IDT AUSTRALIA LIMITED — Proxy Solicitation & Information Statement 2014

Nov 9, 2014

IDT AUSTRALIA LIMITED ABN 66 006 522 970

Notice of Extraordinary General Meeting And Explanatory Memorandum

11 December 2014

ABN 66 006 522 970

IDT AUSTRALIA LIMITED

Notice of Extraordinary General Meeting

Notice is given for a General Meeting of the Company to be held at 45 Wadhurst Drive, Boronia, Victoria, 3155 at 10.00 am on Thursday, 11 December 2014.

AGENDA

Business

Resolution 1: - Approval of Share Placement

To consider, and if thought fit, to pass the following resolution as an ordinary resolution :

“That for the purposes of ASX Listing Rule 7.1 and for all other purposes, the Directors are authorised to issue and allot up to 100 million ordinary shares in the Company to sophisticated and professional investors, at an issue price of $0.15 per share to raise up to $15 million and otherwise on the terms set out in the attached Explanatory Statement.”

Resolution 2: Participation of Reo Shigeno in the Placement

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

"That subject to the passing of Resolution 1, for the purpose of Listing Rule 10.11 and for all other purposes, Shareholders approve and authorise the Directors to issue and allot Shares on the same terms and conditions as the other participants in the Placement to Reo Shigeno (or his nominee) of up to 333,333 Shares."

Resolution 3: Participation of David Williams in the Placement

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

"That subject to the passing of Resolution 1, for the purpose of Listing Rule 10.11 and for all other purposes, Shareholders approve and authorise the Directors to issue and allot Shares on the same terms and conditions as the other participants in the Placement to David Williams (or his nominee) of up to 333,333 Shares."

Resolution 4: Approval of Shares to be issued under Share Purchase

Plan

“That subject to the passing of Resolution 1, for the purposes of ASX Listing Rule 7.1, and for all other purposes, the Directors are authorised to issue and allot up to 20,000,000 ordinary shares in the Company to existing shareholders of the Company, at an issue price of $0.15 per share to raise up to $3.00 million pursuant to the terms of a Share Purchase Plan and otherwise on the terms set out in the attached Explanatory Statement.”

By order of the Board Joanna Johnson and David Sparling Joint Company Secretaries 7 November 2014

Explanatory Notes

Snapshot Date

For the purposes of voting at this meeting, the directors have determined that all shares of the Company that are quoted securities at 10 am (Melbourne time) on 9 December 2014 are taken to be held by the persons who are registered as holding them at that time. The entitlement of members to vote at the meeting will be determined by reference to that time.

Questions and Comments

The Chairman will give Shareholders a reasonable opportunity to ask questions about or comment on the resolutions.

Proxies

A member entitled to vote may vote their shares directly by completing Step 2 on the enclosed Proxy Form and returning the Proxy Form as indicated below. In this case a member is not appointing a proxy. Members voting directly should complete a "for" or "against" for each resolution. A vote of "abstain" for a direct vote will result in the Shares represented by that vote not counting towards a majority vote. If no direction is given for a particular resolution and no proxy appointed, the vote will be passed to the Chairman of the meeting to vote as that member's undirected proxy.

If you are entitled to vote at the meeting you have the right to appoint a proxy to attend and vote in your place. To appoint a proxy you should complete the first section of Step 1 on the attached Proxy Form. The proxy need not be a Shareholder of the Company. If you are entitled to cast 2 or more votes you may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise.

If the proxy appointments do not specify the proportion or number of your votes that each proxy may exercise, each proxy may exercise half your votes. If there is more than one proxy appointed, on a show of hands only one of the proxies may vote, but on a poll, each proxy may exercise votes in respect of those shares the proxy represents.

The Chairman intends to vote all undirected proxies in favour of the resolutions put in the Notice of Meeting.

Please Note:

• (a) if a member has not directed their proxy how to vote, the proxy may vote as the proxy determines, and

• (b) if a member appoints the Chairman of the Meeting as proxy and does not direct the Chairman how to vote on an Item of Business, the Chairman will vote in accordance with his voting intention as stated in this Notice of Meeting, namely in favour of each of the proposed resolutions set out in the Notice of Meeting.

Proxy forms must be received by Link Market Services Limited no later than 10.00am (AEDT) on 9 December 2014. Proxy forms may be lodged using the reply paid envelope or:

Online:

www.linkmarketservices.com.au

Login to the Link website using the holding details as shown on the Proxy Form. Select ‘Voting’ and follow the prompts to lodge your vote. To use the online lodgement facility, shareholders will need their “Holder Identifier” (Security holder Reference Number (SRN) or Holder Identification Number (HIN) as shown on the front of the Proxy Form).

By mail:

IDT Australia Limited c/~ Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia Share Registry Telephone +61 1300 554 474

By Fax:

(02) 9287 0309 (from within Australia) +61 2 9287 0309 (from outside Australia)

By hand:

Delivering it to Link Market Services Limited 1A Homebush Bay Drive, Rhodes NSW 2138 or Level 12, 680 George Street Sydney NSW 2000

A proxy form accompanies this Notice of General Meeting. Additional proxy forms are available on request from the registered office of the Company or its share registrar.

Bodies Corporate

A body corporate may appoint an individual as a representative to exercise all or any of the powers the body corporate may exercise at meetings of a company’s shareholders or in the capacity of a shareholder’s proxy. The appointment may be a standing one. Unless otherwise specified in the appointment, the representative may exercise, on the body corporate’s behalf, all of the powers that the body could exercise at a meeting or in voting on a resolution.

IDT AUSTRALIA LIMITED

ABN 66 006 522 970

Explanatory Memorandum

This Explanatory Memorandum has been prepared for the information of shareholders of the Company in connection with the business to be conducted at the Extraordinary General Meeting of Shareholders to be held at 10.00 am, 11 December 2014.

IDT Australia Limited ACN 006 522 970 (the Company or IDT ) on 3 November 2014 announced that it had entered an agreement to purchase the ANDAs (as described in more in section 1.1 below) and subject to IDT shareholder approval the Company is intending to undertake:

• (a) an underwritten placement of 100,000,000 fully paid ordinary shares in the capital of IDT ( Placement Shares ) being issued at $0.15 per Share; and

• (b) a share purchase plan pursuant to which shareholders are invited to subscribe for up to $15,000 each in Shares at an issue price per Share the same as the Placement Shares are being issued ( Share Purchase Plan or SPP ).

1. Resolution 1: Placement of Shares

1.1 Introduction – Proposed Issue of Placement Shares and Share Purchase Plan

The Company on 3 November 2014 entered into an asset purchase agreement ( Purchase Agreement ) for the acquisition of a group of 23 Abbreviated New Drug Applications as described below ( ANDAs ) and seeks shareholder approval to allow the placement ( Placement ) of up to 100 million fully paid ordinary shares to sophisticated and professional investors to raise up to $15 million for the payment of the purchase price pursuant to the Purchase Agreement.

An ANDA is a generic drug application which has been submitted and approved by the US FDA's Center for Drug Evaluation and Research, Office of Generic Drugs; which provides for the review and ultimate approval of a generic drug product. Once approved an ANDA drug product can then be manufactured and marketed to the US public as a lower cost alternative / generic to the innovator or original approved drug product. They are described as "abbreviated" because they are generally not required to include preclinical (animal and in vitro ) and clinical (human) trial data to establish safety and effectiveness. Instead, applications for a generic ANDA must scientifically demonstrate that their product is bioequivalent (i.e., performs in the same manner as the innovator drug).

It is a condition of completion of the purchase ( Completion ) that the Company receives prior shareholder approval to the issue of the Placement Shares upon the terms described in this Notice of Meeting.

The proposed issue of the Placement Shares is fully underwritten by Wilson HTM Corporate Finance Ltd ACN 057 547 323 ( Underwriter ).

If Completion pursuant to the Purchase Agreement does not occur for any reason, then the Placement Shares will not be issued, even if this Resolution has already been passed.

The accompanying Notice of Meeting and this Explanatory Memorandum relates to the proposed issue of the Placement Shares and accompanying Share Purchase Plan.

1.2 Overview

Subject to IDT shareholder approval, the Company is seeking approval to issue up to 100 million Shares to sophisticated and professional investors introduced by the Underwriter ( Potential Investors ) in order to raise $15 million at $0.15 per Share ( Placement ).

This Placement is fully underwritten by the Underwriter pursuant to the terms of a written underwriting agreement dated 3 November 2014 ( Underwriting Agreement ). Pursuant to the Underwriting Agreement, the Company appoints the Underwriter as lead manager and underwriter to, in conjunction with the Company, invite Potential Investors to subscribe for Placement Shares and arrange, manage and market the Placement. A summary of the Underwriting Agreement appears in Annexure A to this Explanatory Memorandum.

If Shareholders do not approve this Resolution, the Underwriter will not proceed with the Placement and Completion will not take place pursuant to the Purchase Agreement.

As at the date of this Explanatory Memorandum the issued capital of the Company is as follows:

Number of Shares on issue as at the date of this 77,734,248 Information Memorandum

Proposed issue of Placement Shares to 100,000,000 sophisticated and professional investors Proposed issue of Share Purchase Plan to 20,000,000 Eligible Members

Total number of Shares on issue after the 197,734,248 Placement and SPP (assuming full subscription under the SPP)

ASX Listing Rule 7.1 prohibits a company from issuing or agreeing to issue equity securities which amounts to more than 15% of its ordinary securities in a rolling 12 month period without the prior approval of its shareholders or otherwise as permitted by the ASX Listing Rules.

The Company therefore seeks shareholder approval for the issue of the Placement Shares (which is the subject of this Resolution).

1.3 R egulatory background – ASX Listing Rule 7.1

ASX Listing Rule 7.3 sets out the regulatory requirements that must be satisfied in relation to the issue of Placement Shares under this Resolution.

The Company intends to issue up to 100 million Shares at an issue price of A$0.15. This number of Shares exceeds its entitlement to issue shares pursuant to Listing Rule 7.1 without prior shareholder approval.

ASX Listing Rule 7.3 requires that a notice of meeting pursuant to which Shareholders are requested to consider approving an issue of shares pursuant to ASX Listing Rule 7.1 must include certain specified information in relation to the securities to be issued. This information is set out below:

(a) maximum number of securities to be issued:

100 million Shares

(b) date which the securities are to be issued

The Placement Shares are to be issued as soon as practical after the later of IDT shareholder approval of this Resolution and the Board of IDT has agreed to proceed with the acquisition of the ANDAs pursuant to the Purchase Agreement, and if so, in any case within 3 months of the date of this IDT shareholder approval (or such later date to the extent permitted by any waiver that may be granted by ASX).

(c) issue price of the securities:

A$0.15 per Share

(d) names of the allottee/s (if known):

The names of the allottees of Placement Shares are unknown at this stage. The Placement Shares will be issued and allotted to Proposed Investors introduced by the Underwriter to whom disclosure pursuant to Chapter 6D of the Corporations Act is not required, as determined by IDT in conjunction with the Underwriters.

(e) terms of the securities:

Fully paid ordinary shares in the capital of the Company.

(f) the intended use of the funds raised:

The funds raised from the issue of the Placement Shares will only be used to fund the Company's acquisition of certain assets (a group of 23 Abbreviated New Drug Applications) if the Board of Directors of the Company agrees upon the terms of, and decides to proceed with, the acquisition pursuant to the Purchase Agreement. If Completion does not occur under the Purchase Agreement, the Placement Shares will not be issued and no funds will be raised.

1.4 Financial considerations

(a) Financial position of IDT: before and after the Share Placement

IDT's Net Asset position of $25.551m as at 30 June 2014 will be improved by a further $15m (less costs of the capital raising) following the Share Placement.

(b) IDT tax considerations

The Share Placement will have no impact on IDT’s tax position.

1.5 Advantages of the Placement

The Board is of the view that the proposed Placement has significant potential advantages, including the following:

• Facilitates the Company purchasing the ANDAs;

• With the purchase and re-launch of these ANDA products, IDT will become a manufacturer and wholesaler of its own suite of generic drug products;

• Manufacturing of these ANDA drug products in the Company’s FDA certified Melbourne facility will materially increase the utilisation of fixed plant along with improving the Company’s, sales and margins; and

• Improving the Company’s capital position.

1.6 Disadvantages of the Placement

The Board is of the view that the proposed Placement has limited disadvantages, including the following:

• Risk associated with the integration of the ANDA drug products in to IDT’s Melbourne manufacturing facility;

• Regulatory risk associated with the FDA approving the Company’s efforts to recommercialise these ANDA products; and

• The issue of Placement Shares will result in dilution of existing shareholders holdings.

• 1.7

IDT Board Recommendation

IDT shareholders should seek their own financial and taxation advice concerning the proposed Share Placement having regard to the information contained in this Explanatory Memorandum.

The price of A$0.15 is equivalent to a 31% discount to the 5 day volume weighted average price of the Company's shares prior to the trading halt on Tuesday 28 October 2014. However, in the view of the Board this is an acceptable discount given the substantial funds to be raised at one time and under the current market conditions.

The Board unanimously recommends that shareholders vote in favour of this Resolution . If Resolution 1 is not approved by shareholders, Resolutions 2, 3 and 4 will be withdrawn at the Meeting.

1.8

Voting exclusions – Resolution 1

Pursuant to ASX Listing Rules 7.3 and 14.11.1, IDT will disregard any votes cast on this Resolution by:

• any person who may participate in the proposed issue pursuant to this Resolution; and

• an associate of that person (or those persons).

However, IDT need not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

2. Resolutions 2 and 3: Directors' participation in the Placement

2.1 Background

The Participating Directors wish to participate in the Placement on the same terms as the other participants. The extent of each Participating Director's participation is described in Resolution 2 (in respect of Reo Shigeno, or his associates) and Resolution 3 (in respect of David Williams or his associates) is subject to Shareholder approval in each case. The participation of the Participating Directors in the Placement are not interdependent and there may be circumstances where the Company issues Placement Shares to none of or only one of Messrs Reo Shigeno and David Williams.

2.2 ASX Listing Rules

ASX Listing Rule 10.11 provides that a listed company must not, without the approval of ordinary shareholders, issue equity securities to a related party. A "related party" (as defined in the ASX Listing Rules) includes the directors of the listed company.

ASX Listing Rule 10.13 requires that the notice in relation to a proposed resolution to approve an issue of securities to a related party, include the following information:

(a) name of the Directors

The Placement Shares described in Resolutions 2 and 3 will be issued and allotted to:

• (i) Reo Shigeno (or his associates or nominees) (in respect of Resolution 2); and

• (ii) David Williams (or his associates or nominees) (in respect of Resolution 3).

(collectively, Participating Directors ).

(b) maximum number of securities to be issued

The maximum number of Placement Shares to be offered to each of the Participating Directors will be in aggregate 666,666, issued:

(i) up to 333,333 Placement Shares to Reo Shigeno (in respect of Resolution 2),

(ii) up to 333,333 Placement Shares to David Williams (in respect of Resolution 3)

Any Placement Shares issued as a result of Resolutions 2 or 3 being passed will be issued at the same price and on the same terms and conditions (as noted above in in Resolution 1) as those Placement Shares issued to other participants under the Placement.

Where not approved, the Placement Shares which are subject of Resolutions 2 and 3 will be within the number of the Placement Shares that may be issued pursuant to the Underwriting Agreement and placed to other sophisticated and professional investors determined by the Company and the Underwriter.

(c) date which the securities are to be issued

The Placement Shares described in Resolutions 2 and 3 will be issued within 1 month of the date of this Meeting (or such later date to the extent permitted by any waiver that may be granted by ASX), and they are to be issued at the same time as the other participants in the Placement which is expected to occur within that period.

(d) issue price of securities

A$0.15 per Share

(e) terms of the securities:

Fully paid ordinary shares in the capital of the Company

(f) intended use of funds

The funds raised from the issue of the Placement Shares (under Resolutions 2 and 3) will only be used to fund the Company's acquisition and integration of certain assets (a group of 23 Abbreviated New Drug Applications) pursuant to the intended use of funds detailed in Resolution 1.

2.3 Chapter 2E Corporations Act:

Under the Corporations Act, the provision of any financial benefit to a related party requires shareholder approval in accordance with the procedure set out in Part 2E.1 of that Act, unless one of a number of exceptions applies. Part 2E.1 of the Corporations Act applies to the issuance of securities to a related party. A “related party” (as defined in the Act) includes the Directors of the Company.

With respect to Resolutions 2 and 3 relating to the issuance of Placement Shares to the Participating Directors as the Placement Shares are being issued on the same terms as other participants under the Placement, the Board is of the view that the Placement Shares to be issued meets the "arm's length terms" criteria of Section 210 of the Corporations Act. According, the Board considers that the "arm's length" exemption applies in these circumstances and shareholder approval is not being sought for the purpose of Chapter 2E of the Corporations Act.

2.4 Resolution 2 – IDT Board Recommendation

The Board (excluding Reo Shigeno) unanimously recommends that shareholders vote in favour of Resolution 2 .

2.5 Resolution 3 – IDT Board Recommendation

The Board (excluding David Williams) unanimously recommends that shareholders vote in favour of Resolution 3 .

2.6 Resolution 2– Voting Exclusion Statement

For the purposes of ASX Listing Rule 10.13.6, the Company will disregard any votes cast on Resolution 2 by:

• (i) Reo Shigeno; and

(ii) any associate of Reo Shigeno.

However, the Company need not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• It is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

2.7 Resolution 3– Voting Exclusion Statement

For the purposes of ASX Listing Rule 10.13.6, the Company will disregard any votes cast on Resolution 3 by:

• (i) David Williams; and

• (ii) any associate of David Williams.

However, the Company need not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• It is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

3. Resolution 4: Approval of Shares to be issued under Share Purchase Plan

3.1 Background

As announced on 3 November 2014, the Board is seeking shareholder approval to issue Shares pursuant to a Share Purchase Plan ( SPP ). The SPP, in summary, comprises:

• (a) Under the SPP, Eligible Members who held IDT Limited shares at 7.00pm, Melbourne time on 31 October 2014 ( Record Date ), will be able to purchase up to $15,000 worth of new fully paid ordinary shares in the Company ( SPP Shares ), with a closing date being 15 December 2014 ;

• (b) This offer pursuant to the Plan ( Offer ) is irrespective of the number of Shares an Eligible Member currently holds;

• (c) The SPP Shares are being offered exclusively to Eligible Members of the Company at the price, and on the terms, described in the Terms & Conditions set out in Annexure B ( Terms and Conditions );

• (d) Subscription under the SPP will be at the same price as under the Placement, namely $0.15 per Share;

• (e) It is proposed that up to 20,000,000 SPP Shares will be issued under the Plan (a raise target of approximately $3.0 million). Any over subscriptions will be scaled back on a pro rata basis.

The SPP is not underwritten. If Resolution 1 is not approved by shareholders, this Resolution 4 will be withdrawn at the Meeting.

ASX Listing Rule 7.1 prohibits a company from issuing or agreeing to issue equity securities which amounts to more than 15% of its ordinary securities in a rolling 12 month period without the prior approval of its shareholders or otherwise as permitted by the ASX Listing Rules. An exception to this 15% limit is a share purchase plan under ASX Listing Rule 7.2 Exception 15. However, as this Share Purchase Plan does not meet the criteria set out in Exception 15, shareholder approval is being sought under Listing Rule 7.1.

3.2 Regulatory Requirements – ASX Listing Rule 7.1

ASX Listing Rule 7.3 sets out the regulatory requirements that must be satisfied in relation to the issue of SPP Shares pursuant to the SPP.

The Company seeks intends to issue up to 20 million SPP Shares at an issue price of A$0.15. This number of Shares exceeds its entitlement to issue shares pursuant to Listing Rule 7.1 without prior shareholder approval.

ASX Listing Rule 7.3 requires that a notice of meeting pursuant to which Shareholders are requested to consider approving an issue of shares pursuant to ASX Listing Rule 7.1 must include certain specified information in relation to the securities to be issued. This information is set out below:

(a) maximum number of securities to be issued:

20 million SPP Shares

(b) date which the securities are to be issued

The SPP Shares are to be issued as soon as practical after the Issue Date described in the Terms and Conditions, but in any case within 3 months of the date of this IDT shareholder approval (or such later date to the extent permitted by any waiver that may be granted by ASX)

(c) issue price of the securities:

A$0.15 per Share

(d) names of the allottee/s (if known):

The names of the allottees of SPP Shares are unknown at this stage. The Placement Shares will be issued and allotted to those Eligible Shareholders who subscribe for SPP Shares pursuant to the Terms and Conditions.

(e) terms of the securities:

Fully paid ordinary shares in the capital of the Company

(f) the intended use of the funds raised:

The funds raised from the SPP will be used to fund the integration of the ANDA drug products in IDT’s Melbourne manufacturing facility and for working capital.

Listing Rule 7.3.8 normally also requires the Company to include a voting exclusion statement that would have the effect of excluding 'any person who may participate in the proposed issue pursuant to this Resolution' from voting on this Resolution. As all shareholders may participate in the SPP, the ASX has granted a waiver from compliance with the requirement to exclude the shareholders from voting on this Resolution.

In addition, as shareholder approval is being obtained for the SPP itself pursuant to this Resolution, the ASX has also granted the Company a waiver from compliance with Listing Rule 10.11 which would have otherwise required the Company to also seek separate shareholder approval with respect to each director who wished to participate in the SPP (on the same terms as all other shareholders) with respect to the Shares that director (and their associates) owned as at the Record Date.

3.3 Financial considerations

(a) Financial position of IDT: before and after the SPP

IDT's Net Asset position of $25.551m as at 30 June 2014 will be improved by a further $3m (less costs of the capital raising) following the SPP (and excluding the effect of the Share Placement).

(b) IDT tax considerations

The SPP will have no impact on IDT’s tax position.

4. Further information

The Directors are not aware of any other information which is relevant to the consideration by members of the proposed resolutions set out in the notice of general meeting.

The Directors recommend members read these explanatory notes in full and, if desired, seek advice from their own independent financial or legal adviser as to the effect of the proposed resolutions before making any decision in relation to the proposed resolutions.

Annexure – Glossary

Definitions

The following definitions are used in the Notice of Meeting and the Explanatory Memorandum: ASX means ASX Limited ACN 008 624 691.

ASX Listing Rules means the Listing Rules of the ASX as amended from time to time.

Board means the board of Directors of the Company.

Company means IDT Australia Limited ABN 66 006 522 970.

Corporations Act or Act means the Corporations Act 2001 (Cth).

Director means a director of the Company.

Explanatory Memorandum means the explanatory memorandum attached to this Notice.

Extraordinary General Meeting / EGM means the extraordinary general meeting of the Company to be held on 11 December 2014 pursuant to the Notice of Meeting.

Meeting means the general meeting the subject to this Notice.

Notice of Meeting or Notice means this notice of extraordinary general meeting.

Placement has the meaning as defined in the Explanatory Memorandum.

Placement Shares means a Share issued under the Placement.

Placement Underwriter has the meaning as defined in section 1.1 of the Explanatory Memorandum.

Resolution means the resolution referred to in the Notice of Meeting.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of a Share.

Underwriter means Wilson HTM Corporate Finance Ltd ACN 057 547 323.

Annexure A - Underwriting Agreement Summary

Underwriting

Pursuant to an underwriting agreement dated 3 November 2014 between the Company and the Underwriter (Wilson HTM Corporate Finance Ltd) ( Underwriting Agreement ), the Underwriter has agreed to underwrite the Placement of 100 million shares at $0.15 each to raise $15million ( Underwritten Amount ). Under the terms of the Underwriting Agreement the Company will pay the Underwriter, for its role as lead manager and Underwriter, a lead manager fee of 1% on the Underwritten Amount plus an underwriting fee equal to 4% on the Underwritten Amount (plus any applicable GST).

In addition, the Company must pay, indemnify and keep indemnified, the Underwriter for all costs incurred by the Underwriter in connection with the Placement, including legal fees and disbursements and the reasonable costs of travel and accommodation, marketing, communications and associated costs. The Company has given warranties and covenants to the Underwriter, and indemnified the Underwriter against any Losses incurred by the Underwriter (as defined in the Agreement) which are usual in an agreement of this nature.

Conditions

The obligations of the Underwriter under Underwriting Agreement are subject to conditions (each a Condition ), including:

• (a) the passing of a resolution at a general meeting of the members of the Company in accordance with Listing Rules 7.1 and 7.3 of the ASX Listing Rules approving the issue of the Placement Shares; and

• (b) the Company signing an asset purchase agreement relating to the purchase by the Company of the assets comprising the Acquisition ( Purchase Agreement ); and

• (c) the completion of the acquisition under the Purchase Agreement ( Transaction ) occurring, upon and subject only to completion of the Placement.

The Company undertakes for a period of 60 days after the issue of Placement Shares not to allot or agree to allot (or indicate that it will do so) any shares in the Company or other securities which are convertible into or exchangeable or contain the right to acquire shares in the Company, without the prior written consent of the Underwriter (other than pursuant to this Placement, the Share Purchase Plan, an employee share plan or a bonus share plan already in existence.

Warranties and Indemnities

The Company has provided the Underwriter with warranties that are typical for transactions such as this underwriting, including in relation to the Company's power and authority to enter the Underwriting Agreement; the validity of the shares that would be issued should the Placement proceed; the Company's compliance with applicable securities laws; disclosure of information and events affecting the business.

The Company indemnifies the Underwriter for all liabilities it incurs relating to or arising from the engagement of the Underwriter under the Underwriting Agreement, except to the extent the liability arises from the Underwriter's fraud, wilful misconduct or gross negligence. The Company also releases the Underwriter from all claims that the Company may have otherwise been able to make against the Underwriter as a result of the participation of the Underwriter in the Placement, except to the extent the Claim arises from the Underwriter's fraud, wilful misconduct or gross negligence.

Termination Events of Underwriter

If any of the following events occurs prior the issue date of the Placement Share ( Issue Date ), then the Underwriter may terminate its obligations under the Underwriting Agreement at any time before the Issue Date by giving written notice to the Company.

• (a) The remaining above conditions are not satisfied, or waived by the Underwriter (in its absolute discretion), by 19 December 2014.

• (b) An above Condition becomes incapable of satisfaction and the parties agree that the condition cannot be satisfied.

• (c) The Company withdraws any part of the Placement.

• (d) Any event specified in the timetable included in the Underwriting Agreement ( Timetable ) is delayed for more than 3 business days due to the acts of the Company without the prior written approval of the Underwriter.

• (e) Any director or employee of the Company is charged with a criminal offence, or a director of the Company is disqualified from managing a corporation under the Corporations Act.

• (f) ASX does any of the following:

• (i) announces that the Company will be removed from the official list of ASX or Shares will be suspended from quotation;

• (ii) removes the Company from the official list; or

• (iii) suspends the trading of Shares for any period of time, other than any trading halt or suspension made in accordance with the Timetable.

• (g) The Company is in default of any of the terms of the Underwriting Agreement that has, or is likely to have, a material adverse effect upon the success of the Placement or a representation or warranty by the Company is or becomes misleading or deceptive or is or becomes false or incorrect.

• (h) A change in the senior management or in the board of directors of the Company occurs.

• (i) Any one of the following occurs:

• (i) the Company is or states that it is unable to pay its debts as and when they fall due; or it fails to comply with a statutory demand;

• (ii) any step being taken towards:

  • A. the appointment of a liquidator, provisional liquidator, administrator, receiver, receiver and manager or other similar official in relation to, or to any property of, the Company; or

  • B. the Company being wound up or dissolved or entering into a scheme, moratorium, composition or other arrangement with, or to obtain protection from, its creditors or any class of them or an assignment for the benefit of its creditors or any class of them;

• (iii) circumstances existing which would permit a presumption of insolvency in relation to the Company under section 459C(2) of the Corporations Act, or

• (iv) anything analogous or having a substantially similar effect occurring in relation to the Company (or any member of the Company's group).

• (j) The S&P/ASX 200 Index falls by an amount that is 10% or more on any two consecutive trading days of the level of that index at the close of trading on the day before the date of the Underwriting Agreement.

• (k) ASIC issues or threatens to issue proceedings in relation to the Placement or commences, or threatens to commence any inquiry or investigation in relation to the Placement.

• (l) There is a material adverse change, or there is a development involving a prospective material adverse change, in the financial position, results, operations or prospects of the Company.

(m) There occurs, in the Underwriter’s bona fide opinion, any adverse change or disruption to the political conditions or financial markets of Australia, or the international financial markets or any change or development involving a prospective material adverse change in national or international political, financial or economic conditions, the effect of which makes it impractical (in the bona fide opinion of the Underwriter) to proceed with the issue or enforce contacts to issue the Placement Shares.

• (n) Subject to the Materiality provisions below, any of the following occurs.

• (i) There is introduced into, or contemplated by, into the Parliament of Australia, or any State in Australia, any law or prospective law:

  • A. that is reasonably expected to adversely affect investors in the Company; or

  • B. which does or is likely to prohibit, restrict, regulate or otherwise affect the Placement, capital issues or stock markets.

• (ii) There is an outbreak or escalation of hostilities in any part of the world, whether war has been declared or not, or an act or acts of terrorism, involving one or more of any one or more of Australia, United States or United Kingdom, Indonesia, China, Japan, New Zealand, South Korea, North Korea, and any member country of the European Union.

• (iii) A general moratorium on commercial banking activities in Australia, United States or United Kingdom is declared by the relevant central banking authority in any of those countries, or there is a material disruption in commercial banking or security settlement or clearance services in any of those countries.

• (iv) The Company fails to comply with any of the following:

• A. the Corporations Act or any other applicable laws;

• B. the Listing and Market Rules;

• C. the Constitution or other constituent documents;

• D. any legally binding requirement of ASIC, the ASX or other Governmental Agencies; or

• E. any material agreement entered into by it.

• (v) ASIC commences or gives notice of an intention to commence:

• A. a prosecution of the Company or any director or employee of the Company; or

• B. a hearing or investigation into the Company.

Materiality: No event listed in sub clause (n) above entitles the Underwriter to exercise its termination rights unless, in the bona fide opinion of the Underwriter, it:

• (a) has, or could reasonably be expected to have, a material adverse effect on the willingness of persons to apply for Placement Shares at the Placement Price or the price at which Shares are sold on the ASX;

• (b) renders it impracticable to effect acceptance of applications for the Placement Shares or settlement and issue of the Placement Shares; or

• (c) could be expected to give rise to a liability the Underwriter under the Corporations Act or any other applicable law.

Termination Events of the Company

If any of above Conditions are not satisfied, or waived by the Company (in its absolute discretion), by 19 December 2014, then the Company may terminate the Underwriting Agreement document at any time before the Issue Date by written notice to the Underwriter

Consequences of Termination

Where there is a termination as described above:

• (a) the obligations of the Underwriter under this document immediately end; (b) any entitlements of the Underwriter accrued under this document, including the right to be indemnified, up to the date of termination survive; and

• (c) without limiting sub clause (b), the Company will immediately pay the Underwriter in full all fees and expenses to which it is then entitled under this document at the time of such termination.

Annexure B – Share Purchase Plan – Terms and Conditions

1. Participation

Participation in the Plan is open to all persons ( Eligible Members ) who, as at the record date of 31 October 2014 ( Record Date ), are registered as holders of ordinary shares in IDT Limited ( Shares ), and who have an address (as recorded in the Company’s register of members) in Australia or New Zealand.

The offer pursuant to the Plan ( Offer ) opens on 12 November 2014. The closing date for acceptances is 5.00pm, Melbourne time, 15 December 2014 ( Closing Date ), unless extended by the Directors.

Participation in the Plan is optional and is subject to these terms and conditions.

2. Offers

Offers under the Plan are non-renounceable and new Shares will be issued only to the Eligible Members who accept offers made to them.

Each offer is made on the same terms and conditions. All Eligible Members of IDT Limited receive the same offer, irrespective of the number of Shares which they hold on the Record Date (and irrespective of the number of application forms received by them, which may be more than one because of various separate holdings in the IDT Limited share register).

The maximum value of Shares for which each Eligible Member may subscribe is $15,000 ( Plan Limit ). This limit applies to each shareholder even if that person holds Shares in more than one capacity and receives more than one offer. If a Share is held by a trustee or nominee on account of another person and the trustee or nominee relationship is expressly noted in the share register, the beneficiary for whom the Shares are held is taken to be the registered holder. The Company reserves the right to reject any application form where it believes there has not been compliance with the Plan Limit.

It is proposed that up to 20,000,000 new Shares will be issued under the Plan. Over subscriptions will be scaled back on a pro rata basis.

3. Issue price

The Shares are being offered at a price of 15 cents per Share ( Issue Price ). The Issue Price has been calculated on the basis that it is the same as the price at which the Placement Shares are being offered.

4. Costs of participation

No brokerage, commission, stamp duty or other transaction costs will be payable by a shareholder in respect of an issue of shares under the Plan.

5. Issue of shares

The Company will issue new Shares as soon as reasonably practicable after the Closing Date and will promptly apply for those Shares to be quoted on the Australian Stock Exchange. Within the period required by the ASX Listing Rules, the Company will send each participant a holding statement in respect of any Shares issued under the Plan.

Shares issued under the Plan will rank equally with all other ordinary Shares in IDT Limited and will therefore carry the same voting rights, dividend rights and other entitlements as those shares.

6. Acceptance of offers

An offer to participate in the Plan may be accepted by an Eligible Member only by completing and returning the application form that will be provided to Eligible Members after the Record Date, together with the appropriate payment for the maximum possible amount to which the acceptance relates, by no later than the Closing Date, 15 December 2014 .

The Directors of the Company have an absolute discretion to reject as invalid an application form if they determine that acceptance of the form would or might prejudice the effective operation of the Plan or would or might be contrary to the laws of any country.

Applications for Shares under the Plan are irrevocable. If one or more acceptance forms are received from an Eligible Member in relation to Shares with a value greater than the Plan Limit, the shareholder (subject to any scaling back for any oversubscriptions) will be issued with the maximum number of Shares permitted pursuant to the Offer and the excess subscription monies will be refunded.

7. Amendment of the Plan

The Directors of the Company may, in their discretion, amend the Plan at any time (including, without limitation, by extending the Closing Date). The Company will notify the Australian Stock Exchange of any amendment of the Plan, but failure to do so will not invalidate the amendment. The Company may issue to any person fewer shares than subscribed for under the Plan (or none at all), including where the Company believes that the issue of those shares would contravene any law or the ASX Listing Rules or the Corporations Act 2001.

8. Administration and dispute resolution

The Company may adopt any administrative procedures it thinks appropriate in relation to the Plan.

The Company may settle, in any manner it thinks fit, any difficulties, anomalies or disputes which may arise under or in connection with the operation of the Plan, whether generally or in relation to any participant or class of participants, offer, acceptance or shares, and the decision of the Company will be conclusive and binding on all participants and other persons to whom the determination relates.

9. Notices

Notices and statements to participating shareholders may be given in any manner determined by the Company.