TABLE OF CONTENTS

Exhibit 10.20

EXECUTION COPY

CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

PREFERRED SUPPLIER AGREEMENT

Dated as of June 29, 2009

by and among

BP ENERGY COMPANY,

BP CORPORATION NORTH AMERICA INC.

AND

IDT ENERGY, INC.

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           Page

ARTICLE 1     Definitions; Rules of Interpretation

   1

1.1

  

Definitions

   1

1.2

  

Rules of Interpretation

   12

1.3

  

Relationship Among Transaction Documents

   13

ARTICLE 2     Nature of Relationship; Credit Exposure

   14

2.1

  

Nature of Relationship

   14

2.2

  

Credit Requirement

   15

ARTICLE 3     Purchase Contracts

   15

3.1

  

Agreements between BP and IDT or between BPCNA and IDT

   15

3.2

  

Transaction Execution Process

   17

3.3

  

Permissible Transactions Not Subject to this Agreement

   17

ARTICLE 4     Conditions Precedent

   18

4.1

  

Closing Date

   18

4.2

  

Conditions to Each Direct Transaction or Credit-Enabled Transaction

   20

ARTICLE 5     Interface with Independent System Operators

   22

5.1

  

Scheduling Agent

   22

5.2

  

Scheduling Agent Designation

   22

5.3

  

Compliance with ISO Rules and FERC Regulations

   22

5.4

  

Specific Responsibilities by ISO

   22

5.5

  

Financial Responsibilities

   22

5.6

  

Transition Period

   23

5.7

  

Post-Transition Period

   24

5.8

  

Scheduling Discrepancies

   24

ARTICLE 6     Supply Fee

   24

ARTICLE 7     Sale Contracts

   25

7.1

  

Sale Contract Terms

   25

7.2

  

Transactions Outside Approved Retail Energy Business

   25

7.3

  

Sale Contract Accounting

   26

7.4

  

Modification to Sale Contracts

   26

ARTICLE 8     Reporting Obligations

   26

8.1

  

Obligations of BP

   26

8.2

  

Obligations of IDT

   27

8.3

  

Material Deviations

   29

8.4

  

Audit

   29

 

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TABLE OF CONTENTS

CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

ARTICLE 9     Accounts

   29

9.1

  

Deposit Account

   29

9.2

  

Collateral Account

   31

9.3

  

Independent Collateral Amount

   32

9.4

  

Deposit Account Control Agreements

   32

ARTICLE 10     Billing and Payment

   33

10.1

  

Billing; Invoicing

   33

10.2

  

Payment Extensions

   33

10.3

  

Interest Accrual

   34

10.4

  

Distribution from Collateral Account

   35

10.5

  

ISO Billing Disputes

   36

10.6

  

Disputed Invoices, etc.

   36

ARTICLE 11     Regulatory Change

   37

ARTICLE 12     Planned Term; Early Termination

   38

12.1

  

Planned Term

   38

12.2

  

Early Termination

   38

ARTICLE 13     Tax and Bankruptcy

   40

13.1

  

Taxes

   40

13.2

  

Return of Documents and Information

   40

13.3

  

Bankruptcy Provisions

   40

ARTICLE 14     [RESERVED]

   41

ARTICLE 15     Wind-Down Period

   41

ARTICLE 16     Representations and Warranties

   43

16.1

  

Representation and Warranties of IDT

   43

16.2

  

Representation and Warranties of the BP Parties

   48

ARTICLE 17     Covenants

   49

ARTICLE 18     Events of Default

   53

18.1

  

IDT Events of Default

   53

18.2

  

BP Event of Default

   55

18.3

  

MNA Default under Master Netting Agreement

   57

ARTICLE 19     Miscellaneous

   57

19.1

  

Amendments, Consents, Etc.

   57

19.2

  

Notices, Etc.

   57

19.3

  

No Waiver; Remedies

   58

 

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CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

19.4

  

Indemnification

   58

19.5

  

Governing Law; Submission to Jurisdiction

   59

19.6

  

Execution in Counterparts

   60

19.7

  

WAIVER OF JURY TRIAL

   60

19.8

  

Severability

   60

19.9

  

Captions

   60

19.10

  

Successors and Assigns

   60

19.11

  

Integration

   61

19.12

  

USA PATRIOT Act

   61

19.13

  

Confidentiality

   61

19.14

  

Imaged Agreement

   63

 

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CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

Exhibits and Schedules

 

Exhibit 1    Supply Fees    Exhibit 2    [reserved]    Exhibit 3    Material
Terms of Sale Contract    Exhibit 4    [reserved]    Schedule 3.1    Existing
Use of Pipelines and Storage Facilities    [New Request] Schedule 3.3   
Permitted Other Transactions    [Coming] Schedule 5.4    ISO Interface
Responsibilities    Schedule 16.1(c)    Required Filings    [Received]
Schedule 16.1(m)    List of Sales Contracts and Purchase Contracts    [Received]
Schedule 16.1(w)    Authorized Direct Pay Customers    [Received]

 

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THIS PREFERRED SUPPLIER AGREEMENT together with all exhibits and schedules (the
“Agreement”) is made and entered into as of June 29, 2009 (the “Effective
Date”), by and among BP Energy Company, a Delaware corporation (“BP”), BP
Corporation North America Inc., an Indiana corporation, (“BPCNA” and together
with BP, the “BP Parties”), and IDT Energy, Inc., a Delaware corporation
(“IDT”). Each of BP, BPCNA and IDT may be referred to herein individually as a
“Party” or collectively as the “Parties.”

WHEREAS, the BP Parties are engaged in the business of purchasing and selling at
wholesale physical and financial Energy, and physical and financial Natural Gas;
and

WHEREAS, IDT, directly and through its wholly owned subsidiary North American
Energy, Inc., a Delaware corporation, is engaged in the business of marketing
retail Energy and Natural Gas to commercial, residential, governmental and
industrial Customers; and

WHEREAS, the Parties desire to enter into an arrangement, subject to all terms
and conditions set forth in this Agreement and the Related Agreements, whereby
the BP Parties will transact with IDT for the purchase, sale and delivery of
physical and financial Energy, physical Natural Gas, and Related Services for
IDT to use in connection with the Approved Retail Energy Business, and IDT will
(i) pay specified fees to the BP Parties in consideration for the performance of
obligations under this Agreement, (ii) grant the BP Parties a first-priority
security interest in the Collateral (as defined herein) to secure its
performance hereunder and under the Related Agreements, as more specifically
described in the Security Documents, and (iii) provide BP with the information
necessary to provide such services, all as described more fully herein.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1

DEFINITIONS; RULES OF INTERPRETATION

 

1.1 Definitions. Capitalized terms used herein shall have the following
meanings:

“Account Bank” means (a) with respect to the Deposit Account, Wachovia Bank,
N.A., or any of its successors, and (b) with respect to the Collateral Account,
JPMorgan Chase Bank, N.A, or any of its successors.

“Affiliate” means, with respect to a Party, any entity that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Party. For this purpose, “control” means
the direct or indirect ownership of fifty percent (50%) or more of the
outstanding capital stock or other equity interests having ordinary voting
power.

“Aggregate Customer Receivables” means, for any period, the sum of (a) the
accounts receivable of all Authorized Direct Pay Customers that are invoiced
during such period and that arise under any Sale Contract and (b) the aggregate
of settled amounts that are payable during such period to IDT under all POR
Programs and that arise under any Sale Contract.

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CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

“Agreement” has the meaning set forth in the introductory paragraph.

“Ancillary Services” means all services required of a Load-Serving Entity (as
defined in any ISO Protocols) by the ISO or any other governmental or
quasi-governmental agency with jurisdiction over Load Serving Entities operating
in the markets covered by this Agreement or otherwise allocated by the ISO or
any other governmental or quasi-governmental agency with jurisdiction to a
Scheduling Agent with respect to such Scheduling Agent’s scheduled load to
effectuate the delivery of Energy, including, without limitation: Capacity
support services, energy imbalance services, pool operation services, scheduling
services, system control services, reactive power services, voltage control
services, operating reserve services (including spinning, non-spin, black start
or other).

“Approved Retail Energy Business” means the retail business owned and operated
by IDT of providing physical and financial Energy and physical Natural Gas to
Customers in a Designated Region and services ancillary thereto.

“Authorized Direct Pay Customers” means those Non-POR Customers set forth in
Schedule 16.1(w).

“Bankruptcy” has the meaning set forth in the Master Netting Agreement.

“Bankruptcy Code” has the meaning set forth in Section 13.3(a).

“BP” has the meaning set forth in the introductory paragraph.

“BP Event of Default” has the meaning set forth in Section 18.2.

“BP Parties” means BP and BPCNA, collectively, and “BP Party” means any of BP or
BPCNA, individually.

“BPCNA” has the meaning set forth in the introductory paragraph.

“Business Day” means any day Monday through Friday that is not (a) a Federal
Holiday, (b) or a state banking holiday in the state of New York, or (c) a BP
corporate holiday for which BP provides at least ninety days’ prior written
notice to IDT.

“Calculation Date” has the meaning set forth in the Master Netting Agreement.

“Capacity” means a reliability product required to be purchased by Load Serving
Entities operating within certain ISO or RTO markets, designated as either
Installed Capacity (ICAP), Unforced Capacity (UCAP), or a similar energy
capacity product, in any such case, by the respective ISO or RTO.

 

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CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

“Carrying Cost” has the meaning set forth in Section 3.1(b).

“Close-Out” has the meaning set forth in the Master Netting Agreement.

“Closing Date” means the date on which all of the conditions precedent set forth
in Section 4.1 shall have been fulfilled or properly waived in accordance with
the terms of this Agreement.

“Collateral” has the meaning as set forth in the Pledge and Security Agreement.

“Collateral Account” has the meaning set forth in Section 9.2.

“Collateral Requirement” has the meaning set forth in the Master Netting
Agreement.

“Collateral Value” has the meaning set forth in the Master Netting Agreement.

“Confirmation” and “Confirmations” have the meanings set forth in Section 3.1.

“Costs” has the meaning set forth in the Master Netting Agreement.

“Credit-Enabled Transaction” has the meaning set forth in Section 3.1.

“Creditworthy Assignee” has the meaning set forth in Section 15.2(a).

“Customer” means any retail, commercial, residential, governmental or industrial
customer in a Designated Region that purchases Energy or Natural Gas from IDT.

“Defaulting Party” has the meaning set forth in the Master Netting Agreement.

“Delivery Month” has the meaning set forth in Section 10.1.

“Delivery Point” has the meaning set forth in the EEI Agreement or the NAESB
Agreement, as applicable.

“Deposit Account” has the meaning set forth in Section 9.1.

“Deposit Account Control Agreement” has the meaning set forth in Section 9.4.

“Designated Customer” means (a) any existing Customer of IDT in a Designated
Region as of the Effective Date, and (b) any Person that becomes a Customer of
IDT in a Designated Region after the Effective Date and, in any such case, which
has entered into a Sale Contract with IDT.

 

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CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

“Designated Region” means: (a) with respect to Energy, the geographic region in
which NYISO operates, and (b) with respect to Natural Gas, the geographic region
in which Niagara Mohawk, Orange & Rockland, Consolidated Edison Company of New
York, National Fuel Gas Company, Rochester Gas & Electric, Central Hudson Gas &
Electric Corporation and KeySpan (now National Grid), as applicable, operate.

“Direct Transaction” has the meaning set forth in Section 3.1.

“Disputed Amounts” has the meaning set forth in Section 10.6.

“Early Termination” has the meaning set forth in Section 12.2.

“Early Termination Net Payment” has the meaning set forth in Section 12.2.

“EEI Agreement” means that certain Edison Electric Institute form of Master
Power Purchase and Sale Agreement, including any special provisions or addendums
thereto, dated June 29, 2009, by and between IDT and BP.

“Effective Date” has the meaning set forth in the introductory paragraph.

“Eligible Collateral” has the meaning set forth in the Master Netting Agreement.

“Energy” means electric power and, where appropriate, shall include Capacity,
Ancillary Services or other similar services relating to the production and
delivery of electric power.

“Environmental Law” means any and all present and future United States Federal,
state and local and all present and future foreign laws, rules or regulations,
and any orders or decrees, in each case as now or hereafter in effect, relating
to the regulation or protection of human health, safety or the environment or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or toxic or hazardous substances or wastes into the
indoor or outdoor environment, including, without limitation, ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals or toxic
or hazardous substances or wastes.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“Event of Default” has the meaning set forth in Section 18.1.

“Financial Products” means any hedge, swap or heat rate swap that is entered
into for the purpose of hedging the price of Energy, Capacity or Related
Electric Power Services that IDT purchases solely in connection with the
Approved Retail Energy Business. BP will not provide similar products related to
Natural Gas or Related Natural Gas Services, and such products will not
constitute Financial Products under this Agreement.

 

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CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

“Financial Responsibility Period” has the meaning set forth in Section 5.5.

“FTP” means a file transfer protocol used to connect two computers over the
internet so that the user of on computer can transfer files to and perform file
commands on the other computer.

“Government Contract” means any prime contract, subcontract, teaming agreement,
joint venture, basic ordering agreement, pricing agreement, letter contract,
grant, cooperative agreement, or other mutually binding legal agreement between
IDT and the United States Government, or any agency or division thereof.

“Governmental Authority” means any federal, state, municipal, county, regional
or local government, administrative, judicial or regulatory entity operating
under any applicable laws and includes any department, commission, bureau,
board, council, including the ISO, administrative agency or regulatory body of
the United States Government or any state or local body or division thereof
which governs and controls or otherwise has authority over the Parties, as well
as over any Transaction Document and the applicable Government Contract as
defined herein.

“Guarantee” means a guarantee, an endorsement, a contingent agreement to
purchase or to furnish funds for the payment or maintenance of, or otherwise to
be or become contingently liable under or with respect to, the Indebtedness,
other obligations, maintenance of net worth, working capital or earnings of any
Person.

“Hazardous Material” means, collectively, (a) any petroleum or petroleum
products, flammable materials, explosives, radioactive materials, asbestos, urea
formaldehyde foam insulation, and transformers or other equipment that contain
polychlorinated biphenyls (“PCBs”), (b) any chemicals or other materials or
substances that are now or hereafter become defined as or included in the
definition of “hazardous substances”, “hazardous wastes”, “hazardous materials”,
“extremely hazardous wastes”, “restricted hazardous wastes”, “toxic substances”,
“toxic pollutants”, “contaminants”, “pollutants” or words of similar import
under any Environmental Law and (c) any other chemical or other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated under any Environmental Law.

“IDT” has the meaning set forth in the introductory paragraph.

“IDT Event of Default” has the meaning set forth in Section 18.1.

“Imaged Agreement” has the meaning set forth in Section 19.14.

 

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CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

“Indebtedness” means, for any Person:

 

  (a) obligations created, issued or incurred by such Person for borrowed money
(whether by loan, the issuance and sale of debt securities or the sale of
property to another Person subject to an understanding or agreement, contingent
or otherwise, to repurchase such property from such Person);

 

  (b) obligations of such Person to pay the deferred purchase or acquisition
price of property or services, other than trade accounts payable (other than for
borrowed money) arising, and accrued expenses incurred, in the ordinary course
of business so long as such trade accounts payable are payable within 60 days of
the date the respective goods are delivered or the respective services are
rendered and such trade accounts payable are not 90 days or more past due;

 

  (c) the amount of any prepayment received by IDT for Energy, Natural Gas or
Related Services in connection with the sale and delivery of Energy, Natural Gas
or Related Services that has not been delivered;

 

  (d) indebtedness of others secured by a Lien on the property of such Person,
whether or not the respective indebtedness so secured has been assumed by such
Person;

 

  (e) obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for
account of such Person;

 

  (f) capital lease obligations of such Person (as determined in accordance with
GAAP);

 

  (g) indebtedness or other obligations of others constituting a Guarantee by
such Person; and

 

  (h) the net liability of such Person under hedge agreements.

“Indemnified Party” has the meaning set forth in Section 19.4.

“Independent Collateral Amount” has the meaning set forth in Section 9.3.

“Information” has the meaning set forth in Section 19.13.

“Interest Rate” means the lesser of (a) * or (b) the maximum lawful rate.

“Invoice” has the meaning set forth in Section 10.1(a).

 

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CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

“ISDA Agreement” means that certain International Swaps and Derivatives
Association form contract, including any schedules or annexes thereto, dated
June 29, 2009, by and between IDT and BPCNA.

“ISO” means an Independent System Operator that coordinates, controls and
monitors the operation of the electrical power system, usually within a single
State, but sometimes encompassing multiple states. As context requires herein,
the ISO shall refer to NYISO.

“ISO Barred Issue” has the meaning set forth in Section 10.5.

“ISO Protocols” means the ISO Protocols adopted by the ISO (in effect at the
time of the performance or non-performance of an action).

“Legal Requirement” means any applicable requirement arising out of any federal,
state, local, municipal, or constitutional, law, ordinance, principle of common
law, code, regulation, statute, statutory instrument or subordinate legislation,
including ISO rules, protocols, or other ISO requirements.

“LIBOR” means the one-month LIBOR rate of interest in effect from time to time
for large U.S. money center commercial banks as published under “Money Rates” by
The Wall Street Journal (or any equivalent publication selected by BP, if such
information is not available in The Wall Street Journal).

“Lien” means any legal claim against an asset, including any (a) any mortgage,
deed of trust, hypothecation, lien, pledge, encumbrance, charge, or security
interest in or on such asset, whether arising by contract or by operation of
law, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease, or title retention agreement relating to such asset,
(c) in the case of securities, any purchase option, call, or similar right of a
third party with respect to such securities, and (d) the filing of any financing
statement or similar instrument under the Uniform Commercial Code or similar
applicable Legal Requirement.

“Load-Serving Entity” means any state-licensed retail selling company recognized
by the jurisdictional ISO and local electric utility company to conduct business
selling retail electricity to retail customers.

“Master Netting Agreement” means the Master Netting, Setoff, Security and
Collateral Agreement, dated as of June 29, 2009, among IDT, BP, and BPCNA.

“Material Adverse Effect” means a material adverse effect on (a) the
consolidated financial condition, assets, properties, or operations of a Party,
(b) the ability of any Party to perform its obligations under this Agreement
(including, in the case of IDT, the Obligations), any Transaction Document or a
significant number (or value) of Sale Contracts to which it is a party, (c) the
authorization, legality, validity or enforceability of

 

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FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

this Agreement or any other Transaction Document, or (d) the validity,
enforceability, perfection, or priority of the Liens granted in favor of BP
under the Security Documents or this Agreement or the value of the Collateral
subject to such Liens.

“MMBtu” means one million British thermal units.

“MNA Default” has the meaning set forth in the Master Netting Agreement.

“Monthly Distribution Date” has the meaning set forth in Section 10.4.

“Moody’s” means Moody’s Investor Services, Inc., or its successor.

“MWh” means a megawatt hour.

“NAESB Agreement” means that certain North American Energy Standards Board,
Inc.’s Base Contract for Sale and Purchase of Natural Gas, including any special
provisions or addendums thereto, dated June 29, 2009, by and between IDT and BP.

“Natural Gas” has the meaning ascribed for “Gas” under the NAESB Agreement.

“NERC” means the North American Electric Reliability Corporation.

“Net Exposure” has the meaning set forth in the Master Netting Agreement.

“Non-defaulting Party” has the meaning set forth in the Master Netting
Agreement.

“Non-POR Customer” means any Designated Customer whose accounts receivable from
IDT’s sale and delivery to such Designated Customer of Energy or Natural Gas are
not subject to payment to IDT under a POR Program.

“NYISO” means New York Independent System Operator.

“Obligations” means, with respect to IDT, each and every present or future
payment or performance obligation or liability of IDT under this Agreement, any
Security Agreement, and, to the extent such obligation or liability arises out
of a Transaction, under any Transaction Document.

“Party” and “Parties” have the meanings set forth in the introductory paragraph.

“Payment Extension” has the meaning set forth in Section 10.2.

“Payment Provision” has the meaning set forth in Section 7.1(a).

“Performance Assurance” has the meaning set forth in the Master Netting
Agreement, including cash and Qualifying Letters of Credit.

 

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CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

“Permitted Extension Period” has the meaning set forth in Section 10.2.

“Permitted Other Transactions” has the meaning set forth in Section 3.3.

“Person” means any individual, corporation, limited liability company,
partnership or other legal entity.

“Planned Expiration Date” means June 30, 2011 or such later date upon renewal of
the Planned Term in accordance with Section 12.1.

“Planned Term” has the meaning set forth in Section 12.1.

“Pledge and Security Agreement” means the Pledge and Security Agreement, dated
as of June 29, 2009, by and among the BP Parties and IDT.

“POR Customer” means any Designated Customer whose accounts receivable from
IDT’s sale and delivery to such Designated Customer of Energy or Natural Gas are
payable to IDT under a POR Program.

“POR Program” means any purchase of receivables program established in
accordance with applicable Legal Requirements of any electric utility or local
gas distribution company in a Designated Region.

“Price Solicitation” has the meaning set forth in Section 3.2.

“Process Agent” has the meaning set forth in Section 19.5(d).

“Purchase Contract” means (a) the purchase of Energy or Related Electric Power
Services, or Financial Products related thereto, by (i) IDT pursuant to a Direct
Transaction with BP, under the EEI Agreement, or with BPCNA, under the ISDA
Agreement, or such other power purchase and sale agreements as may be entered
into by and between the Parties from time to time, or (ii) the BP Parties
pursuant to a Credit-Enabled Transaction with a BP-enabled and an approved
Third-Party Seller, and (b) for the purchase of Natural Gas or Related Natural
Gas Services by (i) IDT pursuant to a Direct Transaction with BP, under the
NAESB Agreement or such other Natural Gas purchase and sale agreements as may be
entered into by and between any of the Parties from time to time, or (ii) by the
BP Parties pursuant to a Credit-Enabled Transaction with a BP-enabled and
approved Third-Party Seller.

“Qualifying Letter of Credit” means a letter of credit in the form of letter of
credit set forth in the Master Netting Agreement and issued by a financial
institution whose (a) short-term senior unsecured debt rating is “Prime-1” and
its long-term, unsecured and unsubordinated debt obligations are rated “Aa2” or
above by Moody’s, and (b) short-term senior unsecured debt rating is “A-1” or
above and its long-term senior unsecured debt rating is “AA” or above.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

“Related Agreements” means, collectively, the following agreements entered into
by the Parties hereunder: the EEI Agreement; the ISDA Agreement; the NAESB
Agreement; the Master Netting Agreement; all Confirmations; and any other
agreement between the Parties (other than this Agreement, and the Security
Documents).

“Related Electric Power Services” means the products and services that BP agrees
to provide pursuant to a Transaction to deliver electrical power to the Delivery
Point(s) in the Designated Region, including all ISO services, Ancillary
Services and Capacity.

“Related Natural Gas Services” means the products and services that BP agrees to
provide pursuant to a Transaction to deliver Natural Gas to IDT at the Delivery
Point(s).

“Related Services” means Related Electric Power Services or Related Natural Gas
Services.

“Renewable Energy Credits” means a certificate, credit, allowance, green tag, or
other transferable indicia, howsoever entitled, created by an RPS, renewable
energy program, scheme or organization, adopted by a Governmental Authority or
otherwise indicating generation of a particular quantity of energy, or Renewable
Energy Credits associated with the generation of a specified quantity of energy
from a “Renewable Energy Source” or “Renewable Energy Facility” as defined in
the applicable RPS, renewable energy program or scheme. A Renewable Energy
Credit may include some or all additional environmental attributes associated
with the generation of electricity, and those environmental attributes may, but
need not be, verified or certified by the same or different verification
authorities or certification authorities, and disaggregated and retained or sold
separately, all as the Parties may agree in a transaction confirmation. A
Renewable Energy Credit is separate from the Energy produced and may be
separately transferred or conveyed.

“RPS” means a renewable portfolio standard.

“RTO” means a regional transmission organization.

“S&P” means Standard & Poor’s Corporation, a division of The McGraw-Hill
Companies, Inc. or its successor.

“Sale Contract” means an agreement, entered into by IDT solely in connection
with the Approved Retail Energy Service, for the sale and distribution of Energy
or Natural Gas by IDT to a Designated Customer.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

“Scheduling Agent” means any Person who acts on behalf of any other Person as
agent for the purpose of scheduling the delivery of Energy or Related Electric
Power Services in the ISO or RTO.

“Scheduling Agent Services” has the meaning set forth in Section 5.1.

“Security Documents” means the Pledge and Security Agreement, each Deposit
Account Control Agreement, and all UCC financing statements and continuation
statements and each other instrument or document delivered by IDT, in each case,
to grant to the BP Parties a Lien on any Collateral or to perfect, assure, or
preserve any such Lien or any rights or remedies created thereby.

“Solvent” means, with respect to any Person, that as of the date of
determination both (a)(i) the then-fair saleable value of the property of such
Person is (A) greater than the total amount of liabilities (including contingent
liabilities but excluding amounts payable under intercompany loans or promissory
notes) of such Person and (B) not less than the amount that will be required to
pay the probable liabilities on such Person’s then-existing debts as they become
absolute and matured considering all financing alternatives and potential asset
sales reasonably available to such Person, (ii) such Person’s capital is not
unreasonably small in relation to its business or any contemplated or undertaken
transaction; and (iii) such Person does not intend to incur, or reasonably
believe that it will incur, debts beyond its ability to pay such debts as they
become due, and (b) such Person is “Solvent” within the meaning given that term
and similar terms under applicable Legal Requirements relating to fraudulent
transfers and conveyances. For purposes of this definition, the amount of any
contingent liability at any time shall be computed as the amount that, in light
of all of the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.

“Storage Delivery Price” has the meaning set forth in Section 3.1(b).

“Storage Delivery Transaction” has the meaning set forth in Section 3.1(b).

“Supply Fee” has the meaning set forth in Article 6.

“Supply Fee Termination Payment” has the meaning set forth in Section 12.2.

“Term” has the meaning set forth in Section 12.1.

“Third-Party Seller” means an entity other than BP that is identified by IDT as
a third-party seller of Energy, Natural Gas, Related Services or Financial
Products and that agrees to sell Energy, Natural Gas, Related Services or
Financial Products to BP or BPCNA for resale to IDT pursuant to a Transaction.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

“Transaction” means any transaction between IDT and the BP Parties for the
purchase or sale of Energy, Natural Gas, Related Services or Financial Products
to the extent that (a) such Energy, Natural Gas, Related Services or Financial
Products are used by IDT in connection with Approved Retail Energy Business, and
(b) such transaction is entered into in accordance with the terms and conditions
of the EEI Agreement, the NAESB Agreement, or the ISDA Agreement, as applicable.
All Transactions shall also be governed by the terms and conditions of this
Agreement.

“Transaction Documents” means this Agreement, the Security Documents and the
Related Agreements.

“Transfer” has the meaning set forth in the Master Netting Agreement.

“UCC” or “Uniform Commercial Code” means the Uniform Commercial Code as
presently in effect from time to time in the State of New York and any other
jurisdiction (including the State of Texas and the State of Delaware), the laws
of which control, among other things, the creation, perfection or priority of
the Liens under the Security Documents.

“UMA Final Settlement Amount” has the meaning set forth in the Master Netting
Agreement.

“Unrelated Contract” has the meaning set forth in Section 15.2(b).

“Unusual Load Profile” has the meaning set forth in Section 7.1(d).

“Wind-Down Commencement Date” has the meaning set forth in Section 15.1.

“Wind-Down End Date” has the meaning set forth in Section 15.1.

“Wind-Down Period” has the meaning set forth in Section 15.1.

Other capitalized terms used in this Agreement and not defined hereinabove shall
have the meanings given them in this Agreement or the Pledge and Security
Agreement.

 

1.2 Rules of Interpretation. In this Agreement, unless a clear contrary
intention appears:

 

  (a) the singular number includes the plural number and vice versa;

 

  (b) reference to any Person includes such Person’s successors and assigns but,
if applicable, only if such successors and assigns are not prohibited by this
Agreement, and reference to a Person in a particular capacity excludes such
Person in any other capacity or individually;

 

  (c) reference to either gender includes the other gender;

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (d) reference to any agreement, document or instrument means such agreement,
document or instrument as amended or modified and in effect from time to time in
accordance with the terms thereof;

 

  (e) reference to any Legal Requirement means such Legal Requirement as
amended, modified, codified, replaced or reenacted, in whole or in part, and in
effect from time to time, including rules and regulations promulgated
thereunder, and reference to any section or other provision of any Legal
Requirement means that provision of such Legal Requirement from time to time in
effect and constituting the substantive amendment, modification, codification,
replacement or reenactment of such section or other provision, in each case
except to the extent that this would increase or alter the liability of the
Parties under this Agreement;

 

  (f) “hereunder,” “hereof,” “hereto,” and words of similar import shall be
deemed references to this Agreement as a whole and not to any particular
Article, Section or other provision hereof;

 

  (g) with respect to the determination of any period of time, “from” means
“from and including” and “to” means “to but excluding”;

 

  (h) headings to Articles, Sections, Exhibits and Schedules are for convenience
only and do not affect the interpretation of this Agreement;

 

  (i) with respect to any capitalized term defined in the Master Netting
Agreement that contains another capitalized term that is also defined in the
Master Netting Agreement, such other capitalized term shall have the meaning
given to such term in the Master Netting Agreement;

 

  (j) the terms “Dollars” and “$” mean United States Dollars;

 

  (k) unless otherwise specified, all times are Houston, Texas time;

 

  (l) unless otherwise specified, references to Sections or Articles shall mean
Sections or Articles in this Agreement; and

 

  (m) unless otherwise specified, use of the word “including” shall mean
“including, but not limited to,”.

 

1.3 Relationship Among Transaction Documents. In the event of any inconsistency
among the Transaction Documents, the terms of the documents shall prevail in the
following order (unless expressly stated otherwise in a Transaction Document):
first, any Confirmation; second, the Master Netting Agreement; third, this
Agreement; fourth, the Security Documents; and, fifth, the EEI Agreement, the
ISDA Agreement and the NAESB Agreement.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

ARTICLE 2

NATURE OF RELATIONSHIP; CREDIT EXPOSURE

 

2.1 Nature of Relationship. The purpose of this Agreement is to establish a
relationship between the Parties whereby the BP Parties will sell and deliver to
IDT, and IDT will purchase and receive from the BP Parties, Energy, Natural Gas,
Related Services (including without limitation ISO-related services), and
Financial Products that IDT uses in connection with the Approved Retail Energy
Business, all as described more fully herein. In exchange, IDT will (i) pay
specified fees to the BP Parties in consideration for the performance of
obligations under this Agreement, (ii) grant the BP Parties a first-priority
security interest in the Collateral to secure its performance hereunder as more
specifically described in the Security Documents, and (iii) provide BP with the
information necessary to provide such services, all as described more fully
herein. With respect to the relationship between the Parties:

 

  (a) It is expressly understood and agreed by the Parties that the relationship
between BP or BPCNA and IDT described herein or established hereby is not a
joint venture, partnership, association or trust. This Agreement shall not be
deemed or construed to authorize any Party to act as an agent, servant or
employee for any other Party for any purpose whatsoever except as explicitly set
forth in this Agreement. In their relations with each other under this
Agreement, the Parties shall not be considered fiduciaries.

 

  (b) IDT agrees that subject to the terms and conditions set forth herein it
will be solely responsible for conducting and managing its day to day business
activities.

 

  (c) IDT shall be named as the contracting party in all Sale Contracts and IDT
shall be solely responsible for the performance of its obligations under such
Sale Contracts.

 

  (d) Notwithstanding anything to the contrary contained herein, IDT
acknowledges and agrees that the BP Parties are not providing and will not
provide (and will not be deemed under any circumstances to have provided) IDT
with any investment, regulatory or compliance advice, including, without
limitation, any opinion or advice regarding the efficacy or advisability of any
Transaction proposed by IDT hereunder. IDT shall make its own investment,
regulatory and compliance decisions, or seek investment, regulatory and
compliance advice from third party experts in each of these areas as IDT deems
necessary.

 

  (e) Unless otherwise agreed by the BP Parties, all Transactions entered into
under this Agreement shall be for the sole purpose of enabling IDT to perform
the Approved Retail Energy Business.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

2.2 Credit Requirement.

 

  (a) IDT recognizes and agrees that the BP Parties’ credit exposure to IDT with
respect to outstanding Transactions entered into under the EEI Agreement, NAESB
Agreement or ISDA Agreement herewith, is governed by this Agreement, the Master
Netting Agreement and the Security Documents for managing mark-to-market
exposures.

 

  (b) If, on any Calculation Date, the BP Parties have a Net Exposure to IDT,
IDT shall, pursuant to the Master Netting Agreement, Transfer to the BP Parties
Performance Assurance having a Collateral Value on the date of Transfer at least
equal to IDT’s Collateral Requirement. Until IDT Transfers to the BP Parties
such Performance Assurance, neither BP Party shall be required to enter into any
new Direct Transactions or Credit-Enabled Transactions. The BP Parties shall
return to IDT such Performance Assurance to the extent required under the Master
Netting Agreement.

 

  (c) Using its commercially reasonable judgment and in accordance with its
credit risk management policies, BP shall determine the value of the Collateral
Value for purposes of the Master Netting Agreement.

ARTICLE 3

PURCHASE CONTRACTS

 

3.1 Agreements between BP and IDT or between BPCNA and IDT.

 

  (a) General. On or before the Closing Date, the BP Parties and IDT shall
execute and deliver the Related Agreements. Subject to the terms hereof and the
relevant Related Agreement, the BP Parties and IDT will enter into Transactions
for the purchase and sale of Energy, Natural Gas, Related Services or Financial
Products, under the EEI Agreement, NAESB Agreement, or ISDA Agreement pursuant
to confirmations or other agreements (such confirmations or agreements,
collectively, the “Confirmations” and each individually a “Confirmation”) as
follows: (a) a Transaction between the BP Parties and IDT (a “Direct
Transaction”); or (b) * (a “Credit-Enabled Transaction”)

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (b) Storage Delivery Transactions for Natural Gas. BP, in accordance with this
Section 2.1(b), may sell Natural Gas to IDT for placement by IDT of such Natural
Gas into storage with deferred payment for such Natural Gas (each, a “Storage
Delivery Transaction”). BP will not be obligated to enter into any Storage
Delivery Transactions, and in no case will BP be selling or otherwise providing
storage for Natural Gas under the terms of this Agreement.

*

 

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3.2 *

 

  (a) *

 

  (b) *

 

  (c) *

 

3.3 Permissible Transactions Not Subject to this Agreement. Except for Permitted
Other Transactions, IDT will not enter into transactions under purchase
contracts for Energy, Natural Gas, Related Services or Financial Products with
counterparties other than the BP Parties. No fee shall be due from IDT to the BP
Parties for any Permitted Other Transaction.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

A “Permitted Other Transaction” is each transaction (a) identified on Schedule
3.3 that is not modified, altered or extended after the Closing Date, (b) in
which, regardless of the duration of the trade, (i) the counterparty must offer
a price that is lower than the price the relevant BP Party offers for such
transaction, (ii) the BP Parties are unable to enter into a Credit-Enabled
Transaction with such counterparty, and (iii) the BP Parties will have no
additional responsibilities under the Transaction Documents with respect to the
Energy, Natural Gas, Related Services or Financial Products that are the subject
of such transaction, and (c) for the virtual and transmission congestion
contract markets in NYISO, so long as the BP Parties will have no additional
responsibilities under the Transaction Documents with respect to the Energy,
Natural Gas, Related Services or Financial Products that are the subject of such
transaction.

ARTICLE 4

CONDITIONS PRECEDENT

 

4.1 Closing Date. The Closing Date shall occur upon the fulfillment, in form and
substance satisfactory to BP, or waiver in writing by BP, of the following:

 

  (a) Each of IDT, BP, and BPCNA shall have executed and delivered each of the
following agreements to which it is a party:

 

  (i) this Agreement;

 

  (ii) the Pledge and Security Agreement;

 

  (iii) the EEI Agreement;

 

  (iv) the ISDA Agreement;

 

  (v) the NAESB Agreement; and

 

  (vi) the Master Netting Agreement;

 

  (b) BP shall have received from IDT the following, each of which shall be in
form and substance satisfactory to BP:

 

  (i) a certificate of incumbency;

 

  (ii) a certificate of good standing;

 

  (iii) a certified copy of its certificate of incorporation and of its bylaws;
and

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (iv) certified copies of resolutions or other actions or authorizations, duly
adopted by its members or other authorized governing body, authorizing its
execution, delivery, and performance of the Transaction Documents to which it is
a party;

 

  (c) BP shall have received written legal opinions, in form and substance
satisfactory to BP, dated the Closing Date and addressed to the BP Parties, of
Day Pitney LLP, counsel to IDT.

 

  (d) The BP Parties shall have received, in form and substance satisfactory to
them, (i) evidence that each document (including each UCC financing statement)
required by applicable Legal Requirements, or reasonably requested by BP, to be
filed, registered, or recorded in order to create for the benefit of the BP
Parties a valid, enforceable, and perfected first-priority Lien on the
Collateral (subject to no other Liens) shall have been properly filed,
registered, or recorded in each jurisdiction in which the filing, registration,
or recordation thereof shall be so required or requested, (ii) copies of the UCC
search reports and Lien, judgment, and litigation search reports, dated not more
than ten (10) Business Days before the Closing Date, made in respect of IDT in
each jurisdiction in which IDT is located or in which assets of IDT are located,
and (iii) any other consents reasonably requested by BP that are necessary to
create, or acknowledge the creation of, a valid, enforceable, and perfected
first-priority Lien on the Collateral for the benefit of the BP Parties;

 

  (e) BP shall have received a copy, in form and substance satisfactory to BP,
of the balance sheet of IDT as at July 31, 2008 and the related statements of
income and cash flows of IDT for the fiscal year then ended, with the
unqualified opinion thereon of IDT’s independent public accounting firms that is
recognized by the American Institute of Certified Public Accountants, and the
unaudited balance sheet of IDT and statements of income and cash flows of IDT
for the period ending April 30, 2009;

 

  (f) BP shall have received certificates, in form and substance satisfactory to
BP, demonstrating that IDT has obtained and is maintaining the insurance polices
that it is required to obtain and maintain under this Agreement and the other
Transaction Documents;

 

  (g)

BP shall have received evidence, in form and substance satisfactory to BP, that
(i) IDT has obtained all permits, licenses and other authorizations required
under all Legal Requirements (including Environmental Laws) to execute, deliver
and perform its obligations under the Transaction Documents to which it is a
party and to carry on its business as now being or as proposed to be conducted,
except to the extent failure to have any such permit, license or authorization
has not had, or could not reasonably be expected to have, (either individually
or in the

 

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aggregate) a Material Adverse Effect and (ii) each of such permits, licenses and
authorizations is in full force and effect and IDT is in compliance with the
terms and conditions thereof, and is also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable Legal
Requirement or in any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply therewith has not had, or
could not reasonably be expected to have, (either individually or in the
aggregate) have a Material Adverse Effect;

 

  (h) BP shall have received at least five (5) Business Days prior to the
Closing Date all documentation and other information that BP requests and is
required by any Governmental Authority under applicable “know your customer” and
anti-money laundering rules and regulations, including the Patriot Act;

 

  (i) each of the representations and warranties made by IDT under any
Transaction Document shall be true and correct in all material respects (and in
all respects in the case of a those representations and warranties that are
qualified by materiality or the occurrence or non-occurrence of any event that
could have or would have a Material Adverse Effect);

 

  (j) no Event of Default, and no event that after the giving of notice or the
passage of time or both would result in an Event of Default, has occurred and is
continuing or would occur upon the execution, delivery, or performance of this
Agreement or the other Transaction Documents;

 

  (k) no Material Adverse Effect in respect of IDT has occurred and is
continuing or would occur upon the execution, delivery, or performance of this
Agreement or any of the Transaction Documents; and

 

  (l) BP shall have received a certificate, in form and substance satisfactory
to BP, from an authorized officer of IDT that all of the conditions set forth in
this Section 4.1 have been fulfilled or property waived by BP.

 

4.2 Conditions to Each Direct Transaction or Credit-Enabled Transaction. The
obligation of BP to enter into any Direct Transaction or Credit-Enabled
Transaction, as applicable, is subject to the fulfillment, in form and substance
satisfactory to BP, or waiver in writing by BP, of the following:

 

  (a) the Closing Date shall have occurred;

 

  (b) each of the Collateral Account and the Deposit Account shall have been
established;

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (c) IDT shall have (i) paid to BP in cash an amount equal to the Independent
Collateral Amount, or (ii) established an irrevocable Qualifying Letter of
Credit for the sole benefit of BP in an amount equal to the Independent
Collateral Amount;

 

  (d) BP shall have received written legal opinions, in form and substance
satisfactory to BP, dated the Closing Date and addressed to the BP Parties, of
(i) Day Pitney LLP, counsel to IDT, regarding the enforceability with respect to
IDT and the perfection of applicable security interests, each under the Deposit
Account Agreements, and (ii) in-house counsel to IDT regarding related corporate
authority matters. The initial draft of each opinion will be provided to BP no
later than five (5) Business Days prior to the execution of the last Deposit
Account Agreement;

 

  (e) with respect to Energy and Related Electric Power Services, BP shall have
received, in form and substance satisfactory to BP, the designations necessary
to act as IDT’s Scheduling Agent for the ISO in the Designated Region;

 

  (f) except with respect to Storage Delivery Transactions, immediately
following the Direct Transaction or Credit-Enabled Transaction, the Collateral
Value is in excess of the BP Parties’ a Net Exposure to IDT;

 

  (g) IDT has Transferred to the BP Parties, pursuant to Section 2.2 and the
Master Netting Agreement, any Performance Assurance that the BP Parties has
requested thereunder;

 

  (h) each of the representations and warranties made by IDT under any
Transaction Document shall be true and correct in all material respects (and in
all respects in the case of a those representations and warranties that are
qualified by materiality or the occurrence or non-occurrence of any event that
could have or would have a Material Adverse Effect);

 

  (i) no Event of Default, and no event that after the giving of notice or the
passage of time or both would result in an Event of Default, has occurred and is
continuing or would occur upon the execution, delivery, or performance of such
Direct Transaction or Credit-Enabled Transaction, as applicable;

 

  (j) no Material Adverse Effect in respect of IDT has occurred and is
continuing or would occur upon the execution, delivery, or performance of such
Direct Transaction or Credit-Enabled Transaction, as applicable; and

 

  (k) BP has received proper exemption certificates issued by IDT as are
required to exempt any Transaction under the Transaction Documents as exempt
from state, city, and county level sales or use tax as “sales for resale” in the
State of New Jersey and the State of New York.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

ARTICLE 5

INTERFACE WITH INDEPENDENT SYSTEM OPERATORS

 

5.1 Scheduling Agent. With respect to NYISO, on and after the effective date of
the transfer of responsibility for scheduling and managing transmission from IDT
to BP by NYISO and continuing throughout the Planned Term, subject to the
provisions hereof, BP shall act as IDT’s designated Scheduling Agent. BP’s
responsibilities as Scheduling Agent shall be limited to the scheduling of
Energy and Related Electric Power Services for delivery hereunder (the
“Scheduling Agent Services”), as defined in more detail in Section 5.2 below.

 

5.2 Scheduling Agent Designation. During the Planned Term, IDT shall authorize
BP to act as the exclusive Scheduling Agent for IDT in NYISO (for purposes of
this Article 5, the “ISO”) and to perform all scheduling and settlement with the
ISO, with respect to IDT’s Customer load and the Energy and Related Electric
Power Services purchased in accordance with this Agreement. IDT shall at all
times grant BP all such authority necessary for BP to comply with the ISO’s
Protocols as IDT’s Scheduling Agent during the Planned Term. IDT and BP shall
submit to the ISO all such documentation as may be required to designate BP as
IDT’s Scheduling Agent and to authorize BP to perform Scheduling Agent Services
on IDT’s behalf. IDT acknowledges that BP shall have the right to file all such
reports, subject to IDT’s prior review, as may be required by applicable Legal
Requirements, including, without limitation, all reports as may be required by
the ISO or the applicable regulatory agencies with respect to IDT’s Customer
load and/or transactions consummated by BP on behalf of IDT in accordance with
the terms and conditions of this Agreement.

 

5.3 Compliance with ISO Rules and FERC Regulations. Each of the Parties agrees
to abide by all applicable Legal Requirements (including without limitation all
ISO Protocols, ISO operating and other guidelines, and ISO rules and directives)
in performance of its obligations hereunder, as well as with all applicable FERC
rules and regulations.

 

5.4 Specific Responsibilities by ISO. Schedule 5.4 sets out the respective
responsibilities of IDT and BP with respect to the ISO. This Schedule shall not
be construed as exhaustive.

 

5.5

Financial Responsibilities. Relying upon IDT’s representations, warranties and
covenants that there have been and are no outstanding claims, liabilities or
other issues with the ISO regarding any material financial responsibilities on
or before the date on which the conditions precedents in Section 4.2 of this
Agreement are satisfied, BP agrees, to the extent permissible by the ISO taken
independently, to accept financial credit responsibility under the terms of BP’s
current credit relationship and account with the

 

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ISO arising after and relating solely to the period, in the case of the ISO, at
and after the effective date of the transfer to BP of responsibility to act as
IDT’s Scheduling Agent with respect to the ISO (a “Financial Responsibility
Period”).

For the avoidance of doubt, BP does not accept ultimate financial responsibility
for ISO charges or billings made in the future referencing time periods prior to
the applicable Financial Responsibility Period, which pertain to IDT’s business.
To the extent that BP is deemed by the ISO to be credit responsible for periods
before the effective date of the applicable Financial Responsibility Period, it
is agreed by IDT that IDT shall be solely responsible for such charges and
billings and hereby indemnifies and holds BP harmless from any and all such
liability with respect to any such charges and billings should BP be obligated
as the financially responsible party to make payment to the ISO.

IDT shall require any successor to BP as the responsible party to the ISO to
accept credit responsibility for transactions after the appointment of such
person with the ISO as the successor financially responsible party; provided
that nothing herein shall require BP to continue to act as the financially
responsible party for IDT following an IDT Event of Default. To the extent that
BP is deemed by the ISO to be credit responsible for periods after (x) the
successor financially responsible party has been recognized by the ISO,
(y) termination of this Agreement or (y) an IDT Event of Default, it is agreed
by IDT that IDT shall be solely responsible for such charges and billings and
hereby indemnifies and holds BP harmless from any and all such liability with
respect to any such charges and billings should BP be obligated as the
financially responsible party to make payment to the ISO.

In the event that the ISO invoices BP for charges attributable to IDT’s business
related to transactions that occurred during the Planned Term, but after the
conclusion of Energy deliveries hereunder, as applicable, then BP shall bill and
IDT shall pay for such charges even though these accounting adjustments or
resettlements may occur after the expiration or Early Termination of this
Agreement without any limitation as to time. The obligations of IDT under this
Section 5.5 shall survive expiration or termination of this Agreement.

 

5.6 Transition Period. Until such time as the ISO recognizes the commencement of
the Financial Responsibility Period applicable to it, IDT acknowledges that
(i) all financial transactions that are Credit-Enabled Transactions, as well as
physical transactions, contain terms as between BP and IDT that are equivalent
to the terms as between BP and the Third-Party Seller and (ii) BP will schedule
such physical bilateral transactions with respect to Energy, Natural Gas or
Related Services, for delivery to IDT at receipt points, and IDT shall be
obligated to pay for such physical Energy. IDT is and will be obligated to
accept and pay for delivery (physical or financial) of these products and
volumes and any associated ISO charges or fees on the same terms accepted by BP
and/or BPCNA.

 

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OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

5.7 Post-Transition Period. Upon commencement of any Financial Responsibility
Period, all physical transactions that are Credit-Enabled Transactions shall be
scheduled to BP and subsequently scheduled by BP on behalf of IDT under
applicable ISO rules and procedures for ultimate delivery by IDT to Customers.
Additionally, BP will submit, on behalf of IDT, all schedules required to be
submitted to the ISO necessary to deliver the Energy or Related Electric
Services to be sold to IDT pursuant to any outstanding Transaction. IDT is and
will be obligated to accept and pay for delivery (physical or financial) of
these products and volumes and any associated ISO charges or fees on the same
terms accepted by BP and/or BPCNA.

 

5.8 Scheduling Discrepancies. An IDT Event of Default will occur if IDT's
actualized delivered power volumes by individual ISO load zone and customer
class hourly load profile shape applicable to ISO settlements in any given one
month period exceeds * percent (*%) for any two individual months in a given
consecutive twelve (12) month time period. If the actualized delivered power
volumes by ISO load zone and customer class hourly load profile shape applicable
to ISO settlements in any given one month period exceeds * percent (*%) then the
penalty would be $* payable to BP for each monthly occurrence. If there were
extenuating circumstance that caused the scheduling deviation, and both parties,
acting reasonably, mutually agreed that the event was an extenuating
circumstance, then the event would not be considered an IDT Event of Default.

ARTICLE 6

SUPPLY FEE

In compensation of BP’s services, duties, responsibilities and obligations
hereunder, BP shall be entitled to receive a fee for each calendar month (or
portion thereof) during the Planned Term, payable by IDT to BP each month equal
to the applicable amount for each MWh or MMBtu, as applicable, of Energy,
Natural Gas or Related Services (whether such delivery is a physical delivery or
a financial transaction constituting a deemed delivery of Energy) purchased and
sold in each Credit-Enabled Transaction and Direct Transaction as set forth in
the Exhibit 1 (in either case, the “Supply Fee”). The Supply Fee shall be
considered for all purposes under the EEI Agreement and NAESB Agreement, as
applicable, to be in lieu of any other similar fee (not a separate and
additional fee or cost) in respect of any Credit-Enabled Transaction or Direct
Transaction (unless separately agreed to in a Transaction under the EEI
Agreement or NAESB Agreement, as applicable).

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

ARTICLE 7

SALE CONTRACTS

In order to sell Energy, Natural Gas or Related Services, IDT may enter into
Sale Contracts, subject to the following terms and conditions:

 

7.1 Sale Contract Terms. With respect to Sale Contracts entered into during the
Term, IDT shall, at a minimum, include the terms and conditions listed
hereinafter.

 

  (a) Either (i) all Sale Contracts contain a provision requiring the Customers
to make payment for all sums due thereunder directly and exclusively to the
Deposit Account (the “Payment Provision”), or (ii) IDT shall give legally
binding written instructions consistent with such Payment Provision to any
Customer which is not a party to a Sale Contract already containing such a
Payment Provision. Each new Sale Contract will have provisions substantially
similar to the material terms set forth in Exhibit 3 to this Agreement. A breach
of this sub-section may constitute an Event of Default under Section 18.1(c).

 

  (b) If Customer makes payment for amounts due to IDT at IDT’s place of
business, IDT shall ensure that these payment amounts are deposited into the
Deposit Account within three (3) Business Days from date of receipt of payment,
but in any case as soon as possible. IDT shall deposit all such amounts into the
Deposit Account, and shall make no other use or disposition thereof.

 

  (c) No Customer contracted by IDT shall be a * with any utility or ISO
sponsored program without the prior written consent of BP; provided that a
Customer may be * if such Customer’s demand (i) is established on a day ahead
load shape basis and (ii) does not require real-time metering and associated
technological infrastructure to monitor and control such Customer’s demand real
time.

 

  (d) No customer contracted by IDT shall knowingly have an Unusual Load Profile
without written approval from BP. A customer has an “Unusual Load Profile” if
such customer exceeds 7 MW of demand during any calendar year and has a daily,
monthly, or annual load factor of less than *%.

 

  (e) The aggregate of settled amounts that are payable from fixed price Sale
Contracts for any calendar month will not exceed *% of the Aggregate Customer
Receivables.

 

7.2 Transactions Outside Approved Retail Energy Business. IDT shall not sell and
deliver Energy, Natural Gas or Related Services to any Person on a retail basis
under the terms of this Agreement if such sale and delivery would not constitute
an Approved Retail Energy Business unless (a) a BP Party provides its prior
written consent to such sale and delivery and (b) such sale and delivery is made
pursuant to agreements and contracts approved by a BP Party; provided, however,
that nothing in this Agreement precludes IDT from selling and delivering Energy,
Natural Gas or Related Services on a retail basis to any Person outside the
scope of this Agreement, subject to the option described in the immediately
succeeding sentence. The BP Parties shall have the option, but not the
obligation, to include such new Sale Contracts under the terms hereof with such
deemed charges as may be necessary to include such Sales Contract. Within the
Designated Region, IDT shall not make sales at wholesale of Energy, Natural Gas
or Related Services except to the BP Parties.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

7.3 Sale Contract Accounting. IDT shall be responsible for all volumetric and
financial accounting with respect to the Sale Contracts entered into pursuant to
this Agreement. Billing under any Sale Contracts shall be in accordance with
such Sale Contracts. IDT shall provide or cause to be provided upon request of
BP, in addition to any other disclosure requirements hereunder, all information
and data reasonably required by BP to verify the accounting pertaining to the
Sale Contracts activity, including copies of the Customer Sale Contract if
requested.

 

7.4 Modification to Sale Contracts. IDT will not modify, to the extent extant,
any of the material terms set forth in Exhibit 3, remittance address, account
number, payment instructions and contract delivery point under any Sale Contract
without the prior written consent of BP.

ARTICLE 8

REPORTING OBLIGATIONS

 

8.1 Obligations of BP.

 

  (a) Daily Settlement Reports. BP will provide on a daily basis all the
settlement data associated with the IDT DUNS number as provided by the ISO in
the daily Settlement Extract in its raw format (CSV, HTTP or xml format). BP
will post the daily files in a secure website site that IDT can access remotely.

 

  (b) Settlement Summary Reports. Two (2) Business Days after the ISO’s
settlement period, BP will provide to IDT a settlement summary including
day-ahead and real time volumetric and price data, as well as any other cost
component including Capacity, ancillaries, etc. In the case of the other cost
components, BP will provide to IDT with sufficient detail, including any
allocation formulas, to allow IDT to verify the nature and the amounts charged
or credited to IDT.

 

  (c)

ISO Reports. On a continuous basis, BP will provide IDT online access to view
and download reports regarding activity with the ISO, including daily
settlements reports. IDT’s access will be limited to data regarding transactions
in which the BP’s and IDT’s data is not commingled together. With respect to
transactions where IDT’s and BP’s data is commingled, BP will provide to IDT
with its apportionment of the related transaction within three (3) Business Days
from the availability of the data to BP. In such cases, BP will provide IDT with
sufficient detail, including any allocation formulas, to allow IDT to verify the
nature and the amounts charged or credited to IDT. If IDT reasonably requests
additional

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

relevant information, BP shall exercise commercially reasonable efforts to
provide such information. BP will not be required to provide on line direct
access in instances where the access cannot be restricted to IDT’s specific data
only.

 

8.2 Obligations of IDT.

 

  (a) Scheduling reports. On a weekly basis, IDT will provide to the regional
trade desks at BP a week ahead scheduling forecast by ISO, delivery zone and by
hour. The scheduling report will be delivered electronically in a form and
mechanism mutually acceptable to the Parties.

 

  (b) Forecasting reports. On a quarterly basis, IDT will provide to the trade
control group at BP a weekly, rolling 3-month and rolling 12-month forecast by
ISO delivery zone. The forecasting report(s) will be delivered electronically in
a form and mechanism mutually acceptable to the Parties.

 

  (c) Systems Reports. On a continuous basis, IDT shall make available to the
trade control group at BP via online access at a secure website, reports of its
Customer obligations, projections, incremental business changes, including
specific customer contracts if requested by ISO, ISO zone or specific location
and by month for Energy, Natural Gas or Related Services, RPS Renewable Energy
Certificates and other similar information as reasonably requested, including,
but not limited to, its monthly load forecast report and monthly load forecast
variance report (Any exceptions shall not be sustained without written approval
from BP).

 

  (d) Environmental Reporting. On a monthly basis, IDT shall provide and
reconcile with BP any environmental reporting that BP is required to do in
connection with a Direct Transaction or a Credit-Enabled Transaction.

 

  (e) NERC Reports; Notice of Non-compliance. IDT shall be responsible for
providing, on a timely basis, to NERC all reports and other information that is
required to be provided by a Load Serving Entity under NERC’s Reliability
Standards. IDT shall provide prompt notice to BP of any IDT failure to comply
with NERC’s Reliability Standards.

 

  (f) Other Information. IDT promptly shall provide to the trade control, risk
management, credit, compliance and legal groups at BP all other information,
reports, and data reasonably requested by BP in order for BP to comply with all
ISO and other reporting requirements under applicable laws, rules and
regulations relating to the services, including the QSE services, being provided
by BP hereunder. IDT agrees to indemnify and hold BP harmless from all
penalties, liabilities, costs and expenses (including reasonable attorney fees)
incurred by BP for being non-compliant with any reporting requirements on
account of the failure of IDT in timely providing to BP any of the information
and reports set forth in this Agreement. The provisions of this Section 8.2
shall survive termination or expiration of this Agreement.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (g) Aged Accounts. Within five (5) Business Days after the end of each month,
a report setting forth IDT’s Non-POR Customer aged accounts receivable (e.g.,
1-30 days outstanding, 31-60 days outstanding, 61-90 days outstanding, etc.),
including the amount outstanding for each account receivable listed and the
number of days each such account receivable is past due.

 

  (h) Cash Flow Projections. Within two (2) Business Days prior to the end of
each calendar month, a projection of IDT’s cash flow for the immediately
succeeding 7ninety (90)-day period, such projections to be developed by IDT in
good faith and based on IDT’s best judgment as to the performance of the
Approved Retail Energy Business during such period.

 

  (i) Financial Reports. IDT promptly shall provide to the credit department at
BP:

 

  (i) as soon as available and in any event within 50 days after the end of each
quarterly fiscal period of each fiscal year of IDT, statements of income of IDT
for such period and for the period from the beginning of the respective fiscal
year to the end of such period, and the related balance sheet of IDT as at the
end of such period, setting forth in each case in comparative form the
corresponding figures for the corresponding periods in the preceding fiscal
year, accompanied by a certificate of a senior financial officer of IDT, which
certificate shall state that (A) said financial statements fairly present the
financial condition and results of operations of IDT, in accordance with
generally accepted accounting principles, consistently applied, as at the end
of, and for, such period (subject to normal year end audit adjustments), and
(B) no Event of Default occurred during such period and is continuing;

 

  (ii)

as soon as available and in any event within 90 days after the end of each
fiscal year of IDT, statements of income and cash flows of IDT for such fiscal
year and the related balance sheet of IDT as at the end of such fiscal year,
setting forth in each case in comparative form the corresponding figures for the
preceding fiscal year, and accompanied by an unqualified opinion thereon of
independent certified public accountants recognized by the Public Company
Accounting Oversight Board, which opinion shall state that said financial
statements fairly present the financial condition and results of operations of
IDT as at the end of, and for, such fiscal year in accordance with generally
accepted accounting principles, consistently applied accompanied by a
certificate of a senior officer of IDT, which certificate shall state that
(A) said financial statements fairly present the financial condition and results
of operations of IDT, in accordance with

 

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generally accepted accounting principles, consistently applied, as at the end
of, and for, such period (subject to normal year end audit adjustments), and
(B) no Event of Default occurred during such period and is continuing;

 

  (iii) a notification as soon as IDT knows or has reason to believe that a
material adverse claim had been made against any of the Collateral or any
substantial and adverse change in the value of the Collateral has occurred; and

 

  (iv) from time to time such other information regarding the financial
condition, operations, business or prospects of IDT, or regarding any of the
transactions contemplated hereby or by any of the Related Agreements as BP may
reasonably request.

 

8.3 Material Deviations. A party shall notify the other of any material
deviation from any of the provisions in this Article 8 within two (2) Business
Days of its knowledge of such deviation.

 

8.4 Audit. BP shall have the right at its expense and upon reasonable advance
notice to audit and examine the books and records of the IDT to the extent
reasonably necessary to verify the accuracy of any information pertaining to the
Obligations, a Credit-Enabled Transaction or a Direct Transaction, or any
statement, invoice, payment, calculation or determination made hereunder or any
Related Agreement; provided that BP may not conduct more than three such audits
or examinations within any calendar year. To the extent that BP appoints a
professional audit firm to conduct any such audit, such audit firm shall be
bound by confidentiality obligations. The entity being audited shall fully
cooperate with any such audit. Such right shall extend for a period of twelve
(12) months after the end of the Planned Term of the Agreement, or solely with
respect to the case of a Transaction that extends beyond the end of the Planned
Term of this Agreement for a period of twelve (12) months after the end of the
term of the extended Transaction. If any such audit shall reveal any error or
inaccuracy in the information, statements, invoices, payments, calculations or
determinations made by the entity being audited, then adjustments and
corrections shall be made as promptly as practicable thereafter.

ARTICLE 9

ACCOUNTS

 

9.1 Deposit Account.

 

  (a)

IDT, prior to the initial date on which a Direct Transaction or Credit-Enabled
Transaction is effected, shall maintain a single remittance, non-interest
bearing deposit account (the “Deposit Account”), which shall be governed by the
Deposit

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

 

Account Control Agreement, for the deposit of funds received from Customers,
including payments made to BP pursuant to any POR Program. The Deposit Account
shall be in the name of IDT, but the BP Parties shall have a first-priority Lien
in the Deposit Account. The Deposit Account Control Agreement entered into with
respect to the Deposit Account shall provide that funds that have been deposited
into the Deposit Account shall be remitted automatically on a daily basis to BP
for deposit into the Collateral Account. Notwithstanding anything to the
contrary contained in any Transaction Document, IDT shall be responsible solely
for all fees and service charges relating to the Deposit Account and IDT shall
make any and all payments to the Account Bank to ensure that no charges are made
by the Account Bank against the Deposit Account, none of which shall b7e debited
against the Deposit Account.

 

  (b) The Deposit Account and the Deposit Account Control Agreement related
thereto shall be maintained and remain in effect with an effective date prior to
the first transaction during the Planned Term and until all Obligations under
this Agreement and any other Transaction Documents are satisfied. After the
Deposit Account and the Deposit Account Control Agreement are no longer needed,
BP shall take all reasonable actions necessary to terminate them. BP and IDT
shall take such actions as may be reasonably necessary to ensure that each Party
has access to information in reasonable detail indicating the amounts
transferred into the Deposit Account. If the Account Bank makes an error in the
amount transferred from (or to) the Deposit Account, the Parties shall take
prompt action, in good faith, to reconcile and correct any such errors.

 

  (c) Once the Deposit Account has been established, IDT shall not change the
details thereof or the designated administrators without the prior written
consent of BP (which consent shall not be unreasonably withheld or delayed). IDT
shall cause the Deposit Account to be, and the Deposit Account shall be,
separate from all other accounts held by or under the control or dominion of IDT
or any other Person (other than BP, any Affiliate of BP, or any designee or
assignee of BP). IDT shall deliver or cause to be delivered to BP as soon as
practicable after the end of each calendar month following the Effective Date,
copies of the account statements for the Deposit Account for such month. Such
account statements shall indicate deposits, credits and transfers, and closing
balances. IDT shall provide any additional information or reports relating to
the Deposit Account and the transactions therein reasonably requested from time
to time by BP. Each reference herein to funds held in the Deposit Account shall
be deemed to be a reference to the aggregate amount of U.S. Dollars credited to
the Deposit Account on the date of determination.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

9.2 Collateral Account.

 

  (a) BP, prior to the initial date on which a Direct Transaction or
Credit-Enabled Transaction is effected, shall establish a non-interest bearing
deposit account (the “Collateral Account”) with the applicable Account Bank, and
in respect of which employees of BP are identified as account administrators.
The Collateral Account shall be in the name of BP. BP shall cause the Collateral
Account to be, and the Collateral Account shall be, separate from all other
accounts held by or under the control or dominion of BP or any other Person. BP
shall provide IDT a schedule of fees associated with the Collateral Account, and
BP shall promptly notify IDT in writing of any changes to such fees occurring
after the Closing Date.

The Deposit Account Control Agreement entered into with respect to the
Collateral Account shall (i) permit an authorized representative of IDT to
provide payment instructions to the applicable Account Bank on any Business Day
to make payments in the manner specified in Section 10.4, and (ii) expressly
state that no funds may be disbursed from the Collateral Account without the
written authorization of an authorized representative of BP. Such Deposit
Account Control Agreement shall provide that if IDT fails to submit payment
instructions timely to the Account Bank and such payment instructions are
related to undisputed amounts due, then the Account Bank shall make
disbursements as directed in writing by the authorized representative of BP.

 

  (b) The financial assets and other property and balances credited to the
Collateral Account shall constitute part of the Collateral and shall not
constitute payment of any Obligation until applied thereto as provided in this
Agreement and the other Transaction Documents. Notwithstanding anything to the
contrary contained in any Transaction Document, IDT shall be responsible solely
for all fees and service charges relating to the Collateral Account and BP may
invoice IDT for any such fee or service charge.

 

  (c) BP shall deliver or cause to be delivered to IDT as soon as practicable
after the end of each calendar month following the Effective Date, copies of the
account statements for the Collateral Account for such month. Such account
statements shall indicate deposits, credits and transfers, and closing balances.
BP shall provide any additional information or reports relating to the
Collateral Account and the transactions therein reasonably requested from time
to time by IDT.

 

  (d) Each reference herein to funds held in the Collateral Account shall be
deemed to be a reference to the aggregate amount of U.S. Dollars credited to the
Collateral Account on the date of determination. If the Account Bank makes an
error in the amount transferred from (or to) the Collateral Account, the Parties
shall take prompt action, in good faith, to reconcile and correct any such
errors.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (e) If, following the delivery of the cash flow projections by IDT to BP
pursuant to Section 8.2(h), BP determines that its financial exposure for the
following month based on its supply to IDT of Energy and Natural Gas under this
Agreement and the Related Agreements exceeds the projected cashflow into the
Collateral Account for the following month, BP shall notify IDT of such
deficiency. IDT may elect to not receive or, if requested by BP, shall not
receive any portion of the distribution of funds on deposit in the Collateral
Account on the next Monthly Distribution Date pursuant to Section 10.4(v).

 

  (f) IDT may deliver funds to BP for deposit into the Collateral Account at any
time during normal business hours.

 

9.3 Independent Collateral Amount.

 

  (a) IDT, prior to the initial date on which a Direct Transaction or
Credit-Enabled Transaction is effected, shall (i) pay to BP in cash an amount
equal to the Independent Collateral Amount (as defined below), or (ii) establish
an irrevocable Qualifying Letter of Credit for the sole benefit of BP in an
amount equal to the Independent Collateral Amount (as defined below), which
shall be maintained until all Obligations of IDT have been satisfied at the end
of this Agreement, including any extension necessary for any Transaction that
extends beyond the end of the Planned Term of this Agreement. For the purposes
of this Agreement, the “Independent Collateral Amount” shall be defined as an
independent amount of at least *. Such amount shall be in addition to any other
amounts received in the Collateral Account. The Independent Collateral Amount
may be drawn by BP to satisfy an Obligation due and owing if a default or an
Event of Default occurs under this Agreement or any other Transaction Document.
If at any time the Independent Collateral Amount is drawn upon by BP, IDT must
deliver to BP within one (1) Business Day the amount necessary to cause the
aggregate amount of (x) cash held by BP and (y) any the Qualifying Letter of
Credit, each provided pursuant to this provision, to equal the Independent
Collateral Amount. The Independent Collateral Amount will not be taken into
consideration (or used) for calculation of a Payment Extension or in the
calculation of Net Exposure under the Master Netting Agreement.

 

  (b) The financial assets and other property and balances comprising the
Independent Collateral Amount shall constitute part of the Collateral and shall
not constitute payment of any Obligation until applied thereto as provided in
this Agreement and the other Transaction Documents.

 

9.4

Deposit Account Control Agreements. BP and IDT will execute one or more deposit
account control agreements with the Account Bank (or such other bank which may
from time to time maintain the Collateral Account or the Deposit Account for
receipt of funds hereunder) governing the deposit of funds into, and the
withdrawal of funds from, each of the Collateral Account and the Deposit
Account, as applicable (each, a “Deposit Account

 

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Control Agreement”). If any Deposit Account Control Agreement is modified or
amended from time to time, such Deposit Account Control Agreement, as modified
or amended, shall for all purposes be deemed to be a Deposit Account Control
Agreement referred to herein.

ARTICLE 10

BILLING AND PAYMENT

 

10.1 Billing; Invoicing. Each applicable month during the Planned Term in which
BP delivers Energy, Natural Gas or Related Services, or any month in which IDT
incurs an obligation to make a payment to BPCNA with respect to any Financial
Product, as contemplated herein, may be referred to herein as a “Delivery
Month.”

 

  (a) For each Delivery Month during the Planned Term, the BP Parties shall
deliver to IDT an invoice under the terms of the relevant Related Agreement and
this Agreement with respect to any outstanding Transaction thereunder (each such
invoice, an “Invoice”). With respect to any Delivery Month, IDT may receive more
than one Invoice from the BP Parties. Subject to clause (b), IDT shall make the
payment due under each such Invoice on the date required under the Related
Agreement pursuant to which such Invoice was delivered to IDT, except for any
invoice or portion of an invoice that IDT disputes in accordance with
Section 10.6 of this Agreement.

 

  (b) IDT hereby acknowledges and agrees that, if information necessary for BP
to prepare the Invoice (including without limitation information from the ISO,
local gas distribution company, or the applicable transmission and distribution
provider) is not available to BP on the date on which the Invoice is required to
be delivered to IDT, then BP may reasonably estimate such amounts based on best
available information for purposes of the Invoice and that the actual numbers
shall be trued up on the next Invoice following the date on which such
information is made available to BP. If BP sends an Invoice based on estimates,
BP shall state in writing that the Invoice is based on estimates.

 

10.2 Payment Extensions. In connection with Related Electric Power Services
performed by BP under this Agreement, BP will be deemed to have provided to IDT
an Invoice for immediate payment in respect of any payments made to the ISO. If
funds on deposit in the Collateral Account are not sufficient to pay the amount
of such Invoice, then BP shall, at IDT’s request, extend the payment date for
such deficient amount for a period of 30 days after the extension is made
(“Permitted Extension Period”) to the extent reasonably necessary to enable
funds to be deposited into the Collateral Account to cover such deficient amount
(any such payment extension, a “Payment Extension”).

 

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  (a) Notwithstanding the foregoing, BP shall not be required to give any such
Payment Extension if:

 

  (i) after giving effect to such Payment Extension, (A) a Collateral
Requirement of IDT would arise under the Master Netting Agreement or (B) the
total aggregate amount of Payment Extensions outstanding would exceed * to IDT
under any POR Program;

 

  (ii) the insufficiency of funds in the Collateral Account is due to Customers
that are not covered by a POR Program failing to make direct payments to IDT
when due as of the date IDT requests the Payment Extension;

 

  (iii) such insufficiency of funds in the Collateral Account has been caused,
or contributed to, by actions or inactions on the part of IDT or any Affiliates
of IDT; or

 

  (iv) the conditions that must be satisfied prior to BP’s entering into any
Direct Transaction have not been fulfilled to the satisfaction of, or have not
been waived by, BP as of the date IDT requests such Payment Extension.

 

  (b) To the extent not reimbursed from future funds in the Collateral Account,
IDT will pay all amounts subject to a Payment Extension in full on the last day
of the applicable Permitted Extension Period.

 

  (c) All amounts subject to a Payment Extension shall bear interest from the
original payment due date for the amount included in the Payment Extension until
the date when the amount is paid in full at a per annum interest rate of LIBOR
plus * basis points. Such accrued interest due on the Payment Extension amount
shall be paid to BP on the earlier of the date on which the amount included in
the Payment Extension is paid in full or the last day of the applicable Payment
Extension Period.

 

  (d) Failure to pay the Payment Extension amount, including accrued interest,
as and when due would constitute an Event of Default.

 

10.3 Interest Accrual.

 

  (a) Any outstanding, unpaid amounts owed by IDT to BP, including any Payment
Extension amount plus accrued interest thereon as provided in Section 10.1 not
paid when due, shall accrue (simple, not compounded) interest pursuant to the
applicable Related Agreement, beginning on the applicable due date until the
date upon which any such outstanding amount is paid; provided, however, that, in
calculating such interest, interest shall accrue only on that portion of the
amount owed as may be outstanding from time to time.

 

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  (b) Any and all interest which may accrue pursuant to Section 10.3(a) shall be
included on the next applicable Invoice delivered by BP hereunder, and any such
interest accrued shall be due and payable in accordance with the payment terms
applicable to such next Invoice.

 

  (c) Notwithstanding the foregoing, the Parties acknowledge and agree that
settlement and resettlement information received by BP from the ISO: (i) shall
be treated as incurred during the month in which BP receives such settlement or
resettlement information from the ISO; (ii) shall be included on the applicable
Invoice covering the month in which BP receives such settlement or resettlement
information from the ISO; (iii) shall be due and payable on the applicable due
date with respect to such Invoice in accordance with the terms of this Agreement
as applicable to such Invoice; and (iv) shall not accrue interest unless and
until such amounts remain outstanding and unpaid as of such due date, unless BP
is subject to interest by the billing ISO.

 

10.4 Distribution from Collateral Account. On (a) the Monthly Distribution Date,
(b) any date on which an Event of Default has occurred and is continuing,
(c) the date payment set forth in an Invoice is due under the terms of the
relevant Related Agreement or (d) the date identified in any written
disbursement request submitted by IDT to BP (which date will be at least two
Business Days after BP receives such written disbursement), BP shall submit
instructions to the Account Bank holding the Collateral Account to withdraw the
applicable amount and transfer such amount (i) to an account of a BP Party to
satisfy any Obligations or (ii) to that account of IDT that is identified in
Exhibit 16.1(m) as IDT’s general account. On any date, funds in the account will
be applied in the following order of priority, without duplication, as follows:

 

  (i) first, to pay any sales taxes or transmission/distribution expenses for
the transmission of Energy or Natural Gas transportation or storage expenses due
and payable by IDT to any third party (that is not an Affiliate of IDT) incurred
in connection with any Direct Transaction or Credit-Enabled Transaction;

 

  (ii) second, to BP to pay any and all fees, expenses and other amounts due and
owing (including amounts due and owing from a prior Delivery Period that remain
unpaid) to BP or BPCNA under the Transaction Documents, including amounts due
and owing under the relevant Related Agreement(s) that, in any such case, are
incurred in connection with any Direct Transaction or Credit-Enabled
Transaction, and the Supply Fee due and owing to BP under this Agreement, and
any charges, fees returned checks or other amounts charged by the Account Bank
that are paid from or debited against the Deposit Account or the Collateral
Account (other than Payment Extensions);

 

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  (iii) third, to reimburse BP for any Payment Extensions due and owing together
with accrued interest thereon;

 

  (iv) fourth, if an IDT Event of Default has occurred and is continuing, all
proceeds from the exercise of BP’s rights on account of such Event of Default on
the part of IDT, to be paid to BP for any and all Obligations which became due
and payable immediately on account of such Event of Default, with any excess
proceeds thereafter to be retained in the Collateral Account as collateral
security for the Obligations, and such amount reserved under this priority shall
be unavailable for distribution pursuant to any lower priority under this
Section 10.4 on such distribution date; and

 

  (v) fifth, provided (A) that no IDT Event of Default, and no event or
occurrence that with the passage of time or the giving of notice or both would
constitute an IDT Event of Default, has occurred and is continuing and (B) no
Payment Extension Period is in effect, on the last Business Day of each month
(the “Monthly Distribution Date”), after application of available amounts to
items first through fourth above, at the written request of IDT and subject to
any retention of funds in accordance with Section 9.2(e), any remaining funds
shall be distributed solely to IDT and IDT shall have the right to use such cash
as it chooses.

 

10.5 ISO Billing Disputes. It is recognized by the Parties that the ISO may have
established time periods for disputing certain matters and the Parties will be
subject to such periods in their performance under this Agreement. Therefore,
notwithstanding any provisions in this Agreement, in the event a Party is barred
from disputing and correcting or adjusting with the ISO any matter of any nature
whatsoever affecting any matter covered by this Agreement because the time
period for such dispute has expired such that a Party would not have been able
to file a dispute with the ISO prior to such expiration (a “Barred Issue”), then
the other Party shall be barred for all purposes from disputing any portion of
any statement, invoice, notice or other matter hereunder to the extent that the
first Party is unable to receive adjustment from or dispute such matter with the
ISO because it is a Barred Issue. BP shall be responsible for promptly reviewing
the accuracy of all ISO settlement statements for the IDT related accounts and
shall promptly notify the ISO and IDT in writing of any errors it finds in
accordance with the ISO’s applicable rules and procedures for disputes over ISO
settlements.

 

10.6

Disputed Invoices, etc. If either Party discovers, any error or inaccuracy in
its own or the other Party’s invoice, payment, calculation, measurement or
determination, then proper adjustment and correction thereof will be made as
promptly as practicable thereafter;

 

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provided, that no adjustments or corrections will be made with respect to errors
or inaccuracies unless reasonably specific written notice of such error or
inaccuracy is given to the other Party within one (1) year of the date of such
erroneous or inaccurate invoice, payment, calculation, measurement or
determination. IDT may, in good faith, dispute the correctness of any invoice
(or of any adjustment to any invoice), at any time within one (1) year after the
date of such invoice. In either such event, a Party shall deliver to the other
Party a notice of dispute, stating the basis for the dispute or adjustment and
setting forth the amount disputed in good faith (the “Disputed Amounts”). The
Parties will use commercially reasonable efforts to promptly resolve any
dispute. Upon resolution of the dispute, any required payment shall be made
within one (1) Business Day of such resolution along with (i) simple (not
compounded) interest accrued at the Interest Rate from the original due date
until paid in full, if IDT is making such required payment and (ii) the amount
of simple (not compounded) interest accrued at the Interest Rate from the
original due date until paid in full, if BP is making such required payment.

ARTICLE 11

REGULATORY CHANGE

 

11.1 In the event of any change in applicable laws, rules or regulations during
the term of this Agreement by a Governmental Authority that (a) makes it illegal
for a Party to continue to perform, either in whole or in material part, under
this Agreement, or (b) result in a materially adverse change in a Party’s
economics under this Agreement (a “Regulatory Event”), in each case which cannot
be avoided by such Party upon the exercise of its best efforts, then such Party
(the “Affected Party”) may provide the other Party (the “Non-Affected Party”)
written notice of the Regulatory Event. The Parties shall for thirty
(30) Business Days after such notice is delivered attempt in good faith to reach
mutual agreement to resolve the material adverse economic impact on the Affected
Party or the inability of the Affected Party to continue to perform or to amend
the terms of this Agreement in light of the Regulatory Event to give effect to
the original intention of the Parties, consistent with the original economic
expectations of both Parties.

 

11.2 If, despite good faith negotiations on the part of the Parties, the Parties
are unable to reach agreement within thirty (30) days, then the Affected Party
shall have the right to terminate this Agreement and any affected Transactions,
with settlement payment to be determined in accordance with the early
termination provisions of the Master Netting Agreement.

 

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ARTICLE 12

PLANNED TERM; EARLY TERMINATION

 

12.1 Planned Term. Unless terminated earlier in accordance with this Agreement,
this Agreement shall remain in full force and effect beginning on the Effective
Date and continue until the Planned Expiration Date (such period being the
“Planned Term”); provided that this Agreement will renew automatically for a
term of one (1) year following the prior Planned Expiration Date unless a Party
has provided written notice to the other Parties at least six (6) months prior
to the next Planned Expiration Date that it will not renew this Agreement;
provided further that this Agreement will not renew after June 30, 2012;
provided further that if this Agreement renews after June 30, 2011, the Early
Termination fee specified in Section 12.2(c) shall no longer apply. The Planned
Expiration Date shall not affect or excuse the performance of either Party under
any provision of this Agreement that by its terms survives such expiration.
Further, this Agreement shall continue to apply to, and any such expiration of
the Planned Term shall not affect or excuse the performance by either Party
under, this Agreement or any agreement between the Parties entered into pursuant
hereto related to obligations which were undertaken prior to such expiration and
which remain unperformed at the time of such expiration. Termination of this
Agreement pursuant to this Section 12.1 shall not affect the continued
effectiveness of the EEI Agreement, the NAESB Agreement, the ISDA Agreement, and
any Transactions confirmed under any of the foregoing, or the Master Netting
Agreement.

 

12.2 Early Termination. Each of the Parties may terminate this Agreement prior
to the end of the Planned Term (any such termination, an “Early Termination”) as
follows:

 

  (a) Early Termination by IDT. Upon sixty (60) days’ prior written notice to
BP, IDT may terminate this Agreement at its election for convenience.

 

  (b) Early Termination by BP. Upon four (4) months prior written notice to IDT,
BP may terminate this Agreement if the long-term, unsecured indebtedness of
BPCNA is rated less than BBB- by S&P or less than Baa3 by Moody’s.

 

  (c) Effect of Early Termination.

 

  (i) On a Business Day that is no sooner than five (5) Business Days prior to
the date on which the terminating Party has proposed, in its notice of
termination delivered pursuant to Section 12.2(a) or (b), as applicable, that
this Agreement terminate, the non-terminating Party shall, using the terms of
the Master Netting Agreement, calculate the UMA Final Settlement Amount as of
such Business Day. In determining the UMA Final Settlement Amount, (A) the
non-terminating Party shall be deemed to be the Non-defaulting Party, and
(B) the calculating Party shall include in the calculation of the UMA Final
Settlement Amount only those Direct Transactions or Credit-Enabled Transactions
that will be terminated on the date of Early Termination pursuant to Article 15.
Upon completing such calculation of the UMA Final Settlement Amount, such amount
shall constitute the “Early Termination Net Payment” hereunder. If the Early
Termination Net Payment is positive, IDT shall pay to BP when due the Early
Termination Net Payment. If the Early Termination Net Payment is negative, BP
shall pay to IDT when due the Early Termination Net Payment.

 

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  (ii) If IDT elects an Early Termination pursuant to Section 12.2(a), IDT shall
be obligated to pay to BP, in addition to any Early Termination Net Payment that
it may owe upon an Early Termination, an amount equal to the greater of (A) * or
(B) *% of the Supply Fees that, but for such Early Termination, IDT would owe to
BP from the date of Early Termination through the end of the Planned Term (the
“Supply Fee Termination Payment”). BP shall calculate the Supply Fee Termination
Payment. BP shall utilize the forecasted quantities of Natural Gas and Energy
that, but for such Early Termination, BP would have sold and delivered to IDT in
connection with any Direct Transaction or Credit-Enabled Transaction from the
date of Early Termination through the end of the Planned Term. If BP must pay to
IDT when due the Early Termination Net Payment, BP may offset the Supply Fee
Termination Payment against the Early Termination Net Payment it owes.

 

  (iii) As soon as practicable after completing the calculation of the Early
Termination Net Payment and, if any, the Supply Fee Termination Payment, the
calculating Party shall provide notice to the other Party of (A) the Early
Termination Net Payment and, if any, the Supply Fee Termination Payment,
(B) whether such Early Termination Net Payment is owed by the terminating Party
or the non-terminating Party and (C) the date on which such Early Termination
Net Payment and, if any, the Supply Fee Termination Payment is due (which
payment date shall be no sooner than two (2) Business Days following the date of
Early Termination). If IDT owes any amounts to BP under this Section 12.2, IDT
also shall pay to BP in full, on the same day it is obligated to pay any Early
Termination Net Payment or Supply Fee Termination Payment, any other outstanding
Obligations (including amounts that remain unpaid as a result of any Payment
Extension and any outstanding Supply Fees). If the Party that owes such payment
fails to make payment when due, the unpaid amount shall accrue interest at the
Interest Rate from the payment date until such amount is paid.

 

  (iv) Following such Early Termination, all Transactions that were included in
the calculation of the Early Termination Net Payment shall be terminated and
shall have no further force and effect. With respect to Transactions that were
not terminated upon such Early Termination, the provisions of Article 15 shall
apply to such Transactions.

 

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  (v) Any amount that IDT is obligated to pay to BP under this Section 12.2
shall constitute one of the Obligations.

ARTICLE 13

TAX AND BANKRUPTCY

 

13.1 Taxes. Each Party shall be responsible for reporting and discharging its
own tax measured by the profit or income of the Party. Each Party shall protect,
defend and indemnify the other Party from any and all loss, cost or liability
arising from the indemnifying Party’s failure to report and discharge such taxes
or satisfy such obligations.

 

13.2 Return of Documents and Information. Upon the termination or expiration of
this Agreement, each Party shall destroy or return to the other all documents,
data, and Information belonging to the other Party and shall cooperate fully to
ensure that the termination or expiration of this Agreement and the transition
is accomplished in an efficient and businesslike manner. If such documents are
destroyed, such destruction shall be certified to the Party owning the
Information by an officer of the Party destroying the same. The foregoing
notwithstanding, neither Party shall be obligated to return or destroy any such
documents, data or information that such Party is retaining pursuant to a
document retention policy established in connection with any civil or criminal
investigations or litigation, in which event the documents, data and information
shall be retained by the Party until such time as the document retention policy
is no longer in effect, at which time the documents, data and information shall
be returned to the other Party or destroyed as aforesaid. To the extent that a
Party’s computer back-up procedures create copies of any such documents, data or
information, such Party may retain such copies in its archival or back-up
computer storage for the period the Party normally archives backed-up computer
records. Any such documents, data or information so retained and not destroyed
will be kept confidential.

 

13.3 Bankruptcy Provisions.

 

  (a) The Parties acknowledge and agree that (i) this Agreement and each
Transaction made under this Agreement or any Related Agreement constitute
“forward contracts” and/or a “swap agreement” and/or “master netting agreement”
as defined under Title 11 of the United States Code (the “Bankruptcy Code”),
(ii) each Party is a “forward contract merchant” or “swap participant” as
defined under the Bankruptcy Code, (iii) the rights of the Parties under the
termination provisions of this Agreement or any Related Agreement will
constitute contractual rights to liquidate, net and setoff Transactions,
(iv) any payment related to or setoff related to this Agreement or any Related
Agreement shall constitute a “settlement payment” as defined in Section 101(51A)
of the Bankruptcy Code; and (v) the Parties are entitled to and desire
enforcement of the rights under, and protections afforded by, Sections 362, 546,
553, 556, 560, 561, and 562 of the Bankruptcy Code.

 

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  (b) Under this Agreement, the term “setoff” means, without limitation, offset,
combination of accounts, netting, right of retention or withholding, contractual
right to liquidate transactions, or comparable right or requirement to which a
Party is entitled or subject to (whether arising under this Agreement, any
Related Agreement, any other Transaction Document, or other agreements between
the Parties, under law or otherwise) that is exercised by, or imposed on, the
other Party. Further, the Parties acknowledge and agree that, pursuant to
Sections 362 and 546 of the Bankruptcy Code, transfers and payments made in
connection with this Agreement or any Related Agreement are not enjoined or
otherwise precluded by the automatic stay imposed by the Bankruptcy Code and are
not subject to avoidance under the Bankruptcy Code.

ARTICLE 14

[RESERVED]

ARTICLE 15

WIND-DOWN PERIOD

 

15.1 The period commencing on the day immediately following the last day of the
Planned Term or the date selected by the terminating Party in connection with an
Early Termination (the “Wind-Down Commencement Date”) to the date of the
satisfaction in full of all obligations under the Agreement and the other
Related Agreements, including, without limitation, all Direct Transactions and
all Credit-Enabled Transactions (the “Wind-Down End Date”) will be referred to
as the “Wind-Down Period.”

 

15.2 No later than 90 days before the last day of the Planned Term or no later
than the date that is fifteen (15) days before the effective date of Early
Termination, as applicable, IDT will have the right and obligation to deliver to
BP in writing a plan to wind-down BP’s exposure with respect to the Agreement
and the Related Agreements. If IDT fails to deliver to BP such a plan by the
date due, BP may create the plan for winding-down its exposure, which plan shall
be binding on IDT. Any such plan may include one or more of the following
options:

 

  (a) “Assignment Option”: IDT may request BP to assign to one or more
Creditworthy Assignees (as defined below) any of BP’s positions under
Credit-Enabled Transactions or Direct Transactions on price, terms and
conditions acceptable to BP.

 

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  (i) In connection therewith BP shall be responsible for effecting the
assignment of transactions, so long as a Creditworthy Assignee is available to
take assignment and assume all obligations under the assigned transactions going
forward.

 

  (ii) Either the Creditworthy Assignee or IDT must accept all responsibility in
respect of the position with the ISO or RTO.

 

  (iii) As used herein, “Creditworthy Assignee” shall mean a counterpart(ies)
whose long-term unsecured debt is rated at least “A” by Moody’s or “A” by S&P
and the ability to perform on the applicable assigned transactions.

 

  (b) “Termination Option”: IDT may Close-Out any Credit-Enabled Transaction or
Direct Transaction by paying to, or receiving from, BP an amount equal to the
UMA Final Settlement Amount, calculated under the Master Netting Agreement for
the Direct Transactions and Credit-Enabled Transactions being Closed-Out.

 

  (c) “Hold Option”: IDT may leave in place any Credit-Enabled Transaction or
Direct Transaction. However, until all Transactions have been finally assigned
under the Assignment Option, terminated under the Termination Option, expired
under the Hold Option, or defeased under the Defease Option (as defined below),
the Liens under the Security Documents securing this Agreement and the Related
Agreements shall remain in place and this Agreement shall remain in full force
and effect solely with respect to such Credit-Enabled Transactions or Direct
Transactions whose term extends beyond the Planned Term or effective date of the
Early Termination of this Agreement.

 

  (d) “Defease Option”: IDT may provide guaranties of Creditworthy Assignees or
letters of credit, surety bonds, or cash in amounts and on terms reasonably
satisfactory to BP with respect to any Direct Transactions or Credit-Enabled
Transactions left in place under the Hold Option, and for each transaction so
guaranteed or secured, BP shall release its liens and security interests
securing such transaction.

 

15.3 During the Wind-Down Period in all cases, (i) IDT will not be permitted to
enter into any Purchase Contracts or Sale Contracts that would affect BP’s
rights and obligations under this Agreement, and BP will be under no obligation
to enter into Direct Transactions or Credit-Enabled Transactions and (ii) all
provisions of the Agreement and the other Transaction Documents will remain in
full force and effect, except as described in clause (a) of Section 15.2.

 

  (a) In the event that all transactions under the Agreement have been finally
assigned under the Assignment Option, terminated under the Termination Option,
expired under the Hold Option, or defeased under the Defease Option, BP shall
within three (3) Business Days, terminate all of BP’s liens and security
interests securing the Agreement.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

ARTICLE 16

REPRESENTATIONS AND WARRANTIES

 

16.1 Representation and Warranties of IDT.

IDT represents and warrants to the BP Parties as follows:

 

  (a) It (i) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, (ii) is duly qualified and in
good standing as a foreign corporation and has all governmental licenses in each
other jurisdiction in which it owns or leases property or in which the conduct
of its business requires it to so qualify or be licensed and where, in each
case, failure so to qualify or be licensed and be in good standing has had, or
could reasonably be expected to have a Material Adverse Effect and (iii) has all
requisite corporate power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted.

 

  (b) The execution, delivery and performance by it of each Transaction Document
to which it is a party and the grant by it of the security interest pursuant to
the Security Documents and the Master Netting Agreement, and the consummation of
the other transactions contemplated hereby and thereby, are within its powers,
have been duly authorized by all necessary corporate action, and do not
(i) contravene its organizational documents, (ii) violate any applicable law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award, (iii) conflict with or result in the breach of, or constitute a default
under, any contract, loan, indenture, mortgage, deed of trust, lease or other
instrument binding on it or any of its properties or (iv) except for the Liens
granted in favor of BP hereunder and under the Security Documents and the Master
Netting Agreement, result in or require the creation or imposition of any Lien
upon or with respect to any of its properties.

 

  (c) No authorization or approval or other action by, and no notice to or
filing with, any Governmental Authority or regulatory body or any other third
party is required for:

 

  (i) the due execution, delivery, recordation, filing or performance by it of
the Transaction Documents to which it is a party or the consummation of the
transactions contemplated hereby or thereby; or

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (ii) the exercise by the BP Parties of their rights under the Transaction
Documents, except, as set forth in Schedule 16.1(c), for (A) authorization to
provide retail electricity and Natural Gas services and Related Services in the
applicable jurisdictions which authorization has been obtained and is in full
force and effect, (B) filings in respect of the Liens created under the Security
Documents or the Master Netting Agreement, including but not limited to notices
and other filings in connection with the Assignment of Claims Act of 1940 in the
case of any Government Contract, and (C) in the event of a foreclosure by BP on
the Collateral, filings with and approvals by any Government Authority and
regulatory body, including but not limited to the Federal Energy Regulatory
Commission.

 

  (d) Each Transaction Document to which it is a party has been duly and validly
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as may
be limited by bankruptcy, insolvency or other similar laws affecting the rights
of creditors generally, and except as enforcement may be limited by general
equitable principles (regardless of whether enforcement is sought in a court of
law or equity).

 

  (e) The balance sheet of IDT as at July 31, 2008 and the related statements of
income and cash flows of IDT for the fiscal year then ended, with the
unqualified opinion thereon of IDT independent public accounting firms that is
recognized by the Public Company Accounting Oversight Board, and the unaudited
balance sheet of IDT and statements of income and cash flows of IDT for the
period ending April 30, 2009, copies of which have been furnished to BP, present
fairly the financial condition of IDT as at such respective dates and the
results of the operations of IDT for the respective periods ended on such dates,
all in accordance with generally accepted accounting principles applied on a
consistent basis. Since April 30, 2009, no event or circumstance has occurred
that has had, or could reasonably be expected to have, a Material Adverse
Effect.

 

  (f) There is no action, suit, litigation or proceeding against it or any of
its property pending before any court, Government Authority or arbitrator, or,
to its knowledge, threatened, nor is there any investigation pending in respect
of it that has had, or could reasonably be expected to have, a Material Adverse
Effect.

 

  (g) There are no material issues regarding it that arose prior to the date of
this Agreement that could reasonably be expected to have an impact on BP’s
credit or contracts with the ISO or RTO.

 

  (h) It is not (i) an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended or (ii) a
“commodity pool operator” or a “commodity trading advisor” as defined in, or
subject to regulation under the Commodities Exchange Act, as amended.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (i) It is the sole beneficial owner of, and has good and legal title to the
Collateral, free and clear of all Liens and other adverse claims and
encumbrances. No Lien exists or will exist upon the Collateral at any time,
except for the Lien in favor of BP created or provided for herein and under the
Security Documents, which Lien created in favor of the BP Parties constitutes a
valid first and prior perfected Lien on the Collateral, subject to no other
Lien.

 

  (j) Its full and correct legal name, type of organization, jurisdiction of
organization, organizational ID number (if applicable) and mailing address as of
the Effective Date are correctly set forth in Annex 1 to the Pledge and Security
Agreement. There is no UCC financing statement or similar Lien filing describing
IDT’s property or identifying IDT as a debtor in effect on the Effective Date
except as set forth on Annex 1.

 

  (k) It has not (i) within the period of four months prior to the Effective
Date, changed its location (as defined in Section 9-307 of the UCC),
(ii) heretofore changed its name, or (iii) heretofore become a “new debtor” (as
defined in Section 9-102(a)(56) of the UCC) with respect to a currently
effective security agreement previously entered into by any other Person.

 

  (l) [Reserved]

 

  (m) Other than what is set forth in the IDT financial statements through
April 30, 2009, it does not have (i) any Indebtedness or (ii) other liabilities
other than obligations under existing Sale Contracts and existing Purchase
Contracts to which it is a party. Schedule 16.1(m) sets forth a complete and
correct list of all such Purchase Contracts and Sales Contracts in effect as of
the Effective Date.

 

  (n) It has no subsidiaries other than North American Energy, Inc.

 

  (o) It has delivered to BP a true and complete copy of its organizational
documents. The only shareholder of IDT on the date this representation is made
is IDT Capital, Inc., which is a wholly owned subsidiary of IDT Corp. As of the
date this representation is made, (A) all equity interests in IDT have been duly
authorized and validly issued and are outstanding, (B) there are no outstanding
equity rights with respect to IDT, including (1) any securities convertible into
or exchangeable for equity interests in IDT, or (2) any rights to subscribe for
or to purchase, or any options, warrants, or other rights to acquire, equity
interests in IDT, and (C) there are no outstanding obligations of IDT to
repurchase, redeem, or otherwise acquire any partnership or other equity
interests, or securities convertible into or exchangeable or exercisable for
equity interests, in IDT, nor are there any outstanding obligations of IDT to
make payments to any Person, such as “phantom stock” payments, where the amount
thereof is calculated with reference to the fair market value or equity value of
IDT.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (p) It has obtained all environmental, health and safety permits, licenses and
other authorizations required under all Environmental Laws to carry on its
business as now being or as proposed to be conducted, except to the extent
failure to have any such permit, license or authorization has not had, or could
not reasonably be expected to have, (either individually or in the aggregate) a
Material Adverse Effect. Each of such permits, licenses and authorizations is in
full force and effect and it is in compliance with the terms and conditions
thereof, and is also in compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in any applicable Environmental Law or in any regulation,
code, plan, order, decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder, except to the extent failure to
comply therewith has not had, or could not reasonably be expected to have,
(either individually or in the aggregate) a Material Adverse Effect. In
addition, no notice, notification, demand, request for information, citation,
summons or order has been issued, no complaint has been filed, no penalty has
been assessed and no investigation or review is pending or threatened by any
governmental or other entity with respect to any alleged failure by it to have
any environmental, health or safety permit, license or other authorization
required under any Environmental Law in connection with the conduct of the
business of it or with respect to any generation, treatment, storage, recycling,
transportation, discharge or disposal, or any release of any Hazardous Materials
generated by it that, individually or in the aggregate, has had, or could
reasonably be expected to have, a Material Adverse Effect. All environmental
investigations, studies, audits, tests, reviews or other analyses conducted by
or that are in the possession of it in relation to facts, circumstances or
conditions at or affecting any site or facility now or previously owned,
operated or leased by it and that has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect, in each case, have been made
available to BP.

 

  (q) It is in compliance in all material respects with all laws, regulations
and orders of any Governmental Authority applicable to it or its property and
all indentures, agreements and other instruments binding upon it or its
property, including, but not limited to, having obtained and maintained in full
compliance all retail licenses and any other licenses and permits required from
any Governmental Authority necessary to carry out its retail Energy business and
retail Natural Gas business.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (r) The information, reports, financial statements, exhibits and schedules
furnished in writing by or on behalf of IDT to the BP Parties in connection with
the negotiation, preparation or delivery of the Transaction Documents or
included herein or therein or delivered pursuant hereto or thereto, when taken
as a whole, do not contain any untrue statement of material fact or omit to
state any material fact necessary to make the statements herein or therein, in
the light of the circumstances under which they were made, not misleading.

 

  (s) It has not been suspended, debarred or declared ineligible, or been
proposed for suspension, debarment, or ineligibility, from or with respect to
bidding on or performing Government Contracts or from doing business with any
Government Authority. It has not been (and is not now being), within the past
six years: (i) audited (outside the audits conducted in the ordinary course of
business) or investigated; (ii) subject to any indictments or civil,
administrative or criminal complaints by any Governmental Authority, or any
contractor or subcontractor with a Governmental Authority; or (iii) threatened
with any such audit or investigation or requested to provide information with
respect to any alleged irregularity, misstatement or omission arising under or
relating to any Government Contract or any Government Bid. It has complied in
all material respects with all laws and regulations applicable to Government
Contracts governing or applicable to its Government Contracts and Government
Bids, including the terms and conditions of all such Government Contracts and
Government Bids. Each Government Contract performed or being performed by it was
legally and properly awarded to it and, if performance is ongoing, each
Government Contract is currently valid. It has not, in obtaining or performing
any Government Contract, violated any laws, regulations, rules, directives,
requirements or procedures of any Governmental Authority or any other applicable
legal requirement.

 

  (t) It has obtained liability insurance, in an amount not less than
$10,000,000 per occurrence, with financially sound and reputable insurance
companies (rated at least “A” by A M Best), and with respect to risks of a
character usually maintained by companies engaged in the same or similar
business similarly situated.

 

  (u) It has paid and discharged all taxes, assessments and governmental charges
or levies imposed on it or on its income or profits or on any of its property
prior to the date on which penalties attach thereto, except for any such tax,
assessment, charge or levy the payment of which is being contested in good faith
and by proper proceedings and against which adequate reserves are being
maintained in accordance with generally accepted accounting principles.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (v) It is and, upon its incurrence of any Obligations and after giving effect
to the transactions in connection herewith and the other Transaction Documents,
will be, Solvent.

 

  (w) Schedule 16.1(w) sets forth a complete and correct list of Authorized
Direct Pay Customers.

 

16.2 Representation and Warranties of the BP Parties.

Each of the BP Parties represents and warrants to IDT as follows:

 

  (a) It (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) is duly
qualified and in good standing as a foreign corporation and has all governmental
licenses in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed and
where, in each case, failure so to qualify or be licensed and be in good
standing could reasonably be expected to have a Material Adverse Effect and
(iii) has all requisite power (corporate or other) and authority to own or lease
and operate its properties and to carry on its business as now conducted and as
proposed to be conducted.

 

  (b) The making and performance by it of each Transaction Document to which it
is a party, and the consummation of the other transactions contemplated hereby
and thereby, are within its powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene its relevant organizational
documents, (ii) violate any applicable law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award, or (iii) conflict with or
result in the breach of, or constitute a default under, any contract, loan,
indenture, mortgage, deed of trust, lease or other instrument binding on it or
any of its properties.

 

  (c) No authorization or approval or other action by, and no notice to or
filing with, any Governmental Authority or regulatory body or any other third
party is required for (i) the due execution, delivery, recordation, filing or
performance by it of the Transaction Documents to which it is a party or the
consummation of the transactions contemplated hereby or thereby or (ii) the
exercise by BP of its rights hereunder for authorization to provide retail
electricity services in the applicable jurisdictions which authorization has
been obtained and is in full force and effect.

 

  (d) Each Transaction Document to which it is a party has been duly and validly
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as may
be limited by bankruptcy, insolvency or other similar laws affecting the rights
of creditors generally, and except as enforcement may be limited by general
equitable principles (regardless of whether enforcement is sought in a court of
law or equity).

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (e) There is no action, suit, litigation or proceeding against it or any of
its property pending before any court, governmental agency or arbitrator, or, to
the knowledge of BP, threatened, nor is there any investigation pending to the
knowledge of BP in respect of it, that could reasonably be expected to have a
Material Adverse Effect.

 

  (f) The information, reports, financial statements, exhibits and schedules
furnished in writing by or on behalf of BP or BPCNA to IDT in connection with
the negotiation, preparation or delivery of the Transaction Documents or
included herein or therein or delivered pursuant hereto or thereto, when taken
as a whole, do not contain any untrue statement of material fact or omit to
state any material fact necessary to make the statements herein or therein, in
the light of the circumstances under which they were made, not misleading.

 

  (g) BP has not been suspended, debarred or declared ineligible, or been
proposed for suspension, debarment, or ineligibility, from or with respect to
bidding on or performing Government Contracts or from doing business with any
Government Authority. BP has complied in all material respects with all laws and
regulations applicable to Government Contracts governing or applicable to its
Government Contracts and Government Bids, including the terms and conditions of
all such Government Contracts and Government Bids. Each Government Contract
performed or being performed by BP was legally and properly awarded to BP and,
if performance is ongoing, each Government Contract is currently valid. BP has
not, in obtaining or performing any Government Contract, violated any laws,
regulations, rules, directives, requirements or procedures of any Governmental
Authority or any other applicable legal requirement.

ARTICLE 17

COVENANTS

 

17.1 Covenants of IDT. Until the Obligations have expired or been terminated and
the amounts that remain unpaid as the result of any Payment Extension and all
fees payable hereunder shall have been paid in full, IDT covenants and agrees
with the BP Parties that:

 

  (a) Notice of Event of Defaults. It will promptly give BP notice after it
knows or has reason to believe that any IDT Event of Default has occurred, a
notice of such IDT Event of Default describing the same in reasonable detail
and, together with such notice or as soon thereafter as possible, a description
of the action that it has taken or proposes to take with respect thereto.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (b) Litigation. It will promptly give to BP notice of all legal or arbitral
proceedings, and of all proceedings by or before any Governmental Authority,
arbitration panel or regulatory agency, and any material development in respect
of such legal or other proceedings, affecting it.

 

  (c) Existence, Etc. IDT will:

 

  (i) preserve and maintain all of its material rights, privileges, licenses and
franchises;

 

  (ii) comply in all material respects with the Legal Requirements of all
applicable laws, rules, regulations and orders of any Governmental Authority
(including without limitation the Reliability Standards of NERC, ERISA (if
applicable) and all Environmental Laws);

 

  (iii) maintain in full force and effect all retail operating licenses and all
other licenses, permits, consents, approvals, and authorizations necessary to
enter into and perform its Obligations under this Agreement and any other
Transaction Document, and to continue its retail power business in the territory
of NYISO;

 

  (iv) pay and discharge all taxes, assessments and governmental charges or
levies imposed on it or on its income or profits or on any of its property prior
to the date on which penalties attach thereto, except for any such tax,
assessment, charge or levy the payment of which is being contested in good faith
and by proper proceedings and against which adequate reserves are being
maintained in accordance with generally accepted accounting principles; and

 

  (v) timely pay and discharge all of its other material obligations, including
its obligations under this Agreement and the other Transaction Documents, except
those that are being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained in accordance with
generally accepted accounting principles.

 

  (d) Separateness and Going concern. IDT will:

 

  (i) maintain its own separate books and records and bank accounts;

 

  (ii) at all times hold itself out to the public and all other Persons as a
legal entity separate from any other Person;

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (iii) conduct its business in its own name through its duly authorized
officers and comply with all organizational formalities to maintain its separate
existence;

 

  (iv) comply with GAAP in all financial statements and reports required of it
and issue such financial statements and reports separately from any financial
statements or reports prepared for its members and Affiliates; provided that
such financial statements or reports may be consolidated if the separate
existence of IDT and its assets and liabilities, are clearly noted therein;

 

  (v) account for and manage all of its liabilities separately from any other
Person, and pay its own liabilities only out of its own funds;

 

  (vi) use separate invoices and checks with its name and no other name;

 

  (vii) correct any known misunderstanding regarding its separate identity;

 

  (viii) maintain adequate capital for its business, transactions and
liabilities as exist on the Closing Date;

 

  (ix) subject to IDT Corporation’s risk management policies and procedures,
make all decisions with respect to its business and daily operations
independently, although its manager or officers making any particular decision
may also be employees, officers, directors or managers of the Parent, its
members or its Affiliates;

 

  (x) remain Solvent, provided that the foregoing shall not be construed as
imposing an obligation on its members or Affiliates to contribute additional
capital to it;

 

  (xi) maintain all of its assets used or useful in its business in good working
order and condition, ordinary wear and tear excepted; and

 

  (e) Liens. IDT will not create, incur, assume or suffer to exist any Lien upon
any of the Collateral other than the Liens created under the Security Documents.

 

  (f) Insurance. IDT will maintain liability insurance, in an amount not less
than $10,000,000 per occurrence with financially sound and reputable insurance
companies (rated at least “A” by A M Best), and with respect to risks of a
character usually maintained by companies engaged in the same or similar
business similarly situated.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (g) Limitation on Sale Contracts. Absent BP’s prior written consent, which
consent shall not be unreasonably withheld, IDT shall not enter into any Sale
Contract to any Non-POR Customer or for a fixed-price to any POR Customer.

 

  (h) Further Assurances. IDT will promptly from time to time do all such acts
and things as may be required in the reasonable opinion of BP to give effect to
this Agreement and the other Transaction Documents and to preserve and protect
the rights of the BP Parties hereunder and thereunder, including with respect to
any notices, assignments or other documents required to be completed under the
Assignment of Claims Act of 1940.

 

  (i) Payments. IDT shall require that any and all amounts owing to it under any
Purchase Contract or Sale Contract (other than Government Contracts) or under or
pursuant to any other agreement or instrument shall be paid directly to the
Deposit Account, and shall include in each Sale Contract entered into after the
Effective Date the Payment Provision.

 

  (j) Copies of Representative Terms and Conditions. Upon BP’s written request,
IDT shall provide BP with copies of its standard terms and conditions for retail
sales.

 

  (k) Information. All written information furnished after the Effective Date by
IDT to BP or BPCNA in connection with this Agreement or the other Transaction
Documents and the transactions contemplated hereby and thereby will be true,
complete and accurate in every material respect and will not contain any
material omissions, or (in the case of projections) based on reasonable
estimates and assumptions, on the date as of which such information is stated or
certified.

 

  (l) Transactions with North American Energy. Other than Permitted Other
Transactions, IDT will not receive natural gas or Related Natural Gas Services
from North American Energy without the express prior written consent of BP.

 

17.2 Covenant of BP Parties. Until the Obligations have expired or been
terminated and the amounts that remain unpaid as the result of any Payment
Extension and all fees payable hereunder shall have been paid in full, each of
the BP Parties covenant and agree with IDT that it will promptly give IDT notice
after it knows or has reason to believe that any BP Event of Default has
occurred, a notice of such BP Event of Default describing the same in reasonable
detail and, together with such notice or as soon thereafter as possible, a
description of the action that it has taken or proposes to take with respect
thereto.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

ARTICLE 18

EVENTS OF DEFAULT

 

18.1 IDT Events of Default. If any of the following events (each an “Event of
Default”) shall occur and be continuing:

 

  (a) IDT shall fail to pay any amount as and when such amount shall become due
and payable to BP under this Agreement or any other Transaction Document, unless
such amount is subject to a Payment Extension in which event a failure on the
part of IDT to pay any amount that was not paid due solely to any Payment
Extension when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise; or

 

  (b) IDT shall fail to pay any interest on any amount including any Payment
Extension or any fee or any other amount (other than an amount referred to in
clause (a) of this Article) payable under this Agreement or under any other
Transaction Document, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of three (3) Business Days
or more; or

 

  (c) any material failure of IDT to observe any provision, term, covenant or
agreement (other than any term, covenant or agreement referred to in clause
(a) or (b)) under (i) this Agreement, its organizational documents, or any other
Transaction Document (including without limitation the EEI Agreement, the NAESB
Agreement, or the ISDA Agreement) or (ii) Sale Contracts under which,
individually or in the aggregate, the sale and delivery of Energy, Natural Gas
or Related Services during any period would exceed 3% of IDT’s aggregate sales
and deliveries of such products over such period, including any failure by IDT
(A) to deliver requisite power or any other product or service under such Sale
Contracts when due or (B) to provide timely billing invoices to Customers for
power or any other product or service delivered by IDT under such applicable
Sale Contracts, and, in the case of either clause (i) or (ii), such failure
continues unremedied for a period of five (5) Business Days or more (or two
(2) Business Days in respect of any payment default) after the date on which IDT
has or should have knowledge of such failure or BP shall have given IDT notice
of such failure and such failure is capable of being remedied within such five
(5)-Business Day period (or two (2)-Business Day period, as applicable); or

 

  (d) IDT shall fail to deliver to BP when due Performance Assurances, pursuant
Section 2.2 and the Master Netting Agreement, and such failure continues for one
(1) Business Day; or

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (e) any representation, warranty or certification made or deemed made by IDT
in this Agreement or any other Transaction Document to which it is a party, or
in any amendment or supplement hereto or thereto, or any certificate furnished
to BP or BPCNA pursuant to the provisions hereof or thereof, shall prove to have
been false or misleading as of the time made or furnished in any material
respect, if such representation, warranty or certification shall remain false or
misleading for 30 days after the date on which IDT has knowledge of such failure
or BP shall have given IDT notice of such failure and such failure is capable of
being corrected within such 30-day period; or

 

  (f) a MNA Default where IDT is the Defaulting Party shall have occurred and
shall be continuing; or

 

  (g) a final judgment or judgments for the payment of money of $5,000,000 or
more in the aggregate, or a final judgment or judgments for non-monetary relief
that has had or could reasonably be expected to have a Material Adverse Effect,
shall be rendered by one or more courts, administrative or arbitral tribunals or
other bodies having jurisdiction against IDT and the same shall not be
discharged (or provision shall not be made for such discharge), or a stay of
execution thereof shall not be procured, within 30 days from the date of entry
thereof and IDT shall not, within said period of 30 days, or such longer period
during which execution of the same shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal; or

 

  (h) any of the Liens created by the Security Documents or the Master Netting
Agreement shall at any time not constitute a valid first and prior perfected
Lien on the Collateral purported to be covered thereby in favor of BP, free and
clear of all other Liens (other than resulting from the failure of IDT to retain
possession of the Collateral thereunder in the jurisdiction provided thereunder)
and such Lien is not restored as a valid first and prior perfected Lien within
ten (10) Business Days of such time, or any provision of any Security Document
shall for whatever reason cease to be in full force and effect, or the
enforceability thereof shall be contested by IDT; or

 

  (i) the validity or enforceability of any Transaction Document shall be
contested by IDT or any Transaction Document shall not be in full force and
effect and enforceable in accordance with its terms against IDT;

 

  (j) the total aggregate amount subject to one or more Payment Extensions
exceeds 105% of the aggregate existing outstanding amounts due and owing to IDT
(i) under any POR Program and (ii) from the Authorized Direct Pay Customers; or

 

  (k)

an Event of Default shall have occurred pursuant to Section 5.8 hereof

 

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then, and in every such event, and at any time thereafter during the continuance
of such event, the BP Parties may take any or all of the following actions, at
the same or different times:

 

  (i) terminate any obligations of the BP Parties under this Agreement or any
other Transaction Document and exercise the rights and remedies under the Master
Netting Agreement of a Non-defaulting Party if a MNA Default has occurred and is
continuing;

 

  (ii) declare the Payment Extensions and all other Obligations then outstanding
to be due and payable in whole (or in part, in which case any Payment Extension
or other Obligation not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the Payment Extensions and other
Obligations so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of IDT accrued hereunder or under any
other Transaction Document, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by IDT; provided that, if the Event of Default occurs under the
Master Netting Agreement due to the Bankruptcy of IDT, the Payment Extensions
then outstanding, and all other Obligations then outstanding, together with
accrued interest thereon and all fees and other Obligations of IDT shall become
immediately due and payable in full without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by IDT; and

 

  (iii) exercise its rights with respect to the Collateral under the Security
Documents.

Any and all proceeds of the exercise of such rights (including amounts
constituting the Independent Collateral Amount) shall be deposited to the credit
of the Collateral Account to be distributed therefrom in the following order of
priority: First, to pay to the BP Parties any and all fees, expenses and other
Obligations due and owing to the BP Parties under this Agreement and the other
Transaction Documents (including the EEI Agreement, the NAESB Agreement, and the
ISDA Agreement), including any Supply Fee due and owing to the BP Parties under
this Agreement, interest, and all fees, costs and expenses that the BP Parties
incur to enforce its rights under this Agreement and the other Transaction
Documents, and second, after applying such proceeds to the payment of all
amounts described in priority first, any remaining amounts shall be paid in
accordance with the remaining provisions of Section 10.4.

 

18.2 BP Event of Default. If any of the following events (each a “BP Event of
Default”) shall occur and be continuing:

 

  (a) any representation, warranty or certification made or deemed made by BP or
BPCNA in this Agreement or any other Transaction Document to which it is a
party, or in any amendment or supplement hereto or thereto, or any certificate
furnished to IDT pursuant to the provisions hereof or thereof, shall prove to
have been false or misleading as of the time made or furnished in any material
respect, if such representation, warranty or certification shall remain false or
misleading for 30 days after the date on which BP or BPCNA has knowledge of such
failure or IDT shall have given BP or BPCNA notice of such failure and is
capable of being corrected within such 30-day period; or

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (b) BP or BPCNA shall materially fail to perform or observe any provision,
term, covenant or agreement of it contained in this Agreement or any other
Transaction Document to which it is a party (including without limitation the
EEI Agreement, the NAESB Agreement, or the ISDA Agreement), if such failure
shall remain unremedied for 10 Business Days (or 2 Business Days in respect of
any payment default) after the date on which any BP or BPCNA has knowledge of
such failure or IDT shall have given BP notice of such failure and such failure
is capable of being remedied within such ten (10) Business Day period (or two
(2) Business Day period, as applicable);

 

  (c) a MNA Default where BP or BPCNA is the Defaulting Party shall have
occurred and shall be continuing; or

 

  (d) a final judgment or judgments for the payment of money of $5,000,000,000
or more in the aggregate shall be rendered by one or more courts, administrative
tribunals or other bodies having jurisdiction against BP or BPCNA and the same
shall not be discharged (or provision shall not be made for such discharge), or
a stay of execution thereof shall not be procured, within 30 days from the date
of entry thereof and the BP Parties shall not, within said period of 30 days, or
such longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during such
appeal;

 

  (e) the validity or enforceability of any Transaction Document shall be
contested by BP or BPCNA or any Transaction Document shall not be in full force
and effect and enforceable in accordance with its terms against BP or BPCNA as
applicable; or

 

  (f) either of the BP Parties withdraws funds in deposit in the Collateral
Account in material violation of the terms of this Agreement or a Deposit
Account Control Agreement;

then, and in every such event and at any time thereafter during the continuance
of such event, IDT may (i) terminate any obligations of IDT under this Agreement
or any other Transaction Document and exercise the rights and remedies under the
Master Netting Agreement of a Non-defaulting Party if a MNA Default has occurred
and is continuing, and (ii) exercise any of its rights under the Transaction
Documents, including the rights and remedies under the Master Netting Agreement
of a Non-defaulting Party if a MNA Default has occurred and is continuing, and
all proceeds of the exercise of such rights shall be deposited to the credit of
the Collateral Account to be applied in accordance with Section 10.4. IDT shall
not be obligated to make any termination payment or other penalty in connection
with the exercise of its rights under the Transaction Documents in connection
with a BP Event of Default.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

18.3 MNA Default under Master Netting Agreement. If a MNA Default has been
declared under the Master Netting Agreement, but the underlying event or
condition that gave rise to such MNA Default is no longer outstanding and
continuing, then no Event of Default shall be outstanding or continuing under
Section 18.1 or 18.2 of this Agreement regardless of whether or not such MNA
Default continues under the Master Netting Agreement.

ARTICLE 19

MISCELLANEOUS

 

19.1 Amendments, Consents, Etc. No amendment or waiver of any provision of this
Agreement, nor any consent to any departure by IDT from any provision hereof,
shall in any event be effective unless the same shall be in writing and signed
by IDT, BP, and BPCNA and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

 

19.2 Notices, Etc. All notices and other communications provided for hereunder
shall be in writing (including telecopy communication and electronic mail) and
mailed, sent by telecopy or other means of electronic transmission approved in
advance by the recipient party or delivered by hand or overnight courier
service, as follows:

 

  (a) if to IDT, at its address at:

IDT Energy, Inc.

550 Broad Street

Newark, NJ 07102

Attn: Geoff Rochwarger

Telephone number: 973-438-4434

Fax: 973-438-1285

E-mail address: geoff@idtenergy.com

With copies to

IDT Corporation

550 Broad Street

Newark, NJ 07102

Attn: Legal Department

Telephone: 973-438-4236

Fax: 973-438-1455

 

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  (b) if to BP, at its address at:

BP Energy Company

501 Westlake Park Blvd

Houston, TX 77079

Attn: Power Contracts Administration

Telephone number: 281-366-1649

Fax: 281-366-4929

With copies to:

BP Energy Company

501 Westlake Park Blvd

Houston, TX 77079

Attn: Senior Attorney, Power

Fax: 281-366-7583

The foregoing designations for a Party may be changed by such Party in a written
notice to the other Parties. All such notices and communications shall be
effective upon receipt if received during ordinary business hours or, if
received after ordinary business hours, at the commencement of the next Business
Day.

 

19.3 No Waiver; Remedies. No failure on the part of BP, BPCNA or IDT to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

 

19.4 Indemnification.

 

  (a) IDT will indemnify and hold the BP Parties, and their respective officers,
directors, shareholders, Affiliates, employees and agents (for this
Section 19.4(a), an “Indemnified Party”), harmless from and against any and all
claims, damages, losses, liabilities, and expenses (including, without
limitation, reasonable fees and disbursements of counsel), joint or several,
that may be incurred by or asserted or awarded against any Indemnified Party
(including, without limitation, in connection with or relating to any
investigation, litigation, or proceeding or the preparation of any defense in
connection therewith), in each case arising out of or in connection with or by
reason of the transaction documentation or any breach thereof or any of the
transactions contemplated thereby, including acts or omissions regarding the
accounts provided for under Article 9, except to the extent such claim, damage,
loss, liability, or expense resulted from such Indemnified Party’s gross
negligence or willful misconduct.

 

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  (b) The BP Parties will indemnify and hold IDT, and its officers, directors,
shareholders, Affiliates, employees and agents (for this Section 19.4(b) an
“Indemnified Party”), harmless from and against any and all claims, damages,
losses, liabilities, and expenses (including, without limitation, reasonable
fees and disbursements of counsel), joint or several, that may be incurred by or
asserted or awarded against any Indemnified Party (including, without
limitation, in connection with or relating to any investigation, litigation, or
proceeding or the preparation of any defense in connection therewith), in each
case arising out of or in connection with or by reason of the transaction
documentation or any breach thereof or any of the transactions contemplated
thereby, including acts or omissions regarding the accounts provided for under
Article 9, except to the extent such claim, damage, loss, liability, or expense
resulted from such Indemnified Party’s gross negligence or willful misconduct.

 

19.5 Governing Law; Submission to Jurisdiction.

 

  (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED FOR ALL PURPOSES,
INCLUDING THE RESOLUTION OF ALL DISPUTES BETWEEN OR AMONG PARTIES, BY AND
CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK,
EXCLUSIVE OF ANY CONFLICTS OF LAWS PRINCIPLES THAT COULD REQUIRE THE APPLICATION
OF ANY OTHER LAW.

 

  (b) Submission to Jurisdiction. Each of the Parties hereto irrevocably and
unconditionally submits, for itself and its property, to the non-exclusive
jurisdiction of the courts of the State of New York sitting in New York County
and of the United States District Court of the Southern District of New York,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State court or, to the fullest extent permitted by
applicable law, in such Federal court. Each of the Parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that a party
may otherwise have to bring any action or proceeding relating to any Related
Agreement against the other party, or its properties in the courts of any
jurisdiction.

 

  (c) Waiver of Venue. Each Party hereto irrevocably and unconditionally waives,
to the fullest extent permitted by applicable law, any objection that it may now
or hereafter have to the laying of venue of any action or proceeding arising out
of or relating to this Agreement in any court referred to in clause (b) of this
Section, and hereby irrevocably waives, to the fullest extent permitted by
applicable law, the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

  (d) Service of Process. IDT agrees that service of process in any action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to IDT
Energy, Inc. c/o IDT CORPORATION, 1430 Broadway, Suite 1615, New York, New York
10018, Attention: General Counsel. Each of the BP Parties hereto irrevocably
consents to service of process in the manner provided for notices in
Section 19.2. Nothing in this Agreement will affect the right of any party
hereto to serve process in any other manner permitted by applicable law.

 

19.6    Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of a manually executed counterpart of this Agreement.

 

19.7    WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR IN ANY WAY
RELATING TO THIS AGREEMENT OR THE PERFORMANCE OR NONPERFORMANCE OR OBLIGATIONS
ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT.

 

19.8    Severability. If any provision of this Agreement is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions of this Agreement shall remain in full force and effect
in such jurisdiction and shall be construed in order to carry out the intentions
of the Parties hereto as nearly as may be possible and (b) the invalidity or
unenforceability of any provision of this Agreement in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.

 

19.9    Captions. The table of contents and captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.

 

19.10  Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto and their respective successors and permitted
assigns, provided, no Party may assign any of its rights or obligations
hereunder without the prior written consent of the other Parties, which consent
shall not be unreasonably withheld.

 

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COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*)

 

19.11  Integration. This Agreement, together with the other Transaction
Documents, constitutes the entire agreement and understanding among the parties
hereto and supersedes any and all prior agreements and understandings, oral and
written, relating to the subject matter hereof.

 

19.12  USA PATRIOT Act. BP hereby notifies IDT that pursuant to the requirements
of the USA PATRIOT Act (Title III of Pub. L. 107 56 (signed into law October 26,
2001)), BP may be required to obtain, verify and record information that
identifies IDT, which information includes the name and address of IDT, and
other information that will allow BP to identify IDT in accordance with said
Act.

 

19.13  Confidentiality.

Each Party agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates’
directors, officers and employees, including accountants, legal counsel and
other advisors (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, including in the case of BP the federally appointed
monitor and his staff, (c) to the extent required by applicable laws, rules or
regulations, including those with respect to securities laws (including any
rules or regulations promulgated by a registered securities exchange), or by any
subpoena or similar legal process, (d) in connection with the exercise of any
remedies hereunder or any other Transaction Document or any suit, action or
proceeding relating to this Agreement or any other Transaction Document or the
enforcement of rights hereunder or thereunder, (e) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or participant in, or any prospective assignee of or
participant in, any of its rights or obligations under this Agreement or any
other Transaction Document or (ii) any actual or prospective counterparty (or
its advisors) to any swap or derivative transaction relating to IDT and its
obligations, (f) with the consent of the other Party or (g) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to such Party, on a non-confidential
basis from a source other than the other Party.

For the purposes of this Section, “Information” means all information received
from one Party relating to such Party or its business; provided, that all
reports and information required to be delivered to a Party hereunder or any
other Transaction Document shall be deemed to be Information without further
action. Confidential Information does not include any information which (a) was
know to the receiving Party prior to the date of its disclosure pursuant to this
Agreement and to which there is no existing obligation of confidentiality,
(b) is or becomes generally available to the public other than through the act
or omission of the receiving Party or its Representatives, (c) becomes available
to the receiving party on a non-confidential basis from a source other than the
disclosing Party

 

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or its Representatives, provided that such source is not bound by a
confidentiality agreement with the disclosing party or its Representatives or
otherwise prohibited from transmitting such confidential Information to the
receiving party or the receiving party’s Representatives by a contractual, legal
or fiduciary obligation, or (d) is independently developed by the receiving
Party or any of its Affiliates without the use of or reliance upon the
confidential Information.

Any Person required to maintain the confidentiality of Information as provided
in this Section shall be considered to have complied with its obligation to do
so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

No party shall disclose to any other third party or issue a press release or any
other form of public information involving the other Party without the other
Party’s prior approval and written consent except, following a reasonable
opportunity by BP to comment, to the extent required by applicable laws, rules
or regulations, including those with respect to securities laws (including any
rules or regulations promulgated by a registered securities exchange).

The Parties acknowledge information provided by IDT or its Affiliates and BP and
its Affiliates, including without limitation consumer information, as
confidential and proprietary to IDT or BP and its Affiliates. The Parties will
limit access to such information to members of its trade control, regulatory,
compliance, risk management, credit and legal departments. BP front office
personnel shall be limited on a need-to-know basis only. The BP Parties shall
comply with applicable federal and state law with regard to consumer information
with respect to Customers provided by IDT or its Affiliates to BP or BPCNA.

The Confidential Information shall remain the property of the disclosing Party,
and the disclosing Party may demand the return thereof at any time, upon giving
thirty (30) days prior written notice to the receiving Party. Upon receipt of
such notice, the receiving Party shall return all of the Confidential
Information and all copies in its possession to the disclosing Party as soon as
is reasonably practical, but in no event shall the receiving Party have fewer
than thirty (30) days to return such Confidential Information to the disclosing
Party. In the event that the receiving Party has destroyed any copies, such
receiving Party shall confirm the destruction of such copies in the letter
accompanying the return of the documents and copies that were not destroyed.
Notwithstanding the foregoing, (i) the receiving Party shall not be obligated to
return or destroy any documents created by it that may reflect or refer to
Confidential Information, (ii) the receiving Party may create .and retain an
abstract describing the type of Confidential Information that it receives
sufficient to document the nature and scope of the Parties’ discussions under
this Agreement, (iii) the receiving Party shall not be obligated to return or
destroy any Confidential Information that the receiving Party is retaining
pursuant to a document retention hold established in connection with any civil
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investigations or litigation, in which event the Confidential Information shall
be retained by the receiving Party until such time as the document retention
hold is no longer in effect, at which time the Confidential Information shall be
returned to the disclosing Party or destroyed as aforesaid, and (iv) to the
extent that receiving Party’s computer back-up procedures create copies of the
Confidential Information, the receiving Party may retain such copies in its
archival or back-up computer storage for the period the receiving Party normally
archives backed-up computer records. Any such documents or abstract so created
will be retained subject to this Agreement until they are destroyed or erased.

In the event of any breach or threatened breach by a Party of the terms of this
Section 19.13, the other Party shall be entitled to seek injunctive and other
equitable relief and the Party shall not plead in defense thereto that there
would be an adequate remedy at law. Such remedy shall be cumulative and in
addition to all other remedies available. The Parties acknowledge that the
Confidential Information is valuable and unique and that disclosure in breach of
this Section 19.13 may result in irreparable injury to the disclosing Party.

 

19.14  Imaged Agreement. Any original executed copy of this Agreement, any
Confirmation or any other Transaction Document may be photocopied and stored on
computer tapes and disks (the “Imaged Agreement”). The Imaged Agreement, if
introduced as evidenced on paper in automated facsimile form, and all computer
records of the foregoing, if introduced as evidence in printed format, in any
judicial, arbitration, mediation or administrative proceedings, will be
admissible as between the Parties to the same extent and under the same
conditions as other business records originated and maintained in documentary
form. Neither Party shall object to the admissibility of the Imaged Agreement
(or photocopies of the transcription of the Imaged Agreement) on the basis that
such were not originated or maintained in documentary form under either the
hearsay rule, the best evidence rule or other rule of evidence.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year set forth above.

 

IDT ENERGY, INC. By:     Name:   Title:  

 

BP ENERGY COMPANY By:     Name:   Title:  

 

BP CORPORATION NORTH AMERICA INC. By:     Name:   Title:  

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PREFERRED SUPPLIER AGREEMENT SIGNATURE PAGE

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Exhibit 1

Supply Fees

*

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Exhibit 3

Material Terms of Sale Contract

Price and Term: All Sale Contracts shall specify the price for energy or Natural
Gas, as applicable, and the term of the agreement. The term of the Sale Contract
binding on IDT may not extend beyond the Planned Term.

Payment Provision: Sale Contracts shall require that Customer to make all
payments due to the Deposit Account

Assignability: Sale Contracts will be assignable by IDT to a lender institution
or credit provider, which includes the BP Parties, without the consent of the
Customer.

Force Majeure: Sale Contracts shall contain a standard force majeure provision
excusing performance due to acts beyond the reasonable control of the parties.

Events of Default: Sale Contracts shall contain a provision which includes
customary grounds for default, including, but not limited to, Customer’s failure
to pay invoices.

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Schedule 3.1

Existing Use of Pipelines and Storage Facilities

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Schedule 3.3

Permitted Other Transactions

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Schedule 5.4

ISO Interface Responsibilities

BP will serve as the Principal Account Holder within the NYISO control area on
behalf of IDT pursuant to this agreement. In the capacity of these roles for
IDT, BP will be responsible for the following ISO/RTO activities:

ISO/RTO Communications

 

i. Maintain facilities and personnel required to coordinate operations with the
ISO.

 

ii. Serve as the sole authorized communicator with the ISO for bidding,
scheduling, tagging and settling transactions related to IDT’s load obligations.

 

iii. Serve as the Authorized Security Administrator to access the NYISO MIS
applications on behalf of IDT’s load.

 

iv. Comply with the ISO directive (under an emergency condition or otherwise)
that may require BP to modify an IDT schedule.

Credit and Settlements

 

i. Maintain sufficient credit with the ISO to transact on IDT’s behalf.

 

ii. Timely payment of bona fide ISO invoices applicable to transactions
conducted for IDT’s account.

 

iii. Submission of invoices to IDT for all ISO settlement charges, accounting
adjustments or resettlements, and credits related to IDT’s load transactions and
obligations, including but not limited to energy, ancillary services, installed
Capacity, auction revenue rights, and load related charges, make-whole payments
assigned to loads for reliability services, day-ahead market purposes and other
such charges.

 

iv. Submission of invoices to IDT regarding any resettlement of transactions
related to IDT’s load obligation pursuant to this Agreement, BP reserves the
right to pass-through the rebilled charges and/or credits to IDT.

 

v. The NYISO settlement system does not allow for multiple settlement accounts
associated with a single legal entity. As such, for any settlement charge types
that are not reported to BP by the NYISO at IDT’s Load Asset ID or can not be
directly attributed to IDT’s load obligation, BP will pass-through to IDT in a
relatively proportionate to IDT’s load obligation. Similarly, BP shall pass any
credit through to IDT in a relatively proportionate amount to IDT’s load
obligation.

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vi. If BP receives the ISO short pay due to a market participant default in the
ISO in which BP has established stand alone settlement accounts for IDT’s
transaction, BP will completely pass through the same ISO short pay to IDT in
accordance with the relevant tariff or ISO rules and procedures. If BP is made
whole by the ISO at some future date, then BP will completely pass through the
same make whole amount. The exception to this is in reference to NYISO where a
stand alone settlement account will not be utilized. If the NYISO is to short
pay BP on an invoice, BP will use commercially reasonable means to mimic the
same short pay methodology used by the ISO for IDT’s transactions.

 

vii. File, but not necessarily initiate, all commercially reasonable billing
disputes with the ISO on IDT’s behalf.

Regulatory

 

i. IDT is responsible for its own regulatory or legislative monitoring,
participation and advocacy to protect its interests. For clarification, BP is
not responsible for communicating any regulatory, market rule, tariff change,
NERC issues and standards, or RTO ISO stakeholder meetings or other such
committee and working group information to IDT. IDT remains responsible for its
own regulatory advocacy and interpretation.

 

ii. Nothing herein shall limit IDT’s rights to participate as a Market
Participant in the ISO/RTO or NERC meeting or any regulatory proceeding to
protect its interests. For clarification, if BP participates in the ISO/RTO or
NERC meeting or regulatory meeting, BP shall vote independently to protect its
interests without any obligation to coordinate its vote with IDT or its
Affiliates.

 

iii. IDT will be responsible for any required state, federal or regional reports
applicable to its licenses and business interests. For clarification, nothing
herein shall obligate BP, as scheduling entity, to prepare or submit any
regulatory or governmental reports including, but not limited to, IDT’s FERC
Electronic Quarterly Reporting (EQR), ERCOT PUCT transactions report, or IDT’s
Renewable Energy Credit (REC) reports.

IDT, as the Load-Serving Entity underneath a BP ISO Account ID, will be
responsible for the following activities:

 

i. Provide timely load forecast data, demand bids, virtual transactions,
bilateral transactions, energy schedules, Capacity requirements, auction revenue
right nominations and bilateral ancillary service transactions with a third
party and other such data requirements to BP so that BP is able to meet the
ISO’s applicable day- ahead and real-time scheduling deadlines.

 

ii. Maintain the appropriate state licensing requirement as a Retail Energy
Provider (REP) or Load-Serving Entity serving retail customers within each of
the states in which BP is providing wholesale power to IDT and is acting as the
scheduling agent.

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iii. Remain responsible for reporting IDT’s meter data to the ISO/RTOs either
through its own operations or via agreements with the other entities.

 

iv. Advanced coordination with BP will be required if IDT has a desire to
participate in any of the ISO’s FTR, CRR or TCR auctions. BP will need to ensure
the proper amount of credit has been posted with the respective ISO and the
appropriate security rights have been granted to BP as the Scheduling Agent for
IDT.

 

v. Prior to enrolling any load into the ISO Demand Response type program or
enlisting a Demand Resource in an ICAP or RA auction, IDT will coordinate with
BP to ensure the proper metering and dispatch communication equipment is in
place for BP to be compliant with the ISO’s technical requirements of the
programs.

 

vi. IDT will timely respond to any data requests or reporting obligations
directed to BP from the ISO, NERC or NERC Regional Entity, that is related to
IDT’s load transactions, such as system planning studies, forecasted peak
demand, or audit inquires and other necessary information.

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Schedule 16.1(c)

Required Filings

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Schedule 16.1(m)

List of Sales Contracts and Purchase Agreements

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Schedule 16.1(w)

Authorized Direct Pay Customers