance with
applicable law and its certificate of incorporation and by-laws, all action
necessary to convene a meeting of holders of Common Stock as promptly as
practicable to consider and vote upon the approval of the issuance of the
Warrant Shares.

         4.7. Takeover Statute. If any Takeover Statute is or may become
applicable to the Transactions, the Company and its board of directors shall
grant such approvals and take such actions as are necessary so that such
transactions may be consummated as promptly as practicable on the terms
contemplated by this Agreement and the other Equity Documents and otherwise act
to eliminate or minimize the effects of such statute or regulation on such
transactions.

         Section 5. Conditions to Obligations of IDT. The obligation of IDT to
pay the Purchase Price for the Shares and Warrants to the Company against
delivery of the share certificate(s) and the Warrant Certificate therefor at the
Closing is absolute, subject to the fulfillment or waiver at or before the
Closing of each of the following conditions, any or all of which may be waived
by IDT:

         5.1. Representations and Warranties. The representations and warranties
of the Company set forth in Section 3 hereof shall have been true and correct in
all material respects when made and, if Closing occurs on a date other than the
date hereof, true and correct in all material respects as of the date of the
Closing with the same force and effect as though made on and as of the date of
the Closing.


                                       12



         5.2. Covenants. The Company shall have performed all of its obligations
and agreements and complied with all of its covenants contained in
this Agreement to be performed and complied with at or prior to the date of the
Closing.

         5.3. Authorized Securities. The issuance of the Shares and Warrants
shall have been duly authorized, and upon payment of the Purchase Price by IDT
and delivery of the Shares and Warrants by the Company, the Shares and Warrants
shall be validly issued, fully paid and nonassessable.

         5.4. Governmental Filings. Subject to Section 4.2(c), all notices,
reports and other filings required to be made by the Company with, and consents,
registrations, approvals, permits or authorizations required to be obtained by
the Company from, any governmental or regulatory authority, agency, commission,
body or other governmental entity or court ("Governmental Entity"), in
connection with the execution, delivery and performance of the Equity Documents
by the Company and the issuance and sale of the Shares by the Company hereunder
and upon the exercise by IDT of the Warrants have been made or obtained, except
those that the failure to make or obtain are not, individually or in the
aggregate, reasonably likely to have a Company Material Adverse Effect or to
materially impair the benefit of IDT's investment hereunder or its ability to
exercise the Warrants.

         5.5. No Violation. The execution, delivery and performance of the
Equity Documents by the Company, the issuance and sale of the Shares and
Warrants by the Company hereunder and the issue of the Warrant Shares upon the
exercise by IDT of the Warrants do not and will not constitute or result in (i)
a breach or violation of, or a default under, the certificate of incorporation
or by-laws of the Company, in each case as amended through the date hereof, (ii)
a breach or violation of, or a default under, the acceleration of any
obligations or the creation of a Lien on the assets of the Company (with or
without notice, lapse of time or both) pursuant to, any agreement, lease,
license, contract, note, mortgage, indenture, arrangement or other obligation
("Contracts") binding upon the Company or any law or governmental or
non-governmental permit or license to which the Company is subject or (iii) any
change in the rights or obligations of any party under any of the Contracts,
except, in the case of clause (ii) or (iii) above, for any breach, violation,
default, acceleration, creation or change that, individually or in the
aggregate, is not reasonably likely to prevent, materially delay or materially
impair the ability of the Company to consummate the Transactions or to
materially impair the benefit of IDT's investment hereunder or its ability to
exercise the Warrants. Subject to Section 4.2(c), no provision of any Applicable
Law, injunction, order or decree of any Governmental Entity shall be in effect
which has the effect of making the Transactions illegal or shall otherwise
restrain or prohibit the consummation of the Transactions.

         5.6. Certificate. IDT shall have received (i) a certificate, dated as
of the date of the Closing, executed by an executive officer of the Company and
stating that the conditions set forth in Section 5.1, 5.2, 5.3, 5.4 and 5.5
above have been satisfied, (ii) a certificate of the secretary of the Company
covering such matters as are customarily


                                       13


covered by such certificates, and (iii) a long form good standing certificate
for the Company, together with a telegraphic "bring-down" to the Business Day
immediately prior to closing, from the Secretary of State of the State of
Delaware.

         5.7. Opinion of Counsel to the Company. IDT shall have received an
opinion of counsel to the Company with respect to matters relating to the
transactions contemplated hereby as IDT reasonably may request, in each case
addressed to IDT, dated the date of the Closing and in form and substance
reasonably satisfactory to IDT.

         5.8. Registration Rights Agreement and Warrants. The Registration
Rights Agreement and the Warrants shall have been duly executed and delivered by
the Company.

         5.9. No Adverse Change. Except as previously disclosed to IDT, there
shall not have occurred any event, circumstance, condition, fact, effect or
other matter which has had or could reasonably be expected to have a material
adverse effect (x) on the business, assets, financial condition, or results of
operations of the Company and its subsidiaries taken as a whole or (y) on the
ability of the Company and its subsidiaries to perform on a timely basis any
material obligation under this Agreement or the other Equity Documents or to
consummate the Transactions contemplated hereby.

         Section 6. Conditions to Obligations of the Company. The obligation of
the Company to deliver the Shares and Warrants to IDT at the Closing against
payment of the Purchase Price is absolute, subject to the fulfillment or waiver
at or before the Closing of each of the following conditions, any or all of
which may be waived by the Company:

         6.1. Representations and Warranties. The representations and warranties
of IDT set forth in Section 2 hereof shall have been true and correct in all
material respects when made and, if Closing occurring on a date other than the
date hereof, true and correct in all material respects as of the date of the
Closing with the same force and effect as though made on and as of the date of
the Closing.

         6.2. Covenants. IDT shall have performed all of its obligations and
agreements and complied with all of its covenants contained in this
Agreement to be performed and complied with at or prior to the date of the
Closing.

         6.3. Registration Rights Agreement. The Registration Rights Agreement
shall have been executed and delivered by IDT.

         Section 7. Transfer Limitations: 1933 Act Legend. (a) Unless sold
pursuant to an effective registration statement, each certificate representing
the Investor Securities shall bear a legend substantially in the following form:

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
         (THE "ACT"), AND MAY


                                       14


         NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
         UNLESS AND UNTIL SUCH SECURITIES 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. THE SECURITIES
         REPRESENTED BY THIS CERTIFICATEARE MAY ALSO BE SUBJECT TO A PROXY IN
         FAVOR OF THE CHIEF EXECUTIVE OFFICER OF THE COMPANY".

              (b) The foregoing legend shall be removed from the certificates
representing any shares of Common Stock or Warrants, 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) or another provision of Rule 144 of the Act pursuant to which all or a
portion of the Investor Securities 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.

         Section 8. Indemnification.
                    ---------------

         8.1. Company Indemnification. The Company covenants and agrees to
defend, indemnify and save and hold IDT harmless, together with its officers,
directors, partners, shareholders, employees, Affiliates and beneficial owners,
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) 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 or in any
         writing delivered pursuant to this Agreement; or

              (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.

         8.2. Procedure. If IDT is entitled to be indemnified pursuant to
Section 8.1, IDT shall notify the Company in writing of any action against IDT
in respect of which the Company is or may be obligated to provide
indemnification on account of Section 8.1, promptly after the receipt of notice.
The omission of IDT so to notify the Company of any such action shall not
relieve the Company from any liability which it may have to IDT except to the
extent the Company shall have been materially prejudiced by the


                                       15


omission of IDT so to notify the Company, pursuant to this Section 8.2. In case
any such action shall be brought against IDT and it shall notify the Company of
the commencement thereof, the Company shall be entitled to participate therein
and, to the extent that the Company may wish, to assume the defense thereof,
with counsel reasonably satisfactory to the Company, and after notice from the
Company to IDT of its election so to assume the defense thereof, the Company
will not be liable to IDT under Section 8.1 for any legal or other expense
subsequently incurred by IDT in connection with the defense thereof nor for any
settlement thereof entered into without the consent of the Company; provided,
however, that (i) if the Company shall elect not to assume the defense of such
claim or action or shall fail to do so in a prompt manner or (ii) if IDT
reasonably determines (x) that there may be an actual or potential conflict
between the positions of the Company and of IDT in defending such claim or
action or (y) that there may be legal defenses available to IDT different from
or in addition to those available to the Company, then separate counsel for IDT
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 Company
shall be liable for any reasonable legal or other expenses incurred by IDT in
connection with the defense.

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

         Section 9. Miscellaneous.
                    -------------

         9.1. Termination. (a) This Agreement may be terminated (i) at any time
prior to the date of the Closing by mutual written agreement of the Company and
IDT, (ii) if the Closing shall not have occurred on or prior to April 30, 2001
(the "Outside Date"), by IDT at any time after the Outside Date, or (iii) by
either party, in the event that the other party has breached any of its material
obligations under this Agreement.

              (b) If this Agreement is terminated, as permitted by Section
9.1(a), such termination shall be without liability of any party (or any
stockholder, director, officer, partner, employee, agent, consultant or
representative of such party) to any other party to this Agreement; provided
that if such termination shall result from the willful (i) failure of any party
to fulfill a condition to the performance of the obligations of the other party,
(ii) failure to perform a covenant made by it in this Agreement or (iii) breach
by any party hereto of any of its representations or warranties contained
herein, such failing or breaching party shall be fully liable for any and all
losses (excluding consequential damages) incurred or suffered by the other party
as a result of such failure or breach, subject to the express limitations of
Section 8.

         9.2. No Assignment. The Company may not assign this Agreement or any of
its rights hereunder without the prior written consent of IDT. IDT may not
assign this Agreement or any of its rights hereunder, except to a subsidiary of
IDT Corporation,


                                       16



without the prior written consent of the Company; upon any such assignment by
IDT, IDT shall be fully released from all obligations hereunder and shall cease
to be a party hereto. Any purported assignment which does not comply with the
foregoing provisions of this Section 9.2 shall be null and void. This Agreement
shall be binding upon each of the parties hereto and their respective permitted
successors and assigns.

         9.3. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. WITH RESPECT TO ANY SUIT,
ACTION OR PROCEEDING INITIATED BY A PARTY TO THIS AGREEMENT ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE PARTIES HERETO HEREBY SUBMIT TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF NEW YORK
AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
THAT THEY MY NOW HAVE OR HEREAFTER OBTAIN TO THE LAYING OF VENUE IN ANY SUCH
COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.

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

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

         9.6. Notices. All notices to be given herein shall be effective upon
receipt and shall be in writing and delivered personally or by recognized
delivery service or mailed, first class mail, postage prepaid or given by
telegram, telecopy or other similar means (followed with a confirmation by mail)
to the parties, as the case may be, at the following address or such other
address as may hereafter be designated, in writing, by the respective party in
accordance with this paragraph:

                  If to the Company, to:

                  STAR Telecommunications, Inc.
                  223 East de La Guerra Street
                  Santa Barbara, California 93101
                  Attention: Brett Messing
                  Fax:  (805) 884-1137

                  If to IDT, to:

                  IDT Investments Inc.
                  2325 B Renaissance Drive
                  Las Vegas, Nevada 89119
                  Attention:  President
                  Fax:  (702) 966-4247


                                       17



                  with a copy to:

                  Sullivan & Cromwell
                  125 Broad Street
                  New York, New York 10004
                  Attention: John Evangelakos
                  Fax:  (212) 558-3588

         9.7. Amendments and Waivers. All terms 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 IDT. No
consent or waiver, express or implied, by a party in the performance by the
other party to or of any breach or default by the other party of its obligations
hereunder shall be deemed or construed to be a consent or waiver to or of any
other breach or default in the performance by such other party of the same or
any other obligations of such other party hereunder. The giving of consent by a
party in any one instance shall not limit or waive the necessity to obtain such
party's consent in any future instance. No waiver of any rights under this
Agreement shall be binding unless it is in writing signed by the party waiving
such rights.

         9.8. Severability. If any term or provision hereof or the application
thereof to any circumstance shall be held invalid or unenforceable, such term or
provision shall be ineffective but shall not affect in any respect whatsoever
the validity of the remainder of this Agreement; and the parties shall
immediately renegotiate such term or provision to eliminate such invalidity or
unenforceability, maintaining to the greatest extent permissible the spirit of
the Agreement as originally written.

         9.9. Entire Agreement. This Agreement (and the Annexes and Schedules
hereto), the Registration Rights Agreement and the Warrants constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings and discussions between them,
including the letter agreement, executed and delivered by the Company and IDT on
January 23, 2001 (the "Letter Agreement"); provided, that the obligations of the
parties hereto with respect to claims asserted for any breach of the provisions
of the Letter Agreement prior to the date hereof, shall survive until such
claims are finally adjudicated or otherwise resolved.

         9.10. Specific Enforcement. The parties hereto agree that irreparable
harm would occur in the event that any of the provisions of this Agreement were
not performed in accordance with its specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof, this being in addition to any other remedy to
which they are entitled at law or in equity.


                                       18



         9.11. Expenses. Each party hereto shall pay its own (including, without
limitation, legal fees and disbursements) legal fees and expenses
incurred in connection with the fulfillment of its respective obligations and
the preparation, negotiation and execution of the Equity Documents.

         9.12. 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 THE
EQUITY DOCUMENTS. 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 9.12 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.


                       [Signatures on the following page.]




                                       19



         IN WITNESS WHEREOF, the parties have executed this Investment Agreement
as of the date first above written.




                                              STAR TELECOMMUNICATIONS, INC.



                                              By:  /s/ Brett Messing
                                                 -------------------------------
                                                 Name: Brett Messing
                                                 Title:Chairman & Chief
                                                        Executive Officer


                                               IDT INVESTMENTS INC.



                                              By: /s/ Jonathan Levy
                                                 -------------------------------
                                                 Name:  Jonathan Levy
                                                 Title: Treasurer


                                       20

EX-99.4

                                                                       Exhibit 4

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAW, AND SUCH SECURITIES MAY NOT BE
OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY ALSO BE SUBJECT TO A PROXY IN FAVOR OF THE CHIEF EXECUTIVE
OFFICER OF STAR TELECOMMUNICATIONS, INC.


THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS
AS SET FORTH IN THE REGISTRATION RIGHTS AGREEMENT, DATED AS OF FEBRUARY 7, 2001,
BETWEEN STAR TELECOMMUNICATIONS, INC. AND IDT INVESTMENTS INC. THE TERMS OF
WHICH ARE INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL EXECUTIVE OFFICE OF STAR TELECOMMUNICATIONS, INC.







No. W-1                                                                3,389,249

                                    WARRANTS

                               TO PURCHASE SHARES

                                       OF

                                  COMMON STOCK

                                       OF

                          STAR TELECOMMUNICATIONS, INC.


         This certifies that, for value received, IDT INVESTMENTS INC., a Nevada
corporation ("IDT Investments"), or its registered assigns (the "Holder"), is
the registered owner of warrants (the "Warrants") to purchase 3,389,249 Warrant
Shares (as hereinafter defined), subject to adjustment from time to time as
provided herein (such number of Warrant Shares being hereinafter referred to as
the "Warrant Share Number"), from STAR Telecommunications, Inc., a Delaware
corporation ("STAR"), at any time on or after the Date of Original Issuance (as
defined herein) and on or before the Expiration Date (as defined herein), each
Warrant representing the right of the Holder to purchase, subject to the
provisions of this Warrant, one share of Common Stock of the Company (such share
or shares for which each Warrant may be exercisable as of any time of
determination, the "Warrant Shares"), in each case at the purchase price per
share calculated as specified herein. The price to be paid for each Warrant
Share is subject to adjustment from time to time as hereinafter set forth. The
purchase price payable for each Warrant Share at any time and as adjusted from
time to time is referred to herein as the "Exercise Price."

         Section 1. Certain Definitions. For purposes of this Warrant, the
following terms have the following respective meanings:

         "Average Price" means, with respect to any shares of stock or
securities, on any date of determination, the average for the ten (10)
consecutive Trading Days preceding (but excluding such date of determination) of
the reported last sale prices per share in the regular trading session on the
principal national securities exchange or inter-dealer quotation system on which
such stock or security is listed or admitted to trading, or if not listed or
admitted to trading on any national securities exchange or inter-dealer
quotation system, the average for the ten (10) consecutive Trading Days
preceding (but excluding the date of determination) of the average of the
closing bid and asked prices per share or security in the regular trading
session in the over-the-counter market as furnished by any New York Stock
Exchange member firm selected from time to time by the Company for that purpose,
it being understood that any determination of price per share shall exclude the
results of any late trading session or after hours trading.


                                       2



         "Business Day" means any day, other than a Saturday, Sunday or a day on
which banking institutions in the States of California or New York are
authorized or obligated by law or executive order to close.

         "Common Stock" means the Company's common stock, $0.001 par value per
share, and any capital stock of any class of the Company thereafter authorized
that shall not be limited to a fixed sum in respect of the rights of the holders
thereof to participate in dividends or in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the Company.

         "Date of Original Issuance" means the date of the Closing (as defined
in the Investment Agreement between the Company and IDT Investments, dated
February 7, 2001 (the "Investment Agreement").

         "Expiration Date" shall mean February 7, 2004; provided, however, that
if as a result of IDT Investments exercising the Warrants on February 7, 2004,
IDT Investments and any of its affiliates, on a combined basis, will own more
than 25.0% of the outstanding shares of Common Stock immediately after such
exercise, the "Expiration Date" shall be extended to the date that is 30 days
after the date upon which the Company has provided written notice to IDT
Investments specifying that the exercise of the Warrants will not cause IDT
Investments and any of its affiliates to own on a combined basis more than 25.0%
of the outstanding shares of Common Stock immediately after such exercise.

         "Fair Market Value" means, with respect to any shares of stock or other
securities, (i) if such stock or securities are listed or admitted to trading on
a national securities exchange or an inter-dealer quotation system or traded in
the over-the-counter market, the Average Price per share or security, as the
case may be, at the close of the regular trading session on the Trading Day
immediately preceding the day on which the relevant determination is to be made
and (ii) if such stock or security is not so listed, admitted or traded, the
fair market value of such stock or security as determined by an Independent
Appraiser.

         "Gotel Closing" shall have the meaning assigned in the Investment
Agreement.

         "Gotel Purchase Price" shall have the meaning assigned in the
Investment Agreement.

         "Independent Appraiser" means an appraisal firm or any other financial
expert of recognized national standing, selected by the Holder and reasonably
acceptable to the Company, that does not (or whose directors, officers,
employees, affiliates or stockholders do not) have a direct or indirect material
financial interest in the Company or the Holder, who has not within the prior
two years been, and, at the time called upon to give independent financial
advice to the Company or the Holder, is not (and none of its directors,
officers, employees, affiliates or stockholders are) a promoter, director or
officer of the Company.



                                       3


         "Person" means any individual, firm, corporation, company, limited
liability company, association, partnership, joint venture, trust or
unincorporated organization, or a government or any agency or political
subdivision thereof.

         "Trading Day" means (i) if the relevant stock or security is listed or
admitted for trading on the New York Stock Exchange or any other national
securities exchange, a day on which such exchange is open for business; (ii) if
the relevant stock or security is quoted on the Nasdaq National Market or any
other system of automated dissemination of quotations of securities prices, a
day on which trades may be effected through such system; or (iii) if the
relevant stock or security is not listed or admitted for trading on any national
securities exchange or quoted on the Nasdaq National Market or any other system
of automated dissemination of quotation of securities prices, a day on which the
relevant stock or security is traded regular way in the over-the-counter market
and for which a closing bid and a closing asked price for such stock or security
are available.

         Section 2. Warrant Shares. The Warrant Shares shall be shares of Common
Stock.

         Section 3. Exercise Price.
                    --------------

         (1) The Exercise Price shall be $0.833, subject to adjustment from time
to time as provided for herein.

         (2) Without duplication of the provisions of Section 9, in the event
the Gotel Closing shall occur after the exercise of any of the Warrants, the
Company shall adjust the number of Warrant Shares previously delivered to IDT
Investments (the "Gotel True Up"), as follows:

              (a) Immediately following the Gotel Closing, the Company shall
         issue and deliver to IDT Investments a share certificate representing
         shares of Common Stock equal to the number obtained by subtracting (x)
         the Warrant Shares delivered to IDT Investments from (y) the multiple
         of (i) the quotient of ((1) the number of Warrant Shares delivered
         divided by (2) the number of shares of Common Stock outstanding on the
         date the Warrant Shares were delivered (on a fully diluted basis)), by
         (ii) the number of shares of Common Stock outstanding immediately
         following the Gotel Closing (on a fully diluted basis).

              (b) In the event the Gotel Purchase Price is less than the
         Exercise Price paid by IDT Investments then (in addition to any shares
         to be delivered pursuant to clause (a) above) the Company promptly
         shall deliver to IDT Investments such number of shares of Common Stock
         as is necessary to cause the average price of all Warrant Shares
         (including any shares provided pursuant to clause (a) above or this
         clause (b)) to be not more than the Gotel Purchase Price.

         Section 4. Exercise of Warrants. Subject to the provisions hereof, this
Warrant may be exercised, in whole or in part, at any time on or after the Date
of Original



                                       4



Issuance and on or before the Expiration Date, by presentation and surrender
hereof to the Company at the office or agency of the Company maintained for that
purpose pursuant to Section 15 (the "Warrant Office"), with the Purchase Form
annexed hereto duly executed and accompanied by payment to the Company, for the
account of the Company, of the Exercise Price for the number of Warrant Shares
specified in such form.

         The Exercise Price shall be paid at the option of the Holder by
certified or official bank check or by wire transfer of immediately available
funds to an account designated by the Company for this purpose.

         If this certificate evidencing Warrants ("Warrant Certificate") should
be exercised in part only, the Company shall, upon surrender of this Warrant
Certificate for cancellation, execute and deliver a new Warrant Certificate
evidencing the rights of the Holder thereof in the unexercised Warrants. The
Company shall keep at the Warrant Office a register for the registration of
transfer of Warrants (the "Warrant Register").

         Upon receipt by the Company of this Warrant at the Warrant Office, in
proper form for exercise of any number of Warrants evidenced hereby, the Holder
shall be deemed to be the holder of record of the Warrant Shares issuable upon
such exercise, notwithstanding that the stock transfer books of the Company
shall then be closed or that Warrant Certificates evidencing such Warrant Shares
shall not then be actually delivered to the Holder. The Company shall promptly
thereafter deliver to the exercising Holder duly executed certificates for the
Warrant Shares issuable, at the last address indicated for such Holder in the
Warrant Register. The Company shall pay all expenses, and any and all United
States Federal, state and local taxes and other charges that may be payable in
connection with the preparation, issue and delivery of stock certificates under
this Section 4.

         The Company covenants that all Warrant Shares issued upon exercise of
Warrants will, upon payment of the Exercise Price, be duly authorized and
validly issued, fully paid and nonassessable, free of preemptive rights and,
free from all taxes, liens, charges and security interests with respect to the
issue thereof. The Company shall list or include the shares of Common Stock, if
any, constituting Warrant Shares required to be delivered upon exercise of the
Warrants prior to such delivery on each securities exchange or in each quotation
system, if any, upon which the outstanding Common Stock is listed or quoted at
the time of such delivery.

         The Company shall, from time to time, take all action which may be
necessary to obtain and keep effective any and all permits, consents and
approvals of governmental agencies and authorities and securities act filings
under federal and state laws which may be or become requisite in connection with
the issuance, sale, transfer and delivery of the Warrants, the exercise of the
Warrants, and the issuance, sale, transfer and delivery of the Warrant Shares
issued upon exercise of the Warrants.

         Section 5. Reservation of Shares; Preservation of Rights of Holder. The
Company hereby agrees that at all times prior to the later of (i) the Expiration
Date and (ii) the date the Gotel True Up is completed, if necessary, there shall
be reserved for issuance upon



                                       5


exercise of the Warrants, free from preemptive rights, such number of shares of
authorized but unissued shares of Common Stock, as shall be or may be required
for issuance upon exercise of the total number of Warrants then outstanding and
unexercised and the consummation of the Gotel True Up. Notwithstanding the
forgoing, IDT Investments shall have a priority over any other party or investor
of the Company, including without limitations, Gotel Investments Ltd. and any of
its affiliates, for any authorized and unissued shares required to be reserved
to enable IDT Investments to exercise the Warrants in full and for the Company
to consummate the Gotel True Up.

         Section 6. Fractional Shares. No fractional Warrant Shares shall be
issued upon exercise of the Warrants. If more than one Warrant shall be
presented for exercise in full at the same time by the same Holder, the number
of full Warrant Shares which shall be issuable upon such exercise thereof shall
be computed on the basis of the aggregate number of Warrant Shares acquirable on
exercise of the Warrants so presented. Subject to the foregoing, if any
fractional Warrant Shares would otherwise be issuable upon exercise of any
Warrants, the Company shall calculate and pay a cash adjustment in respect of
such fraction (calculated to the nearest 1/1,000th of a share) in an amount
equal to the same fraction of the Fair Market Value of a Warrant Share on the
day of exercise.

         Section 7. Exchange, Transfer, Assignment or Loss of Warrant. This
Warrant Certificate is assignable, without expense, at the option of the Holder
to any subsidiary of IDT Corporation, upon presentation and surrender to the
Company hereof at the Warrant Office for other Warrant Certificates evidencing
in the aggregate the same number of Warrant Shares purchasable hereunder. Upon
surrender of this Warrant Certificate to the Company at the Warrant Office with
the Assignment Form annexed hereto ("Assignment Form") duly executed, the
Company shall, without charge, execute and deliver a new Warrant Certificate or
Warrant Certificates registered in the name of the assignee named in the
Assignment Form at the address specified in the Assignment Form, and this
Warrant Certificate shall promptly be canceled. A Warrant Certificate, if
presented together with a properly executed Assignment Form, may be exercised by
an assignee for the purchase of Warrant Shares without prior delivery of a new
Warrant Certificate issued in the name of the assignee.

         This Warrant Certificate may be subdivided or combined with other
Warrant Certificates evidencing the same rights as the rights evidenced hereby,
upon presentation and surrender hereof at the Warrant Office together with a
written notice signed by the Holder hereof specifying the denominations in which
new Warrant Certificates are to be issued. Upon presentation and surrender of
any Warrant Certificate or Warrant Certificates, together with such written
notice, for subdivision or combination, the Company shall issue a new Warrant
Certificate or Warrant Certificates, in the denominations requested, evidencing
the same aggregate number of Warrants as the Warrant Certificate or Warrant
Certificates so surrendered. Such new Warrant or Certificate or Certificates
shall be registered in the name of the Holder submitting such request and
delivered to such Holder, unless such Holder shall have submitted a properly
executed Assignment Form, in which case such new Warrant Certificates as shall
have been assigned by the Holder shall be registered in the name of and
delivered to the Holder's assignee or designee. Any Warrant Certificate
surrendered for subdivision or combination shall


                                       6



be canceled promptly upon the issuance of such new Warrant Certificate or
Certificates. The term "Warrant" as used herein includes this Warrant
Certificate and any Warrants into which this Warrant Certificate may be
subdivided, combined or exchanged. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant Certificate, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant Certificate, if mutilated, the Company will execute and deliver a
new Warrant Certificate of like tenor and date. Any such new Warrant Certificate
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant Certificate so lost,
stolen, destroyed or mutilated shall be at any time enforceable by anyone.

         Section 8. Rights of the Holder. Prior to the exercise of the Warrants,
the Holder shall not be entitled to the rights of a stockholder of the Company
by reason of the Holder's ownership of the Warrants.

         Section 9. Antidilution Provisions. The Exercise Price shall be subject
to adjustment from time to time as provided in this Section 9. If at any time or
from time to time, after the date hereof, the Company shall issue or sell, or
is, in accordance with clauses (1) through (5) of this Section 9, deemed to have
issued or sold, any shares ("Additional Common Shares") of its Common Stock
(including, without limitation, pursuant to the Gotel Closing), then the
Exercise Price in effect immediately prior to each such issuance shall be
reduced, concurrently with such issue or sale, to a price equal to the quotient
obtained by dividing: (A) the product of (x) such Exercise Price multiplied by
(y) the total number of shares of Common Stock outstanding immediately prior to
such issuance by (B) the total number of shares of Common Stock outstanding
(including any shares of Common Stock deemed to have been issued pursuant to
clauses (1) through (5) of this Section 9) immediately after such issuance of
the Additional Common Shares.

         No adjustment of the Exercise Price, however, shall be made in an
amount less than $0.01 per share, and any such lesser adjustment shall be
carried forward and shall be made at the time and together with the next
subsequent adjustment which together with any adjustments so carried forward
shall amount to $0.01 per share or more.

         The Warrant Shares Number shall also be subject to adjustment if at any
time or from time to time, after the date hereof, the Company shall issue or
sell Additional Common Shares. In such event, the Warrant Shares Number in
effect immediately prior to each such issuance shall be increased, concurrently
with such issue or sale, to equal the sum (rounded up to the nearest whole
number) obtained by multiplying: (A) 5% and (B) the total number of shares of
Common Stock outstanding (including any shares of Common Stock deemed to have
been issued pursuant to clauses (1) through (5) of this Section 9) immediately
after such issuance of the Additional Common Shares.

         For purposes of calculating any adjustment to the Exercise Price
pursuant to this Section 9, any shares of Common Stock issuable upon the
exercise of any Options (as defined below) or the conversion of any Convertible
Securities (as defined below) shall be deemed to be


                                       7



outstanding, other then currently outstanding employee stock options that have
an exercise price greater than $5.00 per share of Common Stock ("Excluded Stock
Options").

         For purposes of this Section 9, but without duplication, the following
clauses (1) to (6) shall also be applicable:

         (1) Issuance of Rights or Options. In case at any time the Company
shall in any manner grant (whether directly or by assumption in a merger or
otherwise) any rights to subscribe for or to purchase, or any option or warrant
for the purchase of, Common Stock or any stock or securities convertible into or
exchangeable for Common Stock (such rights or options being herein called
"Options" and such convertible or exchangeable stock or securities being herein
called "Convertible Securities") whether or not such Options or the right to
convert or exchange any such Convertible Securities are immediately exercisable,
then the total maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon conversion or exchange of the total maximum
amount of such Convertible Securities issued upon the exercise of such Options
shall be deemed to have been issued as of the date of granting of such Options
and thereafter shall be deemed to be outstanding and the Exercise Price shall be
adjusted as provided above in this Section 9 as if such shares of Common Stock
or Convertible Securities were deemed outstanding. Except as otherwise provided
in clause (3), no adjustment of the Exercise Price shall be made upon the actual
issue of such Common Stock or of such Convertible Securities upon exercise of
such Options or upon the actual issue of such Common Stock upon conversion or
exchange of such Convertible Securities.

         (2) Issuance of Convertible Securities. In case the Company shall in
any manner issue (whether directly or by assumption in a merger or otherwise) or
sell any Convertible Securities, whether or not the rights to exchange or
convert thereunder are immediately exercisable, then the total maximum number of
shares of Common Stock issuable upon conversion or exchange of all such
Convertible Securities shall be deemed to have been issued as of the date of the
issue or sale of such Convertible Securities and thereafter shall be deemed to
be outstanding and the Exercise Price shall be adjusted as provided above in
this Section 9 as if such shares of Common Stock or Convertible Securities were
deemed outstanding, provided that (a) except as otherwise provided in clause (3)
below, no adjustment of the Exercise Price shall be made upon the actual issue
of such Common Stock upon conversion or exchange of such Convertible Securities,
and (b) if any such issue or sale of such Convertible Securities is made upon
exercise of any Option to purchase any such Convertible Securities for which
adjustments of the Exercise Price have been or are to be made pursuant to other
provisions of this Section 9, no further adjustment of the Exercise Price shall
be made by reason of such issue or sale.

         (3) Change in Option Price. If after the date hereof, the exercise
price provided for in any Excluded Stock Option is reduced at any time to less
than $5.00 per share (in each case other than under or by reason of provisions
designed to protect against dilution), whether by a decrease in such exercise
price or by increasing the number of shares of Common Stock for which such
Options may be exercised, the Exercise Price in effect at the time of such
reduction shall forthwith be readjusted to the Exercise Price which would have
been in effect at


                                       8



such time had such Options provided for such reduced exercise price at the Date
of Original Issuance.

         (4) Stock Dividends. In case the Company shall declare a dividend or
make any other distribution upon any stock of the Company payable in Common
Stock, Options or Convertible Securities, any Common Stock, Options or
Convertible Securities, as the case may be, issuable in payment of such dividend
or distribution shall be deemed to have been issued or sold without
consideration and the Exercise Price then in effect immediately prior to such
dividend declaration or distribution shall be reduced as if the Company had
subdivided its outstanding shares of Common Stock into a greater number of
shares as provided in clause (5) of this Section 9.

         (5) Subdivision or Combination of Stock. In case the Company shall at
any time subdivide its outstanding shares of Common Stock into a greater number
of shares or shall declare or pay a dividend on its outstanding shares of Common
Stock payable in shares of Common Stock, as applicable, the Exercise Price in
effect immediately prior to such subdivision shall be proportionately reduced
and conversely, in case the outstanding shares of Common Stock shall be combined
into a smaller number of shares, the Exercise Price in effect immediately prior
to such combination shall be proportionately increased.

         (6) Record Date. In case the Company shall take a record of the holders
of its Common Stock for the purpose of entitling them (i) to receive a dividend
or other distribution payable in Common Stock, Options or Convertible
Securities, or (ii) to subscribe for or purchase Common Stock, Options or
Convertible Securities, then such record date shall be deemed to be the date of
the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

         Section 10. Provision in Case of Reorganization or Reclassification. If
any capital reorganization or reclassification of the capital stock of the
Company shall be effected in such a way (including, without limitation, by way
of consolidation or merger) that holders of Common Stock shall be entitled to
receive stock, securities, cash or assets with respect to or in exchange for
Common Stock then, as a condition of such reorganization or reclassification,
lawful and adequate provisions (in form satisfactory to the holders of at least
66 2/3% of the outstanding Warrants) shall be made whereby each Holder of a
Warrant shall thereafter have the right to receive, upon the basis and upon the
terms and conditions specified herein and in lieu of the share or shares of
Common Stock of the Company immediately theretofore purchasable upon the
exercise of such Warrant, such shares of stock, securities, cash or assets as
may be issued or payable with respect to or in exchange for the share or shares
of Common Stock immediately theretofore so purchasable under this Warrant had
such reorganization or reclassification not taken place and in any such case
appropriate provision shall be made with respect to the rights and interests of
such Holder to the end that the provisions hereof (including without limitation
provisions for adjustments of the Exercise Price) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock, securities,
cash or assets thereafter deliverable upon the exercise (including an immediate
adjustment, by reason of such reorganization or

                                       9


reclassification, of the Exercise Price to the value per share of Common Stock
reflected by the terms of such reorganization or reclassification if the value
so reflected is less than the Exercise Price in effect immediately prior to such
reorganization or reclassification). In the event of a merger or consolidation
of the Company as a result of which a greater or lesser number of shares of
common stock of the surviving corporation are issuable to holders of the Common
Stock of the Company outstanding immediately prior to such merger or
consolidation, the Exercise Price in effect immediately prior to such merger or
consolidation shall be adjusted in the same manner as though there were a
subdivision or combination of the outstanding shares of Common Stock of the
Company. In the case of any merger or consolidation of the Company with or into
another Person, the Person formed by such consolidation or resulting from such
merger or consolidation, as the case may be, shall execute and deliver to the
Holder simultaneously therewith a new Warrant Certificate, satisfactory in form
and substance to the Holder, together with such other documents as the Holder
may reasonably request, entitling the Holder thereof to receive upon exercise of
the Warrants before the Expiration Date the kind and amount of shares of stock,
securities or other assets receivable upon such consolidation or merger in
accordance with the foregoing provisions, and the Company may not effect any
such merger or consolidation unless and until the foregoing has been complied
with. Such new Warrants shall have the same basic other terms and conditions as
the Warrants evidenced hereby and shall provide for adjustments which, for
events subsequent to the effective date of such written instrument, shall be as
nearly equivalent as may be practicable to the adjustments provided for in
Section 9 and this Section 10. If the Holders of the Warrants may elect the kind
or amount of shares of stock, other securities and assets receivable upon such
consolidation, merger, conveyance, sale, transfer or lease, then for the purpose
of this Section 10 the kind and amount of shares of stock and other securities
and property receivable upon any such reorganization or reclassification
(including any merger or consolidation) shall be deemed to be the election made
by the Holder, which specification shall be made by the Holder by the later of
(A) 10 Business Days after the Holder is provided with a final version of all
information required by law or regulation to be furnished to Holders of Warrants
concerning such election, or if no such information is required, 10 Business
Days after the Company notified the Holders of all material facts concerning
such election and (B) the last time at which Holders of Warrants are otherwise
permitted to make their election.

         Section 11. No Dilution or Impairment. If any event shall occur as to
which the provisions of Section 9 or 10 hereof are not strictly applicable but
the failure to make any adjustment would adversely affect the purchase rights
represented by the Warrants in a way that is contrary to the manifest and
essential intent and principles of Sections 9 and 10 hereof, then, in each such
case, the Company shall appoint an Independent Appraiser, which shall give their
opinion upon the adjustment, if any, on a basis consistent with the manifest and
essential intent and principles established in Sections 9 and 10 hereof,
necessary to preserve, without dilution, the purchase rights represented by this
Warrant Certificate. Upon receipt of such opinion, the Company will promptly
provide notice thereof accompanied by a copy thereof to the Holder and shall
make the adjustments described therein.

         Section 12. Taxes on Issue or Transfer of Warrant Shares. The Company
shall pay any and all documentary stamp or similar issue or transfer taxes
payable in respect of the issuance of shares of Warrant Shares on the exercise
of this Warrant.



                                       10



         Section 13. Notice of Adjustment of Exercise Price or Warrant Shares
Number. Within 10 Business Days following the end of each calendar quarter in
which the Exercise Price or Warrant Shares Number is adjusted as herein provided
(and at such other times as a Holder may from time to time request), the Company
shall promptly file at the Warrant Office a certificate of a firm of independent
public accountants (who may be the regular accountants employed by the Company)
setting forth the Exercise Price and Warrant Shares Number after such adjustment
and setting forth a statement of the facts requiring such adjustment and showing
in reasonable detail the manner of computing the same. Within 10 Business Days
following the end of each calendar quarter and at such other times as a Holder
may from time to time request, the Company shall give notice to the Holders, at
their respective addresses as set forth in the Warrant Register, of all such
adjustments since the prior notification to the Holders and since the date
hereof.

         Section 14. Notice Regarding Dividends, Subscription Rights,
Reclassifications and Dissolutions. In case:

              (a) the Company shall declare a dividend (or any other
         distribution) on any shares of Common Stock; or

              (b) the Company shall authorize the granting to the holders of its
         shares of Common Stock or other Warrant Shares of rights, options or
         warrants to subscribe for or purchase any shares of capital stock of
         any class or of any other rights; or

              (c) of any reclassification of the shares of Common Stock or other
         Warrant Shares, or of any consolidation, merger or share exchange to
         which the Company is a party and for which approval of any stockholders
         of the Company is required, or of the conveyance, sale, transfer or
         lease of all or substantially all of the assets of the Company; or

              (d) of the voluntary or involuntary dissolution, liquidation or
         winding up of the Company; or

              (e) the Company or any subsidiary of the Company shall commence a
         tender offer for all or a portion of the Company's outstanding shares
         of Common Stock or other Warrant Shares (or shall amend any such tender
         offer);

then the Company shall provide to the Holder, and shall cause to be filed at the
Warrant Office, at least 20 days (or 10 days in any case specified in clause (a)
or (b) above) prior to the applicable record, expiration or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, rights, options or
warrants, or, if a record is not to be taken, the date as of which the holders
of or record shares of Common Stock or other Warrant Shares to be entitled to
such dividend, distribution, rights, options or warrants are to be determined,
(y) the date on which the right to make tenders under such tender offer expires
or (z) the date on which such reclassification, consolidation, merger,
conveyance, transfer, sale, lease, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of record shares of Common Stock


                                       11


or other Warrant Shares shall be entitled to exchange such shares or Warrant
Shares for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, sale, lease,
dissolution, liquidation or winding up.

         Section 15. Maintenance of Office or Agency; Other. Warrant
Certificates may be presented or surrendered for split-up, combination,
registration of transfer, or exchange and notices and demands to or upon the
Company in respect of the Warrants may be served to 223 East de La Guerra
Street, Santa Barbara, California 93101. The Company shall provide notice to the
Holder of any change in such address promptly after such change.

         The Company will cooperate with the Holder in and obtaining any
governmental and regulatory approvals or consents, and in submitting any
governmental filings (including with Board of Governors of the Federal Reserve
System under the Bank Holding Company Act of 1956, if applicable) that may be
required to permit the Holder to exercise this Warrant and acquire the Warrant
Shares.

         Section 16. Notices. Notices under this Warrant to the Holder shall be
provided to the address of the Holder set forth in the Warrant Register. Notices
to the Holder shall be made in writing and mailed, first-class postage prepaid,
or delivered by hand or overnight courier, at its last address as it shall
appear upon the Warrant Register.

         Section 17. Successors. All the covenants and provisions of the
Warrants shall bind and inure to the benefit of the respective successors of the
Company and the Holder.

         Section 18. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. WITH RESPECT TO
ANY SUIT, ACTION OR PROCEEDING INITIATED BY A PARTY TO THIS WARRANT ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS WARRANT, THE PARTIES HERETO HEREBY SUBMIT
TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE STATE
OF NEW YORK AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION THAT THEY MY NOW HAVE OR HEREAFTER OBTAIN TO THE LAYING OF VENUE IN
ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.



                                       12



         Section 19. Entire Agreement. This Warrant Certificate (with the
documents referred to herein) embodies the entire agreement and understanding
between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof.



Dated:  2/7/01                              STAR TELECOMMUNICATIONS, INC.
        ----------


                                             By: /s/ Brett Messing
                                                --------------------------------
                                                Name:  Brett Messing
                                                Title: Chairman and Chief
ATTEST:                                                  Executive Officer


/s/ Timothy Sylvester
- --------------------------------
            Secretary







                                  PURCHASE FORM
                                  -------------


         The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing _______ shares of Common Stock, of STAR
Telecommunications, Inc. for $____________ by certified or official bank check
or wire transfer.



                                    Signature:
                                              ----------------------------------



Dated:
       ------------------------


Instructions for Registration of Stock


                           Name
                               -------------------------------------------------
                                    (please typewrite or print in block letters)


                           Address
                                  ----------------------------------------------








                                 ASSIGNMENT FORM
                                 ---------------


         FOR VALUE RECEIVED, _____________________________________________
hereby sells, assigns and transfers unto

Name
     ---------------------------------------------------------------------------
                            (please typewrite or print in block letters)

Address
        ------------------------------------------------------------------------

the right to purchase the Warrant Shares represented by this Warrant to the
extent of _____ shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint ___________________________, attorney, to
transfer the same on the books of the Company with full power of substitution in
the premises.




                                        Signature:
                                                  ------------------------------



Dated:
      -----------------------------------

EX-99.5

                                                                       EXHIBIT 5


                         REGISTRATION RIGHTS AGREEMENT

         REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of February
7, 2001, by and between STAR Telecommunications, Inc., a Delaware corporation
(the "Company"), and IDT Investments Inc., a Nevada corporation (the
"Investor").

         WHEREAS, on February 1, 2001, the Company issued and sold 2,398,082
shares of Common Stock, par value $0.001 per share, of the Company (the "Common
Stock") to IDT at a price of $0.417 per share of Common Stock.

         WHEREAS, the Company and the Investor have entered into a Investment
Agreement, dated as of February 7, 2001, pursuant to which (i) the Investor has
agreed to purchase 6,302,005 shares of Common Stock and the Company has agreed
to sell to the Investor such shares of Common Stock, subject to the conditions
set forth in the Investment Agreement, and (ii) the Investor has agreed to
acquire warrants to purchase up to 3,389,249 additional shares of Common Stock
(subject to adjustments as provided in such warrants) and the Company has agreed
to grant the Investor warrants to purchase such shares of Common Stock, subject
to the conditions set forth in such warrants; and

         WHEREAS, it is a condition to the consummation of the Investment
Agreement that the Company and Investor enter into this Agreement.

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

         Section 1. Definitions. (a) For the purposes of this Agreement:

              "Act" means the Securities Act of 1933, as amended.

              "Affiliate" means, with respect to any person, any other person
directly or indirectly controlling, controlled by or under common control with
the first such person.

              "Closing" and "Closing Date" mean the date of the Closing, as such
term is defined in the Investment Agreement.

              "Holder" means a holder of Registrable Securities or, unless the
context otherwise requires, warrants to purchase Warrant Shares, as the term is
defined in the Investment Agreement.

              "person" means any individual, partnership, corporation, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof, or other entity.





              "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act, and the declaration or ordering of effectiveness of
such registration statement.

              "Registrable Securities" means the Initial Shares, Shares and
Warrant Shares, as the terms are defined in the Investment Agreement, and all
shares of Common Stock the Investor and its affiliates currently beneficially
own, provided, however, that such Shares or Warrant Shares shall cease to be
Registrable Securities when and to the extent that (i) the Shares and Warrant
Shares have been sold pursuant to an effective Registration Statement under the
Act, (ii) the Investor or its Affiliates no longer hold any of the Shares or
Warrant Shares, (iii) all of the Shares and Warrant Shares have become eligible
for resale by the Investor or its Affiliates within any three-month period
pursuant to Rule 144 under the Act (or any similar provision then in force) or
(iv) such Shares or Warrant Shares have ceased to be outstanding.

         (b) Capitalized terms used and not otherwise defined in this Agreement
have the meaning ascribed to them in the Investment Agreement.

         Section 2. Registration Rights.

         2.1. (a) Registration Upon Demand. (i) At any time after the Closing
Date, one or more Holders that in the aggregate beneficially own at least 20% of
the Registrable Securities may make a demand that the Company effect the
registration of all or part of such Holders' Registrable Securities (a "Demand
Registration"). Upon receipt of a valid request for a Demand Registration, the
Company shall promptly, and in any event no later than 15 days after such
receipt, notify all other Holders of the making of such demand and shall use its
reasonable efforts to register under the Act as expeditiously as may be
practicable the Registrable Securities which Holders have requested the Company
to register in accordance with this Section 2.1(a)(i). Notwithstanding the
foregoing, the Company shall only be required to effect a registration if the
number of Registrable Securities that the Company shall have been requested to
register shall, in the aggregate, represent at least 20% of the Registrable
Securities then held by all Holders. The Holders shall together have the right
to two Demand Registrations pursuant to this Section 2.1(a)(i). No other
securityholder of the Company shall be permitted to include any of its
securities in a registration statement pursuant to this Section 2.1(a)(i) unless
the Investor or its Affiliates consent to such inclusion prior to the filing of
the registration statement. Notwithstanding the foregoing provisions of this
clause (a)(i), the Holders shall not make a Demand Registration during the
180-day period following the date hereof, when a Registration Statement on Form
S-1 is in effect which covers the Registrable Securities and has been approved
in writing by the Investor, which approval shall not be unreasonably withheld.

              (ii) Notwithstanding Section 2.1(a)(i) hereof, and in addition to
the rights granted under Section 2.1(a)(i) hereof, at any time the Company is or
becomes eligible to register its securities on Form S-3 (or any successor form),
one or more


                                       2



holders that in the aggregate beneficially own at least 20% of the
Registrable Securities may make a demand that the Company effect the
registration of all or part of such Holders' Registrable Securities (an "S-3
Demand Registration"). Upon receipt of a valid request for an S-3 Demand
Registration, the Company shall promptly, in and any event no later than 15 days
after such receipt, notify all other Holders of the making of such demand and
shall use its reasonable efforts to register under the Act as expeditiously as
may be practicable the Registrable Securities which Holders have requested the
Company to register in accordance with this Section 2.1(a)(ii). Notwithstanding
the foregoing, the Company shall not be required to effect any registration if
the number of Registrable Securities that the Company shall have been requested
to register shall, in the aggregate, represent at least 20% of the Registrable
Securities then held by all Holders. The Holders shall together have the right
to three S-3 Demand Registrations pursuant to this Section 2.1(a)(ii). No other
securityholder of the Company shall be permitted to include any of its
securities in a registration statement pursuant to this Section 2.1(a)(ii)
unless the Investor or its Affiliates consent to such inclusion prior to the
filing of the registration statement.

         (b) Effective Registration Statement. A registration requested pursuant
to Section 2.1(a) hereof shall not be deemed to have been effected (i) if a
registration statement with respect thereto has not been declared effective by
the Securities and Exchange Commission ("SEC"), (ii) if after it has become
effective and prior to the date ninety (90) days after the effective date, such
registration is materially interfered with by any stop order, injunction or
similar order or requirement of the SEC or other governmental agency or court
for any reason not attributable to the fault of any of the Holders, or (iii) the
conditions to closing specified in the underwriting agreement, if any, entered
into in connection with such registration are not satisfied or waived, other
than by reason of a failure on the part of a Holder to perform its obligations
under such underwriting agreement.

         (c) Piggyback Registration. If the Company proposes to file a
registration statement under the Act with respect to an offering of its equity
securities for its own account or for the account of another person or entity,
including, without limitations, for the account of Gotel Investments Ltd. or any
of its affiliates (other than a registration statement on Form S-4 or S-8 (or
any substitute forms that may be adopted from time to time by the SEC)), the
Company shall give written notice of such proposed filing to the Holders at the
address set forth in the share register of the Company as soon as reasonably
practicable (but in no event less than 7 business days before the anticipated
filing date), undertaking to provide each Holder the opportunity to register on
the same terms and conditions such amount of Registrable Securities as such
Holder may request (a "Piggyback Registration"). Each Holder will have 5
business days after receipt of any such notice to notify the Company as to
whether it wishes to participate in a Piggyback Registration (which notice shall
not be deemed to be a request for a Demand Registration). If the registration
statement is filed on behalf of a person or entity other than the Company, the
Company shall include the Registrable Securities that the Holders wish to sell
in the registration statement. If the Company or the person or entity for


                                       3


whose account such offering is being made shall determine in its sole discretion
not to register or to delay the proposed offering, the Company may, at its
election, provide written notice of such determination to the Holders and (i) in
the case of a determination not to effect the proposed offering, shall thereupon
be relieved of the obligation to register such Registrable Securities in
connection therewith and (ii) in the case of a determination to delay a proposed
offering, shall thereupon be permitted to delay registering such Registrable
Securities for the same period as the delay in respect of the proposed offering.

         If the Registrable Securities requested to be included in the Piggyback
Registration by any Holder differ from the type of securities proposed to be
registered by the Company and the managing underwriter for such offering advises
the Company that due to such differences the inclusion of such Registrable
Securities would cause a material adverse effect on the price of the offering (a
"Material Adverse Effect"), then (x) the number of such Holders' Registrable
Securities to be included in the Piggyback Registration shall be reduced to an
amount which, in the opinion of the managing underwriter, would eliminate such
Material Adverse Effect or (y) if no such reduction would, in the opinion of the
managing underwriter, eliminate such Material Adverse Effect, then the Company
shall have the right to exclude all such Registrable Securities from such
Piggyback Registration, provided, that there are not included and offered for
the account of any other Person in such Piggyback Registration any other
securities that differ from the type of securities proposed to be registered.
Any partial reduction in number of Registrable Securities of any Holder to be
included in the Piggyback Registration pursuant to clause (x) of the immediately
preceding sentence shall be effected pro rata based on the ratio which such
Holder's requested securities bears to the total number of securities requested
to be included in such Piggyback Registration by all persons or entities other
than the Company who have the contractual right to request that their securities
be included in such registration statement and who have requested that their
securities be included.

         2.2. Blackout Periods for Holders. If the board of directors of the
Company determines in good faith that the registration of Registrable Securities
pursuant to Section 2.1(a) hereof (or the use of a registration statement or
related prospectus) would be materially detrimental to the Company or its
shareholders because such filing would require disclosure of material non-public
information, and therefore the board of directors determines that it is in the
Company's best interest to defer the filing of the registration statement, and
promptly gives the Holders written notice of such determination in the form of a
certificate signed by an executive officer of the Company following their
request to register any Registrable Securities pursuant to Section 2.1(a), the
Company shall be entitled to postpone the filing of the registration statement
otherwise required to be prepared and filed by the Company pursuant to Section
2.1(a) hereof for a reasonable period of time, but not to exceed 60 days (a
"Demand Blackout Period") after the date of such request, provided that the
Company's exercise of its rights under this Section 2.2(i) shall not result in
Demand Blackout Periods for more than 180 days in any 365 day period, (ii) shall
not result in Demand Blackout Periods that are separated by less than 45



                                       4



days and (iii) shall only be effective when and for so long as the officers and
directors of the Company and other holders, if any, of registration rights with
respect to the Company's securities are similarly restricted from buying or
selling securities of the Company and/or exercising their registration rights,
as applicable. The Company shall promptly notify each Holder of the expiration
or earlier termination of any Demand Blackout Period.

         2.3. Obligations of the Company. Whenever the Company is required to
effect the registration of any Registrable Securities under this Section 2, the
Company shall, at its expense and as expeditiously as may be practicable:

         (a) Prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use its reasonable efforts to cause such
registration statement to become effective and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, use
reasonable efforts to keep such registration statement effective for not less
than 120 days, unless all Registrable Securities included therein are earlier
sold.

         (b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
applicable law with respect to the disposition of all of the Registrable
Securities covered by such registration statement.

         (c) Use its best efforts to qualify such Registrable Securities (i) for
listing on the NASDAQ National Market or listing on the New York Stock Exchange,
Inc. or (ii) if neither such quotation system or exchange is available for
quotation or listing, for listing on a national securities exchange selected by
a majority in interest of the Holders of the Registrable Securities being
registered.

         (d) Furnish to the Holders of Registrable Securities registering such
securities such numbers of copies of a prospectus, including a preliminary
prospectus (in the event of an underwritten offering), in conformity with the
requirements of applicable law, and such other documents as each such Holder may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by it.

         (e) Use reasonable efforts to register and qualify the securities
covered by such registration statement under state blue sky laws in any U.S.
jurisdictions in which such registration and qualification is reasonably
requested by any Holder; provided, that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such jurisdictions.

         (f) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form and substance as agreed to by the Company and the managing underwriter of
such offering.




                                       5



         (g) Promptly notify the Holders in writing: (i) when the registration
statement, the prospectus or any prospectus supplement related thereto or
post-effective amendment to the registration statement has been filed, and, with
respect to the registration statement or any post-effective amendment thereto,
when the same has become effective; (ii) of any request by the SEC for
amendments or supplements to the registration statement or related prospectus or
any written request by the SEC for additional information; (iii) of the issuance
by the SEC of any stop order suspending the effectiveness of the registration
statement or prospectus or any amendment or supplement thereto or the initiation
of any proceedings by any person for that purpose, and promptly use its
reasonable efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued; and (iv) of the receipt by the
Company of any written notification with respect to the suspension of the
qualification of any Registrable Securities for sale in any jurisdiction or the
initiation or overt threat of any proceeding for such purpose.

         (h) Notify the Holders in writing on a timely basis, at any time when a
prospectus relating to such Registrable Securities is required to be delivered
under applicable law, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing and at the request of
any such Holder promptly prepare and furnish to such Holder a reasonable number
of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the offerees of such securities,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing. Upon receipt of any notice of the occurrence of any event of the kind
described in the preceding sentence, each Holder will cease using such
prospectus until receipt by the Holders of the copies of such supplemented or
amended prospectus. If so requested by the Company, each Holder will deliver to
the Company any copies of such prospectus then in its possession (other than one
permanent file copy). If the Company shall give such notice, the Company shall
extend the period during which such registration statement shall be maintained
effective as provided in Section 2.3(a) hereof by the number of days during the
period from and including the date of the giving of such notice to the date when
the Company shall make available to the Holders such supplemented or amended
prospectus.

         (i) Furnish, at the request of any Holder participating in the
registration, on the date that such Registrable Securities are delivered to the
underwriters for sale, if such securities are being sold through underwriters,
or, if such securities are not being sold through underwriters, on the date that
the registration statement with respect to such securities becomes effective,
(i) an opinion, dated as of such date, of the counsel representing the Company
for the purposes of such registration, in form and substance as if customarily
given to underwriters in an underwritten public offering and reasonably
satisfactory to a majority in interest of the Holders participating in the
registration, addressed to the underwriters, if any, and to the Holders
participating in the registration


                                       6



of Registrable Securities and (ii) a "Cold Comfort" letter dated as of such
date, from the independent certified public accountants to the underwriters in
an underwritten public offering and reasonably satisfactory to a majority in
interest of the Holders participating in the registration, addressed to the
board of directors of the Company, to the underwriters, if any, and if permitted
by applicable accounting standards, to the Holders participating in the
registration of Registrable Securities.

         (j) Cause the transfer agent to remove restrictive legends on
certificates representing the securities covered by such registration statement.

         (k) Prepare and file with the SEC, promptly upon the request of any
such Holders, any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for such Holders, is required under
the Act or the rules and regulations thereunder in connection with the
distribution of the Registrable Securities by such Holders.

         (l) Make reasonably available for inspection by any Holder of such
Registrable Securities, any underwriter participating in any disposition
pursuant to such registration statement and any attorney, accountant or other
agent retained by any such Holder or underwriter, all pertinent financial and
other records, pertinent corporate documents and properties of the Company, as
shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested in connection with such registration
statement.

         (m) Provide a CUSIP number for the Registrable Securities included in
any registration statement not later than the effective date of such
registration statement.

         (n) Cooperate with each selling Holder and each underwriter
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.

         (o) During the period when the prospectus is required to be delivered
under the Act, promptly file all documents required to be filed with the SEC
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act").

         (p) Make generally available to its securityholders, as soon as
reasonably practicable, an earnings statement covering a period of 12 months,
beginning within three months after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Act and the rules and regulations of the SEC thereunder.

         (q) Provide a transfer agent and registrar (which may be the same
entity and which may be the Company) for such Registrable Securities.



                                       7



         (r) Use its reasonable efforts to take all other steps necessary to
effect the registration of such Registrable Securities pursuant to the terms
contemplated hereby.

         2.4. Furnish Information.
              -------------------

         (a) It shall be a condition precedent to the obligation of the Company
to include any Registrable Securities of any Holder in a registration statement
pursuant to this Section 2 that the Holder shall furnish to the Company such
information regarding itself, the Registrable Securities held by it, any other
securities of the Company held by it, and the intended method of disposition of
such Registrable Securities as shall be required to effect the registration of
the Registrable Securities held by such Holder. Any such information shall be
provided to the Company within any reasonable time period requested by the
Company.

         (b) Each Holder shall notify the Company, at any time when a prospectus
is required to be delivered under applicable law, of the happening of any event
as a result of which the prospectus included in the applicable registration
statement, as then in effect, in each case only with respect to information
provided by such Holder, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing. Such Holder shall immediately upon the happening of any such event
cease using such prospectus. Any other Holders shall cease using such prospectus
immediately upon receipt of notice from the Company to that effect. If so
requested by the Company, each Holder shall promptly return to the Company any
copies of such prospectus in its possession (other than one permanent file
copy). The Company shall promptly prepare and furnish to each such Holder a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the offerees
of such securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing.

         2.5. Expenses of Registration. The Company shall bear and pay all
reasonable expenses incurred in connection with any registration, filing or
qualification of Registrable Securities pursuant to this Section 2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, but excluding underwriting discounts and commissions
relating to the Registrable Securities.

         2.6. Underwriting Requirements. In connection with any underwritten
offering of a Holder's Registrable Securities, the Holders shall, after
consulting with the Company, select the underwriters participating in the
registration. Each of the Company and the Holder of Registrable Securities shall
enter into, and perform its obligations under, one or more underwriting
agreements and any related agreements and documents (which may include an escrow
agreement and/or a power of attorney with respect to the disposition of the
Registrable Securities), which shall include such representations,


                                       8



warranties, conditions, covenants, indemnities, lock-up (up to 180 days) and
contribution provisions as are customary in the context of transactions of the
kind, in the form that is reasonably satisfactory to the Company. If any Holder
disapproves of the terms of any underwriting, it may elect, prior to the
execution of any underwriting agreement, to withdraw therefrom by written notice
to the Company and the lead managing underwriter.

         2.7. Delay of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Section 2.

         2.8. Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 2:

         (a) To the extent permitted by law, the Company will indemnify and hold
harmless each Holder and each person, if any, who controls such Holder within
the meaning of the Act and the 1934 Act and their respective directors,
officers, partners, stockholders, members, employees, agents and representatives
and each person, if any, who controls such Holder within the meaning of the Act
and the 1934 Act (each, an "Indemnified Person"), against any losses, claims,
damages, or liabilities joint or several) to which they may become subject
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of, are based upon or relate to (collectively, a "Violation")
(x) any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary or final
prospectus contained therein or any amendments or supplements thereto or (y) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; or
(z) any violation by the Company of the Act, the 1934 Act, any state securities
law or any rule or regulation promulgated under the Act, the 1934 Act or any
state securities law in connection with the offering covered by any registration
statement; and the Company will pay to each Indemnified Person, as they are
incurred, any reasonable legal or other expenses incurred by it in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided that the indemnity agreement contained in this Section 2.8(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in strict conformity with written information
furnished by a Holder expressly for use in connection with such registration or
is caused by any failure by the Holder to deliver a prospectus or preliminary
prospectus (or amendment or supplement thereto) as and when required under the
Act after such prospectus has been timely furnished by the Company.


                                       9



         (b) To the extent permitted by law, each Holder will indemnify and hold
harmless the Company, each of its directors, each of its officers who has signed
the registration statement, and each person, if any, who controls the Company
within the meaning of the Act or the 1934 Act (each, an "Indemnified Person"),
against any losses, claims, damages or liabilities (joint or several) to which
any of the foregoing persons may become subject, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to the extent) that
such Violation is caused by (x) any untrue statement or alleged untrue statement
contained in, or by any omission or alleged omission from, information furnished
in writing to the Company by the Holder specifically and expressly for use in
any such registration statement or prospectus but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
so made in reliance upon and in strict conformity with written information
furnished by such Holder specifically for use in the preparation thereof or (y)
any failure by the Holder to deliver a prospectus or preliminary prospectus (or
amendment or supplement thereto) as and when required under the Act after such
prospectus has been timely filed by the Company. Such Holder will pay any
reasonable legal or other expenses incurred by any Indemnified Person, as they
are incurred, in connection with investigating or defending any such loss,
claim, damage, liability or action; provided that the indemnity agreement
contained in this Section 2.8(b) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Holder, which consent shall not be
unreasonably withheld; provided, further, that in no event shall any indemnity
under this Section 2.8(b) exceed the net proceeds from the offering received by
such Holder upon its sale of Registrable Securities included in the registration
statement.

         (c) Promptly after receipt by an Indemnified Person under this Section
2.8 of notice of the commencement of any action (including any governmental
action), such Indemnified Person will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 2.8, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the indemnifying parties; provided that an Indemnified Person
shall have the right to retain separate counsel, and the reasonable fees and
expenses of such counsel shall be paid by the indemnifying party if
representation of such Indemnified Person by the counsel retained by the
indemnifying party would be inappropriate (in the opinion of the Indemnified
Person) due to actual or potential differing interests between such Indemnified
Person and any other party represented by such counsel in such proceeding,
provided that the indemnifying party in such event shall not be responsible for
the fees of more than one separate firm of attorneys (in addition to any local
counsel) for all Indemnified Persons that may be represented without conflict by
one counsel. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if materially
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the


                                       10



Indemnified Person under this Section 2.8, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any Indemnified Person otherwise than under this Section
2.8.

         (d) If the indemnification provided for in this Section 2.8 is held by
a court of competent jurisdiction to be unavailable to an Indemnified Person
with respect to any losses, claims, damages or liabilities referred to herein,
the indemnifying party, in lieu of indemnifying such Indemnified Person
hereunder, agrees to contribute to the amount paid or payable by such
Indemnified Person as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the Indemnified Person on the other in connection
with the Violation(s) that resulted in such loss, claim, damage or liability, as
well as any other relevant equitable considerations. The relative fault of the
indemnifying party and of the Indemnified Person shall be determined by a court
of law by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the Indemnified Person and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. No person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution hereunder from any person who was not guilty
of such fraudulent misrepresentation. In no event shall a Holder's obligation to
contribute pursuant to this Section 2.8(d) exceed the net proceeds from the
offering received by such Holder upon its sale of Registrable Securities
included in the registration statement.

         (e) The obligations of the Company and the Holders under this Section
2.8 shall survive the completion of any offering of Registrable Securities under
a registration statement pursuant to this Section 2.

         2.9. Assignment of Registration Rights. The rights to cause the Company
to register Registrable Securities pursuant to this Section 2 may be assigned by
a Holder to a transferee of Registrable Securities, provided that (i) the
transferor shall, within ten (10) days after such transfer, furnish to the
Company written notice of the name and address of such transferee or assignee
and the securities with respect to which such registration rights are being
assigned and (ii) such transferee shall agree with the Company in writing to be
subject to the terms and conditions of this Agreement to the extent then
applicable.

         2.10. Rule 144 Reporting. With a view to making available to the
Holders the benefits of certain rules and regulations of the SEC that permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to use its best efforts to:

         (a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Act, at all times;

         (b) File with the SEC, in a timely manner, all reports and other
documents required to be filed by the Company under the Act and the 1934 Act;
and

                                       11



         (c) So long as a Holder owns any Registrable Securities, furnish such
Holder upon request a written statement by the Company as to its compliance with
the reporting requirements of SEC Rule 144 or any similar or analogous rule
promulgated under the Act, and of the 1934 Act, a copy of the most recent annual
or quarterly report of the Company and such other reports and documents as a
Holder may reasonably request in availing itself of any rule or regulation of
the SEC allowing it to sell any such securities without registration.

         Section 3. Miscellaneous.
                    -------------

         3.1. No Assignment. The Company may not assign this Agreement or any of
its rights hereunder without the prior written consent of the Investor. The
Investor may not assign this Agreement or any of its rights hereunder, except to
a subsidiary of IDT Corporation, without the prior written consent of the
Company; upon the full and complete assignment of all of its rights hereunder by
the Investor, the Investor shall be fully released from all obligations
hereunder and shall cease to be a party hereto. Any purported assignment which
does not comply with the foregoing provisions of this Section 3.1 and Section
2.9 shall be null and void. This Agreement shall be binding upon each of the
parties hereto and their respective permitted successors and assigns.

         3.2. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. WITH RESPECT TO ANY SUIT,
ACTION OR PROCEEDING INITIATED BY A PARTY TO THIS AGREEMENT ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE PARTIES HERETO HEREBY SUBMIT TO
THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF
NEW YORK AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION THAT THEY MY NOW HAVE OR HEREAFTER OBTAIN TO THE LAYING OF VENUE IN
ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.

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

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

         3.5. Notices. All notices to be given herein shall be effective upon
receipt and shall be in writing and delivered personally or by recognized
delivery service or mailed, first class mail, postage prepaid or given by
telecopy or other similar means (followed with a confirmation by mail) to the
parties, as the case may be, at the following address or such other address as
may hereafter be designated, in writing, by the respective party in accordance
with this paragraph:


                                       12



         If to the Company:

         STAR Telecommunications, Inc.
         223 East de La Guerra Street
         Santa Barbara, California 93101
         Attention: Brett Messing
         Fax:  (805) 884-1137

         If to the Investor:

         IDT Investments Inc.
         2325 B Renaissance Drive
         Las Vegas, Nevada 89119
         Attention:  President
         Fax:  (702) 966-4247

         with a copy to:

         Sullivan & Cromwell
         125 Broad Street
         New York, New York 10004
         Attention: John Evangelakos
         Fax:  (212) 558-3588

         3.6. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained written consent of Holders
owning in the aggregate at least 51% of the outstanding Registrable Securities
affected by such amendment, modification, supplement, waiver or departure. No
consent or waiver, express or implied, by a party in the performance by the
other party to or of any breach or default by the other party of its obligations
hereunder shall be deemed or construed to be a consent or waiver to or of any
other breach or default in the performance by such other party of the same or
any other obligations of such other party hereunder. The giving of consent by a
party in any one instance shall not limit or waive the necessity to obtain such
party's consent in any future instance. No waiver of any rights under this
Agreement shall be binding unless it is in writing signed by the party waiving
such rights.

         3.7. Severability. If any term or provision hereof or the application
thereof to any circumstance shall be held invalid or unenforceable, such term or
provision shall be ineffective but shall not affect in any respect whatsoever
the validity of the remainder of this Agreement; and the parties shall
immediately renegotiate such term or provision to eliminate such invalidity or
unenforceability, maintaining to the greatest extent permissible the spirit of
the Agreement as originally written.


                                       13



         3.8. Entire Agreement. This Agreement (together with the agreements
referenced herein) contains the entire understanding of the parties hereto with
respect to the subject matter contained herein, and supersedes and cancels all
prior agreements, negotiations, correspondence, undertakings and communications
of the parties, oral or written, respecting such subject matter. There are no
restrictions, promises, representations, warranties, agreements or undertakings
of any party hereto with respect to the matters contemplated hereby, other than
those set forth herein or made hereunder.

         3.9. 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 SECURITIES OR THE SUBJECT MATTER HEREOF. 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 3.9 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.

                       [Signatures on the following page.]



                                       14



         IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.



                                       STAR TELECOMMUNICATIONS, INC.



                                       By: /s/ Brett Messing
                                          --------------------------------------
                                          Name:  Brett Messing
                                          Title: Chairman & Chief Executive
                                                  Officer



                                       IDT INVESTMENTS INC.


                                       By: /s/ Jonathan Levy
                                          --------------------------------------
                                          Name:  Jonathan Levy
                                          Title: Treasurer

EX-99.6

                                                                       EXHIBIT 6

                                 IDT CORPORATION

                                520 BROAD STREET

                            NEWARK, NEW JERSEY 07102

                                                               January 21, 2001

PT-1 Communications Inc.
STAR Telecommunications, Inc.
223 East de La Guerra Street
Santa Barbara, California 93101
Attention: Brett Messing, Chief Executive Officer

Ladies and Gentlemen:

         This Agreement will confirm the results of our negotiations and our
mutual understanding regarding the transaction (the "Transaction") pursuant to
which IDT Corporation ("IDT") will acquire the Transferred Assets and assume the
Assumed Liabilities (each such term, as hereinafter defined) of PT-1
Communications Inc. ("PT-1"), a wholly owned subsidiary of Star
Telecommunications Inc. ("Star"), for a total purchase price of $1.00, on the
terms and subject to the conditions set forth herein.

         1. Definitive Agreements. It is the intention of the parties that this
Agreement shall be a binding and enforceable agreement with respect to the
matters described herein. Notwithstanding the foregoing, the parties intend to
enter into more complete documentation (the "Final Documentation") after the
date hereof which shall, among other things, modify the Transaction structure in
such manner as the parties may mutually agree in order to make such structure as
tax efficient as is practicable for all parties. Each of IDT and PT-1 shall
negotiate in good faith to cause the Final Documentation to be executed and
delivered by the parties as promptly as is practicable after the date hereof and
to reflect in all material terms the substantive provisions hereof. Upon the
execution and delivery of the Final Documentation, this Agreement shall be
deemed to be superseded in its entirety by the Final Documentation.

         2. Transferred Assets. The "Transferred Assets" will include, without
limitations, all of the assets of PT-1 relating to its debit card business (the
"Business"), including, without limitation:

     (a)  the PT-1, PT1, PT-I and PTI brand names and all other trademarks,
          copyrights, service marks, software, know-how and other intellectual
          property owned by or used in the Business, and any and all derivative
          forms thereof;

     (b)  all accounts receivable and other amounts owing to PT-1 (including,
          without limitation, all prepaid expenses) with respect to the Business
          as of the date upon which the Transaction is consummated (which date
          is expected to occur on or about February 1, 2001; the "Closing
          Date"); and





     (c)  other assets material to the Business (including, without limitation,
          intercompany agreements with Star, distributor agreements, and
          non-compete agreements in favor of PT-1), except (i) the switches and
          related switching infrastructure used in the Business and (ii) those
          which IDT in its sole discretion elects not to acquire.

The Transferred Assets shall be sold, transferred, conveyed and assigned free
and clear of any and all liens, pledges, security interests, encumbrances and
all other adverse claims of any kind or nature whatsoever, other than the
Assumed Liabilities.

         3. Assumed Liabilities. The "Assumed Liabilities" will include only the
deferred revenue (i.e., the unutilized minutes on phone cards then in
distribution) reflected on the balance sheet of PT-1 as of the Closing Date (as
hereinafter defined).

         4. Use of Name. (a) PT-1 hereby agrees to, unconditionally, irrevocably
and in perpetuity, relinquish to IDT all rights to, and cease the use of, the
names "PT-1", "PT1", "PT-I", "PTI" and any and all derivative forms thereof, as
well as to the trademarks, tradenames and other intellectual property relating
to each of the debit cards distributed by PT-1 (including, without limitation,
New York Millionaires, Hola Mexico and PT-1 Phonecard).

         (b) For a period of 6 months following the Closing Date, IDT shall
grant to Star a royalty-free, non-exclusive (and non-transferable) license to
use the PT-1 brand name solely in connection with the existing "dial-around"
business of PT-1; provided that PT-1 shall not take any action or permit to
exist with respect to its use of the PT-1 brand name any condition which could
impair the goodwill attached to such mark.

         5. Employees and Facilities. (a) During the period between the date
hereof and the Closing Date, IDT shall review the existing employees of the
Business and shall designate to PT-1 which (if any) of such employees IDT
desires to hire. PT-1 shall be solely responsible for any liabilities or
obligations relating to employee, severance pay, post-employment or retiree
benefits or compensation arrangements (including, without limitation, any and
all liabilities that may arise under the WARN Act) with respect to (i) all
employees of the Business who IDT does not so elect to hire, and (ii) any such
employees which IDT makes an offer of employment but which do not accept such
employment with IDT.

         (b) In the event that IDT so notifies PT-1 on or prior to the Closing
Date, PT-1 shall make available to IDT any facilities (or portions thereof)
utilized by PT-1 in the Business for the term requested by IDT (not to exceed
the term of PT-1's contractual rights on the date hereof) and at a price equal
to PT-1's actual direct cost (or the relevant pro rated portion thereof) for the
use of such facilities (or portions thereof); provided that, with respect to
PT-1's leased real property in Flushing, New York, PT-1 shall have the right to
terminate its lease at any time without liability to IDT and IDT's right of use
shall continue for only such period of time as PT-1 has rights to the property.

         6. Litigation Indemnity. IDT hereby agrees to indemnify PT-1 for PT-1's
liability relating to the items of litigation listed on Schedule A hereto (the
"Litigation Matters"); provided that (a) such liability is adjudicated pursuant
to final, irrevocable and unappealable


                                       2





judgment or fixed by binding settlement agreement, and PT-1's claim for
indemnity is made, within 120 days following the Closing Date hereof and (b) the
amount of IDT's aggregate liability for indemnity under this Section 6 shall not
exceed, with respect to each such item of litigation, the "Cap Amount" set forth
below opposite the title of such litigation:

                           Litigation Title                          Cap Amount
    ------------------------------------------------------------    ------------
    Peter Spano, Caroline Gugliemo and Teresa Davanzo v. Samer       $1,000,000
    Tawfik and PT-1 Communications, Inc.

    Godotsoft LLC v. PT-1 Communications, Inc. (f/k/a Phonetime,     $1,500,000
    Inc.) and STAR Telecommunications

    PT-1 v. Thomas Hickey                                            $2,500,000

To the extent that the liability for any of the Litigation Matters is finally
adjudicated or fixed by binding settlement agreement within such 120-day period
and the amount of IDT's indemnity liability owing hereunder is less than the Cap
Amount described above (the difference between the Cap Amount and IDT's
indemnity liability with respect to a Litigation Matter, the "Indemnitee
Balance"), IDT shall (in addition to such liability) pay to PT-1 in cash within
10 business days following request of PT-1, the amount equal to 50% of such
Indemnitee Balance. In the event that, with respect to any such Litigation
Matter, PT-1 does not satisfy the conditions to payment by IDT of its indemnity
hereunder (i.e., the liability is not fixed within 120 days), then IDT shall, at
PT-1's direction, pay to creditors of PT-1 the amount equal to 70% of the Cap
Amount with respect to each such unresolved Litigation Matter in respect of
amounts owing to such creditors and IDT's indemnity obligations with respect to
such Litigation Matter shall terminate. For the avoidance of doubt, it is
understood and agreed that (x) IDT shall not be liable to indemnify PT-1 for any
of its costs and expenses relating to any such Litigation Matter or to pay any
amounts with respect thereto in excess of the Cap Amount with respect to any
Litigation Matter and (y) any unutilized portion of the Cap Amount with respect
to any Litigation Matter may not be carried over and utilized with respect to
another Litigation Matter.

         7. Switch Services. Star agrees that, for a period of one year
following the Closing Date, PT-1 will charge IDT not more than the fair market
rate for termination of telecommunications traffic on or through any of the PT-1
switches that are presently used in the operation of the Business (including,
without limitation, use of the debit card platform to be transferred by PT-1 to
IDT pursuant to this Agreement until it is in full operation by IDT), and that
such rates will not include any administrative or related overhead charge for
the use of such switch (and platform). Notwithstanding the foregoing, PT-1 may
(upon not less than 60-days' prior written notice to IDT) sell, transfer,
otherwise convey or shut-down any such switch (or platform) at any time after
the date which is six months following the Closing Date and IDT's rights under
this Section 6 with respect to the relevant switch (and platform) will terminate
on the later of (a) the 60th day following written notice from PT-1 to IDT of
PT-1's intention to effect such sale, transfer, conveyance or shut-down and (b)
the date of such sale, transfer, conveyance or shut-down.


                                       3





         8. Deposit. (a) Within two business days following the date upon which
an escrow account is established with the law firm of Courter, Kobert, Laufer &
Cohen (or other escrow agent reasonably acceptable to the parties), IDT shall
deposit in such escrow account $4,000,000 in cash (the "Initial Deposit"), which
amount shall constitute a deposit for future termination services (as described
in clause (b) below). The Initial Deposit shall be released from escrow as
follows:

     (i)   on the Closing Date, the Initial Deposit promptly shall be paid by
           the escrow agent to PT-1;

     (ii)  in the event that this Agreement is terminated at the election of IDT
           following (A) the commencement of any bankruptcy, insolvency or
           similar proceeding of Star or PT-1, (B) failure of Star and PT-1 to
           obtain the consent of WorldCom, Inc. ("WorldCom") to the Transaction
           or (C) the imposition of an injunction or similar impediment to the
           occurrence of the Closing Date by any court of competent
           jurisdiction, the Initial Deposit promptly shall be paid by the
           escrow agent to IDT; and

     (iii) in the event that this Agreement is terminated for any other reason,
           the Initial Deposit promptly shall be paid by the escrow agent to
           PT-1.

Notwithstanding anything to the contrary contained herein, in the event that
this Agreement is terminated because of the effectiveness of the Final
Documentation, then the escrow agent shall retain the Initial Deposit in
accordance with the terms of the Final Documentation. The parties hereto hereby
agree that they shall use their best efforts to appoint an escrow agent as soon
as practicable following the date hereof.

         (b) On the Closing Date, IDT shall advance to Star $1,000,000 in cash
(the "Supplemental Deposit"; together with the Initial Deposit, the "Deposit"),
which amount (together with the Initial Deposit) shall constitute a deposit for
future termination services. At such times as IDT may request (which request
shall not be made more than once in each calendar month), Star shall make
available to IDT its domestic and international termination costs for each route
without any provision for corporate overhead, transport or switching costs
(i.e., the actual amount payable in cash by Star to its termination
counterparty). IDT then shall have the right to purchase from Star termination
over such routes as IDT elects at a price equal to such cost to Star (but
subject to any volume limitations imposed upon Star by such termination
counterparty). In the event that IDT purchases such termination from Star, IDT
shall pay to Star in cash (within 15 days after receipt of detailed invoice) the
amount equal to such cost and the Deposit shall be deemed to be utilized by the
amount equal to the difference between the price paid by IDT and IDT's own cost
for termination over such route (it being understood that, if IDT's own cost is
less than or equal to the price paid to Star, IDT may purchase such termination
from Star at Star's cost and the Deposit shall not be reduced on account of such
purchases). In the event that the Deposit is not reduced by $1,250,000 in any
period of three consecutive months, then Star shall make available to IDT, at no
cost to IDT, termination services (valued, with respect to the relevant route,
at either (x) a market rate to be mutually agreed upon or (y) in the absence of
any such agreement, the lowest of (1) the average of IDT and Star's cost, (2)


                                       4





WorldCom's rate or (3) Concert's rate) having an aggregate value equal to the
difference between $1,250,000 and the amount of the reduction during the
applicable three-month period. The provisions of this clause (b) shall remain in
full force and effect until the Deposit has been fully utilized.

         9. Conditions to Closing. (a) The obligations of IDT, Star and PT-1 to
consummate the Transaction will be subject to (i) complying with any applicable
regulations including, without limitation, expiration or termination of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "H-S-R Act"), and any applicable filings, approvals or
notifications with the Federal Communications Commission and any State public
utility commissions; provided that compliance with any applicable regulations
shall not impose any materially burdensome condition or restriction on IDT, and
(ii) receipt by PT-1 of the consent of WorldCom to the consummation of the
Transaction.

         (b) The obligation of IDT to consummate the Transaction will also be
subject to the following conditions, which may be waived by IDT in its sole
discretion:

     (i)   delivery by PT-1 to IDT of all third party consents that are material
           to the Business or to the consummation of the Transaction, including,
           without limitation, (A) any consents necessary to assign to IDT any
           of the Transferred Assets that, individually or in the aggregate, are
           material to the Business, free of burdensome conditions or
           restrictions;

     (ii)  the release by WorldCom and all other creditors of any liens or
           security interests encumbering any of the Transferred Assets;

     (iii) the absence of any material adverse change in the Business or of any
           event or series of events which, with the passage of time or the
           giving of notice, would reasonably be expected to cause such a
           material adverse change to exist;

     (iv)  the representations and warranties of Star and PT-1 set forth below
           being true and correct in all material respects as of the date hereof
           and as of the Closing Date;

     (v)   prior to the Closing Date, Star or PT-1 shall fail to operate the
           Business in all material respects in the manner in which it has been
           operated prior to the date hereof;

     (vi)  on the Closing Date, the gross receivables of PT-1 (exclusive of bad
           debt) included within the Transferred Assets shall not be less than
           $25,000,000 or the amount of deferred revenues of PT-1 comprising the
           Assumed Liabilities shall not exceed $33,000,000;

     (vii) IDT shall fail for any reason to be satisfied with the results of its
           due diligence investigation of the Business, the Transferred Assets
           and the Assumed Liabilities.


                                       5





Notwithstanding anything to the contrary contained herein, any litigation or
other actions taken by Counsel Communications LLC with respect to the
Transaction shall not relieve IDT of its obligation to consummate the
Transaction unless IDT is prohibited from closing the transaction as a result of
an injunction or similar order of a court of competent jurisdiction. In the
event of any such injunction or similar order, IDT shall not be obligated to
consummate the Transaction (and may terminate this Agreement) and may, at its
election, extend the termination date of this Agreement until 30 days after such
injunction or similar order is terminated. Star and PT-1 jointly and severally
agree to indemnify IDT and its officers, directors, advisors and affiliates for
any liability and expense incurred by them with respect to actions of Counsel
Communications LLC relating to the Business and the Transaction.

         (c) The obligation of PT-1 to consummate the Transaction will also be
subject to the condition, which may be waived by PT-1 in its sole discretion,
that the representations and warranties of IDT set forth below being true and
correct in all material respects as of the date hereof and as of the Closing
Date.

         10. Representations and Warranties. (a) Each of Star, PT-1 and IDT
hereby represents and warrants to the other parties hereto, as to itself (but
not as to any other party hereto), that:

     (i)   It is a corporation duly organized, validly existing and in good
           standing under the laws of its jurisdiction of incorporation, and has
           all requisite corporate power and authority to execute, deliver and
           perform this Agreement.

     (ii)  This Agreement has been duly authorized, validly executed and
           delivered by it, and constitutes a valid and binding agreement of
           such party, enforceable against it in accordance with its terms.

     (iii) The execution, delivery and performance of this Agreement by it does
           not (A) violate any existing provisions of its articles of
           incorporation, by-laws, or like instrument of such party or any of
           its affiliates, or any existing order or award of any court,
           arbitrator or governmental body or any statute, regulation or rule of
           law that is applicable to such party or any of its affiliates; or (B)
           result in a breach of, or conflict with, any of the terms or
           provisions of, or constitute a material default under, any material
           agreement, indenture or other instrument to which such party or any
           of its affiliates is a party or by which any property of such party
           or any of its affiliates is bound, other than, in the case of Star
           and PT-1, certain agreements with WorldCom.

     (iv)  There is no litigation, proceeding or investigation pending or
           threatened involving it or any of its affiliates or any of the
           properties of such party or any of its affiliates which could, if
           adversely determined, materially and adversely affect (A) the
           Business (other than litigation described to IDT in writing prior to
           the date hereof) or (B) the performance of such party's obligations
           under this Agreement or any agreement contemplated hereby.


                                       6





         (b) Star and PT-1 hereby represents and warrants to IDT, as to itself
(but not as to any other party hereto), that:

                  (i) Each of (A) the balance sheet of the Business as of
         December 31, 2000 (as provided to IDT on the date hereof) and (B) the
         statement of revenues of the Business for the period of 12 months ended
         on such date (as provided to IDT on the date hereof) presents fairly in
         all material respects, the financial position of the Business as of
         such date and its revenues for such period , in conformity with
         generally accepted accounting principles (as in effect on the date
         hereof); since January 1, 2001 no event or condition has occurred which
         has had a material adverse effect on the Business, other that (X) the
         termination by WorldAccess Inc. of its intended merger transaction with
         Star and (Y) the termination by Star of the sale of the assets and
         operations of PT-1 to Counsel Communications LLC.

                  (ii) PT-1 owns or leases or otherwise has the right to use all
         of the Transferred Assets and, after giving effect to the consummation
         of the Transaction, all Transferred Assets will be free and clear of
         liens, security interests and other encumbrances and will be free and
         clear of any covenants, conditions or restrictions that are
         inconsistent with the proper operation of the Business in accordance
         with past practice.

         (c) Each of Star and PT-1 hereby agrees to provide such other
representations and warranties in the Final Documentation which IDT may
reasonably request and which are customary or appropriate for a transaction of
this nature.

         11. Indemnification. Star and PT-1 (jointly and severally) shall
indemnify IDT and hold it harmless from and against any losses arising out of,
based upon or caused by, (i) breaches of Star's or PT-1's representations,
warranties and covenants set forth herein and (ii) liabilities not included in
the Assumed Liabilities, and IDT shall indemnify each of Star and PT-1 and hold
it harmless from and against any losses arising out of, based upon and caused
by, breaches of IDT's representations, warranties and covenants set forth
herein. The representations and warranties of Star, PT-1 and IDT shall survive
until the second anniversary of the Closing Date. Any claim for indemnification
hereunder shall be limited to direct damages, such that no party shall have any
liability hereunder for any consequential, special, punitive or other damages
hereunder.

         12. Inspection and Access to Information. During the period from the
date hereof through the Closing Date, (a) PT-1 and Star shall permit access to,
and shall make available to IDT's representatives and their counsel for
inspection and review, the properties, books, records (including tax records),
accounts, and documents of or relating to the Business, the Transferred Assets,
the Assumed Liabilities and Star and (b) IDT shall be entitled to place one or
more employees, agents or advisors at the offices of PT-1 and Star to conduct
such diligence as is reasonably determined by IDT to be appropriate for the
Transaction and each of PT-1 and Star shall make available to IDT all personnel
and information with respect to PT-1, Star, the Business, the Transferred Assets
and the Assumed Liabilities as from time to time may be requested by such
employees, agents and advisors.


                                       7





         13. Expenses. Each party hereto shall pay its own expenses (including,
without limitation, fees and disbursements of counsel) incurred in connection
with the fulfillment of its respective obligations and the preparation,
negotiation and execution of the Final Documentation.

         14. Approvals; Governmental Filings. From and after execution of this
Agreement, each of PT-1, Star and IDT shall (a) use its respective best efforts
to obtain any consents and approvals from governmental or regulatory authorities
and other third parties required to consummate the Transaction and (b) cooperate
in the preparation and filing of any required governmental or regulatory
notices.

         15. Publicity. This Agreement and its terms and the transactions
contemplated hereby shall be kept confidential until the parties hereto mutually
agree upon the language and timing of a press release or until such time as one
such party determines, based upon the advice of counsel, that a public
announcement is required by law, in which case the parties hereto shall in good
faith attempt to agree on any public announcements or publicity statements with
respect thereto. IDT hereby agrees to cooperate with Star in preparing and
releasing a press release with respect to the Transaction promptly upon the
request of Star.

         16. No Assignment. Neither Star nor PT-1 may assign this Agreement or
any of their rights hereunder without the prior written consent of IDT. IDT may
not assign this Agreement or any of its rights hereunder, except to a subsidiary
of IDT, without the prior written consent of Star and PT-1; upon any such
assignment by IDT, IDT shall be fully released from all obligations hereunder
and shall cease to be a party hereto. Any purported assignment which does not
comply with the foregoing provisions of this Section 12 shall be null and void.
This Agreement shall be binding upon each of the parties hereto and their
respective permitted successors and assigns.

         17. Termination. This Agreement may be terminated without any
continuing obligation by either party hereto (a) by the mutual agreement of
Star, PT-1 and IDT at any time, (b) by the appropriate party, in the event that
(i) the conditions described in Section 9 (other than Section 9(a)) are not
satisfied on or prior to April 30, 2001 (or, prior to such date, IDT shall not
be satisfied for any reason with the results of its due diligence investigation
in accordance with Section 9(b)(vii)) and the party who is not obligated to
satisfy such condition so elects or (ii) the other party has breached any of its
material obligations under this Agreement and the non-breaching party so elects
or (c) by IDT, in the event that the condition described in Section 9(a) has not
been satisfied on or prior to April 30, 2001 and IDT so elects.

         18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW JERSEY. WITH RESPECT TO ANY
SUIT, ACTION OR PROCEEDING INITIATED BY A PARTY TO THIS AGREEMENT ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE PARTIES HERETO HEREBY SUBMIT
TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE STATE
OF NEW JERSEY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION THAT THEY MAY NOW HAVE OR HEREAFTER OBTAIN TO THE LAYING OF VENUE IN
ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.


                                       8





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

         20. Non-Compete. Each of Star and PT-1 hereby agrees that, for a period
of three years following the Closing Date, it will not (a) engage, directly or
indirectly, in the prepaid phone card or debit card business in the United
States, Central America, South America, Asia or Europe or (b) own more than 5%
of the outstanding equity securities of any entity engaging in such business in
any such region.

         21. Notices. All notices to be given herein shall be effective upon
receipt and shall be in writing and delivered personally or by recognized
delivery service or mailed, first class mail, postage prepaid or given by
telegram, telecopy or other similar means (followed with a confirmation by mail)
to the parties, as the case may be, at the following address or such other
address as may hereafter be designated, in writing, by the respective party in
accordance with this paragraph:

         IDT:           IDT Corporation
                        520 Broad Street
                        Newark, New Jersey
                        Attention:  Motti Lichtenstein
                        Fax: (973) 438-1503

         PT-1/Star:     Star Telecommunications, Inc.
                        223 East de La Guerra Street
                        Santa Barbara, California 93101
                        Attention: Brett Messing
                        Fax: (805) 884-1137

         22. No Waiver. No consent or waiver, express or implied, by a party in
the performance by the other party to or of any breach or default by the other
party of its obligations hereunder shall be deemed or construed to be a consent
or waiver to or of any other breach or default in the performance by such other
party of the same or any other obligations of such other party hereunder. The
giving of consent by a party in any one instance shall not limit or waive the
necessity to obtain such party's consent in any future instance. No waiver of
any rights under this Agreement shall be binding unless it is in writing signed
by the party waiving such rights.

         23. Severability. If any term or provision hereof or the application
thereof to any circumstance shall be held invalid or unenforceable, such term or
provision shall be ineffective but shall not affect in any respect whatsoever
the validity of the remainder of this Agreement; and the parties shall
immediately renegotiate such term or provision to eliminate


                                       9





such invalidity or unenforceability, maintaining to the greatest extent
permissible the spirit of the Agreement as originally written.

         If the foregoing terms and conditions are acceptable to you, please so
indicate by signing in the space provided below and returning to us an executed
original.

                                         Very truly yours,

                                         IDT CORPORATION


                                         By: /s/ Howard S. Jonas
                                             --------------------------------
                                             Name:  Howard S. Jonas
                                             Title: Chief Executive Officer
                                                    and Chairman of the Board
                                                    of Directors

Agreed to and Accepted:

STAR TELECOMMUNICATIONS, INC.


By: /s/ Brett Messing
    -------------------------------
    Name:  Brett Messing
    Title: Chairman & Chief Executive Officer

PT-1 COMMUNICATIONS INC.


By: /s/ Brett Messing
    -------------------------------
    Name:  Brett Messing
    Title: Chairman & Chief Executive Officer


                                       10





                                                                    SCHEDULE A


                                   LITIGATION

1.   Peter Spano, Caroline Gugliemo and Teresa Davanzo v. Samer Tawfik
     and PT-1 Communications, Inc.
     -----------------------------------------------------------------


Filed in the Supreme Court of the State of New York for the County of Richmond.
The plaintiffs allege that PT-1 is a successor corporation to a prior company
owned by the plaintiffs and Tawfik and that Tawfik promised them 60% of PT-1.
Defendants' Summary Judgment motion was denied during the summer of 2000. At
pre-trial conference in December 2000, the parties' settlement positions were
not even close. Case is scheduled for trial in February 2001.

2.   Godotsoft LLC v. PT-1 Communications, Inc. (f/k/a Phonetime, Inc.) and
     STAR Telecommunications.
     ----------------------------------------------------------------------

Filed on April 9, 1999 in the Superior Court of New Jersey, Essex County.
Pursuant to a license agreement, Godotsoft licenses (Joe Pannullo's
organization) to PT-1 certain software code, documentation and related
technology to be utilized in on-line rating and billing systems for certain
international long distance services, including prepaid calling cards and dial
around services. Plaintiff is suing the defendants for anticipatory breach and
breach of the license agreement between Godotsoft and PT-1 and for breach of the
duty of good faith and fair dealing. Plaintiff has requested judgment against
the defendants for an unspecified amount of damages and punitive damages and
seeks preliminary and permanent injunctive relief prohibiting the defendants
from any further use, exploitation or development of the licensed software and
requiring that they return all copies of the software, derivative works and
related products to the plaintiff. The case is currently in discovery, with a
cut off date of 1/19/01. STAR is filing a motion for SJ (to get STAR out), a
cross complaint for breach of fiduciary duties, for soliciting employees and
stealing trade secret info.

3.   PT-1 v. Thomas Hickey.
     ----------------------

This is a special appraisal proceeding filed in the Supreme Court of the State
of New York for the County of Queens in February 2000 to determine the fair
value of the stock of PT-1 held by Hickey. The case was commenced by PT-1 by
notice of petition following Hickey's election to dissent from the merger
between STAR and PT-1 and demand for payment for the fair value of the PT-1
shares held by Hickey. On September 11, 2000 the court denied Plaintiff's motion
for a preliminary injunction and vacated the temporary restraining order. Hickey
lost his motions for both a temporary restraining order to halt the distribution
of the proceeds from the sale of PT-1 to Counsel Communications, his motion (in
Federal Court) to attach the assets of the sale and his effort to impose a
priority lien vis-a-vis WorldCom. Hickey has reopened settlement negotiations in
light of STAR's failure to merge with WAXS and the termination of the Counsel
transaction.


                                       11

EX-99.7

                                                                       EXHIBIT 7


                             JOINT FILING AGREEMENT,
                          DATED AS OF FEBRUARY 11, 2001


         In accordance with Rule 13d-1(k)(1) under the Securities Exchange Act
of 1934, as amended, the undersigned hereby agree to the joint filing of IDT
Investments Inc., IDT Corporation and Howard S. Jonas on behalf of each of them
of a statement on Schedule 13D (including amendments thereto) with respect to
shares of Common Stock, par value $0.001 per share, of STAR Telecommunications,
Inc., and that this Agreement be included as an Exhibit to such joint filing.
This Agreement may be executed in any number of counterparts all of which taken
together shall constitute one and the same instrument.

         IN WITNESS WHEREOF, the undersigned hereby execute this Agreement this
11th day of February 2001.


                               IDT INVESTMENTS INC.


                               By:   /s/ Howard Millendorf
                                  --------------------------------------------
                                     Howard Millendorf
                                     President


                               IDT CORPORATION


                               By:  /s/ Howard S. Jonas
                                  -------------------------------------------
                                     Howard S. Jonas
                                     Chief Executive Officer and
                                        Chairman of the Board of Directors


                               /s/ Howard S. Jonas
                               ----------------------------------------------
                               Howard S. Jonas