8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 11, 2006

IDT CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-16371	22-3415036
(State or other jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

520 Broad Street Newark, New Jersey	07102
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (973) 438-1000

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01. Completion of Acquisition or Disposition of Assets.

On September 7, 2006, IDT Corporation (the “Registrant) and its subsidiary IDT Dutch Holdings BV (“Dutch Holdings”) entered into a conditional Share Sale and Purchase Agreement (the “Agreement”) for the sale of the Registrant’s U.K.-based Toucan consumer phone services business (“Toucan business”) to Pipex Communications plc (“Pipex”). Pursuant to the terms of the Agreement, Pipex is assuming Toucan’s existing customer base and those employees supporting Toucan’s operations. The parties subsequently amended the Agreement to provide that the consideration is to consist of £4 million in Pipex ordinary shares and the repayment in cash of £20 million of obligations due by the Toucan business to the Registrant and certain of its affiliates. A copy of the amendment is annexed hereto as Exhibit 2.2. Consummation of the sale of the majority of the Toucan business occurred on October 11, 2006. The sale of the remainder of the Toucan business, a call center in Sligo, Ireland that supports the U.K. business, is expected to take place following receipt of applicable regulatory approvals and satisfying certain customary closing conditions. On October 12, 2006, the Registrant issued a press release regarding the consummation of the sale of the majority of the Toucan business, a copy of which is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

Item 7.01. Regulation FD Disclosure.

On October 12, 2006, the Registrant issued a press release announcing the consummation of the sale of the majority of the Toucan business described in Item 2.01 above. The press release is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of such section, nor shall such information be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(b) Proforma Financial Information

(d) Exhibits

2.1	Share Sale and Purchase Agreement by and among the Registrant, Dutch Holdings and Pipex dated September 7, 2006. (Incorporated by reference to the Form 8-K, filed September 13, 2006)
2.2	Amendment Agreement, dated October 11, 2006, related to Share Sale and Purchase Agreement, dated September 7, 2006

99.1 Press Release issued by the Registrant, dated October 12, 2006.

IDT CORPORATION

INDEX TO UNAUDITED PROFORMA INFORMATION

	Page
Proforma Condensed Consolidated Financial Statements - Basis of Presentation	F-2
Proforma Condensed Consolidated Balance Sheet as of July 31, 2006	F-3
Proforma Condensed Consolidated Statement of Operations for the year ended July 31, 2006	F-4
Proforma Condensed Consolidated Statement of Operations for the year ended July 31, 2005	F-5
Proforma Condensed Consolidated Statement of Operations for the year ended July 31, 2004	F-6
Notes and Management’s Assumptions to Proforma Condensed Consolidated Financial Information	F-7

F-1

IDT CORPORATION

PROFORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BASIS OF PRESENTATION

(unaudited)

The proforma condensed consolidated balance sheet as of July 31, 2006, and the proforma condensed consolidated statements of operations for the three years in the period ended July 31, 2006, are based on the historical financial statements of the Registrant.

The proforma condensed consolidated balance sheet as of July 31, 2006, is presented as if the disposition of the Toucan business and receipt of the proceeds by the Registrant as described in item 2.01 of this Form 8-K occurred in its entirety on July 31, 2006. As set forth in Item 2.01 of this Form 8-K, as of October 11, 2006, the first stage of such disposition has been consummated.

The proforma condensed consolidated statements of operations for the three years in the period ended July 31, 2006, are presented as if the disposition of the Toucan business and receipt of the proceeds by the Registrant as described in Item 2.01 of this Form 8-K occurred on November 1, 2003, on which date the Registrant launched the Toucan business. The proforma condensed consolidated financial statements should be read in conjunction with the historical financial statements and notes related thereto appearing in the Registrant’s Annual Reports on Form 10-K for the fiscal years ended July 31, 2006, 2005 and 2004.

Preparation of the proforma information was based on assumptions considered appropriate by the Registrant’s management. The proforma financial information is unaudited and is not necessarily indicative of the results which would have occurred if the transactions described above had been consummated on November 1, 2003 for the proforma condensed consolidated statements of operations and on July 31, 2006 for the proforma condensed consolidated balance sheet, nor does it purport to represent the future financial position and the results of operations for future periods. In management’s opinion, all adjustments necessary to reflect the effects of the transactions listed above have been made.

F-2

IDT CORPORATION

PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of July 31, 2006

(in thousands, except share data)

(unaudited)

	Historical		Adjustments					Proforma
Assets
Current assets:
Cash and cash equivalents	$	119,109	$	37,362		(A	)	$	156,471
Marketable securities		395,713		8,069		(A	)		403,782
Trade accounts receivable, net		185,125		(5,428	)	(B	)		179,697
Other current assets		106,319		(6,897	)	(B	)		99,422
Assets of discontinued operations		436,905							436,905
Total current assets		1,243,171							1,276,277
Property, plant and equipment, net		292,152		(1,654	)	(B	)		290,498
Goodwill		105,577							105,577
Licenses and other intangibles, net		27,445							27,445
Investments		46,855							46,855
Other assets		47,639							47,639
Total assets	$	1,762,839						$	1,794,291
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable	$	82,327		(7,257	)	(B	)		75,070
Accrued expenses		260,087		(3,866	)	(B	)		256,221
Deferred revenue		134,286		(1,216	)	(B	)		133,070
Capital lease obligations—current portion		18,940							18,940
Other current liabilities		42,312		(2,224	)	(B	)		40,088
Liabilities of discontinued operations		141,860							141,860
Total current liabilities		679,812							665,249
Deferred tax liabilities, net		107,106							107,106
Capital lease obligations—long-term portion		32,122							32,122
Notes payable—long-term portion		90,370							90,370
Other liabilities		6,850							6,850
Total liabilities		916,260							901,697

Minority interests		43,227						43,227
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.01 par value; authorized shares—10,000,000; no shares issued		—						—
Common stock, $.01 par value; authorized shares— 100,000,000; 25,074,860 shares issued; 15,178,173 shares outstanding		251						251
Class A common stock, $.01 par value; authorized shares—35,000,000; 9,816,988 shares issued and outstanding		98						98
Class B common stock, $.01 par value; authorized shares—100,000,000; 76,879,179 shares issued; 71,402,204 shares outstanding		768						768
Additional paid-in capital		901,067						901,067
Treasury stock, at cost, consisting of 9,896,687 shares of common stock, and of 5,476,975 shares of Class B common stock		(220,169	)					(220,169	)
Accumulated other comprehensive income		1,496						1,496
Retained earnings		119,841		46,015	(C	)		165,856
Total stockholders’ equity		803,352						849,367
Total liabilities and stockholders’ equity	$	1,762,839					$	1,794,291

F-3

IDT CORPORATION

PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED JULY 31, 2006

(in thousands, except per share data)

(unaudited)

	Historical			Adjustments					Proforma
Revenues	$	2,226,422			(68,225	)	(D	)	$	2,158,197
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization)		1,779,980			(41,490	)	(D	)		1,738,490
Selling, general and administrative		556,161			(44,388	)	(D	)		511,773
Depreciation and amortization		87,422			(625	)	(D	)		86,797
Restructuring and impairment charges		23,646								23,646
Total costs and expenses		2,447,209								2,360,706
Loss from operations		(220,787	)							(202,509	)
Interest income, net		9,416			565		(D	)		9,981
Investment and other income, net		7,284								7,284
Loss from continuing operations before minority interests and income taxes		(204,087	)							(185,244	)
Minority interests		(16,177	)							(16,177	)
Provision for income taxes		(2,576	)		(3,946	)	(D	)		(6,522	)
Loss from continuing operations	$	(222,840	)						$	(207,943	)
Basic and diluted loss per share from continuing operations	$	(2.32	)						$	(2.17	)
Weighted-average number of shares used in calculation of basic and diluted loss per share from continuing operations		96,028								96,028

F-4

IDT CORPORATION

PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED JULY 31, 2005

(in thousands, except per share data)

(unaudited)

	Historical			Adjustments					Proforma
Revenues	$	2,221,985		$	(43,129	)	(D	)	$	2,178,856
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization)		1,700,866			(25,064	)	(D	)		1,675,802
Selling, general and administrative		533,076			(41,278	)	(D	)		491,798
Depreciation and amortization		93,631			(418	)	(D	)		93,213
Restructuring and impairment charges		34,212								34,212
Total costs and expenses		2,361,785								2,295,025
Loss from operations		(139,800	)							(116,169	)
Interest income, net		20,575			436		(D	)		21,011
Investment and other income, net		71,454								71,454
Loss from continuing operations before minority interests and income taxes		(47,771	)							(23,704	)
Minority interests		(2,639	)							(2,639	)
Provision for income taxes		(6,317	)							(6,317	)
Loss from continuing operations	$	(56,727	)						$	(32,660	)
Basic and diluted loss per share from continuing operations	$	(0.58	)						$	(0.34	)
Weighted-average number of shares used in calculation of basic and diluted loss per share from continuing operations		97,049								97,049

F-5

IDT CORPORATION

PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED JULY 31, 2004

(in thousands, except per share data)

(unaudited)

	Historical			Adjustments					Proforma
Revenues	$	2,066,815		$	(2,342	)	(D	)	$	2,064,473
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization)		1,586,343			(2,070	)	(D	)		1,584,273
Selling, general and administrative		464,363			(4,573	)	(D	)		459,790
Depreciation and amortization		93,795			(32	)	(D	)		93,763
Restructuring and impairment charges		58,220								58,220
Total costs and expenses		2,202,721								2,196,046
Loss from operations		(135,906	)							(131,573	)
Interest income, net		23,512			(14	)	(D	)		23,498
Gain on sale of subsidiary stock		9,418								9,418
Investment and other income, net		37,145								37,145
Loss from continuing operations before minority interests and income taxes		(65,831	)							(61,512	)
Minority interests		(33,728	)							(33,728	)
Benefit from income taxes		30,798								30,798
Loss from continuing operations	$	(68,761	)						$	(64,442	)
Basic and diluted loss per share from continuing operations	$	(0.78	)						$	(0.73	)
Weighted-average number of shares used in calculation of basic and diluted loss per share from continuing operations		87,920								87,920

F-6

IDT CORPORATION

NOTES AND MANAGEMENT’S ASSUMPTIONS

TO THE PROFORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following is a description of the proforma adjustments to the historical condensed consolidated financial statements:

(A) The increase in cash and cash equivalents and marketable securities represent the proceeds from the sale of the Toucan business. Cash of the Toucan business on July 31, 2006, in the amount of $7.7 million was retained by the Registrant and was not included in the disposition.

(B) Reflects the removal of assets and liabilities of the Toucan business as if the sale was consummated on July 31, 2006.

(C) Retained earnings has been adjusted for an estimated increase of $46.0 million from the sale of the Toucan business as if the sale occurred on July 31, 2006.

(D) Reflects the removal of the results of operations of the Toucan business as if the sale was consummated on November 1, 2003.

F-7

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

IDT CORPORATION
By:	/s/ Marcelo Fischer
	Name: Marcelo Fischer
	Title: Chief Financial Officer and Treasurer

Dated: October 16, 2006

EXHIBITS INDEX

Exhibit Number	Description
2.1	Share Sale and Purchase Agreement among the Registrant, Dutch Holdings and Pipex dated September 7, 2006. (Incorporated by reference to the Form 8-K, filed September 13, 2006)
2.2	Amendment Agreement, dated October 11, 2006, related to Share Sale and Purchase Agreement, dated September 7, 2006
99.1	Press Release issued by the Registrant, dated October 12, 2006.

EX-2.2

Amendment Agreement
relating to a Share Sale and Purchase Agreement dated 7 September 2006
Dated	11 October 2006
IDT Dutch Holdings BV (1)
Pipex Communications plc (2)
IDT Corporation (3)

TABLE OF CONTENTS

1	Introduction	1
2	Agreement	1
3	Payment of Trade Debts	5
7	Counterparts	6
8	Variation	6
9	Severance	6
10	Governing law	6
11	Jurisdiction	6

	DATE	11 October 2006
	PARTIES
(1)	IDT DUTCH HOLDINGS BV (a company incorporated in The Netherlands) whose registered office is at Van Vollenhovenstratt 3, 3016 BE Rotterdam, The Netherlands (the “Seller");
(2)	PIPEX COMMUNICATIONS PLC (a company incorporated in England and Wales with company number 3974683) whose registered office is at 1 Triangle Business Park, Stoke Mandeville, Buckinghamshire, HP22 5BL (the “Buyer”); and
(3)	IDT CORPORATION (a company incorporated in the State of Delaware, United States of America) whose headquarters are at 520 Broad Street, Newark NJ07102, United States of America (the ”Guarantor”).

1          Introduction

1.1       The Seller, the Buyer and the Guarantor are together the parties to a conditional share purchase agreement dated 7 September 2006 relating to the sale and purchase of the entire issued share capital of IDT Direct Limited (the “Share Purchase Agreement”).

1.2       The parties now wish to amend the Share Purchase Agreement as set out below in this Deed.

1.3       Except where a different interpretation is necessary in the context, the words and expressions used in this Agreement shall have the same meaning as those used in the Share Purchase Agreement.

2         Agreement

2.1       Each of the Buyer, the Seller and the Guarantor hereby agree that the Share Purchase Agreement be amended as follows:

(a)                the definition of “Cash Consideration” be deleted;

(b)                the definition of “Trademark and Domain Name Assignment” be deleted;

(c)                the following new definitions be inserted in clause 1:

“Assignment of Generic Domain Names” the agreement relating to the assignment of certain generic domain names entered into between the Company (1) and the Guarantor (2) of the same date as this Agreement

“Licence relating to Trademarks and Domain Names” the agreement relating to the exclusive licence of certain trademarks and Domain Names between the Company (1), IDT Direct Ireland Limited (2) and the Guarantor (3) of the same date as this Agreement

“Outstanding Intra-Group Debts” £20,000,000, being the amount of all debts outstanding between the Company and the members of the Seller’s Group immediately before Completion (as set out in Part A of Schedule 10) to be repaid by the Company at Completion in accordance with clause 6.3(a).”

(d)                the following definitions at clause 1 be amended:

“IDT England NCL” by deleting the definition of this term and inserting in its place a new definition consisting of the words “the aggregate amount, at the close of business on 30 September 2006, by which the current liabilities of IDT England exceed the aggregate amount, at the close of business on 30 September 2006, of the current assets of IDT England calculated in accordance with the Accounting Instructions”.

“IDT Ireland NCL” by deleting the definition of this term and inserting in its place a new definition consisting of the words “the aggregate amount, at the close of business on 30 September 2006, by which the current liabilities of IDT Ireland exceed the aggregate amount, at the close of business on 30 September 2006, of the current assets of IDT Ireland calculated in accordance with the Accounting Instructions”.

“Claim” by inserting after the words “other provision hereunder” the words “but excluding for the avoidance of doubt any adjustment to the Consideration required in accordance with clause 8”.

“Completion Accounts” by inserting after the words “the IDT England Completion Accounts” the words “and the IDT Ireland Completion Accounts”

“Guarantee” by deleting the numbers “37.1(a)” and “37.1(b)” and replacing them respectively with the numbers “38.1(a)” and “38.1(b)”

“IDT Ireland Shares” by deleting each of the numbers “1” and replacing each of them with the number “1,250,001”

“Customer Determination Date” by deleting the words “6 September, being”

(e)                clause 3.1 be amended by (i) deleting “£24,000,000” on the first line and inserting “£4,000,000” in its place; (ii) deleting the letter “(a)” and the word “and” at the end of sub-clause (a); and (iii) deleting sub clause (b).

(f)                clause 4.1(b) be amended by deleting (i) the comma after “(5)” and inserting the word “and” in its place; (ii) the words “the Trademark and Domain Name Assignation” and inserting the words “Assignment of Generic Domain Names” in its place and (iii) the words “and the IDT Ireland Share Purchase Agreement” and inserting the words “Licence relating to Trademarks and Domain Names” in its place on the fourth line of this clause.

(g)                In clause 6.3(a) the words are deleted and replaced with:

“procure the payment by the Company, by the delivery to the Seller’s Solicitors of an electronic transfer of £20,000,000, being the amount of, and paid by the Company in satisfaction of, the Outstanding Intra-Group Debts.”

(h)                clause 6.3 be amended by (i) deleting the words appearing in sub-clause (d) of clause 6.3 and inserting the words “procure the delivery to the Seller of the counterpart of the Supplementary Disclosure Letter duly signed by the Buyer” in their place, (ii) deleting sub-clause (i) of clause 6.3 in its entirety and re-numbering clause 6.3(j) accordingly and (iii) inserting the words “(or, as the case may be, by such Affiliate of the Buyer as is party to it)” after the words “duly signed by the Buyer” in each of sub-clauses (e), (f) and (i) (as renumbered) of clause 6.3.

(i)                a new clause 6.6 be inserted as follows:

“The Seller shall within 7 Business Days of the Completion Date deliver to the Buyer a legal opinion of Stibbe (or other Dutch counsel reasonably acceptable to the Buyer) in a form reasonably acceptable to the Buyer, which opinion shall (i) contain reasonable or customary limitations, exceptions, qualifications and factual assumptions, and (ii) address, inter alia, the following matters (but in the precise language chosen by the issuing counsel):

(a) that each of the Seller’s Completion Documents have been validly entered into by the Seller and represent binding obligations upon it enforceable in accordance with their terms;

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(b) that the entry into and consummation of the Seller’s Completion Documents will not conflict with or breach the Seller’s articles of association or equivalent constitutional documents;

(c) that the entry into and consummation of the Seller’s Completion Documents does not require any filing with, or the obtaining of any permit, authorisation, consent or approval of, any governmental or regulatory authority of The Netherlands;

(d) that no consents, approvals, authorisations or licences are required to be obtained by the Seller from, and no registrations or filings are required to be made by the Seller with, any governmental or other authority or agency in The Netherlands in connection with the entry into and consummation of the Seller’s Completion Documents;

(e) that the Seller is not subject to any insolvency events; and

(f) that the Seller is a company duly incorporated in The Netherlands and validly existing with limited liability under the laws of The Netherlands.”

(j)                a new clause 6.7 be inserted as follows:

“6.7 The Seller shall following Completion take all reasonable action to facilitate the resignation of the auditors of the Company in accordance with section 392 of the Companies Act 1985 within 14 days of Completion”

(k)                Clause 8.6 be amended by inserting the words “or Customer Determination Date (as applicable)” after the words “Accounts Determination Date”.

(l)                a new clause 10.16 be inserted as follows:

“10.16 Notwithstanding any other provision of this Agreement, the parties agree that, to the extent that any of the Warranties contain any statement as to the value of the tax assets of the Company, such Warranties shall be deemed to relate to such value as at 30 September 2006 and not as at Completion.”

(m)                clause 18.1 be amended by inserting the words “and the deed of amendment to be entered into between the parties immediately prior to Completion (the “Deed of Amendment”)” after the words “incorporated in it” and before the words “constitute the” on the first line.

(n)                clause 18.3 be amended by inserting the words “, the Deed of Amendment” after the words “Tax Deed” and before the words “or in any other” on the first line.

(o)                a new clause “24 Grossing up” be inserted as follows:

“If Taxation is payable on any sum paid by the Seller or the Guarantor under this Agreement and/or the Tax Deed, the sum otherwise so payable shall be grossed up by such amount as will ensure that, after payment of any Taxation charged on or in respect of such payment, there shall be left a sum equal to that which would otherwise be payable under this Agreement and/or the Tax Deed.”

(p)                a new clause “25 Period between 1 October and Completion” be inserted as follows:

“25.1 The Seller shall procure that the bank account of the Company shall at Completion contain cleared funds in pounds Sterling in an amount (the “Required Amount”) at least equal to the sum of the following:

(a) all cash received by the Company (save for any sum lent to the Company by any member of the Seller’s Group) in the period from 1 October 2006 to the Completion Date (inclusive); less

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(b) all cash paid by the Company to creditors (other than to BT plc or its Affiliates and other than any sum paid to any member of the Seller’s Group) in the period from 1 October 2006 to the Completion Date (inclusive).

The current non-binding estimate of the amount of the Required Amount is £1,148,333 less £2,345 (being the sterling equivalent of €3,470), as derived from the table set out in Part B of Schedule 10. The parties acknowledge that the Company shall have paid £1,588,232 plus £2,345 (being the sterling equivalent of €3,470) to the Guarantor or an Affiliate of the Guarantor prior to Completion.

25.2 In the event of any dispute as to the amount of the Required Amount, such matter shall be deemed to be a “Disputed Matter” and shall be referred to an Independent Accountant for determination and the provisions of paragraphs 3.5 to 3.9 of Schedule 6 shall apply mutatus mutandis as regards the determination by the Independent Accountant of the Required Amount. If the Required Amount as so determined by the Independent Accountant is greater than the relevant amount held in the Company’s bank account at Completion as referred to in clause 25.1, then the Seller shall pay to the Buyer in cash an amount equivalent to such difference within 3 Business Days of the date that the Independent Account determines the Required Amount.”

(q)                clauses 24 “Effect of Completion” to and including clause 37 “Execution” be re-numbered as clauses 26 “Effect of Completion” to and including clause 39 “Execution” and all cross references in the current clauses (i) 29 “Notices” and 4.4 to the number “29” be substituted with the number “31”; and (ii) 36 “Guarantee and indemnity” to the number 36 be substituted with the number “38”.

(r)                Part 2 of Schedule 2 be amended by (i) inserting the word “Company” after the words “secretary of the” in paragraph 7, (ii) deleting the words appearing in paragraph 8 and inserting the words “Evidence of the authority of those persons who have signed the Telemarketing Agreement on behalf of IDT Global Israel Limited” in its place, (iii) deleting the words appearing in paragraph 9 and inserting the words “The Assignment of Generic Domain Names duly signed by all parties to the agreement” in its place, (iv) deleting the words appearing in paragraph 17 and inserting the words “Licence relating to Trademarks and Domain Names duly signed by all parties to the agreement” in its place, (v) deleting the words appearing in paragraph 19 and inserting the words “Duly signed letters in the agreed form in respect of the waiver of certain indebtedness owed by and to the Company to and from members of the Seller’s Group,” (vi) inserting the words “(other than the Buyer)” after the words “to the agreement” in each of paragraphs 15, 16 and 18 and (vii) inserting a new paragraph 21 with the words “A copy of the minutes of a meeting of the directors of each of the Seller and the Guarantor authorising the execution by the appropriate signatories on behalf of the Seller and the Guarantor (as appropriate) of such agreements as the Seller and/or the Guarantor are to become party at Completion as provided in this Agreement (such copy minutes being certified as accurate by the company secretary of the Seller and the Guarantor (as appropriate)).”.

(s)                In Schedule 4 a new paragraph 23.6 shall be inserted as follows:

Obligations of the Company

23.6The only obligations in the nature of indebtedness owing from the Company to any member of the Seller’s Group at Completion are (i) set out in Part A of Schedule 10, and (ii) in respect of trade debts arising in the ordinary course of business between 1 September 2006 and the Completion Date (which, for the avoidance of doubt, do not exceed £678,534 and the actual amount of which will be included in the IDT England NCL).

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23.7As far as the Seller is aware, other than as provided for in paragraph 23.6 of this Schedule 4, the only obligations owing from the Company to any member of the Seller’s Group are those in respect of the Facilities Transition Agreement, the Telemarketing Agreement, the Systems Transition Agreement, the International Calls Termination Agreement, the Licence relating to Trademarks and Domain names and the Assignment of Generic Domain Names.

(t)   the Warranties contained in Schedule 4 shall be deemed to be amended and qualified to reflect (i) the obligations contemplated by this Agreement and (ii) (A) the waiver of amounts owed by and to the Company and from members of Seller’s Group (in the net amount of £8,827,255 of forgiveness of obligation owed by the Company), and (B) the payment of an obligation in the amount of £2,003,096 by IDT Global Limited to the Company and the payment of an obligation in such amount from the Company to IDT Global Limited, prior to Completion and any agreements entered into in connection therewith (the “Waiver of Debt”), including without limitation, those Warranties contained in clauses 4, 9.1 and 23.2 of Schedule 4 to the Share Purchase Agreement. For the avoidance of doubt, such Warranties shall be deemed to be amended and qualified without the need for express amendment in the Disclosure Letter.

(u)                paragraph 4.2 of Schedule 4 be amended by substituting the number “12.3” in place of “11.2” on the third line.

(v)                paragraph 9.1(h) of Schedule 4 be amended by deleting the words “[insert amount]” and inserting in their place the words “£25,000”.

(w)                in relation to Schedule 6: (i) the word “completion” in paragraph 2.1 of Schedule 6 be deleted and replaced with the words “30 September 2006”, (ii) the words “Completion Date” in paragraph 2.2 be deleted and replaced with the words “30 September 2006”, (iii) paragraph 2.4 of Schedule 6 be interpreted in light of the revised definitions of “IDT England NCL” and “IDT Ireland NCL” as set out in paragraph 2.1(d) above, and (iv) a new paragraph 2.5 of Schedule 6 be inserted as follows: “2.5 Any deferred tax asset shall not be included as an asset in the Completion Accounts or otherwise taken into account in their preparation” provided however, that in connection with the preparation of the Completion Accounts an amount for the deferred tax assets as of 30 September 2006 shall be prepared and agreed upon by the parties.”

(x)                there shall be added to Share Purchase Agreement a new Schedule 10 in the form appearing at Schedule 1 to this Agreement.

(y)                the words appearing below the heading “Customers” in Schedule 7 shall be deleted and there shall be inserted in their place the words appearing in Schedule 2 to this Agreement.

3                Payment of Trade Debts

The Buyer shall procure the payment by the Company and/or IDT Direct Ireland Limited (as the case may be), of the trade debts owing to members of the Seller’s Group that are included in the Completion Accounts.

4                Payment of Outstanding Intra-Group Debts

For the avoidance of doubt, the obligation to pay the Outstanding Intra-Group Debts in accordance with clause 6.3(a) of the Share Purchase Agreement (as amended) is an obligation of the Company and not the Seller, and the Buyer shall procure that the Company is put in funds in order to be able to meet this obligation.

5                Target NCL

The parties agree that the IDT England NCL Target shall be £(1,399,997) and that the IDT Ireland NCL Target shall be £(112,436).

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6                Completion

The parties acknowledge that the Conditions are satisfied and that Completion shall accordingly take place in accordance with the terms of the Share Purchase Agreement forthwith after execution of this Agreement.

7                Counterparts

This Agreement may be executed in any number of counterparts, each of which shall constitute an original, and all the counterparts shall together constitute one and the same agreement.

8                Variation

Any variation of this Agreement or of any of the documents referred to in it is valid only if it is in writing and signed by or on behalf of each party.

9                Severance

If any provision of this Agreement is held to be invalid or unenforceable by any judicial or other competent authority, all other provisions of this Agreement will remain in full force and effect and will not in any way be impaired.

10                Governing law

This Agreement is governed by and is to be construed in accordance with English law.

11                Jurisdiction

Save as otherwise expressly provided in this Agreement, the parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute which may arise out of or in connection with this Agreement.

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SIGNED and delivered as a deed by IDT DUTCH HOLDINGS BV acting by:
	/s/ Douglas Mauro Director
	/s/ Pongchand Permsuvan Director

SIGNED and delivered as a deed by PIPEX COMMUNICATIONS PLC acting by:
	/s/ Peter Dubens Director
Stewart Porter	/s/ Stewart Porter Director / Secretary

SIGNED and delivered as a deed by IDT CORPORATION acting by:
	/s/ Marcelo Fischer - CFO Director
	_____________________ Director

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EX-99.1

IDT Corporation Completes Sale of U.K.-Based Toucan Consumer Phone Services Business to Pipex Communications plc

Newark, N.J., October 12, 2006 - IDT Corporation (NYSE: IDT, IDT.C) today announced that it has closed its previously announced sale of IDT’s U.K.-based Toucan consumer phone services business to Pipex Communications plc (AIM: PXC.L) for £20m in cash and £4m in Pipex stock.

About IDT

IDT Corporation is an innovative and opportunistic multinational holding company with operations that span various industries. Through its Telecom subsidiary, IDT provides telecommunications services worldwide to the retail and wholesale markets. IDT's Capital division incubates newer businesses, and the company's Spectrum subsidiary holds its spectrum license assets. IDT Telecom provides retail and wholesale telecommunications services and products, including pre-paid and rechargeable calling cards, consumer local, long distance, and wireless phone services, and wholesale carrier services. Through Net2Phone, the company also provides a range of voice over Internet protocol (VoIP) communications services. IDT Capital's operations include an Energy Services Company (ESCO) in New York State, ethnic food distribution, brochure distribution and other initiatives. IDT Corporation's Class B Common Stock and Common Stock trade on the New York Stock Exchange under the ticker symbols IDT and IDT.C, respectively.

About Pipex

Pipex is a multiple award-winning provider of integrated telecommunications and Internet services. With a broad customer base including small/home-offices and blue chip companies, Pipex provides a comprehensive range of consumer, business and corporate voice, broadband, security domain name registration and shared and dedicated hosting solutions. Pipex’s focus is simple: enabling businesses and consumers to achieve their aspirations through proven communications services and emerging technologies. This is achieved through an extensive portfolio of high-speed Internet connectivity, managed services and hosting, security and voice products - combining exceptional performance, innovation and a commitment to customer service.

Owning one of the UK’s most extensive communication networks, Pipex boasts more than 100 Points of Presence (PoPs) nationwide. In addition, state-of-the-art data centres, which are manned and monitored 24x7, ensure the security of Pipex’s customers’ business critical applications. Its commitment to investing in its technology infrastructure ensures that Pipex continues to deliver the most scalable, resilient, secure and reliable services.

Contact:
IDT Corporation:	Investor Relations
Gil Nielsen	Yossi Cohn
973-438-3553	973-438-3858

Pipex Communications plc:

Chairman

Peter Dubens

+44 20 7766-6909

Financial Dynamics (financial PR)

Juliet Clarke / Edward Bridges / Hannah Sloane

+44 20 7831 3113