Genie Energy. Ltd. (Form: 10-12G/A, Received: 10/07/2011 06:02:46)

PREFERRED SUPPLIER AGREEMENT

Dated as of June 29, 2009

by and among

BP ENERGY COMPANY,

BP CORPORATION NORTH AMERICA INC.

AND

IDT ENERGY, INC.

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 (*)

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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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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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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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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
Schedule 3.3		Permitted Other Transactions
Schedule 5.4		ISO Interface Responsibilities
Schedule 16.1(c)		Required Filings
Schedule 16.1(m)		List of Sales Contracts and Purchase Contracts
Schedule 16.1(w)		Authorized Direct Pay Customers

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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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“ 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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“ 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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“ 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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“ 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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“ 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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“ 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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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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“ 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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“ 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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“ 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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“ 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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(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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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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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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(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	Transaction Execution Process*

(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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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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(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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(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)

(i)

(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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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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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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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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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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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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(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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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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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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(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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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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(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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(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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(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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(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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(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)

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(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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(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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(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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(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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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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(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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(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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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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(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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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 or criminal

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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.

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

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:

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.

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

The following consents/notices are required to be obtained/sent to the applicable utilities:

CENTRAL HUDSON – need consent to assignment (not to be unreasonably withheld, delayed or conditioned)

CONSOLIDATED EDISON – need to provide them with a copy of the document in which the assignment is made or so much of the document as may be necessary to make clear the identity of the parties and the terms of the assignment.

KEYSPAN – need to provide them with a copy of the document in which the assignment is made or so much of the document as may be necessary to make clear the identity of the parties and the terms of the assignment.

NATIONAL FUEL – need to give them 19 days’ prior written notice of assignment.

NIAGRA MOHAWK – need to give them 20 days’ prior written notice of assignment

ORANGE & ROCKLAND – need to give them prior notice of assignment

ROCHESTER GAS & ELECTRIC – need to give them prior written notice of assignment

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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

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.20549

SCHEDULE 14C INFORMATION

Information Statement Pursuant to Section 14(c) of the

Securities Exchange Act of 1934

Check the appropriate box:

x	Preliminary Information Statement

¨	Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))

¨	Definitive Information Statement

¨	Definitive Additional Materials

GENIE ENERGY LTD.

(Name of Registrant as Specified In Charter)

Payment of Filing Fee (Check the appropriate box):

x	No fee required.

¨	Fee computed on table below per Exchange Act Rule 14c-5(g), and 0-11.

(1)

Title of each class of securities to which transaction applies:

(2)

Aggregate number of securities to which transaction applies:

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

(4)

Proposed maximum aggregate value of transaction:

(5)

Total fee paid:

¨	Fee paid previously with preliminary materials.

¨	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

(1)

Amount Previously Paid:

(2)

Form, Schedule or Registration Statement No.:

(3)

Filing Party:

(4)

Date Filed:

Howard S. Jonas

Chairman of the Board of Directors and

Chief Executive Officer

IDT Corporation

520 Broad Street

Newark, NJ 07102

October [__], 2011

Dear IDT Corporation Stockholder:

I am pleased to inform you that the Board of Directors of IDT Corporation (“IDT”) has approved the spin-off of Genie Energy Ltd. (“Genie”), a wholly-owned subsidiary of IDT, to IDT’s stockholders. IDT currently owns 100% of Genie and will be distributing all of that interest to IDT’s stockholders. Following the spin-off, IDT’s businesses will consist primarily of IDT Telecom, Innovative Communications Technologies, Inc., as well as other interests and smaller operations, including IDT’s interests in Zedge and Fabrix. Genie consists of IDT Energy, which operates our energy services company (ESCO), and Genie Oil and Gas, our unconventional energy operations.

The spin-off of Genie will occur by way of a pro rata distribution of Genie Class A common stock and Class B common stock to IDT’s stockholders. In the distribution, on the distribution date, each IDT stockholder will receive one share of Genie Class A common stock for every share of IDT Class A stock and one share of Genie Class B common stock for every share of IDT Class B common stock, held at 5:00 p.m., New York City time, on October [_], 2011, which is the record date for the spin-off. The distribution of shares of our Class B common stock will be paid in book-entry form and physical stock certificates will be issued only to holders of Class A common stock and, upon request, to holders of Class B common stock.

Stockholder approval of the spin-off is not being sought, and you are not required to take any action to receive your Genie common stock.

We believe that the spin-off will separate certain of our business units that have different business drivers and growth characteristics. We believe that separating the two groups of operating units will allow the management of each of IDT and Genie to design and implement corporate strategies and policies that are based primarily on the business characteristics of the respective companies and their business units, maintain a sharper focus on the core business and growth opportunities, and concentrate their financial resources wholly on their own operations. Moreover, the separation of Genie from IDT will allow each of the companies to be more easily understood and provide investors with greater transparency regarding the value of the businesses. Accordingly, we believe the spin-off will build long-term stockholder value.

Following the spin-off, you will own shares in both IDT and Genie. We intend to apply to have Genie’s Class B common stock listed for trading on New York Stock Exchange (“NYSE”) under the symbol “GNE” and to satisfy all the requirements for that listing. IDT Class B common stock will continue to trade on the NYSE under the symbol “IDT”.

We intend for the spin-off to be tax-free for stockholders. To that end, we received a ruling from the IRS (the “IRS Ruling”) substantially to the effect that, for U.S. federal income tax purposes, the distribution of shares of Genie common stock will qualify as tax-free under Section 355 of the of the Internal Revenue Code of 1986 (the “Code”). In addition to obtaining the IRS Ruling, we expect to receive an opinion from PricewaterhouseCoopers LLP, confirming the tax-free status of the spin-off for U.S. federal income tax purposes, including confirming the satisfaction of the requirements under Section 355 of the Code not specifically addressed in the IRS Ruling. You should, of course, consult your own tax advisor as to the particular consequences of the spin-off to you.

The enclosed Information Statement, which is being mailed to IDT stockholders, describes the spin-off in detail and contains important information about Genie, including its financial statements.

We look forward to your continued support as a stockholder of IDT. We remain committed to working on your behalf to build long-term stockholder value.

Sincerely,

Howard S. Jonas

Chairman of the Board of Directors and Chief Executive Officer

October [__], 2011

Dear Genie Energy Ltd. Stockholder:

It is my pleasure to welcome you as a stockholder of Genie Energy Ltd. Our strategy as an independent publicly traded company is to maximize value to our stockholders by building on our current strengths and capitalizing on our investment in science and technology to develop unconventional energy opportunities.

The spin-off will separate our businesses from the remainder of IDT’s operations and holdings. We, along with IDT’s management, believe that the operational and growth prospects of our businesses may best be realized by a separation from those that will remain with IDT based on several factors including industry characteristics and the growth prospects of our retail energy services, or ESCO, and unconventional energy businesses. As a separate company, investors will have the ability to independently value our company, a high-growth energy company, in contrast to IDT’s more mature business. Specifically, we will continue the operation of our ESCO business and expect to expand into additional markets and utility regions where we see attractive opportunities, while we invest, together with our partners, in unconventional oil and gas projects, including the research, development and exploration of our oil shale properties in Colorado and Israel as they move toward commercially viable and environmentally acceptable operations. As an independent company, we expect that we will be able to have direct access to the capital markets. We anticipate that this direct access will improve our ability to invest in our business and continue to develop innovative new products, services and technologies, pursue strategic transactions, enhance our market recognition with investors and increase our ability to attract and retain employees.

Our focused and experienced management team is highly motivated to make a difference in the energy industry, as we enhance value for our customers and stockholders as a growth-oriented company.

We intend to apply to have Genie’s Class B common stock to be listed for trading on the New York Stock Exchange under the symbol “GNE” and to satisfy all the requirements for that listing.

We invite you to learn more about Genie Energy by reviewing the enclosed Information Statement. We look forward to our future as a separate publicly-traded company and to your support as a stockholder.

I am excited about the opportunities that the spin-off will create for our company, our customers and for you, our stockholders.

Sincerely,

Claude A. Pupkin

Chief Executive Officer

Information contained herein is subject to completion or amendment. A Registration Statement on Form 10 relating to these securities has been filed with the United States Securities and Exchange Commission under the Securities and Exchange Act of 1934, as amended.

SUBJECT TO COMPLETION, DATED OCTOBER [__], 2011

PRELIMINARY INFORMATION STATEMENT

GENIE ENERGY LTD.

Class A Common Stock

and

Class B Common Stock

(each, par value $0.01 per share)

This Information Statement is being furnished by IDT to its stockholders in connection with the distribution to holders of Class A common stock and Class B common stock, each par value $0.01 per share, of IDT Corporation, or IDT, of all the outstanding shares of Class A common stock and Class B common stock, each par value $0.01 per share, of Genie Energy Ltd., or Genie.

We are currently a wholly-owned subsidiary of IDT. We own 99.3% of our subsidiary, Genie Energy International Corporation, or GEIC, which owns 100% of IDT Energy and 92% of Genie Oil and Gas, Inc., or GOGI. Following the spin-off, our principal businesses, which are currently part of IDT, will consist of:

·	IDT Energy, which operates our energy services company, or ESCO, that resells electricity and natural gas to residential and small business customers in New York, New Jersey and Pennsylvania; and

Genie Oil and Gas, which consists of (1) American Shale Oil Corporation, or AMSO, which holds and manages a 50% interest in American Shale Oil, LLC, or AMSO, LLC, our oil shale initiative in Colorado, and (2) an 89% interest in Israel Energy Initiatives, Ltd., or IEI, our oil shale initiative in Israel.

Our business will consist of two reporting segments: IDT Energy and Genie Oil and Gas.

The spin-off of Genie will occur by way of a pro rata distribution of the Genie Class A common stock and Class B common stock held by IDT to IDT’s stockholders. In the distribution, on the distribution date each IDT stockholder will receive one share of Genie Class A common stock for every share of IDT Class A common stock and one share of Genie Class B common stock for every share of IDT Class B common stock, held at 5:00 p.m., New York City time, on October [__], 2011, which is the record date for the spin-off. The distribution of shares of our Class B common stock will be paid in book-entry form and physical stock certificates will be issued only to holders of Class A common stock and, upon request, to holders of Class B common stock.

No stockholder approval of the spin-off is required or sought and you are not required to take any action to receive your Genie common stock. We are not asking you for a proxy and you are requested not to send us a proxy. IDT stockholders will not be required to pay for the shares of our Class A common stock or Class B common stock to be received by them in the spin-off or to surrender or exchange shares of IDT Class B common stock or Class A common stock in order to receive our Class A common stock and Class B common stock or to take any other action in connection with the spin-off.

Currently, there is no trading market for our Class A common stock or Class B common stock. However, we expect that a limited market, commonly known as a “when-issued” trading market, for our Class B common stock will develop on or shortly before the record date for the spin-off, and we expect that “regular way” trading of our Class B common stock will begin the first trading day after the spin-off. We intend to apply to have the Genie Class B common stock traded on NYSE under the symbol “GNE” and to satisfy all the requirements for that listing. However, neither method of trading will occur on the New York Stock Exchange unless our Class B common stock has received prior approval for listing.

We do not intend to list our Class A common stock for trading on any exchange or trading system.

In reviewing this Information Statement, you should carefully consider the matters described under “Risk Factors” beginning on page 8 for a discussion of certain factors that should be considered by recipients of our common stock.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this Information Statement is truthful or complete. Any representation to the contrary is a criminal offense.

This Information Statement does not constitute an offer to sell or the solicitation of an offer to buy any securities.

This Information Statement is first being mailed to IDT stockholders on or about October [__], 2011.

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	Page
Questions and Answers About the Spin-Off	1
Executive Summary	5
Risk Factors	8
Special Note About Forward-Looking Statements	14
The Spin-Off	15
Dividend Policy	20
Unaudited Pro Forma Consolidated Financial Data	21
Selected Financial Data	25
Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Business	45
Management	51
Corporate Governance	54
Director Compensation	56
Executive Compensation	56
Security Ownership by Certain Beneficial Owners and Management	59
Our Relationship with IDT After the Spin-Off and Related Person Transactions	61
Legal Proceedings	63
Description of Our Capital Stock	63
Where You Can Find More Information	66
Index to Consolidated Financial Statements	F-1

This Information Statement is being furnished by IDT solely to provide information to IDT stockholders who will receive shares of our Class A common stock and Class B common stock in the distribution. This Information Statement is not, and is not to be construed as, an inducement or encouragement to buy or sell any of our securities or any securities of IDT. This Information Statement describes our business, the relationship between IDT and us, and how the spin-off affects IDT and its stockholders, and provides other information to assist you in evaluating the benefits and risks of holding or disposing of our common stock that you will receive in the distribution. You should be aware of certain risks relating to the spin-off, our business and ownership of our common stock, which are described under the heading “Risk Factors.”

You should not assume that the information contained in this Information Statement is accurate as of any date other than the date set forth on the cover. Changes to the information contained in this Information Statement may occur after that date, and we undertake no obligation to update the information, except in the normal course of our public disclosure obligations and practices.

Unless the context indicates otherwise, all references in this Information Statement:

·	to “Genie,” “us,” “we,” or “our” are to Genie Energy Ltd. and its subsidiaries; and
·	to “IDT” are to IDT Corporation and its subsidiaries, and, with respect to periods following the spin-off, IDT Corporation and its subsidiaries other than Genie and its subsidiaries.

The transaction in which we will be separated from IDT and become a separately-traded public company is referred to in this Information Statement as the “separation,” the “distribution” or the “spin-off.”

We obtained the market and industry data and other statistical information used throughout this Information Statement from our own research, surveys or studies conducted by third parties, independent industry or general publications and other published independent sources. While we believe that each of these sources is reliable, we have not independently verified such data. Similarly, we believe our internal research is reliable, but it has not been verified by any independent sources.

QUESTIONS AND ANSWERS ABOUT THE SPIN-OFF

Q:	Why am I receiving this document?

A:	IDT is delivering this document to you because you were a holder of IDT’s Class A common stock or Class B common stock on the record date for the distribution of our shares of Class A common stock and Class B common. Accordingly, you are entitled to receive one share of our Class A common stock for every share of IDT Class A common stock and one share of our Class B common stock for every share of IDT Class B Common stock that you held on the record date. No action is required for you to participate in the distribution.

Q:	What is the spin-off?

A:	The spin-off is the overall separation of our company from IDT resulting in Genie being owned by the public and continuing to own and operate the assets of the IDT Energy and Genie Oil and Gas segments of IDT. The spin-off will occur by the pro rata distribution by IDT of our Class A common stock and Class B common stock held by IDT to holders of IDT’s Class A common stock and Class B common stock as set forth in the answer above. We refer to this last step as the “distribution.”

Q:	What is Genie?

A:	Up to the time of the spin-off, we will be a wholly-owned subsidiary of IDT. Following the spin-off, we will be a separate publicly-traded company. We have majority holdings in IDT Energy and Genie Oil and Gas.

Q:	Why is IDT separating our businesses and distributing our stock?

A:	IDT’s Board of Directors and management believe the separation will provide the benefits set forth below under the caption “The Spin-Off--Reasons for the Spin-Off” beginning on page 15, including that the operational and growth prospects of our businesses may best be realized by a separation from those that will remain with IDT based on several factors including industry characteristics and growth prospects of our ESCO and unconventional energy businesses. As a separate company, investors will have the ability to independently value our Company and our business units, in contrast to IDT’s more mature business. Moreover, the spin-off will allow management of each of IDT and Genie to design and implement corporate strategies and policies that are based primarily on the business and industry dynamics of that company and its business units, maintain a sharper focus on core business and growth opportunities, concentrate their financial resources wholly on their own operations and allowing investors to appreciate the value of each company’s business units.

Q:	Why is the separation of the two companies structured as a spin-off?

A:	IDT’s Board of Directors believes that a tax-free spin-off of our shares is a cost-effective and tax efficient way to separate the companies. For additional information, see “Material U.S. Federal Income Tax Consequences of the Spin-Off” beginning on page 17.

Q:	What is the record date for the distribution?

A:	The record date is October [__], 2011 and ownership will be determined as of 5:00 p.m., New York City time, on that date. When we refer to the “record date,” we are referring to that time and date.

Q:	What will be our relationship with IDT after the spin-off?

A:	IDT and Genie each will be independent, publicly-traded companies. Howard Jonas will be chairman of the board of both companies as well as Chief Executive Officer of IDT. Further, we intend to enter into agreements with IDT that will ease our transition from consolidated operating segments to an independent company following the spin-off and we will continue to cooperate with IDT when there is an opportunity for cost savings that does not impact the independence of the two companies. For example, it is intended that IDT, pursuant to a Transition Services Agreement will continue to provide certain services, including, but not limited to services relating to human resources, employee benefits administration, finance, accounting, tax, internal audit, facilities, investor relations and legal for an agreed period following the spin-off. Additionally, under the same agreement, Genie intends to provide specified administrative services to certain of IDT’s foreign subsidiaries. Furthermore, IDT will grant us a license to use the IDT name for our ESCO business. For additional information regarding our relationship with IDT after the spin-off, see “Our Relationship with IDT After the Spin-Off and Related Person Transactions” beginning on page 61.

Q:	When will the spin-off be completed?

A:	Shares of our Class A common stock and Class B common stock will be distributed on or about [____ __,] 2011. We refer to this date as the “distribution date.”

Q:	Can IDT decide to cancel the distribution of our Class A common stock and Class B common stock even if all the conditions to the distribution have been met?

A:	Yes. The distribution is conditioned upon satisfaction or waiver of certain conditions. See “The Spin-Off--Spin-Off Conditions and Termination” beginning on page 19. IDT has the right to terminate the distribution, even if all of these conditions are met, if at any time IDT’s Board of Directors determines, in its sole discretion that IDT and Genie are better served by remaining a combined company or that market or business conditions are such that it is not advisable to complete the spin-off.

Q:	What will happen to the listing of IDT’s Class B common stock?

A:	Nothing. We expect that IDT Class B common stock will continue to be traded on the New York Stock Exchange (“NYSE”) under the symbol “IDT”.

Q:	Will the spin-off affect the market price of my IDT shares?

A:	Probably. As a result of the spin-off, the trading price of IDT shares immediately following the distribution may be lower than immediately prior to the distribution because the trading price will no longer reflect the value of the Genie businesses. In addition, until the market has fully analyzed the operations of IDT without these business segments, the price of IDT shares may fluctuate significantly. Furthermore, the combined trading prices of IDT’s Class B common stock and, if and when outstanding, our Class B common stock, after the distribution may be higher or lower than the trading price of IDT Class B common stock prior to the distribution. See the Risk Factor entitled “There may not be an active trading market for shares of our common stock and stockholders may find it difficult to transfer our securities” on page 13.

Q:	What will IDT stockholders receive in the spin-off?

A:	In the spin-off, IDT stockholders will receive one share of our Class A common stock for every share of IDT Class A common stock and one share of our Class B common stock for every share of IDT Class B common stock that they own as of the record date. Immediately after the spin-off, IDT stockholders will still own all of IDT’s current business segments, but they will own them as two separate investments rather than as a single investment. Holders of our Class A common stock will be entitled to three votes per share and holders of our Class B common stock will be entitled to one tenth of one vote per share. After the spin-off, the certificates and book-entry interests representing the “old” IDT Class A common stock and Class B common stock will represent such stockholders’ interests in the IDT businesses (other than our businesses) following the spin-off, and the certificates and book-entry interests representing our Class A common stock and Class B common stock that stockholders receive in the spin-off will represent their interest in Genie businesses only.

Q:	If a stockholder owns restricted stock of IDT, what will that stockholder receive in the spin-off?

A:	Holders of restricted Class B common stock of IDT will receive, in respect of those restricted shares, one share of our Class B common stock for every restricted share of IDT that they own as of the record date for the spin-off. Those particular shares of our stock that you will receive will be restricted under the same terms as the IDT restricted shares in respect of which they were issued. This means that restricted shares of our stock received in the spin-off are subject to forfeiture on the same terms, and their restrictions lapse at the same time, as the corresponding IDT shares.

Q:	If a stockholder owns options to purchase shares of IDT stock, what will that option holder receive in the spin-off?

A:	In the spin - off, the exercise price of each outstanding option to purchase IDT Class B common stock will be proportionately reduced based on the trading price of IDT following the spin-off. Further, each option holder will share ratably in a pool of options to purchase 50,000 shares of Genie Class B common stock with an exercise price equal to the market value and an expiration date equal to the expiration of the IDT option held by such option holder.

Q:	What does an IDT stockholder need to do now?

A:	IDT stockholders do not need to take any action, although we urge you to read this entire document carefully. The approval of the IDT stockholders is not required or sought to effect the spin-off, and IDT stockholders have no appraisal rights in connection with the spin-off. IDT is not seeking a proxy from any stockholders, and you are requested not to send us a proxy. IDT stockholders will not be required to pay anything for our shares distributed in the spin-off or to surrender any shares of IDT Class A common stock or Class B common stock. IDT stockholders should not send in their IDT share certificates. IDT stockholders will automatically receive their shares of our Class A common stock and Class B common stock when the spin-off is effected.

Q:	Are there risks associated with owning Genie common stock?

A:	Yes. Our business is subject to both general business risks and specific risks relating to our operations. In addition, our spin-off from IDT presents risks relating to our becoming a separately-traded public company as well as risks relating to the nature of the spin-off transaction itself. See “Risk Factors” beginning on page 8 .

Q:	What are the U.S. federal income tax consequences of the spin-off to IDT stockholders?

A:	IDT stockholders should not recognize a gain or loss on the receipt of shares of our common stock in the spin-off. IDT stockholders should apportion their tax basis in IDT common stock between such IDT common stock and our common stock received in the spin-off in proportion to the relative fair market values of such stock at the time of the spin-off. An IDT stockholder’s holding period for our common stock received in the spin-off should include the period for which that stockholder’s IDT common stock was held. See “The Spin-Off--Material U.S. Federal Income Tax Consequences of the Spin-Off” beginning on page 17. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR AS TO THE PARTICULAR CONSEQUENCES OF THE SPIN-OFF TO YOU.

Q:	What if I want to sell my IDT common stock or my Genie common stock?

A:	You should consult with your own financial advisors, such as your stockbroker, bank or tax advisor. We do not make any recommendations on the purchase, retention or sale of shares of IDT common stock or our common stock to be distributed. If you do decide to sell any shares, you should make sure your stockbroker, bank or other nominee understands whether you want to sell your IDT common stock or your Genie common stock after it is distributed, or both.

Q:	Where will I be able to trade shares of Genie common stock?

A:	There is no current public market for our common stock. We intend to apply to have our Class B common stock traded on NYSE under the symbol “GNE” and to satisfy all the requirements for that listing. We have received notice from the New York Stock Exchange Regulations, Inc. that our Class B common stock has received preliminary approval and clearance for submitting a listing application. We anticipate that trading in shares of our Class B common stock will begin on a “when-issued ” basis on or shortly before the record date and before the distribution date, and “regular way” trading will begin on the first trading day following the distribution date. If trading does begin on a “when-issued” basis, you may purchase or sell our Class B common stock after that time, but your transaction will not settle until after the distribution date. On the first trading day following the distribution date, when-issued trading with respect to our Class B common stock will end and regular way trading will begin. We cannot predict the trading prices for our Class B common stock before or after the distribution date. However, neither method of trading will occur on the New York Stock Exchange unless our Class B common stock has received prior approval for listing. We do not intend to list our Class A common stock for trading on any exchange or trading system.

Q:	Do you intend to pay dividends on your common stock?

A:	Genie does not anticipate paying dividends on its common stock in the foreseeable future. Genie’s current intent is to retain earnings, if any, to finance the working capital needs and potential expansion of Genie’s ESCO business, as well as the development of Genie’s unconventional energy businesses. The payment of dividends in the future will be at the sole discretion of Genie’s Board of Directors and will depend on, among other things, Genie’s results of operations, financial condition, capital expenditures and other cash obligations. In November 2010, IDT announced its intention to pay quarterly dividends. However, because we and IDT will be separate entities after the spin-off, our decision to pay (or not pay) dividends in the future will not impact IDT’s intention and decision of whether to pay (or not pay) dividends in the future. See “Dividend Policy” on page 20 for additional information on our dividend policy following the spin-off.

Q:	Where can IDT stockholders get more information?

A:	If you have any questions relating to the distribution, you should contact: IDT Corporation 520 Broad Street Newark, New Jersey 07102 Attention: Bill Ulrey (973) 438-3838

Q:	Who will be the distribution agent for the spin-off?

A:	American Stock Transfer & Trust Company will be the distribution agent for the spin-off. The distribution agent can be contacted at: 59 Maiden Lane Plaza Level New York, New York 10038 Telephone: (800) 937-5449

EXECUTIVE SUMMARY

Genie Energy Ltd., a Delaware corporation, is currently a subsidiary of IDT. Genie owns 99.3% of its subsidiary, GEIC, which owns 100% of IDT Energy and 92% of GOGI. Following the spin-off, our principal businesses, which are currently part of IDT, will consist of:

·	IDT Energy, which operates our energy services company, or ESCO, that resells electricity and natural gas to residential and small business customers in New York, New Jersey and Pennsylvania; and

Our business will consist of two reporting segments: IDT Energy and Genie Oil and Gas.

The diagram below sets forth our corporate structure:

Summary of the Spin-Off

The following is a summary of the terms of the spin-off. Please see “The Spin-Off” beginning on page 15 for a more detailed description of the matters described below.

Distributing company		IDT Corporation, a Delaware corporation.

Distributed company		Genie Energy Ltd., a Delaware corporation, which, following the spin-off, will be comprised of the current energy operations of IDT, specifically, IDT Energy, our ESCO business, and Genie Oil and Gas, which consists of our holdings in our unconventional energy initiatives. Genie’s principal executive offices are located at 550 Broad St., Newark, NJ 07102.

Distribution ratio		Each holder of IDT Class A common stock will receive a distribution of one share of Genie Class A common stock for every share of IDT Class A common stock held on the record date and each holder of IDT Class B common stock will receive a distribution of one share of Genie Class B common stock for every share of IDT Class B common stock held on the record date.

Securities to be distributed		Approximately 1.6 million shares of Genie Class A common stock, which will constitute all of the outstanding shares of Genie Class A common stock immediately after the spin-off (based on approximately 1.6 million shares of IDT Class A common stock that were expected to be outstanding on the record date). Approximately 21.1 million shares of Genie Class B common stock, which will constitute all of the outstanding shares of Genie Class B common stock immediately after the spin-off (based on approximately 21.1 million shares of IDT Class B common stock that were expected to be outstanding on the record date).

Record date		The record date is 5:00 p.m., New York City time, on October [__], 2011. In order to be entitled to receive shares of Genie Class A common stock and/or Class B common stock in the spin-off, holders of shares of IDT Class B common stock and Class A common stock must be stockholders as of 5:00 p.m., New York City time, on the record date.

Distribution date		The distribution date will be on or about [___ __], 2011.

Relationship between Genie and IDT after the spin-off		Following the spin-off, IDT and Genie each will be independent, publicly-traded companies. Howard Jonas will be Chairman of the Board of both companies and Chief Executive Officer of IDT. Further, we intend to enter into agreements with IDT that will ease our transition from consolidated operating segments to an independent company following the spin-off and we will continue to cooperate with IDT when there is an opportunity for cost savings that does not impact the independence of the two companies. For example, it is intended that IDT, pursuant to a Transition Services Agreement, will continue to provide certain services, including, but not limited to services relating to human resources, employee benefits administration, finance, accounting, tax, internal audit, facilities, investor relations and legal for an agreed period following the spin-off. Furthermore, IDT will grant us a license to use the IDT name for our ESCO business. Additionally, under the same agreement, Genie intends to provide specified administrative services to certain of IDT’s foreign subsidiaries. For additional information regarding our relationship with IDT after the spin-off, see “Our Relationship with IDT After the Spin-Off and Related Person Transactions” beginning on page 61.

Dividend policy		Genie does not anticipate paying dividends on its common stock in the foreseeable future. Genie’s current intent is to retain earnings, if any, to finance the potential expansion of our businesses. The payment of dividends in the future will be at the sole discretion of Genie’s Board of Directors and will depend on Genie’s results of operations, financial condition, capital expenditure plans and other cash obligations.

Intercompany indebtedness		There is no intercompany debt between IDT and the businesses included in Genie. There are current obligations for services between IDT and its subsidiaries, on the one hand, and the entities included in Genie, on the other hand, that will be paid or offset in the ordinary course of business. The only contemplated obligations arising after the spin-off would be obligations that arise under the Separation and Distribution Agreement and Transition Services Agreement, Tax Separation Agreement or that arise in the ordinary course of business pursuant to arms’ length arrangements between Genie and IDT.

Corporate Information and Structure

Pursuant to the spin-off, we will be separated from IDT and become a separate publicly-traded company. The spin-off and our resulting separation from IDT involve the following steps:

Before our separation from IDT, we will enter into a Separation and Distribution Agreement and Tax Separation Agreement with IDT to effect the separation and provide a framework for our relationship with IDT after the spin-off. We also will enter into a Transition Services Agreement with IDT which will provide for certain services to be performed by each of IDT and us to facilitate our transition into a separate publicly-traded company. These agreements will provide, among other things, for the allocation between us and IDT of the assets, liabilities and obligations currently owned by IDT and attributable to periods prior to, at and after our separation from IDT, services relating to human resources, employee benefits administration, finance, accounting, tax, internal audit, facilities, investor relations and legal and/or the allocation of liabilities and responsibilities relating to employee compensation and benefit plans and programs and other related matters and the administration of insurance claims. For more information on these agreements, see “Our Relationship with IDT after the Spin-Off and Related Person Transactions” beginning on page 61.

IDT will transfer cash to us prior to the spin-off such that we will have approximately $115 million in cash at the time of the spin-off for our working capital, expansion capital for IDT Energy and to cover the cost of development of our unconventional energy projects and technologies at Genie Oil and Gas.

·	Under the Securities Exchange Act of 1934, as amended(the “Exchange Act”), the registration statement on Form 10, of which this Information Statement is a part, shall have become effective, and IDT will mail this Information Statement to its stockholders.

IDT has received a private letter ruling (the “IRS Ruling”) from the IRS substantially to the effect that, for U.S. federal income tax purposes, the spin-off will qualify as tax-free under Section 355 of the of the Internal Revenue Code of 1986 (the “Code”). In addition to obtaining the IRS Ruling, IDT expects to receive an opinion from PricewaterhouseCoopers LLP (“PwC”) confirming the tax-free status of the spin-off for U.S. federal income tax purposes, including confirming the satisfaction of the requirements under Section 355 of the Code not specifically addressed in the IRS Ruling.

Following the separation, we will operate as a separate publicly-traded company, and we expect that our Class B common stock will begin trading on NYSE under the symbol “GNE” on a regular way basis on the first trading day following the distribution date. However, trading will not occur on the New York Stock Exchange unless our Class B common stock has received prior approval for listing.

For a further explanation of the spin-off, see “The Spin-Off” beginning on page 15.

RISK FACTORS

Our business, operating results or financial condition could be materially adversely affected by any of the following risks associated with any one of our businesses, as well as the other risks highlighted elsewhere in this document. The trading price of our Class B common stock could decline due to any of these risks. Note that references to “our,” “us”, “we,” etc. used in each risk factor below refers to the business about which such risk factor is provided.

Risks Related to IDT Energy

The ESCO business is highly competitive, so we may be forced to cut prices or incur additional costs.

IDT Energy faces substantial competition both from the traditional incumbent utilities as well as from other ESCOs, including ESCO affiliates of the incumbent utilities in specific territories. As a result, we may be forced to reduce prices, incur increased costs or lose market share. We compete on the basis of provision of services, customer service and price. Present or future competitors may have greater financial, technical or other resources which could put us at a disadvantage.

IDT Energy’s growth depends on its ability to enter new markets.

New markets for our business are determined based on many factors, which include the regulatory environment, as well as IDT Energy’s ability to procure energy in an efficient and transparent manner. We seek to purchase wholesale energy where there is a real time market that reflects a fair price for the commodity for all participants. Once new markets are determined to be suitable for IDT Energy, we will incur significant customer acquisition costs and there can be no assurance that we will be successful in new markets. Furthermore, there are regulatory differences between the markets that we currently operate in and new markets, including, but not limited to, exposure to credit risk, additional churn caused by tariff requirements, rate-setting requirements and incremental billing costs.

Unfair business practices or other activities of ESCO’s may adversely affect us.

Competitors in the highly competitive ESCO market engage in unfair business practices to sign up new customers. Competitors engaging in unfair business practices create an unfavorable impression about our industry on consumers. Such unfair practices by other companies can adversely affect our ability to grow or maintain our customer base. The successes, failures or other activities of various ESCOs within the markets that we serve may impact how we are perceived in the market.

Demand for ESCO services and consumption by customers are significantly related to weather conditions.

Typically, colder winters and hotter summers create higher demand and consumption for natural gas and electricity, respectively. Milder than normal winters and/or summers may reduce the demand for our energy services, thus negatively impacting our financial results.

Our current strategy is based on current regulatory conditions and assumptions, which could change or prove to be incorrect.

Regulation over the electricity and natural gas markets has been in flux at the state and federal levels. In particular, any changes adopted by the Federal Energy Regulatory Commission, or FERC, or changes in state or federal laws or regulations (including greenhouse gas laws) may affect the prices at which IDT Energy purchases electricity or natural gas for its customers. While we endeavor to pass along increases in energy costs to our customers pursuant to our variable rate customer offerings, we may not always be able to do so due to competitive market forces and the risk of losing our customer base. In addition, potential regulatory changes may impact our ability to use our established sales and marketing channels. Any changes in these factors, or any significant changes in industry development, could have an adverse effect on our revenues, profitability and growth or threaten the viability of our current business model.

Regulatory conditions can affect the amount of taxes and fees we need to pay and our pricing advantages.

We are subject to audits in various jurisdictions, including New York, for various taxes, including income tax, utility excise tax, and sales and use tax. Aggressive stances taken recently by regulators increase the likelihood of our having to pay additional taxes and fees in connection with these audits. In the future, we may seek to pass such charges along to our customers, which could have an adverse impact on our pricing advantages.

Commodity price volatility could have an adverse effect on our cost of goods sold and our results of operations.

Volatility in the markets for certain commodities can have an adverse impact on our costs for the purchase of the electricity and natural gas that IDT Energy sells to its customers. We may not always choose to pass along increases in costs to our customers to protect overall customer satisfaction. This would have an adverse impact on our margins and results of operations. Alternatively, volatility in pricing for IDT Energy's products related to the cost of the underlying commodities can lead to increased customer churn.

We face risks that are beyond our control due to our reliance on third parties and our general reliance on the electrical power and transmission infrastructure within the United States.

Our ability to provide energy delivery and commodity services depends on the operations and facilities of third parties, including, among others, BP Energy Company and BP Corporation North America, Inc. (collectively BP), the New York Independent System Operator, Inc., or NYISO and PJM Interconnection, LLC, or PJM. Our reliance on the electrical power generation and transmission infrastructure within the United States makes us vulnerable to large-scale power blackouts. The loss of use or destruction of third party facilities that are used in providing our services due to extreme weather conditions, breakdowns, war, acts of terrorism or other occurrences could greatly reduce our potential earnings and cash flows.

The ESCO business, including our relationship with our suppliers, is dependent on access to capital and liquidity, which may be limited under current circumstances.

Our business involves entering into contracts to purchase large quantities of electricity and natural gas. Because of seasonal fluctuations, we are generally required to purchase electricity or natural gas in advance and finance that purchase until we can recover such amounts from revenues. IDT Energy has a Preferred Supplier Agreement with BP pursuant to which BP is our preferred provider of electricity and natural gas. In addition to other advantages of this agreement, we are no longer required to post security with most suppliers other than BP. There can be no assurance that we will be able to maintain the required covenants, that BP will be able to maintain their required credit rating, or that the agreement will be renewed upon its expiration in June 2014. In addition, the security requirements outside of the BP agreement may increase as we enter other markets. Difficulty in obtaining adequate credit and liquidity on commercially reasonable terms may adversely affect our business, prospects and financial conditions.

A revision to certain utility best practices and programs in which we participate and with which we comply could disrupt our operations and adversely affect our results and operations.

Certain retail access “best practices” and programs proposed and/or required by state regulators have been implemented by utilities in most of the service territories in which we operate. One such practice in New York is participation in purchase of receivables, or POR, programs under which certain utilities purchase customer receivables for approximately 98% of their face value in exchange for a first priority lien in the customer receivables without recourse against an ESCO. This program is a key to our control of bad debt risk in our ESCO business in New York and a similar program is important to us in Pennsylvania. In the event that POR programs or any other best practice or program were to be revised or eliminated by state regulators or the individual utilities, we would need to adjust our current strategy regarding customer acquisition and our focus on the growth of our customer base. We would also need to adjust our current business plan to reduce our exposure to existing customers who may pose a bad debt risk. Any failure to properly respond to changing conditions could adversely affect our results of operations and profitability.

In addition, on June 23, 2008, the New York State Public Service Commission, or NYPSC issued its Order Establishing Energy Efficiency Portfolio Standard, or EEPS, and Approving Programs setting a goal of gradually reducing electricity usage by 15% statewide by 2015 and requiring the utilities to file energy efficiency programs consistent with the policies and cost/benefit factors adopted by the NYPSC. Since 2009, the Commission has approved 90 electric and natural gas energy efficiency programs to implement the EEPS policy. We cannot predict the impact of the EEPS on the electricity usage of our customers. There could be an adverse effect on the result of operations of our ESCO business if the EEPS results in a reduction in the aggregate amount of customer demand.

In New Jersey, customers who are delinquent in paying their invoices are no longer eligible to receive a consolidated utility invoice. A consolidated utility invoice is similar to a purchase of receivables program since the utility has the responsibility to bill the customer and collect the receivable. Instead, those customers will be switched to a dual bill arrangement whereby IDT Energy will be responsible to bill and collect the commodity portion of the customers’ invoices. Once we invoice these customers under a dual bill arrangement, we have bad debt risk associated with that portion of our revenues. Economic conditions, the creditworthiness of our customers in New Jersey and our ability to collect from these customers, among other things, may impact our profitability.

The ESCO business depends on the continuing efforts of our management team and our personnel with strong industry or operational knowledge and our efforts may be severely disrupted if we lose their services.

Our success depends on key members of our management team, the loss of whom could disrupt our business operation. Our business also requires a capable, well-trained workforce to operate effectively. There can be no assurance that we will be able to retain our qualified personnel, the loss of which may adversely affect our business, prospects and financial conditions.

The ESCO business relies on information systems.

We depend on our information systems and related computer hardware as well as on the information systems of third parties. Failure of our systems or of third party systems could result in suspension of our ESCO license and would cause a negative impact on our results of operations, financial condition, cash flow and reputation with our customers and/or regulators.

Risks Related to Genie Oil and Gas

We have no current production of oil and gas and we may never have any.

We do not have any current production of oil and gas. We cannot assure you that we will produce or market shale oil or gas at all or in commercially profitable quantities. Our ability to produce and market oil and gas may depend upon our ability to develop and operate our planned projects and facilities, which may be affected by events or conditions that impact the advancement, operation, cost or results of such projects or facilities, including:

§	Energy commodity prices relative to production costs;
§	The occurrence of unforeseen technical difficulties;

§	The outcome of negotiations with potential partners, governmental agencies, regulatory bodies, suppliers, customers or others;
§	Changes to existing legislation or regulation governing our current or planned operations;

§	Our ability to obtain all the necessary permits to operate our facilities;
§	Changes in operating conditions and costs, including costs of third-party equipment or services such as drilling and processing and access to power sources; and

§	Security concerns or acts of terrorism that threaten or disrupt the safe operation of company facilities.

In-situ technology for the extraction of oil and gas from oil shale is in its early stages of development and has not been deployed commercially at large scale. AMSO, LLC and IEI may not be able to develop environmentally acceptable and economically viable technology in connection therewith.

Our strategy is predicated on the production and extraction of unconventional resources, defined as any resource other than the traditional oil well. Our initial activity is in the in-situ production of oil and gas from oil shale which is typically more costly and is less established technically than traditional oil and gas production and therefore incurs a higher degree of technology risk. The greater cost increases the risk that we will not be profitable given commodity price fluctuations, assuming we enter into commercial production.

Operating hazards and uninsured risks with respect to the oil and gas operations may have material adverse effects on our operations.

Our research, exploration and, if successful, development and production operations are subject to risks similar to those normally incident to the exploration for and the development and production of oil and gas, including blowouts, subsidence, uncontrollable flows of oil, gas or well fluids, fires, pollution and other environmental and operating risks. These hazards could result in substantial losses due to injury or loss of life, severe damage to or destruction of property and equipment, pollution and other environmental damage and suspension of operations. While as a matter of practice we have insurance against some or all of these risks, such insurance may not cover the particular hazard and may not be sufficient to cover all losses. The occurrence of a significant event adversely affecting any of our operations could have a material adverse effect on us, could materially affect our continued operations and could expose us to material liability.

Genie Oil and Gas’ dependence on contractors, equipment and professional services that have limited availability could result in increased costs and possibly material delays in their respective work schedules.

Due to the lack of available technical resources with in-situ hydrocarbon production experience, the costs for our operations may be more expensive than planned or there could be delays in our operating plans. We are also more likely to incur delays in our drilling and operating schedule and we may not be able to meet our required work schedule. Similarly, some of the professional personnel we need for our planned operations are not available in Israel or are not available on short notice for work in Israel, and, therefore, we may need to use overseas contractors for various projects. Any or all of the factors specified above may result in increased costs and delays in our work schedule.

Genie Oil and Gas will require substantial funds and will need to raise additional capital in the future.

We will need substantial funds to fully execute our research and development activities, and, if those activities are successful we will need additional substantial funds to commence our anticipated commercial operations, if any. Failure to secure adequate funding could adversely affect our ability to advance our strategic plans as currently contemplated and require us to delay, scale back, or shut down our operations.

In January 2011, TOTAL S.A., or Total, completed funding of its committed capital contributions to AMSO, LLC, and, accordingly, Total has the option to terminate its obligations to make additional capital contributions and withdraw as a member of AMSO, LLC. If Total exercises this option and terminates its future funding, we will need to find other sources of funding or otherwise risk shutting down AMSO, LLC’s operations.

Genie Oil and Gas’ success depends on the continuing efforts of key personnel and certain strategic partners, and our efforts may be severely disrupted if we lose their services.

Our future success depends, to a significant extent, on our ability to attract and retain qualified technical personnel particularly those with expertise in the oil and gas industry and with in-situ hydrocarbon projects. There is substantial competition for qualified technical personnel, and there can be no assurance that we will be able to attract or retain our qualified technical personnel. Specifically, we heavily rely on the services of the members of the management and technical teams at AMSO, LLC and IEI, including Harold Vinegar, PhD at IEI and Alan Burnham, PhD at AMSO, LLC, for their technical expertise, assistance in the development of our intellectual property and guidance on building out a pilot/commercial facility for potential commercial production. In addition, AMSO, LLC is dependent on Total (as discussed more fully below in the Business section) for technical expertise, financial support and guidance.

The unexpected loss of the services of one or more of these people and/or the technical expertise and support of certain partners, and the ability to find suitable replacements within a reasonable period of time thereafter, could have a material adverse effect on our operations.

There are uncertainties associated with AMSO, LLC’s lease and IEI’s license.

AMSO, LLC’s lease for research, development and demonstration, or RD&D Lease, runs for a 10-year period expiring at the end of 2016, with a possible extension of up to 5-years upon demonstration that a process leading up to the production of commercial quantities of shale oil is diligently being pursued. The terms of the RD&D Lease do not guarantee that the U.S. Bureau of Land Management, or BLM, will grant a commercial lease. Further, there is significant environmental opposition to the commercial production of shale oil. Under current regulation, there are numerous conditions and requirements, the evaluation of which is subject to considerable discretion by the BLM, that AMSO, LLC will have to satisfy in order to convert its RD&D Lease into a commercial lease prior to the expiration of the RD&D Lease term. These conditions, which are more fully discussed in the Business section below, require AMSO, LLC to demonstrate, among other things, an economically viable commercial production process which will likely depend upon the prices of competing products, including conventional oil. There can be no assurance that AMSO, LLC will satisfy all of these conditions and requirements. Additionally, there have been proposed changes to the regulations governing commercial leases such as the lease into which AMSO intends to convert its RD&D Lease. The BLM recently announced their intention to issue new commercial oil shale regulations, which could affect the commercial royalty rates and the conversion criteria. Although the conversion terms of AMSO’s RD&D Lease provide for applicability of the existing regulatory scheme, we cannot assure you that we will not be subjected to more restrictive or less favorable regulations.

IEI holds an exclusive Shale Oil Exploration and Production License that expires in July 2012. The initial term of the license was for three years until July 2011. The license was extended for an additional year, and it may be further extended in one year increments until July 2015(the maximum term of a license under Israeli Law is seven years). Although the license may be further extended and IEI may also apply for a new license, there is no guarantee the license will be extended, that a new license would be granted or that the license will not be successfully challenged by environmental or other opposition groups. IEI’s project may be delayed or even suspended if IEI loses its license as a result of the legal proceedings filed by the Israel Union for Environmental Defense (see Legal Proceedings elsewhere in this Information Statement). In addition, the license is subject to certain conditions and milestones and the failure to reach those milestones may result in the termination, revocation, suspension or limitation of the license.

Genie Oil and Gas is subject to regulatory, legal and political risks that may limit its operations.

Our operations and potential earnings may be affected from time to time in varying degree by regulatory, legal and political factors including laws and regulations related to environmental or energy security matters, including those addressing alternative and renewable energy sources and the risks of global climate change. Such laws and regulations continue to increase in both number and complexity and affect our operations with respect to, among other things:

§	The discharge of pollutants into the environment;
§	The handling, use, storage, transportation, disposal and cleanup of hazardous materials and hazardous and nonhazardous wastes;

§	The dismantlement, abandonment and restoration of our properties and facilities at the end of their useful lives;
§	Restrictions on exploration and production;

§	Loss of petroleum rights including key leases, licenses or permits;
§	Tax or royalty increases, including retroactive claims;

§	Intellectual property challenges that would limit our ability to use our planned in-situ production technologies; and
§	Political instability, war or other conflicts in areas where we operate.

For example, in March 2011, the Israeli Parliament passed a new bill materially increasing the overall taxes, royalties and other fees due to the Israeli government from revenues derived by oil and natural gas producers. The Israeli Income Tax Ordinance was revised accordingly and the amount payable to the government from revenues derived by oil and natural gas producers increased from a maximum of 32% to 52%. This tax will only be imposed once a project has passed certain milestones set forth in the ordinance (when the profits derived from a certain field have reached 150% of the original investment in that field).

AMSO, LLC’s RD&D Lease is subject to other third party lease interests.

There are other mineral leases which are collocated with AMSO, LLC’s lease interests, including the territory designated for AMSO LLC’s commercial lease conversion. While some of these other leases are subject to special oil shale stipulations requiring the leaseholders to minimize potential impacts and prevent interference with oil shale development, others are not. Although AMSO, LLC works to coordinate drilling plans and operations with these collocated leaseholders to preserve the integrity of its resource and operations, we cannot guaranty that these collocated leases will not interfere with AMSO LLC’s operations.

Regulation of greenhouse gas emissions could increase Genie Oil and Gas’ operational costs, cause delays and/or restrict our operations.

The production and processing of oil shale will result in some emission of greenhouse gases. International agreements and national or regional legislation and regulatory measures to limit greenhouse emissions are currently in various phases of discussion or implementation. The Kyoto Protocol and other actual or pending federal, state and local regulations, envision a reduction of greenhouse gas emissions through market-based trading schemes. As a result of these and other potential environmental regulations, if our research and development activities are successful and we eventually begin commercial production, we can expect to incur additional capital, compliance, operating, maintenance and remediation costs. To the extent these costs are not ultimately reflected in the price of the products we sell, our operating results will be adversely affected.

The oil and gas industry is subject to the general inherent industry and economic risks.

The oil and gas business is fundamentally a commodity business. This means that potential future commercial operations and earnings may be significantly affected by changes in oil and gas prices and by changes in margins on gasoline, natural gas and other refined products.

We may be exposed to infringement or misappropriation claims by third parties, which, if determined adversely to us, could cause us to lose significant rights and pay significant damage awards.

Our success also depends largely on our ability to use and develop our technology and know-how without infringing the intellectual property rights of third parties. The validity and scope of claims relating to our technology involve complex scientific, legal and factual questions and analysis. It is therefore difficult to accurately predict whether or not a third party will assert that we are infringing on its intellectual property or whether it would prevail. Although we are not currently aware of any infringement or of any parties pursuing or intending to pursue infringement claims against us, we cannot assure you that we will not be subject to such claims in the future. Also, in many jurisdictions, patent applications remain confidential and are not published for some period after filing. Thus, we may be unaware of other parties’ pending patent applications that relate to our processes. While at present we are unaware of competing patent applications, such applications could potentially surface.

The defense and prosecution of intellectual property suits, patent opposition proceedings and related legal and administrative proceedings can be both costly and time consuming and may significantly divert the efforts and resources of our technical and management personnel. An adverse determination in any such litigation or proceedings to which we may become a party could subject us to significant liability to third parties, require us to seek licenses from third parties, to pay ongoing royalties, to redesign our products, or subject us to injunctions prohibiting the manufacture and sale of our products or the use of our technologies.

Risks Relating to the Spin-Off

We may be unable to achieve some or all of the benefits that we expect to achieve from our separation from IDT.

As a stand-alone, independent public company, we believe that our business will benefit from, among other things, allowing our management to design and implement corporate strategies and policies that are based primarily on the characteristics of our energy businesses, to focus our financial resources wholly on our own operations and to implement and maintain a capital structure designed to meet our own specific needs. However, we may not be able to achieve some or all of the benefits expected as a result of the spin-off.

Additionally, by separating from IDT, there is a risk that we may be more susceptible to industry and stock market fluctuations and other adverse events than we would have been were we still a part of IDT due to a reduction in business diversification.

Prior to the spin-off, we have been able to take advantage of IDT’s size and purchasing power in procuring certain goods, technology and services, including insurance, human resources and employee benefits administration, finance, accounting, tax and legal. As a separate, stand-alone entity, we may be unable to obtain access to financial and other resources on terms as favorable as those available to us prior to the separation. Furthermore, as a stand-alone company, we will not be able to enjoy certain benefits from IDT’s operating diversity, borrowing leverage and available capital for investments.

If the spin-off were to fail to qualify as a tax-free spin-off under Section 355 of the Code, IDT and/or our stockholders, might be subject to significant tax liability.

Despite receipt of the IRS Ruling, if the spin-off fails to qualify for tax-free treatment, IDT would be treated as if it had sold our common stock for its fair market value, resulting in a taxable gain to the extent of the excess of such fair market value over its tax basis in our stock. In general, our initial public stockholders would be treated as if they had received a taxable distribution equal to the fair market value of our common stock that was distributed to them. For additional information, see “Material U.S. Federal Income Tax Consequences of the Spin-Off” beginning on page 17.

Our operations may depend on the availability of additional financing and after the spin-off we will not be able to obtain financing from IDT.

Following the spin-off, we expect to have sufficient liquidity to support the short to medium term development of our business. In the future, however, we may require additional financing for capital requirements and growth initiatives. After the spin-off, IDT will not provide funds to us. Accordingly, we will depend on our ability to generate cash flows from operations and to borrow funds and issue securities in us or our subsidiaries in the capital markets or to strategic investors to maintain and expand our business and operations. We may need to incur debt or issue equity on terms and at interest rates that may not be as favorable as those historically enjoyed by IDT. If additional financing is not available when required or is not available on acceptable terms, we may be unable to fund our business, successfully promote and expand our business, develop or enhance our technologies, products and services, take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our business prospects, financial condition and results of operations.

Our historical and pro forma financial information may not be indicative of our future results as an independent company.

The historical and pro forma financial information we have included in this Information Statement may not reflect what our results of operations, financial position and cash flows would have been had we been an independent company during the periods presented or be indicative of what our results of operations, financial position and cash flows may be in the future when we are an independent company. We have made pro forma adjustments based upon available information and assumptions that we believe are reasonable to reflect these factors, among others, in our pro forma financial information included in this Information Statement. However, our assumptions may not prove to be accurate. In addition, the service agreements between IDT and us will include additional services to be provided, on an interim basis, as a separate publicly-traded company. Charges for these additional services were not included in our historical consolidated financial statements or in our pro forma adjustments since they were not applicable for periods that we were not a separate public company. We estimate that the additional costs (including for services to be provided by IDT and others) related to being a publicly-traded company and being separated from IDT, will be between $3.5 million and $5.0 million annually. Several of the costs included in this estimated range are preliminary, subject to negotiation, and may vary from our assumptions when finalized. Our pro forma information should not be assumed to be indicative of what our results of operations, cash flows or financial condition actually would have been as a stand-alone public company or to be a reliable indicator of what our results of operations, cash flows and financial condition actually may be in the future.

Risk Factors Generally Relating to Us and Our Common Stock

We have limited resources and could find it difficult to raise additional capital.

As a result of the spin-off, IDT Energy and Genie Oil and Gas will be newly independent from IDT. We have no operating history as an independent company and limited sources of financing, as described below in “Business—Genie Oil and Gas.”There can be no assurance that we will be able to obtain the necessary funding on commercially reasonable terms in a timely fashion. Failure to receive the funding could have a material adverse effect on our business, prospects, and financial condition.

There may not be an active trading market for shares of our Class B common stock and stockholders may find it difficult to transfer our securities.

Prior to the spin-off, there was no public trading market for shares of our common stock. We intend to apply to have our Class B common stock traded on the NYSEand to satisfy all the requirements for that listing. We have received notice from NYSE Regulation, Inc. that our Class B common stock has received clearance to submit a listing application. We have filed the listing application. However, our Class B common stock may not be approved for listing on the New York Stock Exchange or any other national securities exchange.We cannot predict the extent to which investor interest in us will lead to the development of an active trading market in our common stock or how liquid such a market might become. It is possible that, if our Class B common stock iseventually listed on the NYSE an active trading market will not develop or continue, and there can be no assurance as to the price at which our Class B common stock will trade. The initial share price of our Class B common stock may not be indicative of prices that will prevail in any future trading market.

In addition, because of the significant changes that will take place as a result of the spin-off, the trading market for our Class B common stock and IDT’s Class B common stock after the spin-off may be significantly different from that for IDT’s Class B common stock prior to the spin-off.

We cannot predict the price range or volatility of our Class B common stock after it is listed, and sales of a substantial number of shares of our Class B common stock may adversely affect the market price of our Class B common stock.

Investors may suffer dilution.

In the future, we may engage in equity financing to fund our future capital expenditures, operations and growth. If we raise additional funds by issuing equity or equity-linked securities, stockholders may experience significant dilution of their ownership interest (both with respect to the percentage of total securities held, and with respect to the book value of their securities) and such securities may have rights senior to those of the holders of our common stock.

We are controlled by our principal stockholder, which limits the ability of other stockholders to affect the management of the Company.

Howard S. Jonas, our Chairman of the Board, will, following the spin-off, have voting power over 5,376,733 shares of our common stock (which includes 1,574,326 shares of our Class A common stock and 3,802,407 shares of our Class B common stock and representing approximately 74.7% of the combined voting power of our outstanding capital stock, as of July 31, 2011. Mr. Jonas will be able to control matters requiring approval by our stockholders, including the approval of significant corporate matters, such as any merger, consolidation or sale of all or substantially all of our assets. As a result, the ability of any of our other stockholders to influence our management will be limited.

We intend to exercise our option for the “controlled company” exemption under NYSE rules with respect to our Nominating Committee.

Following the spin-off, we will be a “controlled company” as defined in section 303A of the NYSE Listed Company Manual because more than 50% of the combined voting power of all of our outstanding capital will be beneficially owned by Howard S. Jonas, our Chairman of the Board. As a “controlled company,” we will be exempt from certain NYSE listing standards requiring a board of directors with a majority of independent members, a compensation committee composed entirely of independent directors and a nominating committee composed entirely of independent directors. These independence standards are intended to ensure that directors who meet those standards are free of any conflicting interest that could influence their actions as directors. We intend to apply this “controlled company” exemption for our corporate governance practices only with respect to (i) the independence requirements of our Nominating Committee and (ii) not having a single Nominating/Corporate Governance Committee. Accordingly, with respect to our Nominating Committee and, if we choose to apply the controlled company exemption to them, for the other independence requirements as well, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE.

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Information Statement and other materials filed or to be filed by us and IDT, as well as information in oral statements or other written statements made or to be made by us and IDT, contain statements, including in this document under the captions “Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are forward-looking statements. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “foresees” or the negative version of those words or other comparable words and phrases. Any forward-looking statements contained in this Information Statement are based upon our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved.

We believe that the factors that could cause our actual results to differ materially include but are not limited to the factors we describe in this Information Statement, including under “Risk Factors,” “The Spin-off” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The following list represents some, but not necessarily all, of the factors that could cause actual results to differ from historical results or those anticipated or predicted by these forward-looking statements:

§	Changes in demand for our products and services;
§	Commodity price fluctuations

§	Weather conditions and natural disasters;
§	Regulatory changes including changes to environmental regulations;

§	Research and development difficulties and/or delays;
§	Difficulty in developing, preserving and protecting our intellectual property;

§	Loss of key management and technical personnel;
§	Availability and access to financial and other resources;

§	Changes to tax and royalty structures
§	Acts of terrorism or war;

§	Competition and innovation in our industries;
§	Our ability to develop and introduce new or enhanced products and services;

§	Our ability to protect our information systems;
§	Adequacy of our internal controls;

§	Our ability to comply with laws governing our operations and industry;
§	Increases in tax liabilities;

§	Difficulty in implementing our business strategies;
§	Failure of the spin-off to qualify as a tax-free transaction; and

§	Labor force stoppages.

These factors should not be construed as all inclusive and should be read in conjunction with the other cautionary statements that are included in this Information Statement. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Consequently, actual events and results may vary significantly from those included in or contemplated or implied by our forward-looking statements. The forward-looking statements included in this Information Statement are made only as of the date of this Information Statement, and we undertake no obligation to publicly update or review any forward-looking statement made by us or on our behalf, whether as a result of new information, future developments, subsequent events or circumstances or otherwise.

THE SPIN-OFF

After a thorough strategic review of IDT’s business portfolio, IDT determined that separating our energy businesses from its other operations would allow us to be in a better position to thrive under our own management and allow us to create more long-term value individually than through the combined entity. In addition, by separating from the remaining IDT businesses, we would avoid the risks associated with those businesses and provide investors with a company solely focused on the energy industry.

The transaction is intended to be in the form of a tax-free distribution to IDT’s stockholders. To that end, IDT received the IRS Ruling substantially to the effect that, for U.S. federal income tax purposes, the distribution of shares of our Class B common stock will qualify as tax-free under Section 355 of the Code. In addition to obtaining the IRS Ruling, IDT expects to receive an opinion from PwC confirming the tax-free status of the spin-off for U.S. federal income tax purposes, including confirming the satisfaction of the requirements under Section 355 of the Code not specifically addressed in the IRS Ruling. IDT’s Board of Directors will establish record and payment dates for the spin-off shortly before the completion of the distribution. You should consult your own tax advisor concerning the tax impact of the spin-off on you.

Reasons for the Spin-Off

The spin-off will separate our businesses from the remainder of IDT’s operations and holdings that have different growth and industry characteristics. We, along with IDT’s management and Board of Directors, believe that the operational and growth prospects of our businesses may best be realized by a separation from those that will remain with IDT based on several factors including industry characteristics and growth prospects of our ESCO and unconventional energy businesses. We and IDT believe that separating the two groups of operating units will allow our management and IDT’s management to design and implement corporate strategies and policies that are based primarily on the business characteristics of the industry in which we or IDT operate, maintain a sharper focus on core business and growth opportunities, and concentrate our and IDT’s financial resources wholly on our respective operations. Moreover, our separation from IDT will make IDT a more easily understood company and provide investors with greater transparency regarding the future prospects and value of our business units. Investors will have the ability to independently value our company, a high-growth energy company, in contrast to IDT’s more mature business. Accordingly, we believe the spin-off will build long-term stockholder value.

Other Benefits of the Spin-Off

The Board of Directors of IDT considered the following potential benefits in making the determination to effect the spin-off:

Increase transparency and clarity into the different businesses. IDT’s telecom and energy businesses are fundamentally different. They are at different stages of development, with different growth characteristics and capital requirements. Thus, the investment community, stockholders and investors will be better able to evaluate the merits and future prospects of each company. This will allow potential investors to invest in industry-focused investment vehicles, thus enhancing the likelihood that each company will receive an appropriate market valuation.

Both companies will likely receive coverage from industry-specialized equity analysts as they will be able to focus on the different industries of each company.

§	Investors will be able to choose whether they want to invest in a company with a more predictable cash flow or in a company that will have higher risk but potentially higher return.
§	As an independent, energy focused company, Genie should have improved access to the capital markets to fund the development of our businesses, especially Genie Oil and Gas, which is expected to require substantial ongoing capital needs as it develops its technology and transitions into commercial production.

Reduce internal competition for capital. Instead of having limited access to resources, we will now be able to invest any excess cash flow exclusively into the growth initiatives of our energy businesses. In addition, we will have direct access to the public capital markets to allow us to seek to finance our operations and growth without having to compete with IDT’s other businesses with respect to financing. As an independent entity, we will be in a position to pursue strategies our Board of Directors and management believe will create long-term stockholder value, including organic and acquisition growth opportunities, provided we continue to have access to capital.

Provide both companies heightened strategic flexibility to form strategic business alliances in their target markets, unencumbered by considerations of the potential impact on the other business.

Allow us to effect future strategic transactions utilizing our common stock for all or part of the consideration and to issue a security more directly tied to the performance of our business.

Create our common equity shares, including options and restricted shares, in order to provide the appropriate incentive mechanisms to motivate and reward our management and employees. Assuming we are able to list our common stock and an active trading market develops, we will be able to develop and implement more appropriate incentive programs to attract and retain key employees through the use of stock-based and performance-based incentive plans that more directly link their compensation with our financial performance. These programs will be designed to more directly reward employees based on our performance.

§	Allow each separated company to recruit and retain employees pursuant to compensation policies which are appropriate for their respective lines of business.
§	The telecom business is a more stable and mature business with modest growth and limited capital needs going forward and expects to pay dividends after the spin-off, while the Genie Oil and Gas businesses are very capital intensive, and have huge growth potential in our oil shale projects. Accordingly, we do not plan on paying dividends in the foreseeable future.

Neither we nor IDT can assure you that, following the spin-off, any of these benefits will be realized to the extent anticipated or at all. For a description of the factors that might impact our ability to achieve these benefits, see “Risk Factors.”

IDT’s Board of Directors also considered a number of other factors in evaluating the spin-off, including:

§	The one-time and on-going costs of the spin-off, and having us operate as an independent public company;
§	Our capital structure;

§	The possibility that disruptions in normal business may result;
§	The risk that the combined trading prices of our common stock and IDT common stock after the distribution may be lower than the trading price of IDT common stock before the distribution; and
§	The fact that Genie will not be eligible to utilize IDT’s net operating loss carryforwards to offset its taxable income for periods following the spin-off and, as a result, will likely have an increased tax burden as compared to the remaining part of IDT’s consolidated tax group.

IDT’s Board of Directors concluded that the potential long-term benefits of the spin-off outweigh these factors, and that separating us from IDT in the form of a tax-free distribution is appropriate and advisable.

Manner of Effecting the Spin-Off

The general terms and conditions relating to the spin-off will be set forth in the Separation Agreement between us and IDT. The spin-off will be effective at 11:59 p.m., New York City time on the distribution date, which will be on or about [_____ __,] 2011. As a result of the spin-off, each IDT stockholder will receive one share of our Class A common stock for every share of IDT Class A common stock and one share of our Class B common stock for every share of IDT Class B common stock held as of the record date.

In order to be entitled to receive shares of our common stock in the spin-off, IDT stockholders must be stockholders as of the record date. The distribution of unrestricted shares of our Class B common stock will be paid in book-entry form and physical stock certificates will be issued only to holders of our Class A common stock and, upon request, to holders of our Class B common stock. Each share of our Class A common stock and Class B common stock that is distributed will be validly issued, fully paid and non-assessable and free of preemptive rights. See “Description of Our Capital Stock” beginning on page 63.

IDT stockholders will not be required to pay for shares of our Class A common stock and Class B common stock received in the spin-off or to surrender or exchange shares of IDT Class A common stock and/or Class B common stock in order to receive our common stock or to take any other action in connection with the spin-off. No vote of IDT stockholders is required or sought in connection with the spin-off, and IDT stockholders will have no appraisal rights in connection with the spin-off.

If any stockholder of IDT on the record date sells shares of IDT common stock after the record date but on or before the spin-off date, the buyer of those shares, and not the seller, will become entitled to receive the shares of our common stock issuable in respect of the shares sold. See “Trading Between the Record Date and Spin-Off Date” below for more information.

Trading Between the Record Date and Distribution Date

Beginning on or shortly before the record date and continuing up to and including through the distribution date, we expect that there will be two markets in IDT Class B common stock: a “regular-way” market and an “ex-distribution” market. Shares of IDT Class B common stock that trade on the regular-way market will trade with an entitlement to receive shares of Genie Class B common stock distributed pursuant to the distribution. Shares that trade on the ex-distribution market will trade without an entitlement to receive shares of Genie Class B common stock distributed pursuant to the distribution. Therefore, if you sell shares of IDT Class B common stock in the “regular-way” market after the close of business on the record date and up to and including through the distribution date, you will be selling your right to receive shares of Genie Class B common stock in the distribution. If you own shares of IDT Class B common stock at the close of business on the record date and sell those shares on the “ex-distribution” market, up to and including through the distribution date, you will still receive the shares of Genie Class B common stock that you would be entitled to receive pursuant to your ownership of the shares of IDT Class B common stock.

We have received notice from the New York Stock Exchange Regulations, Inc. that our Class B common stock has received preliminary approval and clearance for listing. Therefore, beginning on or shortly before the record date and continuing up to and including through the distribution date, we expect that there will be a “when-issued” market in our Class B common stock. “When-issued” trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. The “when-issued” trading market will be a market for shares of Genie Class B common stock that will be distributed to IDT stockholders on the distribution date. If you owned shares of IDT Class B common stock at the close of business on the record date, you would be entitled to shares of our common stock distributed pursuant to the distribution. You may trade this entitlement to shares of Genie Class B common stock, without trading the shares of IDT Class B common stock you own, on the “when-issued” market. On the first trading day following the distribution date, “when-issued” trading with respect to Genie Class B common stock will end and “regular-way” trading will begin. However, neither method of trading will occur on the New York Stock Exchange unless our Class B common stock has received prior approval for listing.

Results of the Spin-Off

After the spin-off, we will be a separately traded public company. Immediately following the spin-off, we expect to have approximately 6 record holders of our Class A common stock and 108 record holders of shares of our Class B common stock based on the number of beneficial and record holders, respectively, of shares of IDT Class B common stock and Class A common stock on October [__], 2011 and the number of beneficial and record holders, respectively, of shares of Genie common stock held by minority stockholders prior to the spin-off.

The actual number of shares to be distributed will be determined on the record date and will reflect any exercise of IDT options between the date the Board of Directors of IDT declares the distribution for the spin-off and the record date for the spin-off.

We and IDT will be parties to a number of agreements that govern the spin-off and the future relationship between the two companies. For a more detailed description of these agreements, please see “Our Relationship with IDT after the Spin-Off and Related Person Transactions” beginning on page 61.

Treatment of Stock Options in the Spin-Off

In the spin-off, the exercise price of each outstanding option to purchase IDT Class B common stock will be proportionately reduced based on the trading price of IDT following the spin-off. Further, each option holder will share ratably in a pool of options to purchase 50,000 shares of Genie Class B common stock with an exercise price equal to the market value and an expiration date equal to the expiration of the IDT option held by such option holder.

Interest of Genie’s Officers and Directors

The interest of our officers and Board of Directors in the spin-off is reflected in their stock ownership as set forth in the Security Ownership and Certain Beneficial Owners and Management on page 59 as certain of them will be receiving shares of our common stock as a result of the distribution.

Material U.S. Federal Income Tax Consequences of the Spin-Off

The following is a summary of the material U.S. federal income tax consequences to IDT, the holders of IDT Class A common stock and Class B common stock, us and the holders of our common stock after the spin-off as of the date hereof. This summary does not discuss all tax considerations that may be relevant to stockholders in light of their particular circumstances, nor does it address the consequences to stockholders subject to special treatment under the U.S. federal income tax laws, such as stockholders subject to the alternative minimum tax, tax-exempt entities, non-resident alien individuals, foreign entities, foreign trusts and estates and beneficiaries thereof, stockholders who acquire shares as compensation for services (including holders of IDT restricted stock who did not make a Section 83(b) election), banks, insurance companies, other financial institutions, traders in securities that use mark-to-market accounting, and dealers in securities or commodities. In addition, this summary does not address any state, local or foreign tax consequences. This summary is based upon provisions of the Code, Treasury Regulations promulgated thereunder, pertinent judicial authorities, rulings of the Internal Revenue Service and such other relevant authorities, in effect on the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in U.S. federal income tax consequences different from those summarized below.

This summary is limited to holders of shares of IDT common stock that are U.S. Holders, as defined immediately below. A U.S. Holder is a beneficial owner of IDT common stock that is, for U.S. federal income tax purposes:

• an individual who is a citizen or a resident of the United States;

• a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States or any state thereof or the District of Columbia;

• an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

• a trust, if (i) a court within the United States is able to exercise primary jurisdiction over its administration and one or more United States persons have the authority to control all of its substantial decisions or (ii) in the case of a trust that was treated as a domestic trust under the law in effect before 1997, a valid election is in place under applicable Treasury Regulations.

This summary does not address the U.S. federal income tax consequences to IDT stockholders who do not hold shares of IDT common stock as a capital asset. Moreover, this summary does not address any state, local or foreign tax consequences or any estate, gift or other non-income tax consequences.

If a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) holds shares of IDT common stock, the tax treatment of a partner in that partnership will generally depend on the status of the partner and the activities of the partnership. Such a partner or partnership should consult its own tax advisor as to the tax consequences of the distribution.

YOU SHOULD CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. TAX CONSEQUENCES OF THE DISTRIBUTION.

THIS SUMMARY IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY PARTICULAR INVESTOR

IDT has received a private letter ruling from the IRS substantially to the effect that, for U.S. federal income tax purposes, the spin-off will qualify as tax-free under Section 355 of the Code. In addition to obtaining the IRS Ruling, IDT expects to receive an opinion from PwC confirming the tax-free status of the spin-off for U.S. federal income tax purposes, including confirming the satisfaction of the requirements under Section 355 of the Code not specifically addressed in the IRS Ruling.

Although the IRS Ruling is generally binding on the IRS, it is based on certain facts and assumptions, and certain representations and undertakings, from us and IDT that certain conditions that are necessary to obtain tax-free treatment under the Code have been satisfied. Furthermore, the IRS did not rule on whether a distribution satisfies certain requirements necessary to obtain tax-free treatment under the Code. Rather, a private letter ruling is based on representations by us and IDT that these conditions have been or will be satisfied and any inaccuracy in such representations could invalidate the ruling. The opinion that IDT expects to receive from PwC will address all of the requirements necessary for the spin-off to obtain tax-free treatment under the Code and will be based on certain facts and assumptions, and certain representations and undertakings, from us and IDT. An opinion represents our advisor’s best legal judgment and is not binding on the IRS or any court. We cannot assure you that the IRS will agree with the conclusions expected to be set forth in the opinion, and it is possible that the IRS or another tax authority could adopt a position contrary to one or all of those conclusions and that a court could sustain that contrary position. If any of the facts, representations, assumptions or undertakings described or made in connection with the ruling or the opinion are not correct, are incomplete or have been violated, the IRS Ruling could be revoked retroactively or modified by the IRS, and our and IDT’s ability to rely on the opinion of counsel could be jeopardized. We are not aware of any facts or circumstances, however, that would cause these facts, representations or assumptions to be untrue or incomplete, or that would cause any of these undertakings to fail to be complied with, in any material respect.

As the distribution qualifies under Section 355 of the Code, for U.S. federal income tax purposes:

• no gain or loss will be recognized by IDT or us as a result of the distribution;

• no gain or loss will be recognized by, or be includible in the income of, a holder of IDT common stock, solely as a result of the receipt of our common stock in the distribution;

• the aggregate tax basis of the shares of IDT common stock and our common stock in the hands of IDT stockholders immediately after the distribution will be the same as the aggregate tax basis of the shares of IDT common stock held by the holder immediately before the distribution, allocated between the shares of IDT common stock and our common stock in proportion to their relative fair market values immediately following the distribution; and

• the holding period with respect to our common stock received by IDT stockholders will include the holding period of their shares of IDT common stock, provided that such shares of IDT common stock are held as a capital asset immediately following the distribution.

If, notwithstanding the conclusions included in the private letter ruling and expected to be included in the opinion, it is ultimately determined that the distribution does not qualify as tax-free for U.S. federal income tax purposes, then IDT would recognize gain in an amount equal to the excess of the fair market value of our common stock distributed to IDT stockholders over IDT's tax basis in such shares.

In addition, if the distribution were not to qualify as tax-free for U.S. federal income tax purposes, each IDT stockholder that is subject to U.S. federal income tax and who receives our common stock in the distribution could be treated as receiving a distribution in an amount equal to the fair market value of our common stock that was distributed to the stockholder, which generally would be taxed as a dividend to the extent of the stockholder’s pro rata share of IDT's current and accumulated earnings and profits and then treated as a non-taxable return of capital to the extent of the stockholder’s basis in the IDT stock and finally as capital gain from the sale or exchange of IDT stock.

Even if the distribution otherwise qualifies for tax-free treatment under Section 355 of the Code, it may result in corporate level taxable gain to IDT under Section 355(e) of the Code if 50% or more, by vote or value, of our stock or IDT’s stock is acquired or issued as part of a plan or series of related transactions that includes the distribution. For this purpose, any acquisitions or issuances of IDT's stock within two years before the distribution, and any acquisitions or issuances of our stock or IDT's stock within two years after the distribution are generally presumed to be part of such a plan, although we or IDT may be able to rebut that presumption. We are not aware of any acquisitions or issuances of IDT’s stock within the two years before the distribution that would be considered to occur as part of a plan or series of related transactions that includes the distribution. If an acquisition or issuance of our stock or IDT's stock triggers the application of Section 355(e) of the Code, IDT would recognize taxable gain as described above and such gain would be subject to U.S. federal income tax.

A merger, recapitalization or acquisition, or issuance or redemption of our common stock after the spin-off, in some circumstances, could be counted toward the 50% change of ownership threshold. As a result, we may be unable to engage in strategic or capital raising transactions that stockholders might consider favorable, or to structure potential transactions in the manner most favorable to us.

If you are a “significant distributee” with respect to the spin-off, you are required to attach a statement to your federal income tax return for the year in which the spin-off occurs setting forth our name and IRS employer identification number, IDT’s name and IRS employer identification number, the date of the spin-off, and the fair market value of the shares of our common stock that you receive in the spin-off. Upon request, IDT will provide the information necessary to comply with this reporting requirement to each stockholder of record as of the record date. You are a “significant distributee” with respect to the spin-off if you own at least 5% of the outstanding shares of IDT common stock immediately before the spin-off. You should consult your own tax advisor concerning the application of this reporting requirement in light of your particular circumstances.

Certain State Income Tax Matters

The above discussion does not address any tax consequences of the spin-off other than the material U.S. federal income tax consequences set forth above. IDT stockholders are encouraged to consult their tax advisor concerning all possible state income tax consequences of the spin-off.

Listing and Trading of Our Class B Common Stock

There is currently no public market for our common stock. We intend to apply to have our Class B common stock traded on NYSE and expect to list under the ticker symbol “GNE” and to satisfy all the requirements for that listing. We have received notice from the New York Stock Exchange Regulations, Inc. that our Class B common stock has received preliminary approval and clearance for listing.

We anticipate that trading of our Class B common stock will commence on a when-issued basis on or shortly before the record date. When-issued trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. On the first trading day following the distribution date, when-issued trading with respect to our Class B common stock will end and regular way trading will begin. Regular way trading refers to trading after a security has been issued and typically involves a transaction that settles on the third full business day following the date of the transaction. However, neither method of trading will occur on the New York Stock Exchange unless our Class B common stock has received prior approval for listing.

We cannot predict what the trading price for our Class B common stock will be before or after the distribution date. We also cannot predict any change that may occur in the trading price of IDT Class B common stock as a result of the spin-off. Until our Class B common stock is fully distributed and an orderly market develops, the prices at which it trades may fluctuate significantly and may be lower or higher than the price that would be expected for a fully distributed issue. See “Risk Factors--Risk Factors Generally Relating to Us and Our Common Stock.”

The shares of our Class B common stock distributed to IDT stockholders will be freely transferable except for shares received by persons who may be deemed to be our “affiliates” under the Securities Act of 1933, as amended (the “Securities Act”). Persons that may be considered affiliates of us after the spin-off generally include individuals or entities that control, are controlled by or are under common control with us. This may include some or all of our officers and directors as well as our principal stockholders. Persons that are our affiliates will be permitted to sell their shares only pursuant to an effective registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act, such as the exemptions afforded by Section 4(1) of the Securities Act or Rule 144 thereunder.

Following the spin-off, the number of shares of each of our Class A common stock and Class B common stock, other than Class B common stock that will be freely transferable, that could be sold pursuant to Securities Act Rule 144 or that we have agreed to register under the Securities Act for sale by resale is 1,574,326 and 4,426,451, respectively.

We do not intend to list or quote our Class A common stock on any exchange or trading system.

Spin-off Conditions and Termination

We expect that the spin-off will be effective on the distribution date, provided that:

§	Our registration statement on Form 10, of which this Information Statement is a part, shall have become effective under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and no stop order relating to the registration statement is in effect; and
§	No action, proceeding or investigation shall have been instituted or threatened before any court or administrative body to restrain, enjoin or otherwise prevent the consummation of the spin-off, and no restraining order or injunction issued by any court of competent jurisdiction shall be in effect restraining the consummation of the spin-off.

§	IDT shall have received an opinion from PwC as to the satisfaction of certain required qualifying conditions for the application of Section 355 of the Code to the spin-off upon which the IRS will not rule.

The fulfillment of the foregoing conditions will not create any obligation on IDT’s part to affect the spin-off, and the Board of Directors of IDT has reserved the right to amend, modify or abandon the spin-off and the related transactions at any time prior to the distribution date. The Board of Directors of IDT may also waive any of these conditions.

In addition, IDT has the right not to complete the spin-off and related transactions if, at any time, IDT’s Board of Directors determines, in its sole discretion, that the distribution is not in the best interests of IDT and its stockholders or that business conditions are such that it is not advisable to spin-off our businesses.

Reason for Furnishing this Information Statement

This Information Statement is being furnished by IDT solely to provide information to IDT stockholders who will receive shares of our common stock in the spin-off. It is not and is not to be construed as an inducement or encouragement to buy or sell any securities. We believe that the information contained in this Information Statement is accurate as of the date set forth on the cover. Changes may occur after that date and neither we nor IDT undertakes any obligation to update the information except in the normal course of our respective public disclosure obligations.

DIVIDEND POLICY

Genie was formed in January 2011 and has never paid cash dividends. Genie does not anticipate paying dividends on its common stock in the foreseeable future. Genie’s current intent is to retain earnings, if any, to finance the working capital needs and potential expansion of Genie’s ESCO business, as well as the development of Genie’s unconventional energy businesses. The payment of dividends in the future will be at the sole discretion of Genie’s Board of Directors and will depend on, among other things, Genie’s results of operations, financial condition, capital expenditures and other cash obligations.

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

The unaudited pro forma consolidated financial data reported below consists of an unaudited pro forma consolidated balance sheet as of July 31, 2011 and unaudited pro forma consolidated statement of operations for the year then ended. The unaudited pro forma consolidated financial data reported below should be read in conjunction with our “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our audited consolidated financial statements as of July 31, 2011 and 2010 and for each of the fiscal years in the three year period ended July 31, 2011 and the notes thereto, all of which are included elsewhere in this Information Statement. Our unaudited pro forma consolidated financial data was prepared on the same basis as our audited consolidated financial statements and, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position and results of operations for these periods.

The pro forma balance sheet adjustments assume that our spin-off from IDT occurred as of July 31, 2011. The pro forma adjustments to the unaudited consolidated statement of operations for the year ended July 31, 2011 assume that the spin-off occurred as of August 1, 2010.

The following unaudited pro forma consolidated financial statements reflect IDT’s transfer to us of all of its assets and liabilities related to Genie, the contribution by IDT prior to the spin-off to Genie of an amount of cash so that Genie held $115 million in cash and the distribution by IDT to its stockholders of approximately 1.6 million shares of our Class A common stock and approximately 21.1 million shares of our Class B common stock. In the distribution each IDT stockholder will receive one share of Genie Class A common stock for every share of IDT Class A common stock and one share of Genie Class B common stock for every share of IDT Class B common stock held on the record date for the spin-off.

The unaudited pro forma financial statements assume that the charges for the services provided by IDT to us and by us to IDT will be similar to those currently being charged via inter-company billings between us and IDT. Accordingly, the pro forma financial statements assume that future service agreements will not result in a significantly different impact on our results of operations as compared to periods preceding the spin-off.

In addition, the service agreements between IDT and us will include additional services to be provided, on an interim basis, as a separate publicly-traded company. Such services will include assistance with internal audit, our periodic reports required to be filed with the Securities and Exchange Commission, or SEC, as well as maintaining our minutes, books and records of meetings of the Board of Directors and its committees. Charges for these additional services were not included in our historical consolidated financial statements or in our pro forma adjustments since they were not applicable for periods that we were not a separate public company. We estimate that the additional costs (including for services to be provided by IDT and others) related to being a publicly-traded company and being separated from IDT, will be between $3.5 million and $5.0 million annually. Several of the costs included in this estimated range are preliminary, subject to negotiation, and may vary from our assumptions when finalized.

The unaudited pro forma consolidated balance sheet and unaudited statement of operations included in this Information Statement have been derived from our audited consolidated financial statements included elsewhere in this Information Statement and do not purport to represent what our financial position and results of operations or cash flows actually would have been had the spin-off occurred on the date indicated, or to project our financial performance for any future period.

GENIE ENERGY LTD.

PROFORMA CONSOLIDATED BALANCE SHEET

AS OF JULY 31, 2011

(in thousands, except shares)

(unaudited)

	Historical			Pro Forma Adjustments				Pro Forma
Assets
Current assets:
Cash and cash equivalents	$	23,876		$	91,124		(A)	$	115,000
Restricted cash		164							164
Trade accounts receivable, net		26,124							26,124
Due from IDT Corporation		4,266		$	(4,266	)	(A)		—
Inventory		2,756							2,756
Prepaid expenses		2,157							2,157
Deferred income tax assets—current portion		1,019							1,019
Other current assets		245							245
Total current assets		60,607							147,465
Property and equipment, net		335							335
Goodwill		3,663							3,663
Deferred income tax assets—long-term portion		1,795							1,795
Other assets		1,006							1,006
Total assets	$	67,406						$	154,264

Liabilities and equity
Current liabilities:
Trade accounts payable	$	16,537						$	16,537
Accrued expenses		7,474							7,474
Income taxes payable		1,663							1,663
Other current liabilities		91							91
Total current liabilities		25,765							25,765
Other liabilities		60							60
Total liabilities		25,825							25,825
Equity:
Preferred stock, $.01 par value; authorized shares—10,000,000; no shares issued		—							—
Class A common stock, $.01 par value; authorized shares— 35,000,000; 1,574,326 shares issued and outstanding		16			—				16
Class B common stock, $.01 par value; authorized shares— 200,000,000; 21,108,970 shares issued and outstanding		211			—				211
Additional paid-in capital		11,577			86,858		(A)		98,435
Accumulated other comprehensive income		357							357
Retained earnings		35,225							35,225
Total Genie Energy Ltd. stockholders’ equity		47,386							134,244
Noncontrolling interests:
Noncontrolling interests		(4,805	)						(4,805	)
Receivable for issuance of equity		(1,000	)						(1,000	)
Total noncontrolling interests		(5,805	)						(5,805	)
Total equity		41,581							128,439
Total liabilities and equity	$	67,406						$	154,264

GENIE ENERGY LTD.

PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED JULY 31, 2011

(in thousands, except per share data)

(unaudited)

	Historical			Pro Forma Adjustments		Pro Forma

Revenues	$	203,561				$	203,561
Costs and expenses:
Direct cost of revenues (exclusive of depreciation)		149,714					149,714
Selling, general and administrative		33,768					33,768
Research and development		7,843					7,843
Depreciation		24					24
Total costs and expenses		191,349					191,349
Equity in the net loss of AMSO, LLC		(5,238	)				(5,238	)
Income from operations		6,974					6,974
Interest expense and financing fees, net		(1,974	)				(1,974	)
Other expense, net		(610	)				(610	)
Income before income taxes		4,390					4,390
Provision for income taxes		(6,945	)		(B)		(6,945	)
Net loss		(2,555	)				(2,555	)
Net loss attributable to noncontrolling interests		4,185					4,185
Net income attributable to Genie Energy Ltd.	$	1,630				$	1,630

Earnings per share:
Basic	$	0.08				$	0.08
Diluted	$	0.07				$	0.07

Weighted average number of shares used in calculating earnings per share
Basic		20,365			(C)		20,365
Diluted		22,683			(C)		22,683

GENIE ENERGY LTD.

NOTES AND MANAGEMENT’S ASSUMPTIONS

TO THE PROFORMA CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following is a description of the pro forma adjustments to the consolidated financial statements:

(A)

Reflected as if IDT made a total of a $91.1 million cash contribution to us on July 31, 2011. In connection with the planned spin-off, we expect that IDT will repay the amount due from IDT and will transfer cash to us prior to the spin-off such that we will have approximately $115 million at the time of the spin-off.

(B)

Our historical financial statements include provisions for federal, state and foreign income taxes on a separate tax return basis for all periods presented. Accordingly, no provision for income taxes is provided as a pro forma adjustment.

(C)

Basic earnings per share excluded 2.3 million shares of Class B common stock which were restricted (non-vested).

SELECTED FINANCIAL DATA

The selected consolidated financial data presented below for the each of the fiscal years in the four-year period ended July 31, 2011 has been derived from our Consolidated Financial Statements, which have been audited by Zwick and Banyai, PLLC independent registered public accounting firm. The selected consolidated financial data presented below for fiscal year ended July 31, 2007, is unaudited. The selected consolidated financial data should be read in conjunction with the Consolidated Financial Statements and the Notes thereto and other financial information appearing elsewhere in this Information Statement.

				Fiscal Year Ended July 31,
(in thousands)	2011			2010		2009		2008			2007
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues	$	203,561		$	201,358	$	264,709	$	248,890		$	190,751
Net (loss) income		(2,555	)		14,081		22,728		(681	)		6,233

(in thousands)	July 31, 2011		July 31, 2010		July 31, 2009		July 31, 2008		July 31, 2007
CONSOLIDATED BALANCE SHEET DATA:
Total assets	$	67,406	$	56,998	$	50,932	$	73,360	$	40,341

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We are currently a subsidiary of IDT. We own 99.3% of our subsidiary, GEIC, which owns 100% of IDT Energy and 92% of GOGI. Following the spin-off, our principal businesses, which are currently part of IDT, will consist of:

·	IDT Energy, which operates our energy services company, or ESCO, that resells electricity and natural gas to residential and small business customers in New York, New Jersey and Pennsylvania; and

·	Genie Oil and Gas, which consists of (1) AMSO, which holds and manages a 50% interest in AMSO, LLC, our oil shale initiative in Colorado, and (2) an 89% interest in IEI, our oil shale initiative in Israel.

The minority holders of GEIC include an anticipated member of our board of directors and an entity associated with another individual who was instrumental during the early stages of the development of our oil shale projects. In addition to the 0.7% interest, held by those individuals, Mr. Courter, who serves as the Vice Chairman of our Board of Directors, has an option to exchange 225,130 shares of IDT Class B common stock for shares representing 1% of the outstanding shares as of October 21, 2009 of the common stock of GEIC. Minority holders of GOGI include investors in that business unit affiliated with Michael Steinhardt, Lord Jacob Rothschild and Rupert Murdoch. In addition to the common stock owned, investors affiliated with Mr. Steinhardt and Lord Rothschild hold options and warrants, respectively, to purchase additional equity interests in GOGI at determined valuations. The equity interests in IEI not owned by Genie are held by key employees of that business.

Additionally, equity interests in Genie and certain of its operating subsidiaries will likely be issued to management, employees and other key personnel as more fully described under “Executive Compensation” below.

In the spin-off, holders of options to purchase IDT Class B common stock may receive options to purchase shares of Genie Class B common stock. As of August 24, 2011, there were outstanding options to purchase an aggregate of 474,816 shares of IDT Class B common stock, all of which were currently exercisable.

IDT Energy

IDT Energy resells electricity and natural gas to residential and small business customers in New York, New Jersey and Pennsylvania. IDT Energy began adding customers in select utility territories in New Jersey and Pennsylvania in the third quarter of fiscal 2010. IDT Energy’s revenues represented 100% of our consolidated revenues in fiscal years 2011, 2010 and 2009.

IDT Energy’s direct cost of revenues consists primarily of gas and electricity purchased for resale. As of June 29, 2009, IDT Energy entered into a Preferred Supplier Agreement with BP pursuant to which BP is IDT Energy’s preferred provider of electricity and natural gas. The agreement allows for purchases of electricity and natural gas for customers in areas where the utilities have purchase of receivable, or POR, programs, and includes a one-time inclusion of existing IDT Energy customers not covered by a POR program. IDT Energy purchases electricity and natural gas from BP and pays an additional financing fee based on volumetric loads in accordance with the agreement. IDT Energy makes a monthly payment for its purchases and the related fees, and any outstanding, unpaid amounts accrue interest until paid. IDT Energy’s obligations to BP are secured by a first security interest in deposits or receivables from utilities in connection with their purchase of customer receivables under the applicable POR program, and in any cash deposits or letters of credit posted in connection with any collateral accounts with BP. The term of the agreement is through June 30, 2014, with an automatic renewal for an additional year unless either party provides written notice to the other party at least six months prior to June 30, 2014 that it will not renew the agreement. IDT Energy’s ability to purchase electricity and natural gas under this agreement is subject to satisfaction of certain conditions including the maintenance of certain covenants.

Prior to entering into the Preferred Supplier Agreement with BP, IDT Energy purchased natural gas from wholesale suppliers and various utility companies, and purchased electricity through the wholesale markets administrated by the NYISO.

IDT Energy does not own electrical power generation, transmission, or distribution facilities, or natural gas production, pipeline or distribution facilities. Instead, IDT Energy has contracts with various pipeline and distribution companies for natural gas pipeline, storage and transportation services, and utilizes the NYISO and PJM for electric transmission and distribution. Our direct cost of revenues includes scheduling costs, independent system operator (ISO) fees, pipeline costs and utility service charges for the purchase of these services.

IDT Energy utilizes forward physical delivery contracts for a portion of its purchases of electricity and natural gas, which are recorded in direct cost of revenues when the related electricity or natural gas is received from suppliers. In addition, IDT Energy enters into put and call options as hedges against unfavorable fluctuations in market prices of electricity and natural gas. The forward contracts and put and call options are recorded at fair value as a current asset or liability and any changes in fair value are recorded in direct cost of revenues. The impact of these contracts and options on direct cost of revenues is relatively small as compared to IDT Energy’s purchases of gas and electricity for resale.

The NYISO and PJM perform real-time load balancing for each of the electrical power grids in which we operate. Similarly, load balancing is performed by the utility or the local distribution company, or LDC, for each of the natural gas markets in which we operate. Load balancing ensures that the amount of electricity and natural gas that we purchase is equal to the amount necessary to service our customers’ demands at any specific point in time. We are charged or credited for balancing the electricity and natural gas purchased and sold for our account by our suppliers and the LDCs. We manage the differences between the actual electricity and natural gas demands of our customers and our bulk or block purchases by buying and selling any shortfall or excess in the spot market, and through monthly cash settlements and/or adjustments to future deliveries in accordance with the load balancing performed by utilities, LDCs, NYISO and PJM.

The electricity and natural gas we sell is generally metered and delivered to our customers by the local utilities. The local utilities also provide billing and collection services for most of our customers on our behalf. The positive difference between the sales price of electricity and natural gas sold to our customers and the sum of the cost of our electricity and natural gas supplies, transmission and ancillary services provides us with a gross profit margin.

Volatility in the electricity and natural gas markets can have an adverse impact on our costs for the purchase of the electricity and natural gas that IDT Energy sells to its customers. We may not always choose to pass along increases in costs to our customers to protect overall customer satisfaction. This would have an adverse impact on our gross margins and results of operations. Alternatively, volatility in IDT Energy's rates charged to customers related to the cost of the underlying electricity and natural gas can lead to increased customer churn.

IDT Energy’s selling expenses consist primarily of sales commissions paid to independent agents and marketing costs, which are the primary costs associated with the acquisition of customers. General and administrative expenses include compensation, benefits, utility fees for billing and collection, professional fees, rent and other administrative costs.

Concentration of Customers and Associated Credit Risk

IDT Energy reduces its credit risk by its participation in purchase of receivable programs for a significant portion of its receivables. Utility companies provide billing and collection services, purchase IDT Energy’s receivables and assume all credit risk without recourse to IDT Energy. IDT Energy’s primary credit risk is therefore nonpayment by the utility companies. Certain of the utility companies represent significant portions of our consolidated revenues and consolidated gross trade accounts receivable balance and such concentrations increase our risk associated with nonpayment by those utility companies. We monitor the timely collections from our significant utility companies and may take further steps as necessary in an effort to reduce our credit risk.

In New Jersey, customers who are delinquent in paying their invoices are switched to a dual bill arrangement whereby IDT Energy is responsible to bill and collect the commodity portion of the customers’ invoices. Once IDT Energy invoices these customers under a dual bill arrangement, IDT Energy assumes the credit risk associated with that portion of its receivables. Generally, IDT Energy cancels service to these customers before the credit risk becomes significant.

The following table summarizes the percentage of consolidated revenues from utility companies that equal or exceed 10% of consolidated revenues in the fiscal year (no other single customer accounted for more than 10% of consolidated revenues in fiscal 2011, fiscal 2010 and fiscal 2009):

	Fiscal Year Ended July 31,
	2011			2010			2009
Con Edison		46.7	%		50.3	%		53.6	%
National Grid USA		16.5	%		21.4	%		20.4	%
National Grid dba Keyspan		10.3	%		12.4	%		13.9	%

The following table summarizes the percentage of consolidated gross trade accounts receivable by utility company that equal or exceed 10% of consolidated gross trade accounts receivable at July 31, 2011 and July 31, 2010:

	July 31, 2011			July 31, 2010
Con Edison		63.3	%		74.4	%
National Grid USA		12.0	%		14.8	%

Seasonality and Weather

IDT Energy’s revenues are impacted by, among other things, the weather and the seasons. Weather conditions have a significant impact on the demand for natural gas for heating and electricity for air conditioning. Typically, colder winters and hotter summers create higher demand and consumption for natural gas and electricity, respectively. Milder winters and/or summers may reduce the demand for natural gas and electricity, respectively. Natural gas revenues typically increase in the second and third fiscal quarters due to increased heating demands and electricity revenues typically increase in the fourth and first fiscal quarters due to increased air conditioning use. Approximately 80% and 81% of IDT Energy’s natural gas revenues were generated in the second and third quarters of fiscal 2011 and fiscal 2010, respectively, when demand for heating is highest. Although the demand for electricity is not as seasonal as natural gas, approximately 57% and 56% of IDT Energy’s electricity revenues were generated in the first and fourth quarters of fiscal 2011 and fiscal 2010, respectively.

Investment in American Shale Oil, LLC

AMSO, LLC is one of three holders of leases awarded by the BLM to research, develop and demonstrate in-situ technologies for potential commercial shale oil production in western Colorado. The RD&D Lease awarded to AMSO, LLC by the BLM covers an area of 160 acres. The lease runs for a ten year period beginning on January 1, 2007, and is subject to an extension of up to five years if AMSO, LLC can demonstrate that a process leading to the production of commercial quantities of shale oil is diligently being pursued. If AMSO, LLC can demonstrate the economic and environmental viability of its technology, it will have the opportunity to submit a one-time payment equivalent to the fair market value of the commercial lease as defined in the Oil Shale Management Rules and Regulations and convert its RD&D Lease to a commercial lease on 5,120 acres which overlap and are contiguous with the 160 acres in its RD&D Lease. However, we are unable to quantify the amount of the one-time payment because the fair market value cannot be established at this time.

In April 2008, AMSO, a wholly owned subsidiary of GOGI, acquired a 75% equity interest in AMSO, LLC in exchange for cash of $2.5 million and certain commitments for future funding of AMSO, LLC’s operations. In a separate transaction in April 2008, IDT acquired an additional 14.9% equity interest in AMSO, LLC in exchange for cash of $3.0 million. Following this transaction, IDT owned 89.9% of the equity interests in AMSO, LLC, 75% through AMSO and 14.9% directly.

In March 2009, a subsidiary of TOTAL S.A., the world’s fifth largest integrated oil and gas company, acquired a 50% interest in AMSO, LLC in exchange for cash paid to us of $3.2 million and Total’s commitment to fund the majority of AMSO, LLC’s research, development and demonstration expenditures as well as certain other funding commitments. Immediately prior to this transaction, all owners (including IDT’s 14.9% direct equity interest) other than AMSO exchanged their ownership interest for a proportionate share of a 1% override on AMSO, LLC’s future revenue. IDT assigned the cash proceeds of its override interest to the IDT U.S. Oil Shale Charitable Distribution Trust, subject to certain remainder interests retained by Genie. Following the transaction with Total, AMSO and Total each owned a 50% interest in AMSO, LLC. While AMSO is the operator of the project during the RD&D phase, Total will provide a majority of the funding during the RD&D phase, and technical and financial assistance throughout the RD&D and commercial stages. Total will lead the planning of the commercial development and will assume management responsibilities during the subsequent commercial phase.

We consolidated AMSO, LLC prior to the closing of the transaction with Total. Beginning with the closing, we account for our 50% ownership interest in AMSO, LLC using the equity method since we have the ability to exercise significant influence over its operating and financial matters, although we no longer control AMSO, LLC. AMSO, LLC is a variable interest entity, however, we have determined that we are not the primary beneficiary.

Pursuant to the AMSO, LLC Second Amended and Restated Limited Liability Company Agreement as of March 2, 2009 (or the LLC Agreement), AMSO and Total agreed to fund AMSO, LLC as follows: (1) AMSO shall fund 20% and Total shall fund 80% of the initial $50 million of expenditures, (2) AMSO shall fund 35% and Total shall fund 65% of the expenditures above the initial $50 million up to $100 million in aggregate expenditures, (3) AMSO shall fund 50% and Total shall fund 50% of the expenditures above $100 million in aggregate expenditures, and (4) AMSO shall fund 40% and Total shall fund 60% of the costs of the one-time payment on conversion of the lease described above. Also pursuant to the LLC Agreement, AMSO, LLC’s net loss or net income will first be allocated to the members disproportionately in order to equalize their capital accounts, and then the allocation will be in accordance with their 50% ownership interests. Accordingly, AMSO has been allocated 20% of the net loss of AMSO, LLC in all periods presented, which is included in “Equity in the net loss of AMSO, LLC” in the accompanying consolidated statements of operations.

In accordance with the agreement between the parties, AMSO has committed to a total investment of $10.0 million in AMSO, LLC, subject to certain exceptions including those described below where the amount could be greater or lesser.

Total may terminate its obligations to make additional capital contributions and withdraw as a member of AMSO, LLC. If Total withdraws as a member of AMSO, LLC, AMSO may also terminate its obligations to make capital contributions and withdraw as a member of AMSO, LLC.

Although, subject to certain exceptions, AMSO and Total are not obligated to make additional contributions beyond their respective shares (which for AMSO is $10.0 million), they could dilute or forfeit their ownership interests in AMSO, LLC if they fail to contribute their respective shares for additional funding.

Total can increase AMSO’s initial required funding commitment of $10.0 million up to an additional $8.75 million if Total wishes to continue to fund the pilot test up to an agreed upon commitment level.

At July 31, 2011, our maximum exposure to loss as a result of our required investment in AMSO, LLC was $1.6 million. Our maximum exposure to loss will increase as AMSO’s commitment to fund AMSO, LLC increases. The maximum exposure at July 31, 2011 was determined as follows:

( in millions)
AMSO’s total committed investment in AMSO, LLC	$	10.0
Less: cumulative capital contributions to AMSO, LLC		(7.8	)
Less: liability for equity loss in AMSO, LLC at July 31, 2011		(0.6	)
Maximum exposure to loss	$	1.6

In August 2011, AMSO made an additional capital contribution to AMSO, LLC of $1.4 million and Total has contributed $33.5 million to AMSO, LLC from inception through September 30, 2011.

AMSO’s total committed investment in AMSO, LLC and its maximum exposure to loss is subject to certain exceptions where the amounts could be greater. One exception is the additional funding that may be necessary to fund the pilot test as described above. The other significant exception is additional capital contributions that may be required to fund unexpected liabilities, in the event they occur, outside the purview of the traditional research, development and demonstration operations incorporated in AMSO, LLC’s budgeting and planning. However, any additional capital contributions for such liabilities would have to be authorized by both AMSO and Total.

Israel Energy Initiatives, Ltd.

In March 2008, GEIC indirectly formed IEI which holds an exclusive Shale Oil Exploration and Production License awarded in July 2008 by the Israeli Ministry of National Infrastructures. The license covers approximately 238 square kilometers in the south of the Shfela region in Israel, and grants IEI an exclusive right to demonstrate in-situ technologies for potential commercial shale oil production. Under the terms of the license, IEI is to conduct a geological appraisal study across the license area, characterize the resource and select a location for a pilot plant in which it will demonstrate its in-situ technology.

IEI began its resource appraisal study in the third quarter of calendar 2009, and it is expected that the field operations of this phase will be finalized in the calendar 2011. The resource appraisal is comprised primarily of a drilling operation conducted in the license area. The resource appraisal plan includes drilling and coring several wells to depths of approximately 600 meters as well as well logging, analysis of core materials and other geochemical tests, water monitoring and hydrology tests, as well as laboratory analyses of samples and other laboratory experiments. To date, the results from the appraisal process, both from field tests and laboratory experiments, confirm IEI’s expectations as to the attractiveness of the oil shale resource in the license area from the standpoint of richness, thickness and hydrology. IEI is continuing permitting and other preparatory work required prior to construction of a pilot plant and operation of a pilot test. The pilot test will provide a basis for determining the technical, environmental and economic viability of IEI’s proposed process for extracting oil from the oil shale resource. Pilot plant design has begun, and if not delayed by permitting, regulatory action or pending litigation, pilot test drilling and construction is scheduled to begin in calendar 2012. Pilot test operations could begin as early as calendar 2013. Pilot test operations are contingent on receipt of an extension to the current license which expires in July 2012. The initial term of the license was for three years until July 2011. The license was extended for an additional year until July 2012, and it may be further extended in one year increments until July 2015.

Assuming IEI receives an extension to its current license, the pending lawsuit filed in August 2010 by the Israel Union for Environmental Defense is favorably resolved, and IEI successfully demonstrates a commercially viable and environmentally acceptable technology, IEI intends to apply for a long-term commercial lease from the Israeli government to build and operate a commercial project. Under the Israeli petroleum law, long-term leases are typically for a term of 30 years, with a possible extension for an additional 20 years.

Construction may be delayed or even suspended if IEI loses its license as a result of the legal proceeding filed by the Israel Union for Environmental Defense as discussed more fully in Legal Proceedings elsewhere in this Information Statement.

In March 2011, the Israeli Parliament passed a new bill materially increasing the overall taxes, royalties and other fees due to the Israeli government from revenues derived by oil and natural gas producers. The Israeli Income Tax Ordinance was revised accordingly and the amount payable to the government from revenues derived by oil and natural gas producers increased from a maximum of 32% to 52%. This tax will only be imposed once a project has passed certain milestones set forth in the ordinance (when the profits derived from a certain field have reached 150% of the original investment in that field).

CRITICAL ACCOUNTING POLICIES

Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses as well as the disclosure of contingent assets and liabilities. Critical accounting policies are those that require application of management’s most subjective or complex judgments, often as a result of matters that are inherently uncertain and may change in subsequent periods. Our critical accounting policies include those related to the allowance for doubtful accounts, goodwill and income taxes. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. See Note 1 to the Consolidated Financial Statements in this Information Statement for a complete discussion of our significant accounting policies.

Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts for estimated losses that result from the inability or unwillingness of our customers to make required payments. Our allowance is determined based on known troubled accounts, historical experience and other currently available evidence. Our estimates of recoverability of customer accounts may change due to new developments, changes in assumptions or changes in our strategy, which may impact our allowance for doubtful accounts balance. We continually assess the likelihood of potential amounts or ranges of recoverability and adjust our allowance accordingly, however, actual collections and write-offs of trade accounts receivables may materially differ from our estimates.

Goodwill

Our goodwill balance of $3.7 million at July 31, 2011 and 2010 is allocated to our IDT Energy segment. IDT Energy is the reporting unit for our goodwill impairment test. Goodwill is not amortized since it is deemed to have an indefinite life. It is reviewed annually (or more frequently under various conditions) for impairment using a fair value approach. The goodwill impairment assessment involves estimating the fair value of the reporting unit and comparing it to its carrying amount, which is known as Step 1. If the carrying value of the reporting unit exceeds its estimated fair value, Step 2 is performed to determine if an impairment of goodwill is required. We estimate the fair value of our reporting unit using discounted cash flow methodologies, as well as considering third party market value indicators. Goodwill impairment is measured by the excess of the carrying amount of the reporting unit’s goodwill over its implied fair value. IDT Energy’s estimated fair value substantially exceeded its carrying value in Step 1 of our annual impairment tests for fiscal 2011, fiscal 2010 and fiscal 2009, therefore it was not necessary to perform Step 2 for these tests. In addition, we do not believe IDT Energy is currently at risk of failing Step 1. Calculating the fair value of the reporting unit, and allocating the estimated fair value to all of the tangible assets, intangible assets and liabilities, requires significant estimates and assumptions by management. Should our estimates or assumptions regarding the fair value of our reporting unit prove to be incorrect, we may be required to record impairments to our goodwill in future periods and such impairments could be material.

Income Taxes

Our current and deferred income taxes are impacted by events and transactions arising in the normal course of business as well as in connection with special and non-routine items. Assessment of the appropriate amount and classification of income taxes is dependent on several factors, including estimates of the timing and realization of deferred income tax assets, the results of Internal Revenue Service audits of our federal income tax returns, and changes in tax laws or regulations. We use a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return. We determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, we presume that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. Tax positions that meet the more-likely-than-not recognition threshold are measured to determine the amount of tax benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result in one or more of the following: an increase in a liability for income taxes payable, a reduction of an income tax refund receivable, a reduction in a deferred tax asset, or an increase in a deferred tax liability. We review and adjust our liability for unrecognized tax benefits based on our best estimate and judgment given the facts, circumstances and information available at each reporting date. To the extent that the final outcome of these tax positions is different than the amounts recorded, such differences may impact income tax expense and actual tax payments.

RECENTLY ISSUED ACCOUNTING STANDARDS NOT YET ADOPTED

In May 2011, an accounting standard update to achieve common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards, or IFRS, was issued. The amendments in this update (1) clarify the application of certain existing fair value measurement and disclosure requirements and (2) change certain principles or requirements for measuring fair value or disclosing information about fair value measurements. We are required to adopt this standard update on February 1, 2012. We are evaluating the impact that this standard update will have on our consolidated financial statements.

In June 2011, an accounting standard update was issued to increase the prominence of items reported in other comprehensive income and to facilitate convergence of U.S. GAAP and IFRS. As a result of this standard update, the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity was eliminated, among other changes contained in this update. The update requires comprehensive income to be presented either in a single financial statement or in two separate but consecutive statements. We adopted this update in these financial statements and accordingly, presented comprehensive income in two separate consecutive statements.

In September 2011, an accounting standard update to simplify how an entity tests goodwill for impairment was issued. The amendments in the update will allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. An entity will no longer be required to calculate the fair value of a reporting unit (Step 1) unless the entity determines, based on a qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. We are required to adopt this standard update on August 1, 2012. The adoption of this standard update will not impact our financial position, results of operations or cash flows.

In January 2010, the Financial Accounting Standards Board amended the accounting standard relating to extractive activities-oil and gas to align its oil and gas reserve estimation and disclosure requirements with the requirements of the SEC’s final rule, Modernization of the Oil and Gas Reporting Requirements , that was issued on December 31, 2008. The amendments are designed to modernize and update the oil and gas disclosure requirements and related definitions to align them with current practices and changes in technology. One of the provisions of the amendments is the expansion of the definition of oil- and gas-producing activities to include the extraction of saleable hydrocarbons, in the solid, liquid or gaseous state, from oil sands, shale, coalbeds, or other nonrenewable natural resources that are intended to be upgraded into synthetic oil or gas, and activities undertaken with a view to such extraction. AMSO, LLC and IEI are currently performing research and development activities. Their activities will meet the new definition of oil- and gas-producing activities if and when either of them begins extraction or production of saleable hydrocarbons from oil shale. If and when this occurs, AMSO, LLC or IEI will comply with the amended disclosure requirements, as well as begin to account for their activities using one of the two accounting methods for oil and gas production under U.S. GAAP, namely full-cost or successful-efforts.

RESULTS OF OPERATIONS

Genie was incorporated in January 2011 in the state of Delaware. The consolidated financial statements include the assets, liabilities, results of operations and cash flows of the entities to be included in the spin-off, and are reflected as if Genie existed and owned these entities in all periods presented, or from the date an entity was acquired, if later.

We evaluate the performance of our operating business segments based primarily on income (loss) from operations. Accordingly, the income and expense line items below income (loss) from operations are only included in our discussion of the consolidated results of operations.

Year Ended July 31, 2011 Compared to Year Ended July 31, 2010

IDT Energy Segment

(in millions)					Change
Year ended July 31,	2011		2010		$			%
Revenues	$	203.6	$	201.4	$	2.2		1.1	%
Direct cost of revenues		149.7		143.6		6.1		4.3
Selling, general and administrative		31.4		19.9		11.5		57.4
Depreciation		—		0.1		(0.1	)	(100.0	)
Income from operations	$	22.5	$	37.8	$	(15.3	)	(40.6	)%

Revenues . IDT Energy resells electricity and natural gas to residential and small business customers in New York, New Jersey and Pennsylvania. IDT Energy began adding customers in select utility territories in New Jersey and Pennsylvania in the third quarter of fiscal 2010. IDT Energy’s revenues consisted of electricity sales of $137.8 million in fiscal 2011 compared to $132.2 million in fiscal 2010, and natural gas sales of $65.8 million in fiscal 2011 compared to $69.2 million in fiscal 2010.

IDT Energy’s electricity revenues increased 4.3% in fiscal 2011 compared to fiscal 2010 as a result of increases in the average rate charged to customers and in consumption. The average electric rate charged to customers increased 1.0% and electric consumption increased 0.5% in fiscal 2011 compared to fiscal 2010. The increase in the average electric rate charged to customers was primarily the result of an increase in the underlying commodity cost in the beginning of fiscal 2011 partially offset by a decrease in the average unit cost of electricity later in fiscal 2011, as well as discounted promotional rates for new customers and an effort to manage churn through rate adjustments during portions of fiscal 2011. The increase in electric consumption was the result of relatively higher usage meters added in the new territories coupled with, in the first quarter of fiscal 2011 compared to the same period in fiscal 2010, warmer temperatures. Electric consumption per meter increased 2.4% in fiscal 2011 compared to fiscal 2010.

IDT Energy’s natural gas revenues declined 5.0% in fiscal 2011 compared to fiscal 2010 primarily due to declines in the average rate charged to customers. The average natural gas rate charged to customers decreased 6.3% and natural gas consumption increased 1.4% in fiscal 2011 compared to fiscal 2010. The decrease in the average natural gas rates charged to customers reflected discounted promotional rates for new customers as well as decreases in the average unit cost of natural gas of 5.4% in fiscal 2011 compared to fiscal 2010. The slight increase in natural gas consumption was primarily the result of an increase in meters served in the second half of fiscal 2011 compared to the same period in fiscal 2010. This increase in consumption offset the declines in consumption in the first and second quarters of fiscal 2011 compared to the similar periods in fiscal 2010, which were due to the loss of relatively high usage meters in upstate New York and the addition of a concentration of relatively low usage meters. Natural gas consumption per meter increased 0.1% in fiscal 2011 compared to fiscal 2010.

As of July 31, 2011, IDT Energy’s customer base consisted of approximately 405,000 meters (232,000 electric and 173,000 natural gas) compared to 369,000 meters (210,000 electric and 159,000 natural gas) as of July 31, 2010.

Gross meter acquisitions in fiscal 2011 were 220,000 compared to 109,700 in fiscal 2010. The new meter acquisitions in fiscal 2011 were partially offset by customer churn, which resulted in net gains of approximately 36,000 meters since July 31, 2010. Average monthly churn increased to 4.9% in fiscal 2011 compared to 3.1% in fiscal 2010, partially because newly acquired customers have significantly higher churn rates than longer-term customers.

The average rates of annualized energy consumption, as measured by residential customer equivalents, or RCEs, are presented in the chart below. An RCE represents a natural gas customer with annual consumption of 100 mmbtu or an electricity customer with annual consumption of 10 MWh. Because different customers have different rates of energy consumption, RCEs are a useful metric for evaluating the consumption profile of IDT Energy’s customer base. The RCE increase at July 31, 2011 compared to July 31, 2010 reflects the increase in meters served as well as a gradual shift in IDT Energy’s customer base to customers with higher consumption per meter as a result of targeted customer acquisition programs.

RCE’s at end of fiscal quarter (in thousands)	July 31, 2011		April 30, 2011		January 31, 2011		October 31, 2010		July 31, 2010		April 30, 2010		January 31, 2010		October 31, 2009		July 31, 2009
Electricity customers		136		119		124		122		117		103		98		95		92
Natural gas customers		99		94		91		87		88		88		87		86		89
Total RCEs		235		213		215		209		205		191		185		181		181

Direct Cost of Revenues . IDT Energy’s direct cost of revenues consisted of electricity cost of $98.1 million in fiscal 2011 compared to $89.8 million in fiscal 2010, and cost of natural gas of $51.6 million in fiscal 2011 compared to $53.8 million in fiscal 2010. Direct cost of revenues for electricity increased in fiscal 2011 compared to fiscal 2010 due to the increase in the average unit cost, as well as the slight increase in consumption. Direct cost of revenues for natural gas decreased in fiscal 2011 compared to fiscal 2010 primarily due to the decline in the average unit cost partially offset by the increase in consumption.

Gross margins in IDT Energy decreased to 26.5% in fiscal 2011 compared to 28.7% in fiscal 2010. Comprising these figures were gross margins on electricity sales in fiscal 2011 of 28.8% compared to 32.0% in fiscal 2010 and gross margins on natural gas sales in fiscal 2011 of 21.6% compared to 22.4% in fiscal 2010. Gross margin was pressured by increased competition and the impact of expansion into new territories in New Jersey and Pennsylvania, where gross margin was sacrificed to facilitate customer acquisitions. IDT Energy’s gross margin in the fourth quarter of fiscal 2011 of 23.8% was in-line with our expectations for normalized longer term gross margins.

Selling, General and Administrative . The increase in selling, general and administrative expenses in fiscal 2011 compared to fiscal 2010 was due to increases in customer acquisition costs and marketing costs, as well as an accrual related to ongoing tax audits. Customer acquisition costs increased primarily due to the significant increase in the number of new customers acquired as described above. Marketing costs increased as a result of testing new sales channels coupled with the expansion into new territories. The accrual for the tax audits represents IDT Energy’s estimate of the potential liability that may result from the audits. As a percentage of total IDT Energy revenues, selling, general and administrative expenses increased from 9.9% in fiscal 2010 to 15.4% in fiscal 2011 because of the significant increase in costs related to customer acquisitions and non-income related tax audits mentioned above.

In July 2011, IDT Energy entered into an agreement with one of its employees pursuant to which, on or before the consummation of the spin-off, the employee will be granted approximately 22,000 shares of Genie’s restricted Class B common stock and options to purchase approximately 22,000 shares of Genie’s Class B common stock. The restricted shares and options will vest ratably on the first, second and third anniversaries of the grant, subject to forfeiture if the employee is no longer employed by Genie or one of its subsidiaries prior to vesting. The options will have a term of 10 years and an exercise price equal to the fair market value of the underlying shares upon the spin-off. The fair value of this grant was estimated to be $0.2 million, which will be recognized on a straight-line basis over the three year vesting period. We recognized compensation cost related to this agreement of $5,000 in fiscal 2011. The fair value of the Genie shares was the aggregate of the estimated values of IDT Energy and GOGI. The value of IDT Energy was estimated using an income approach and a market approach and the value of GOGI was estimated using a cost approach and a transaction approach.

Genie Oil and Gas Segment

Genie Oil and Gas does not currently generate any revenues, nor does it incur any direct cost of revenues.

(in millions)					Change
Year ended July 31,	2011		2010		$		%
General and administrative expenses	$	0.6	$	0.5	$	0.1	35.5	%
Research and development		7.8		5.2		2.6	49.3
Equity in the net loss of AMSO, LLC		5.2		1.6		3.6	226.9
Loss from operations	$	13.6	$	7.3	$	6.3	87.5	%

General and Administrative. The increase in general and administrative expenses in fiscal 2011 as compared to fiscal 2010 was due primarily to increases in payroll and consulting fees.

Research and Development. Research and development expenses in fiscal 2011 and fiscal 2010 were entirely related to the operations of IEI in Israel. IEI began its resource appraisal study in the third quarter of calendar 2009, and it is expected that the field operations of this phase will be finalized in calendar 2011. We expect continued, significant increases in the expenses of our Genie Oil and Gas segment reflecting the costs of facility construction, drilling and operations of the IEI pilot test as well as further staffing to support engineering and scientific operations and business development activities. We expect IEI’s pilot test to require $25 million to $30 million over the next two years.

Equity in the Net Loss of AMSO, LLC. AMSO accounts for its 50% ownership interest in AMSO, LLC using the equity method. AMSO, LLC is utilizing a team of experienced experts in various fields to conduct its research, development and demonstration activities. In fiscal 2011, AMSO, LLC continued advanced stage construction work on the surface oil and gas processing facilities while drilling wells for its upcoming pilot test in Colorado. The pilot test is expected to begin in the fall of 2011 barring permitting or operational delays. The pilot test is intended to confirm the accuracy of several of the key underlying assumptions of the proposed in-situ heating and retorting process. Upon successful completion of the pilot test, AMSO, LLC expects to design and implement a larger scale demonstration project to further test its process and operations under commercial conditions, and assess scalability to commercial levels. Upon completion of a successful demonstration, AMSO, LLC intends to submit an application to convert the RD&D Lease into a commercial lease.

AMSO’s equity in the net loss of AMSO, LLC increased in fiscal 2011 compared to fiscal 2010 as a result of the increase in AMSO, LLC’s net loss to $26.2 million in fiscal 2011 from $8.0 million in fiscal 2010. AMSO, LLC’s net loss increased primarily as a result of the substantial increase in the costs associated with the pilot test.

Corporate

(in millions)					Change
Year ended July 31,	2011		2010		$		%
General and administrative expenses	$	1.8	$	0.8	$	1.0	127.6	%

Corporate does not generate any revenues, nor does it incur any direct cost of revenues. Corporate costs include compensation, Board of Director fees, consulting fees, legal fees and other corporate-related general and administrative expenses.

The increase in general and administrative expenses in fiscal 2011 as compared to fiscal 2010 was due primarily to increases in compensation, consulting fees and stock-based compensation.

Consolidated

The following is a discussion of our consolidated income and expense line items below income from operations.

(in millions)								Change
Year ended July 31,		2011			2010			$			%
Income from operations	$	7.0		$	29.7		$	(22.7	)		(76.5	)%
Interest expense and financing fees, net		(2.0	)		(1.7	)		(0.3	)		(14.6	)
Other (expense) income, net		(0.6	)		—			(0.6	)	nm
Provision for income taxes		(7.0	)		(14.0	)		7.0			50.2
Net (loss) income		(2.6	)		14.0			(16.6	)		(118.1	)
Net loss attributable to noncontrolling interests		4.2			0.5			3.7			750.6
Net income attributable to Genie	$	1.6		$	14.5		$	(12.9	)		(88.8	)%

nm – not meaningful

Interest Expense and Financing Fees, net . The increase in interest expense and financing fees, net in fiscal 2011 compared to fiscal 2010 was primarily due to an increase in finance fees from the Preferred Supplier Agreement between IDT Energy and BP, pursuant to which BP is IDT Energy’s preferred provider of electricity and natural gas. The BP finance fees increased to $2.1 million in fiscal 2011 compared to $1.8 million in fiscal 2010.

Other (Expense) Income, net . The change in other (expense) income, net in fiscal 2011 compared to fiscal 2010 was due primarily to the increase in foreign currency transaction losses from $7,000 in fiscal 2010 to $0.5 million in fiscal 2011. In addition, other (expense) income, net in fiscal 2011 included aggregate expense of $0.1 million related to the change in the estimated fair value of the options to purchase shares of our subsidiary held by Michael Steinhardt, the Chairman of the Board of IEI.

Provision for Income Taxes . The provision for income taxes in fiscal 2011 decreased compared to fiscal 2010 due primarily to a decrease in pre-tax income. In fiscal 2011 and 2010, we were included in the consolidated federal income tax return of IDT Corporation. Our income taxes are presented on a separate tax return basis.

Net Loss Attributable to Noncontrolling Interests. The increase in the net loss attributable to noncontrolling interests in fiscal 2011 compared to fiscal 2010 was primarily due to increases in the net losses of GEIC and its subsidiaries and in the noncontrolling interests’ share of a portion of these net losses.

Year Ended July 31, 2010 Compared to Year Ended July 31, 2009

IDT Energy Segment

(in millions)					Change
Year ended July 31,	2010		2009		$			%
Revenues	$	201.4	$	264.7	$	(63.3	)	(23.9	)%
Direct cost of revenues		143.6		192.5		(48.9	)	(25.5	)
Selling, general and administrative		19.9		26.7		(6.8	)	(25.3	)
Depreciation		0.1		0.1		—		(27.6	)
Income from operations	$	37.8	$	45.4	$	(7.6	)	(16.6	)%

Revenues . IDT Energy resells electricity and natural gas to residential and small business customers in New York State, and beginning in the third quarter of fiscal 2010, IDT Energy began adding customers in two utility territories in New Jersey and Pennsylvania. IDT Energy’s revenues consisted of electricity sales of $132.2 million in fiscal 2010 compared to $157.2 million in fiscal 2009, and natural gas sales of $69.2 million in fiscal 2010 compared to $107.5 million in fiscal 2009.

IDT Energy’s electricity and natural gas revenues declined in fiscal 2010 compared to fiscal 2009 reflecting declines in the average rates charged to customers, which resulted from declines in the underlying commodity costs, and a decline in consumption, particularly natural gas consumption. The average electric rate declined 14.0% in fiscal 2010 compared to fiscal 2009 and electric consumption declined 2.2% in fiscal 2010 compared to fiscal 2009. The average natural gas rates declined 18.9% in fiscal 2010 compared to fiscal 2009 and natural gas consumption declined 20.6% in fiscal 2010 compared to fiscal 2009. The decline in natural gas consumption reflected our concentration of meter acquisitions in territories with lower consumption per meter but higher gross margin opportunities.

The decline in consumption was partially due to the decline in customers since July 31, 2009 and partially due to lower consumption per meter for natural gas. As of July 31, 2010, IDT Energy’s customer base consisted of approximately 369,000 meters (210,000 electric and 159,000 natural gas) compared to 397,000 meters (228,000 electric and 169,000 natural gas) as of July 31, 2009.

Partly as a result of the initiative to reorganize its sales teams and restructure its marketing approach that began during the fourth quarter of fiscal 2009, IDT Energy’s churn fell in fiscal 2010 compared to fiscal 2009, from 4.9% in fiscal 2009 to 3.1% in fiscal 2010.

The initiative to create a significantly smaller but better trained external sales force and restructure the marketing approach slowed the pace of new meter acquisitions during the fourth quarter of fiscal 2009 and in fiscal 2010, resulting in gross meter acquisitions of 109,700 in fiscal 2010 compared to 247,100 in fiscal 2009. New meter acquisitions were more than offset by customer churn in fiscal 2010, which resulted in a net loss of approximately 27,600 meters. However, IDT Energy’s customer base increased by approximately 5,000 meters from April 30, 2010 to July 31, 2010. This increase in meters in the fourth quarter of fiscal 2010 was the result of new meter acquisitions in New Jersey and Pennsylvania since customer churn in New York State exceeded new meter acquisitions.

Direct Cost of Revenues . IDT Energy’s direct cost of revenues consisted of electricity cost of $89.8 million in fiscal 2010 compared to $102.1 million in fiscal 2009, and cost of natural gas of $53.8 million in fiscal 2010 compared to $90.4 million in fiscal 2009. Direct cost of revenues for both electricity and natural gas decreased in fiscal 2010 compared to fiscal 2009 as a result of the decline in consumption and decreases in the average unit costs.

Gross margins in IDT Energy increased to 28.7% in fiscal 2010 compared to 27.3% in fiscal 2009. Comprising these figures were gross margins on electricity sales in fiscal 2010 of 32.0% compared to 35.0% in fiscal 2009 and gross margins on natural gas sales in fiscal 2010 of 22.4% compared to 15.9% in fiscal 2009. The gross margin on electricity sales decreased in fiscal 2010 compared to fiscal 2009 because the decrease in IDT Energy’s average rates charged to customers was greater than the decrease in the average unit cost of electricity. The gross margins on natural gas sales increased in fiscal 2010 compared to fiscal 2009 primarily because IDT Energy’s average unit cost of natural gas decreased due to continuing favorable market conditions.

Selling, General and Administrative . The decrease in selling, general and administrative expenses in fiscal 2010 compared to fiscal 2009 was due primarily to decreases in customer acquisition costs, POR fees, bad debt expense and compensation expense. Customer acquisition costs decreased due to the decrease in the number of new customers acquired as described above. The decrease in POR fees was due to the decrease in revenues, although POR fees as a percentage of IDT Energy’s revenues increased in fiscal 2010 compared to fiscal 2009 as a result of certain of the utilities’ annual increase in the fee. The decrease in bad debt expense was due primarily to the transition, beginning in the third quarter of fiscal 2009, to a POR program of a significant portion of IDT Energy’s receivables that were not previously included in a POR program. Compensation expense decreased due to decreases in payroll and bonus expense. As a percentage of total IDT Energy revenues, selling, general and administrative expenses decreased from 10.1% in fiscal 2009 to 9.9% in fiscal 2010.

Genie Oil and Gas Segment

(in millions)							Change
Year ended July 31,	2010			2009			$			%
General and administrative expenses	$	(0.5	)	$	(0.1	)	$	(0.4	)	(152.0	)%
Research and development		(5.2	)		(6.3	)		1.1		16.4
Equity in the net loss of AMSO, LLC		(1.6	)		(0.7	)		(0.9	)	(119.1	)
Gain on sale of interest in AMSO, LLC		—			2.6			(2.6	)	(100.0	)
Loss from operations	$	(7.3	)	$	(4.5	)	$	(2.8	)	(59.4	)%

Research and Development . Research and development expenses consist of the following:

(in millions)
Year ended July 31,	2010		2009
Israel Energy Initiatives, Ltd.	$	5.2	$	3.1
AMSO, LLC		—		3.2
Total research and development expenses	$	5.2	$	6.3

Equity in the Net Loss of AMSO, LLC . AMSO’s equity in the net loss of AMSO, LLC increased in fiscal 2010 compared to fiscal 2009 because AMSO consolidated AMSO, LLC for most of fiscal 2009 until the sale of a 50% interest in AMSO, LLC to Total in March 2009. AMSO, LLC’s net loss increased to $8.0 million in fiscal 2010 from $6.8 million in fiscal 2009 primarily as a result of the substantial increase in the costs associated with the pilot test, partially offset by reductions in costs related to site characterization.

Gain on Sale of Interest in AMSO, LLC . In March 2009, Total acquired a 50% interest in AMSO, LLC in exchange for cash paid to us of $3.2 million and Total’s commitment to fund the majority of AMSO, LLC’s research, development and demonstration expenditures as well as certain other funding commitments. We recognized a gain of $2.6 million in fiscal 2009 in connection with the sale. AMSO no longer consolidates AMSO, LLC as of the closing of the transaction with Total, instead, AMSO accounts for its 50% ownership interest in AMSO, LLC using the equity method.

Corporate

(in millions)
Year ended July 31,	2010		2009
General and administrative expenses	$	0.8	$	—

Corporate costs include compensation, Board of Director fees, consulting fees, legal fees and other corporate-related general and administrative expenses. In fiscal 2010, Corporate general and administrative expenses included stock-based compensation of $0.3 million related to a consulting arrangement. No corporate expenses were incurred in fiscal 2009.

Consolidated

The following is a discussion of our consolidated income and expense line items below income from operations.

(in millions)							Change
Year ended July 31,	2010			2009			$			%
Income from operations	$	29.7		$	40.8		$	(11.1	)		(27.1	)%
Interest (expense) income and financing fees, net		(1.7	)		0.1			(1.8	)	nm
Other income, net		—			0.1			(0.1	)		(79.5	)
Provision for income taxes		(14.0	)		(18.2	)		4.2			23.6
Net income		14.0			22.8			(8.8	)		(38.0	)
Net loss attributable to noncontrolling interests		0.5			—			0.5		nm
Net income attributable to Genie	$	14.5		$	22.8		$	(8.3	)		(35.9	)%

nm – not meaningful

Interest (Expense) Income and Financing Fees, net . The change in interest (expense) income and financing fees, net in fiscal 2010 compared to fiscal 2009 was due to finance fees of $1.8 million in fiscal 2010 from the Preferred Supplier Agreement between IDT Energy and BP dated as of June 29, 2009, pursuant to which BP is IDT Energy’s preferred provider of electricity and natural gas.

Provision for Income Taxes . The provision for income taxes in fiscal 2010 decreased compared to fiscal 2009 due primarily to a decrease in pre-tax income. In fiscal 2010 and 2009, we were included in the consolidated federal income tax return of IDT Corporation. Our income taxes are presented on a separate tax return basis.

Net Loss Attributable to Noncontrolling Interests. The net loss attributable to noncontrolling interests increased to $0.5 million in fiscal 2010 from $20,000 in fiscal 2009 primarily due to the increase in IEI’s loss in fiscal 2010 compared to fiscal 2009, as well as because the noncontrolling interest in IEI was outstanding for the full year in fiscal 2010 compared to approximately nine months in fiscal 2009. The fiscal 2010 net loss attributable to noncontrolling interests in IEI was partially offset by net income attributable to noncontrolling interests in GEIC as a result of the April 2010 sales of noncontrolling interests in GEIC.

LIQUIDITY AND CAPITAL RESOURCES

General

Historically, we have satisfied our cash requirements primarily through a combination of our existing cash and cash equivalents, IDT Energy’s cash flow from operating activities and funding from IDT. We currently expect our operations in the next twelve months and the balance of cash and cash equivalents that we held as of July 31, 2011 together with the proceeds from the anticipated pre-spin-off infusion of cash from IDT, will be sufficient to meet our currently anticipated cash requirements during fiscal 2012.

As of July 31, 2011, we had cash, cash equivalents and restricted cash of $24.0 million and working capital (current assets less current liabilities) of $34.8 million. As of July 31, 2011, cash of $0.2 million that serves as collateral was restricted against letters of credit, and was included in “Restricted cash” in our consolidated balance sheet. In addition, as of July 31, 2011, IDT had restricted cash and cash equivalents of $2.4 million that serves as collateral for outstanding letters of credit for our benefit. These letters of credit were collateral to secure primarily IDT Energy’s purchases of natural gas, electric capacity, energy and ancillary services.

In connection with the planned spin-off, we expect that IDT will transfer cash to us prior to the spin-off such that we will have approximately $115 million in cash at the time of the spin-off, after repayment of the amount due from IDT, if any. At July 31, 2011, our amount due from IDT was $4.3 million as a result of IDT Energy’s transfers to IDT of excess cash provided by its operations that exceeded cash from IDT to fund our working capital requirements and our investments in our Genie Oil and Gas segment, when necessary, and charges from IDT to us for certain transactions and allocated expenses. In fiscal 2011, fiscal 2010 and fiscal 2009, IDT allocated an aggregate of $4.7 million, $3.8 million and $4.2 million, respectively, to us for payroll, benefits, insurance, facilities and other expenses, which were included in our “Selling, general and administrative expense” in the accompanying consolidated statements of operations. In all periods presented, we were included in IDT’s consolidated federal income tax return. In fiscal 2011 and fiscal 2010, our federal taxable income was offset against IDT’s net operating losses.

The service agreements between IDT and us will include additional services to be provided, on an interim basis, as a separate publicly-traded company. Such services include assistance with internal audit, our periodic reports required to be filed with the SEC as well as maintaining our minutes, books and records of meetings of the Board of Directors and its committees. Charges for these additional services were not included in our historical consolidated financial statements or in our pro forma adjustments since they were not applicable for periods that we were not a separate public company. We estimate that the additional costs (including for services to be provided by IDT and others) related to being a publicly-traded company and being separated from IDT, will be between $3.5 million and $5.0 million annually. Several of the costs included in this estimated range are preliminary, subject to negotiation, and may vary from our assumptions when finalized.

IEI holds an exclusive Shale Oil Exploration and Production License awarded in July 2008 by the Israeli Ministry of National Infrastructures. Under the terms of the license, IEI is to conduct a geological appraisal study across the license area, characterize the resource and select a location for a pilot plant in which it will demonstrate its in-situ technology. Pilot test drilling and construction is scheduled to begin in calendar 2012 if not delayed by permitting, regulatory action or pending litigation. Pilot test operations could begin as early as calendar 2013. We currently expect to use the anticipated cash on-hand at the time of the spin-off of approximately $115 million, and cash provided by our operating activities, to finance the pilot test construction and operations. In addition, we are considering financing IEI’s operations through sales of equity interests in IEI. Finally, we may finance our operations through sales of equity interests in Genie.

(in millions)	Year ended July 31,
	2011			2010			2009
Cash flows provided by (used in)
Operating activities	$	5.5		$	16.9		$	39.6
Investing activities		(3.8	)		6.9			(6.4	)
Financing activities		9.0			(15.6	)		(30.2	)
Increase in cash and cash equivalents	$	10.7		$	8.2		$	3.0

Operating Activities

Our cash flow from operations varies significantly from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable, including payments relating to our research and development activities.

We are subject to audits in various jurisdictions for various taxes, including income tax, utility excise tax, and sales and use tax. Specifically, IDT Energy has the following audits in process: (1) New York State income tax for fiscal 2007, fiscal 2008 and fiscal 2009, (2) New York City utility tax audit on electricity sales for the period from June 1, 2007 through December 31, 2008 and (3) New York State sales and use tax for the period from September 1, 2004 through May 31, 2007. In June 2011, IDT Energy received a Notice of Proposed Tax Adjustments from the New York City Finance Department related to the utility tax audit that included aggregate assessments of tax, interest and penalties of $7.2 million. In addition, IDT Energy’s potential exposure for tax, interest and penalties for the period from January 1, 2009 through July 31, 2011 is an additional $6.2 million. As of July 31, 2011, we have accrued $3.3 million related to these various audits. We believe that we have adequately provided for all of the obligations for these taxes, however amounts asserted by taxing authorities or the amount ultimately assessed against us could be greater than the accrued amounts. Accordingly, additional provisions may be recorded in the future as revised estimates are made or underlying matters are settled or resolved. Imposition of assessments as a result of tax audits could have an adverse effect on our results of operations, cash flows and financial condition.

Genie will not be eligible to utilize IDT’s net operating loss carryforwards to offset its taxable income for periods following the spin-off and, as a result, will likely have an increased tax burden as compared to the remaining part of IDT’s consolidated tax group.

Investing Activities

Our capital expenditures were $152,000, $147,000 and $36,000 in fiscal 2011, fiscal 2010 and fiscal 2009, respectively. We did not have any material commitments for capital expenditures at July 31, 2011. We expect our capital expenditures for the year ending July 31, 2012 to remain at the current levels.

Restricted cash decreased $0.3 million in fiscal 2011. Restricted cash decreased $9.0 million in fiscal 2010 primarily due to the decrease in collateral required to secure IDT Energy’s purchases of natural gas, electric capacity, energy and ancillary services resulting from our agreement with BP. Restricted cash increased $9.5 million in fiscal 2009 primarily due to the increase in collateral required to secure IDT Energy’s operations. Restricted cash serves as collateral for letters of credit to secure IDT Energy’s purchases of natural gas, electric capacity, energy and ancillary services.

As of June 29, 2009, IDT Energy entered into a Preferred Supplier Agreement with BP, pursuant to which BP is IDT Energy’s preferred provider of electricity and natural gas. The agreement allows for purchases of electricity and natural gas for customers in areas where the utilities have purchase of receivable programs. IDT Energy purchases electricity and natural gas from BP and pays an additional fee based on volumetric loads in accordance with the agreement. IDT Energy makes a monthly payment for its purchases and the related fees, and any outstanding, unpaid amounts accrue interest until paid. IDT Energy’s obligations to BP are secured by a first security interest in deposits or receivables from utilities in connection with their purchase of customer receivables under the applicable POR program, and in any cash deposits or letters of credit posted in connection with any collateral accounts with BP. The term of the agreement is through June 30, 2014, with an automatic renewal for an additional year unless either party provides written notice to the other party at least six months prior to June 30, 2014 that it will not renew the agreement. IDT Energy’s ability to purchase electricity and natural gas under this agreement is subject to satisfaction of certain conditions including the maintenance of certain covenants. As of July 31, 2011, cash and cash equivalents of $0.1 million and trade accounts receivable of $25.0 million were pledged to BP as collateral for the payment of IDT Energy’s trade accounts payable to BP of $13.7 million as of July 31, 2011.

In fiscal 2011, fiscal 2010 and fiscal 2009, cash used for capital contributions to AMSO, LLC was $3.9 million, $2.0 million and $1.1 million, respectively.

In March 2009, Total acquired a 50% interest in AMSO, LLC in exchange for cash paid to us of $3.2 million and Total’s commitment to fund the majority of AMSO, LLC’s research, development and demonstration expenditures as well as certain other funding commitments.

In fiscal 2009, proceeds from sales and maturities of marketable securities were $1.0 million.

Financing Activities

During all periods presented, IDT, our parent company, provided us with cash required to fund our working capital requirements and our investments in our Genie Oil and Gas segment, if necessary. We used any excess cash provided by IDT Energy’s operations to repay IDT. In fiscal 2011, expenses paid by IDT on our behalf and net cash transfers received from IDT were an aggregate of $0.6 million. In fiscal 2010 and fiscal 2009, our repayments to IDT net of expenses paid by IDT on our behalf were $21.0 million and $30.4 million, respectively. In addition, in connection with the April 2010 sales of GEIC common stock discussed below, an aggregate of $14.9 million of the amount due to us from IDT was forgiven and accounted for as a reduction of our equity.

In April 2010, Michael Steinhardt, the Chairman of the Board of IEI, purchased a minority interest in GEIC and an option to purchase additional shares of GEIC for $5.0 million. In June 2011, in a refinement of the terms of the initial investment and the rights associated with that investment, Mr. Steinhardt exchanged his interest in GEIC (including the option to purchase additional interests) for a corresponding interest (including options) in GOGI and arranged for IDT and Genie to receive certain consulting services from a third party . In return, the Steinhardt stockholder entity was paid $1.7 million. Also in April 2010, W. Wesley Perry, the Chairman of the Board of GEIC, purchased a minority interest in GEIC for $0.4 million.

In November 2008, we sold a 10% ownership interest in IEI for cash of $0.2 million.

In November 2010, an entity affiliated with Lord (Jacob) Rothschild purchased a 5.0% equity interest in GOGI for $10.0 million paid in cash. Also, in November 2010, Rupert Murdoch purchased a 0.5% equity interest in GOGI for $1.0 million paid with a promissory note. The note is secured by a pledge of the shares issued in exchange for the note. The note accrues interest at 1.58% per annum, and the principal and accrued interest is due and payable on November 15, 2015. In addition, in connection with the purchase by the entity affiliated with Lord Rothschild, in November 2010, warrants were issued to purchase up to an aggregate of 1% of the common stock outstanding of GOGI at an exercise price of up to $2 million that are exercisable through November 12, 2011. GOGI consists of our interests in AMSO and IEI.

Changes in Trade Accounts Receivable and Allowance for Doubtful Accounts

Gross trade accounts receivable was $26.3 million at July 31, 2011 and remained substantially the same compared to $26.9 million at July 31, 2010. The allowance for doubtful accounts as a percentage of gross trade accounts receivable decreased to 0.5% at July 31, 2011 compared to 0.6% at July 31, 2010. The percentage decrease in the allowance for doubtful accounts was primarily due to the write-off of specific accounts receivable balances.

CONTRACTUAL OBLIGATIONS AND OTHER COMMERCIAL COMMITMENTS

The following tables quantify our future contractual obligations and other commercial commitments as of July 31, 2011:

CONTRACTUAL OBLIGATIONS

Payments Due by Period

(in millions)	Total		Less than 1 year		1—3 years		4—5 years		After 5 years
IDT Energy’s forward contracts (1)	$	1.1	$	1.1	$	—	$	—	$	—
Commitment to invest in AMSO, LLC (2)		2.2		2.2		—		—		—
Purchase obligations		1.3		1.3		—		—		—
Operating leases		0.9		0.5		0.4		—		—
TOTAL CONTRACTUAL OBLIGATIONS	$	5.5	$	5.1	$	0.4	$	—	$	—

(1)	At July 31, 2011, the net fair value of IDT Energy’s forward contracts was $16,000 of which $19,000 was included in “Other current assets” and $3,000 was included in “Other current liabilities” in the consolidated balance sheet.

(2)	AMSO’s total committed investment in AMSO, LLC is subject to certain exceptions where the amounts could be greater. The timing of AMSO’s payments is based on the current budget and other projections and is subject to change.

OTHER COMMERCIAL COMMITMENTS

Payments Due by Period

(in millions)		Total				Less than 1 year				1—3 years				4—5 years				After 5 years
Standby letters of credit (1)		$	2.5			$	1.7			$	0.8			$	—			$	—

(1)	As of July 31, 2011, we had letters of credit outstanding totaling $0.1 million and IDT had letters of credit outstanding for our benefit totaling $2.4 million.

FOREIGN CURRENCY RISK

There were no revenues from customers located outside of the United States in fiscal 2011, fiscal 2010 or fiscal 2009. Expenses incurred by IEI in Israel, primarily for research and development, represented 4.2%, 3.1%, and 1.5% of our total consolidated costs and expenses in fiscal 2011, fiscal 2010 and fiscal 2009, respectively. As such, the net amount of our exposure to foreign currency exchange rate changes was not material.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any “off-balance sheet arrangements,” as defined in relevant SEC regulations that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources, other than the following. As of July 31, 2011, IDT had restricted cash and cash equivalents of $2.4 million that serve as collateral against letters of credit for our benefit. These letters of credit were collateral to secure primarily IDT Energy’s purchases of natural gas, electric capacity, energy and ancillary services.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Our primary market risk exposure is the price applicable to our natural gas and electricity purchases and sales. The sales price of our natural gas and electricity is primarily driven by the prevailing market price. Hypothetically, if our gross profit per unit in fiscal 2011 had remained the same as in fiscal 2010, our gross profit from electricity sales would have increased by $4.1 million in fiscal 2011 and our gross profit from natural gas sales would have increased by $1.5 million in fiscal 2011.

The energy markets have historically been very volatile, and we can reasonably expect that electricity and natural gas prices will be subject to fluctuations in the future. In an effort to reduce the effects of the volatility of the price of electricity and natural gas on our operations, we have adopted a policy of hedging electricity and natural gas prices from time to time primarily through the use of forward contracts and put and call options. While the use of these hedging arrangements limits the downside risk of adverse price movements, it also limits future gains from favorable movements. These contracts and options do not qualify for hedge accounting, and the mark-to-market change in fair value is recognized in direct cost of revenue in our consolidated statements of operations.

As of July 31, 2011, IDT Energy had the following contracts outstanding:

Commodity	Settlement Date	Volume
Electricity	August 2011	800 MWh
Electricity	September 2011	16,800 MWh
Natural gas	September 2011	2,000,000 Dth
Natural gas	September 2011	500,000 Dth
Natural gas	October 2011	500,000 Dth
Natural gas	October 2011	500,000 Dth
Electricity	December 2011	16,800 MWh
Electricity	December 2011	16,800 MWh

BUSINESS

·	IDT Energy, which operates our energy services company that resells electricity and natural gas to residential and small business customers in New York, New Jersey and Pennsylvania; and

·	Genie Oil and Gas, which consists of (1) AMSO, which holds and manages a 50% interest in AMSO, LLC, our oil shale initiative in Colorado, and (2) an 89% interest in IEI, our oil shale initiative in Israel.

Our business will consist of two reporting segments: IDT Energy and Genie Oil and Gas (which includes AMSO and IEI).

The minority holders of GEIC include an anticipated member of our board of directors and an entity associated with another individual who was instrumental during the early stages of the development of our oil shale projects. In addition to the 0.7% interest, held by those individuals, Mr. Courter, who serves as the Vice Chairman of our Board of Directors, has an option to exchange 225,130 shares of IDT Class B common stock for shares representing 1% of the then outstanding shares of the common stock of GEIC. Minority holders of GOGI include investors in that business unit affiliated with Michael Steinhardt, Lord Jacob Rothschild and Rupert Murdoch. In addition to the common stock owned, investors affiliated with Mr. Steinhardt and Lord Rothschild hold options and warrants, respectively to purchase additional equity interests in GOGI at determined valuations. The equity interests in IEI not owned by Genie are held by key employees of that business.

IDT Energy

In November 2004, IDT launched a retail energy business, IDT Energy, which has since experienced significant growth in meters served. IDT Energy operates our energy service company that resells natural gas and electricity to residential and small business customers in eight utility markets in New York, four utility territories in New Jersey and three utility territories in Pennsylvania. In addition, IDT Energy has pending license applications to operate in two more utility territories in New Jersey and three more utility territories in Pennsylvania.

IDT Energy’s business, particularly its sales of natural gas, is a seasonal business. In fiscal 2011, approximately 80% of our annual natural gas revenues were generated during IDT Energy’s second and third fiscal quarters when demand for heating is highest. The demand for electricity is not as seasonal as natural gas, but is higher during IDT Energy’s first and fourth fiscal quarters when air conditioning usage peaks. Revenues from sales of electricity in the first and fourth quarters of fiscal 2011 represented approximately 57% of total revenues from electricity sales for the fiscal year.

In fiscal 2011, IDT Energy generated revenues of $203.6 million comprised of $137.8 million from sales of electricity and $65.8 million from sales of natural gas, as compared with revenues of $201.4 million in fiscal 2010. In fiscal 2011, IDT Energy’s revenues represent 100% of our total consolidated revenues from continuing operations. In addition in fiscal 2011, IDT Energy had operating income of $22.5 million, as compared with operating income of $37.8 million in fiscal 2010.

IDT Energy’s business, particularly its sales of natural gas, is a seasonal business. In fiscal 2010, approximately 81% of IDT Energy’s annual natural gas revenues were generated during the second and third fiscal quarters when demand for heating is highest. The demand for electricity is not as seasonal as natural gas, but is higher during IDT Energy’s first and fourth fiscal quarters when air conditioning usage peaks. Revenues from sales of electricity in the first and fourth quarters of fiscal 2010 represented approximately 56% of total revenues from electricity sales in fiscal 2010.

In fiscal 2010, IDT Energy generated revenues of $201.4 million comprised of $132.2 million from sales of electricity and $69.2 million from sales of natural gas, as compared with revenues of $264.7 million in fiscal 2009. In fiscal 2010, IDT Energy’s revenues represented 100% of our total consolidated revenues. In addition in fiscal 2010, IDT Energy had operating income of $37.8 million, as compared with operating income of $45.4 million in fiscal 2009.

Customers

IDT Energy’s services are made available to customers under its standard terms and conditions, offering primarily a variable rate via evergreen or month-to-month agreements, which enable it to recover its costs for electricity and natural gas through adjustments to the rates charged to its customers. The frequency and degree of these adjustments are determined by IDT Energy, and are not subject to regulation. While IDT Energy’s contract rates are not subject to regulation, IDT Energy is required to comply with various reporting requirements in order to maintain eligibility to operate as an ESCO. Certain jurisdictions require IDT to publish its customer offers with the applicable public service commission, or PSC, as an administrative matter. The electricity and natural gas IDT Energy sells are generally metered and delivered to IDT Energy customers by the local utilities. As such, IDT Energy does not have a maintenance or service staff for customer locations. These utilities also provide billing and collection services for the majority of IDT Energy’s customers on its behalf. For a small number of direct bill customers, IDT Energy performs its own billing and collection. Additionally, IDT Energy’s receivables are generally purchased by the utilities in whose areas IDT Energy operates for a percentage of their face value (as of July 31, 2011, approximately 98%) in exchange for the utility receiving a first priority lien in the customer receivable without recourse against IDT Energy.

IDT Energy markets its energy services primarily through direct marketing methods, including door-to-door sales, outbound telemarketing, direct mail and Internet signup. The substantial customer growth since inception can be attributed to IDT Energy’s successful expansion into many of the LDCs territories in New York State. As of July 31, 2011, IDT Energy serviced approximately 406,000 meters (232,000 electric and 174,000 natural gas), as compared to approximately 369,000 meters (210,000 electric and 159,000 natural gas) at the end of fiscal 2010 and approximately 397,000 meters (228,000 electric and 169,000 natural gas) at the end of fiscal 2009. The New York State Public Service Commission, or NYPSC, as published on its website in April 2011, indicates that approximately 21.0% (electric) and 18.9% (gas) of eligible New York customers participated in the deregulation of the market by migrating from a utility to an ESCO. According to these statistics, as of July 31, 2011, IDT Energy had captured approximately 14.6% (gas) and 11.8% (electric) of the migrated customers in NYS. Many of IDT Energy’s customers reside in Con Edison territory in New York State with IDT Energy capturing approximately 23% of Con Edison’s territory’s migrated electric customers and 26% of the territory’s migrated gas customers.

IDT Energy’s strategy is to acquire profitable customers in low-risk markets, specifically where the utilities have adopted a portfolio of ESCO-friendly, regulatory-driven programs. Key among these programs are purchase of receivables (POR) programs where utilities are contractually obligated to purchase customer receivables at a pre-determined fixed discount. Under POR programs, utilities offer consolidated billing, where the utilities have the responsibility of billing the individual customer and the subsequent collections of the remittances. Additionally, we target markets in which we can procure energy in an efficient and transparent manner. We seek to purchase wholesale energy where there is a real time market that reflects a fair price for the commodity for all participants. This, coupled with IDT Energy’s strategy to primarily sell a variable-rate product, allows IDT Energy to reflect a true market cost base and opportunistically vary its rates to its customers taking into account its competitors who are purchasing their commodity at longer intervals.

Utilities in New York State generally offer POR programs without recourse that permit customers with past-due balances to remain in the POR program. However, utilities in New Jersey generally do not permit customers with past-due balances to enroll in their POR programs, and, in the case of PSE&G, remain in their POR programs, which means that after a certain amount of time (determined based on the specific commodity), IDT Energy becomes responsible for the billing and collection of the commodity portion of the future invoices for its delinquent customers. IDT Energy may switch the customer back to the utility at its choosing; the process can typically be accomplished before IDT Energy needs to send an invoice, however it can take one to two billing cycles to complete.

In the third quarter of fiscal 2010, after consideration of the factors described above, IDT Energy began adding customers in two utility territories in New Jersey and Pennsylvania. During the second quarter of fiscal 2011, IDT Energy commenced customer acquisition activities in three more utility territories in these states. As of July 31, 2011, IDT Energy operates in four territories in New Jersey and three territories in Pennsylvania.

IDT Energy also regularly monitors other deregulated or deregulating markets to determine if they are appropriate for entry, and may initiate the licensing process in a selected region should deregulated conditions develop favorably.

Acquisition and Management of Gas and Electric Supply

IDT Energy entered into a Preferred Supplier Agreement with BP during the fourth quarter of fiscal 2009 pursuant to which BP is IDT Energy’s preferred provider of electricity and natural gas. The agreement allows for purchases of electricity and natural gas for customers in areas where the utilities have POR programs, and includes a one-time inclusion of existing IDT Energy customers not covered by a POR program. IDT Energy purchases electricity and natural gas from BP and pays a fee based on volumetric loads in accordance with the agreement. IDT Energy’s obligations to BP are secured by a first security interest in deposits or receivables from utilities in connection with their purchase of customer receivables under the applicable POR program, and in any cash deposits or letters of credit posted in connection with any collateral accounts with BP. Effective January 20, 2010, the agreement with BP was amended to cover the territories in which we operate in New Jersey and Pennsylvania. Effective October 1, 2010, the agreement with BP was modified and extended with a new termination date of June 30, 2014, and with an automatic renewal for an additional year unless either party provides written notice to the other party at least six months prior to June 30, 2014 that it will not renew the agreement. IDT Energy’s ability to purchase electricity and natural gas under this agreement is subject to satisfaction of certain conditions including the maintenance of certain covenants.

Prior to entering into the Preferred Supplier Agreement with BP, IDT Energy purchased natural gas from wholesale suppliers such as Sempra Energy Trading and Nexen as well as from various utility companies, and purchased electricity through wholesale markets administrated by the NYISO. The NYISO operates the high-voltage electric transmission network in New York State, and administers and monitors New York’s wholesale electricity markets.

As an ESCO, IDT Energy does not own electrical power generation, transmission, or distribution facilities, or natural gas production, pipeline or distribution facilities. Besides BP, IDT Energy currently contracts with Dominion Transmission, Inc., National Fuel Supply, Williams Gas Pipeline and Texas Eastern Transmission and others for natural gas pipeline, storage and transportation services, and utilizes the NYISO and PJM for electric transmission and distribution. PJM is a regional transmission organization that coordinates the movement of wholesale electricity in all or parts of thirteen states (including New Jersey and Pennsylvania) and the District of Columbia.

IDT Energy utilizes forward physical delivery contracts for a portion of its purchases of electricity and natural gas, which are defined as commodity derivative contracts. In addition, IDT Energy enters into put and call options as hedges against unfavorable fluctuations in market prices of electricity and natural gas.

The NYISO and PJM perform real-time load balancing for each of the electrical power grids in which IDT Energy operates. Similarly, load balancing is performed by the utilities or LDC for each of the natural gas markets in which IDT Energy operates. Load balancing ensures that the amount of electricity and natural gas that IDT Energy purchases is equal to the amount necessary to service its customers’ demands at any specific point in time. IDT Energy is charged or credited for balancing the electricity and natural gas purchased and sold for its account by its suppliers and the LDCs. IDT Energy manages the differences between the actual electricity and natural gas demands of its customers and its bulk or block purchases by buying and selling any shortfall or excess in the spot market, and through monthly cash settlements and/or adjustments to future deliveries in accordance with the load balancing performed by the LDCs, NYISO and PJM.

Competition

IDT Energy competes with the local utility companies in the areas where it provides service, including Consolidated Edison, Orange and Rockland, Central Hudson, National Fuel, National Grid USA, National Grid dbaKeyspan, Rochester Gas and Electric, Public Service Enterprise Group PPL Corporation, PECO, NFG PA, South Jersey Gas and Atlantic City Electric. Some utilities have affiliated companies that are ESCO’s and compete in the same markets that IDT Energy operates. IDT Energy also competes with several large vertically integrated energy companies as well as many independent ESCOs, including Centrica plc, MXenergy Electric Inc., Just Energy Group Inc., Direct Energy LP, and Reliant Energy Northeast LLC. Some of these competitors or potential competitors may be larger and better capitalized than IDT Energy. The competition with the utilities and ESCOs exposes IDT Energy to the risk of losing customers, especially since residential customers generally do not sign long term contracts.

There are many licensed ESCOs in each of the markets in which we operate. In each major utility service territory there are several ESCOs serving residential natural gas customers and residential electric customers. While it is unclear whether there will be new entrants in these markets, IDT Energy believes ESCO competition in the residential market (which represents the principal market focus for IDT Energy) is not as intense as in the commercial and industrial markets because the majority of ESCOs, unlike IDT Energy, have focused their activities on the commercial and industrial markets, which are comprised of larger customers who prefer to enter into longer term contracts with fixed rates.

Increasing our market share depends in part on our ability to persuade customers to switch to IDT Energy’s service. Local utilities have certain advantages such as name recognition, financial strength and long-standing relationships with customers. Persuading potential customers to switch to a new supplier of such an important service is challenging. If IDT Energy is not successful in convincing customers to switch, our ESCO business, results of operations and financial condition will be adversely affected.

Regulation

IDT Energy currently operates in eight utility markets in New York State and four utility territories in New Jersey and three utility territories in Pennsylvania. In addition, IDT Energy has pending license applications to operate in two more utility territories in New Jersey and three more utility territories in Pennsylvania. The State of New York, the Commonwealth of Pennsylvania, the State of New Jersey, the federal government, and related public service commissions, among others, establish the rules and regulations for our ESCO operations. IDT Energy is affected by the actions of governmental agencies, mostly on the state level by the respective state Public Service Commissions, and other organizations (such as NYISO and PJM) and indirectly the FERC. Regulations applicable to electricity and natural gas have undergone substantial change over the past several years as a result of restructuring initiatives at both the state and federal levels. IDT Energy may be subject to new laws, orders or regulations or the revision or interpretation of existing laws, orders or regulations. Further, if IDT Energy enters markets outside of the utility regions within which it currently operates in New York, New Jersey and Pennsylvania, or markets outside of these states, it would need to be licensed and would be subject to the rules and regulations of such states or municipalities and respective utilities.

Employees

As of August 24, 2011, IDT Energy employs approximately 55 full time employees: approximately 35 of whom are located in the Jamestown, New York office.

Genie Oil and Gas, Inc.

American Shale Oil Corporation

American Shale Oil Corporation, or AMSO, was formed as a wholly owned subsidiary of ours in February 2008. AMSO’s initial entry into the oil shale business occurred in April 2008, when AMSO acquired a 75% equity interest in E.G.L. Oil Shale, L.L.C. (which was subsequently renamed American Shale Oil, LLC, or AMSO, LLC) in exchange for cash of $2.5 million and certain commitments for future funding of AMSO, LLC’s operations. In a separate transaction in April 2008, IDT acquired an additional 14.9% equity interest in AMSO, LLC in exchange for cash of $3.0 million, bringing our and IDT’s total interest in AMSO, LLC to approximately 90%. In March 2009, a subsidiary of TOTAL S.A., or Total, the world’s fifth largest integrated oil and gas company, acquired a 50% interest in AMSO, LLC in exchange for cash paid to us of $3.2 million and Total’s commitment to fund the majority of AMSO, LLC’s research, development and demonstration, or RD&D, expenditures as well as certain other funding commitments. Immediately prior to this transaction, all owners (including IDT’s 14.9% direct equity interest) other than AMSO exchanged their ownership interest for a proportionate share of a 1% override on AMSO, LLC’s future revenue. IDT assigned the cash proceeds of its override interest to the IDT U.S. Oil Shale Charitable Distribution Trust, subject to certain remainder interests retained by Genie. According to the terms of the transaction, AMSO will operate the project during the RD&D phase. Total will provide a majority of the funding during this phase of the project, and technical and financial assistance throughout the RD&D and commercial stages of the project. Total will lead the planning of the commercial development and will assume management responsibilities during the subsequent commercial phase. After the consummation of the Total transaction, AMSO owned 50% of AMSO, LLC.

Oil shale is an organic-rich, fine-grained sedimentary rock that contains significant amounts of kerogen (a solid mixture of organic chemical compounds) from which liquid hydrocarbons can be extracted. However, extracting oil and gas from oil shale is more complex than conventional oil and gas recovery and is more expensive. Rather than pumping it directly out of the ground in the form of liquid oil, the oil shale can be mined and then heated to a high temperature through a process called surface retorting, with the resultant liquid separated and collected. An alternative which AMSO, LLC and others are researching and developing is in-situ retorting, which involves heating the oil shale to a temperature of approximately 660°F while it is still underground, and then pumping the resulting liquid and/or gases to the surface. In-situ retorting is considered to be less environmentally invasive than surface retorting and can offer significant economic advantages.

According to reports from the United States Department of Energy, or DOE, oil shale resources in the United States are estimated at over 2 trillion barrels, and based on management estimates, could potentially supply the U.S.’s demand for liquid fuel over the next 100 years. The majority of those deposits are found in the Green River Formation of Colorado (Piceance Creek Basin), Utah (Uinta Basin) and Wyoming (Green River and Washakie Basins). In March 2009, the U.S. Geological Survey, or USGS, reported that the total “in-place” oil in the Colorado’s Piceance Basin is approximately 1.525 trillion barrels. The majority of those deposits are found in the Green River Formation of Colorado (Piceance Creek Basin), Utah (Uinta Basin) and Wyoming (Green River and Washakie Basins). Colorado’s Piceance Basin, where AMSO, LLC’s RD&D lease is located as described below, contains some of the richest oil shale resources in the world (as reported by DOE and USGS sources), in some cases each acre is estimated to hold up to 2.5 million barrels of oil equivalent.

In 2005, the U.S. Bureau of Land Management, or BLM, began implementation of the Energy Policy Act passed by Congress, seeking proposals from the private sector to develop the oil shale resources in economically and environmentally responsible ways. In June 2005, nominations were solicited and twenty proposals were submitted, including the proposal of E.G.L. Resources, Inc., or EGL Resources. The proposals, which included technical operational plans, were evaluated by an inter-disciplinary team including representatives from the affected states, as well as the DOE and the Department of Defense. A central feature of EGL Resource’s proposal was the then patent pending in-situ oil shale extraction process, Conduction, Convection, Reflux, or CCR, currently AMSO, LLC’s U.S. Patent 7,743,826). Further, proposals were subjected to environmental analysis under the terms of the National Environmental Policy Act and brought before public meetings in Colorado and Utah. The BLM issued a Finding of No Significant Impact for EGL Resources’ proposed plan of operations; and effective January 1, 2007, EGL Resources received a lease for research, development and demonstration, or RD&D Lease, in western Colorado, which it assigned to its affiliate, E.G.L. Oil Shale, L.L.C. (“EGL”). Out of twenty applications for RD&D Leases submitted, three companies were awarded leases in Colorado to test in-situ technologies (Shell, Chevron and EGL), and one company in Utah (OSEC) was awarded a lease for testing above ground retorting processes. In April 2008, EGL was acquired by AMSO and IDT and subsequently renamed American Shale Oil, LLC.

The RD&D Lease awarded by the BLM to EGL Resources and acquired by AMSO, LLC covers an area of 160 acres. The lease runs for a ten-year period beginning on January 1, 2007, and is subject to an extension of up to five years if AMSO, LLC can demonstrate that a process leading to the production of commercial quantities of shale oil is diligently being pursued. If AMSO, LLC can demonstrate the economic and environmental viability of its technology, it will have the opportunity to submit a one-time payment pursuant to the applicable regulations and convert its RD&D Lease to a commercial lease on 5,120 acres which overlap and are contiguous with the 160 acres covered by its RD&D Lease. AMSO, LLC’s initial plan is to target the illite-rich mining interval where the “illite” rich oil shale is located. As technologies are developed to facilitate environmentally sound extraction processes from additional areas of the oil shale formation, we would expect to pursue the remaining reserves within our commercial lease.

AMSO, LLC is utilizing a team of experienced experts in various fields to conduct research, development and demonstration activities. The team has conducted considerable site characterization, which includes exploration and ground water monitoring wells, coring, logging, and other analysis to further explore, understand and characterize the oil shale resources in its RD&D Lease area. During the third quarter of fiscal 2011, AMSO, LLC continued advanced stage construction work on the surface oil and gas processing facilities while drilling pilot wells for its upcoming pilot test in Colorado. The pilot test is expected to begin in the fall of 2011. The pilot test is intended to confirm the accuracy of several of the key underlying assumptions of the proposed in-situ heating and retorting process. Upon successful completion of the pilot test, AMSO, LLC expects to design and implement a larger scale demonstration project to further test its process and operations under commercial conditions, and assess scalability to commercial levels.

Upon completion of a successful demonstration, AMSO, LLC intends to submit an application to convert the RD&D Lease into a commercial lease. Under current regulations, in order for the RD&D Lease to be converted into a commercial lease, AMSO, LLC will have to demonstrate the production of shale oil in commercial quantities, which is defined to mean production of shale oil where there is a reasonable expectation that the expanded operation would provide a positive return after all costs of production have been met, including the amortized costs of the capital investment. The BLM must also determine, following an analysis based on the National Environmental Policy Act, that commercial scale operations can be conducted without unacceptable environmental consequences, and the BLM will have a fair amount of discretion in making this determination. In order to convert the RD&D lease to a commercial lease AMSO, LLC will also have to (a) demonstrate that it consulted with state and local officials to develop a plan for mitigating the socioeconomic impacts of commercial development on communities and infrastructure; (b) submit a nonrecurring conversion payment, which pursuant to applicable rules and regulations, will be equivalent to the greater of $1,000 per acre or the Fair Market Value (to be determined) of the commercial lease; (c) provide adequate bonding; and (d) conduct commercial operations in accordance with all applicable laws, rules, regulations or stipulations provided for. Further, in determining whether to convert the RD&D Lease into a commercial lease, the BLM will also analyze the commercial viability of shale oil production, which will depend on the market price of competing products at such time. Current environmental challenges, however, have led to the BLM announcing their intention to issue new regulations, which could affect the commercial royalty rates and potentially the conversion criteria and thereby making conversion to a commercial lease commercially unfeasible or impracticable.

Through the development of its technology and implementation of its plan of operations, AMSO, LLC hopes to provide a significant domestic supply of liquid fuels at a competitive price and with acceptable environmental impacts. AMSO, LLC believes that its technical and operating approaches could minimize the potential for adverse environmental impacts. AMSO, LLC’s patented CCR heating process and well layout plan have been, and continue to be, designed to maximize energy efficiency and minimize the number of wells needed and the impact on the surface of the lease area. By targeting the deep illite-rich oil shale under the known aquifers, AMSO, LLC expects to maintain the geologic barriers between retorts and protected water sources, and to minimize the amount of clean water needed for its operations. AMSO, LLC is also working diligently to meet emission standards, reduce carbon dioxide generation through thermal efficiency, and develop methods to sequester carbon dioxide generated during heating operations.

AMSO LLC’s operating office is in Rifle, Colorado. AMSO LLC is supported by AMSO and Genie professionals based in Newark, New Jersey. AMSO LLC rents 2,430 square feet of office space and 2,000 square feet of warehouse space in Rifle under operating leases with flexible terms and conditions.

AMSO, LLC incurred $25.4 million, $7.1 million and $6.0 million on research and development in fiscal 2011, fiscal 2010 and fiscal 2009, respectively. Beginning in March 2009, AMSO accounts for its 50% ownership interest in AMSO, LLC using the equity method, therefore we did not consolidate AMSO, LLC’s research and development expense in fiscal 2011 or fiscal 2010, while in fiscal 2009 we consolidated the expense until March 2009. Instead, our share of AMSO, LLC’s net loss is included in “Equity in net loss of AMSO, LLC” in our consolidated statements of operations.

Israel Energy Initiatives, Ltd.

In March 2008, GEIC indirectly formed Israel Energy Initiatives, Ltd., or IEI, an Israeli company. IEI holds an exclusive Shale Oil Exploration and Production License awarded in July 2008 by the Israeli Ministry of National Infrastructures. The license covers approximately 238 square kilometers in the south of the Shfela region in Israel, which is estimated to hold approximately 40 billion barrels of oil equivalent in the form of oil shale, and grants IEI an exclusive right to demonstrate in-situ technologies for potential commercial shale oil production. Under the terms of the license, IEI is to conduct a geological appraisal study across the license area, characterize the resource and select a location for a pilot plant in which it will demonstrate its in-situ technology. The initial term of the license was for three years until July 2011. The license was extended for an additional year until July 2012, and it may be further extended in one year increments until July 2015. Assuming IEI receives an extension to its license before it expires in July 2012,the pending lawsuit filed in August 2010 by the Israel Union for Environmental Defense is favorably resolved, and IEI successfully demonstrates a commercially viable and environmentally acceptable technology, IEI intends to apply for a long-term commercial lease from the Israeli government to build and operate a commercial project. According to Israeli law, as long as a license holder operates in compliance with a pre-approved plan, the State of Israel must grant an extension of the initial license term. Further, under the Israeli petroleum law, long-term leases are typically for a term of 30 years, with a possible extension for an additional 20 years.

IEI believes that Israel presents a unique opportunity for the development of a commercial scale oil shale industry. The country is almost 100% dependent on imported oil for its transportation needs, and energy security is therefore a significant strategic issue, as well as a material burden on the Israeli economy. Compared with other oil shale resources worldwide, IEI believes that the Shfela basin resource is thick, shallow and dry. Short distances in Israel significantly reduce infrastructure and operating costs. Israel has existing complex refining capacity as well as, an existing pipeline infrastructure. IEI believes that environmental concerns are materially mitigated by the fact that the local aquifer is geologically confined and located well below the target oil shale layer and thus is highly unlikely to be contaminated in the proposed process being developed. Further, IEI believes that no direct competition currently exists in Israel for the production of oil from shale.

IEI began its resource appraisal study in the third quarter of calendar 2009, and it is expected that the field operations of this phase will be finalized in calendar 2011. The resource appraisal is comprised primarily of a drilling operation conducted in the license area. The resource appraisal plan includes drilling and coring several wells to depths of approximately 600 meters as well as well logging, analysis of core materials and other geochemical tests, water monitoring and hydrology tests, as well as laboratory analyses of samples and other laboratory experiments. To date, the results from the appraisal process, both from field tests and laboratory experiments, confirm IEI’s expectations as to the attractiveness of the oil shale resource in the license area from the standpoint of richness, thickness and hydrology. IEI is continuing permitting and other preparatory work required prior to construction of a pilot plant and operation of a pilot test. The pilot test will provide a basis for determining the technical, environmental and economic viability of IEI’s proposed process for extracting oil from the oil shale resource. If not delayed by permitting, regulatory action or pending litigation, pilot test drilling and construction could begin in calendar 2012, and pilot test operations could begin in calendar 2013. Pilot test operations are contingent on receipt of an extension to the current license which expires in July 2012.

IEI operates out of IDT’s offices in Jerusalem and a field office and workshop near the city of Beit Shemesh. In addition, IEI built and operates a research laboratory located on the campus of Ben Gurion University in Be’er Sheva.

IEI incurred $7.8 million, $5.2 million and $3.1 million in research and development in fiscal 2011, fiscal 2010, and fiscal 2009, respectively.

Competition

If Genie Oil and Gas is successful developing and producing commercial quantities of oil and gas from oil shale in an environmentally acceptable manner and receives all the necessary regulatory approvals, then, in the commercial production phases of operations, it will likely face competition from conventional and unconventional oil producers, other fossil fuels and other alternative energy providers in marketing and selling refined products and natural gas. Many of the potential competitors, including national oil companies, are larger and have substantially greater resources to be able to withstand the volatility of the oil and gas market (i.e. price, availability, refining capacity, etc.).

Regulation

AMSO, LLC was granted an RD&D Lease by the BLM for 10 years beginning on January 1, 2007 with up to a 5-year extension upon demonstration that a process leading up to the production of commercial quantities of shale oil is diligently pursued. Throughout the term of the RD&D Lease, AMSO, LLC will execute various activities and milestones within the technical phases of its research and development plan with the aim of ultimately converting its RD&D Lease to a long term commercial lease.

In order to execute these activities and milestones, AMSO, LLC must obtain the necessary permitting and comply with the various rules, regulations, and policies spanning multiple regulatory bodies and governmental agencies at various levels. In connection with the site characterization phase (which AMSO, LLC completed) and the pilot phase (which is ongoing), AMSO, LLC has been working to ensure compliance with rules, regulations, and policies of the BLM and the Department of Environmental Protection at the federal level, with the Colorado Division of Reclamation and Mining Service and the Air Pollution Control Division and the Water Control Division of the Colorado Department of Public Health and Environment at the state level, and with Rio Blanco County at the county level. In accordance with the technical and regulatory requirements of the RD&D Lease, in May 2009, AMSO, LLC submitted its in-situ Plan of Development to the BLM. In September 2009, the BLM approved AMSO, LLC’s Plan of Development, allowing AMSO, LLC to proceed with implementation, subject to compliance with Colorado’s permitting requirements (which AMSO, LLC has satisfied). AMSO, LLC continues to refine its Plan of Development in conjunction with its ongoing operations, and the BLM has approved such modifications.

Although AMSO, LLC has diligently worked to satisfy the regulatory requirements and challenges necessary for implementing the site characterization and initial pilot phase of the project, it is difficult at this time to predict all of the compliance requirements that may be necessary throughout the life of the project.

IEI holds an exclusive Shale Oil Exploration and Production License that expires in July 2012. While IEI expects the license to be further extended in one year increments until July 2015 (the maximum term of a license under Israeli Law is seven years) IEI may also apply for a new license, there is no guarantee the license will be extended as described above or that a new license would be granted. As set forth more fully in Legal Proceedings elsewhere in this Information Statement, IEI could also potentially lose its license if the legal proceeding filed by the Israel Union for Environmental Defense seeking to set aside or cancel the license is successful. In addition, the license is subject to certain conditions and milestones and the failure to achieve those milestones may result in the termination, revocation, suspension or limitation of the license.

In order to execute its plan of operation, IEI must obtain and comply with a large number of permits and authorizations from various government agencies, local authorities and other regulators and interested parties in Israel, such as the District Planning Committee, the Ministry of Environmental Protection, the Israel Defense Forces and many others. IEI believes it has duly met all such requirements to date and will continue to do so in the future, but this may considerably delay our operations. To date, IEI’s plans have faced considerable opposition from environmental and local groups.

In order to execute its long term commercial plan, IEI must obtain a Lease under the Petroleum Law. A Lease is granted for an initial period of up to 30 years, with possible extension for an additional 20 years. Such a lease can be granted if a “Discovery” under the Law is declared by the Petroleum Commissioner during the license period. However, we are unaware of any clear guidelines, criteria or precedent of how that term applies to oil shale.

Intellectual Property

In connection with its RD&D process and related technologies, AMSO, LLC owns two issued patents in the United States and has several pending applications, both in the US and abroad. The two issued patents are patent No. 7,743,826 which expires April 16, 2028 and patent No. 7,921,907 which expires January 20, 2027. These patents are both directed to in situ methods and systems for the extraction of oil from shale and are integral to our technical and operational plans.

AMSO has also filed three trademark applications in the United States. IEI has filed seven U.S. provisional patent applications on methods for improved hydrocarbon recovery from unconventional resources, including improvements in both in situ and ex situ methods.

Employees

AMSO (including AMSO, LLC) employs four full-time employees, including a secondee assigned by Total, while IEI employs approximately 20 full-time employees. AMSO and IEI also retain the services of a number of professional consultants, including geologists, hydrologists, drilling and completions engineers, process engineers, environmental experts, permitting consultants, energy experts specializing in the Israeli market, legal, land designation and acquisition consultants.

Industry Segments and Geographic Areas

For disclosure regarding our industry segments and geographic areas, please see Note 14 to our Consolidated Financial Statements below.

MANAGEMENT

Directors, Executive Officers and Key Personnel

Set forth below is information concerning those persons that we expect to serve as our executive officers and directors immediately following the spin-off.

Name	Age		Position*
Howard S. Jonas		55	Chairman of the Board of Directors
Claude Pupkin		49	Chief Executive Officer
Avi Goldin		34	Chief Financial Officer
Geoffrey Rochwarger		40	Vice Chairman
James Courter		69	Director and Vice Chairman of the Board
W. Wesley Perry		55	Director nominee
Allan Sass		72	Director Nominee
Alan B. Rosenthal		57	Director Nominee
Alan K. Burnham		60	Chief Technology Officer, American Shale Oil, LLC.
Harold Vinegar		62	Chief Scientist, IEI
* Messrs. Perry, Sass and Rosenthal have agreed to serve as directors effective upon the spin-off and each has consented to his inclusion herein.

Howard S. Jonas has served as Chairman of Genie since January, 2011 and Co-Vice Chairman of Genie Energy International Corporation since September 2009. Mr. Jonas founded IDT in August 1990, and has served as Chairman of IDT’s Board of Directors since its inception. Mr. Jonas has served as Chief Executive Officer of IDT since October 2009 and from December 1991 until July 2001. Mr. Jonas served as President of IDT from December 1991 through September 1996, and as Treasurer of IDT from inception through 2002. Mr. Jonas has served as the Chairman of the Board of CTM Media Holdings, Inc. since August 2009. Mr. Jonas has also served as the Vice Chairman of the Board of Directors of IDT Telecom from December 1999 to April 2008, as Co-Chairman since April 2008, and as a director of IDT Capital since September 2004. Mr. Jonas served as Co-Chairman of the Board of Directors of IDT Entertainment from November 2004 until August 2006. From August 2006 until August 2011, Mr. Jonas served as a director of Starz Media Holdings, LLC, Starz Media, LLC and Starz Foreign Holdings, LLC, each of which is a subsidiary of Liberty Media Corporation. In addition, Mr. Jonas has been a director of IDT Energy since June 2007 and a director of American Shale Oil Corporation since January 2008. Mr. Jonas is also the founder and has been President of Jonas Media Group (f/k/a Jonas Publishing) since its inception in 1979. Mr. Jonas was the Chairman of the Board of Directors of Net2Phone from October 2001 to October 2004, the Vice Chairman of the Board of Directors of Net2Phone from October 2004 to June 2006, and has served as the Chairman of Net2Phone since June 2006. Mr. Jonas received a B.A. in Economics from Harvard University.

Key Attributes, Experience and Skills:

As founder of the Company and Chairman of the Board since its inception, Mr. Jonas brings extensive and detailed knowledge of all aspects of our Company and each industry it is involved in to the Board. In addition, having Mr. Jonas on the Board provides our Company with effective leadership.

Claude Pupkin has served as Chief Executive Officer of Genie since August 2011 and has been an Executive Vice President of IDT Corporation since December 2008 and has served as Chief Financial Officer of Genie Energy International Corporation since September 2009 and as President, Treasurer and Secretary of AMSO LLC since April 2008. Mr. Pupkin joined IDT in January 2003 and has held several positions with IDT and its affiliates. Previously, Mr. Pupkin served as IDT’s Senior Vice President of Corporate Development. Before joining the parent company, Mr. Pupkin was the Executive Vice President of Finance and Corporate Development for Net2Phone, which was a publicly-traded affiliate of IDT that was fully acquired by IDT in March 2006. In that role, Mr. Pupkin led a follow-on public equity offering for Net2Phone in 2003. Prior to joining IDT, Mr. Pupkin’s career included more than 17 years of finance, investment banking and accounting experience. Immediately prior to joining IDT, Mr. Pupkin led JP Morgan Chase’s Latin America Telecommunications, Media and Technology Investment Banking business. He also worked for several years at Morgan Stanley & Co. and Citibank as an investment banker, assisting companies in raising capital from the debt and equity markets and executing strategic transactions. He began his professional career as a CPA with Ernst & Young (formerly Ernst & Whinney). Mr. Pupkin holds an MBA from The Wharton School of the University of Pennsylvania, an MA in International Studies from the University of Pennsylvania and a Bachelors Degree in Accounting from the University of Maryland, College Park where he graduated Summa Cum Laude . Mr. Pupkin is fluent in Spanish and Portuguese.

Avi Goldin has served as Chief Financial Officer of Genie since August 2011 and has been a Vice President of IDT Corporation since May 2009. Mr. Goldin originally joined IDT in January 2004 and held several positions within IDT and its affiliates before leaving to join CayComm Media Holdings, a privately backed telecommunications acquisition fund, where he served as Vice President, Finance. Mr. Goldin rejoined IDT in May 2009 as Vice President of Corporate Development. Prior to joining IDT, Mr. Goldin served as an Investment Analyst at Dreman Value Management, a $7 billion asset management firm and an Associate in the Satellite Communications group at Morgan Stanley & Co. Mr. Goldin holds an MBA from the Stern School of Business of New York University, a BA in Finance from the Syms School of Business of Yeshiva University and is a Chartered Financial Analyst (CFA).

Geoffrey Rochwarger has served as Vice Chairman of Genie since August 2011, and has served as Chief Executive Officer of IDT Energy since January 2007 and as Chairman of IDT Energy since June 2007. From 2004 to 2009, Mr. Rochwarger served as President and Director of IDT Capital, Inc., the then business incubator for IDT. Prior to 2004, Mr. Rochwarger has held various executive officer positions at IDT Corporation and its affiliates. Mr. Rochwarger received a B.A. in Economics and Psychology at Yeshiva University in 1992. Mr. Rochwarger is not a member of the Board of Directors of the Company.

James A. Courter has served as Vice Chairman of the Board and director of Genie since August 2011. Mr. Courter joined IDT in October 1996 and served as President of IDT from October 1996 until July 2001, and as Chief Executive Officer from August 2001 to October 2009. Mr. Courter has been a director of IDT since March 1996 and has been Vice Chairman of the Board of Directors of IDT since March 1999. Mr. Courter has served as Co-Vice Chairman of the board of directors of Genie Energy International Corporation since September 2009. In addition, from December 1999 to October 2009, Mr. Courter served as a director of IDT Telecom and as a director of Net2Phone, and served as a director of IDT Capital from September 2004 to October 2009. Mr. Courter served as the Vice Chairman of IDT Entertainment from November 2003 to August 2006. Mr. Courter has been a senior partner in the New Jersey law firm of Courter, Kobert & Cohen since 1972. He was also a partner in the Washington, D.C. law firm of Verner, Liipfert, Bernhard, McPherson & Hand from January 1994 to September 1996. Mr. Courter was a member of the U.S. House of Representatives for 12 years, retiring in January 1991. From 1991 to 1994, Mr. Courter was Chairman of the President’s Defense Base Closure and Realignment Commission. Mr. Courter also serves as a director of The Berkeley School. He received a B.A. from Colgate University and a J.D. from Duke University Law School.

Key Attributes, Experience and Skills:

Mr. Courter’s experience as a U.S. Congressman for twelve years positions him to provide guidance in government relations. Moreover, Mr. Courter’s fourteen year tenure with IDT (eight of which was as Chief Executive Officer) affords him extensive knowledge of our various businesses, and experience running of a company with diverse holdings and operations. Mr. Courter also brings leadership oversight to the Board.

W. Wesley Perry has served as a director of GEIC since September 2009. Mr. Perry has been a director of IDT Corporation since September 2010. Mr. Perry owns and operates S.E.S. Investments, Ltd., an oil and gas investment company since 1993. He has served as CEO of E.G.L. Resources, Inc. since July 2008 and served as its President from 2003 to July 2008. Mr. Perry has served as Chairman of the board of directors of Genie Energy International Corporation since September 2009. Mr. Perry has been a director of United Trust Group (OTC:UTGN) since June 2001 and has served on its Audit Committee since June 2002. Mr. Perry is currently the Chairman of the United Trust Group’s Audit Committee. He has served as a director of American Capitol Insurance Company and Texas Imperial Life Insurance Company since 2006. He served as a director of Western National Bank from 2005 to 2009. Mr. Perry served as an at-large councilperson on the Midland City Council from 2002 to 2008. He is currently the Mayor of Midland, Texas, elected in November 2007. He is the President of the Milagros Foundation, a board member of the Abel-Hangar Foundation and a director of the River Foundation. He has a Bachelor of Science degree in Engineering from University of Oklahoma.

Key Attributes, Experience and Skills:

Mr. Perry’s history in the oil and gas industry demonstrates his significant experience in and knowledge of our unconventional oil and gas business. Mr. Perry’s strong financial background, including his service as chairman of the audit committee of United Trust Group, also provides financial expertise to the Board, including an understanding of financial statements, corporate finance and accounting.

Allan Sass, PhD is the former President and Chief Executive Officer of Occidental Oil Shale Corporation, a subsidiary of Occidental Petroleum. He is a member of the Editorial Board of the technical journal, In-Situ. Mr. Sass has a Bachelor of Science in Chemical Engineering from Cooper Union and a Master of Science and PhD in Chemical Engineering from Yale University.

Key Attributes, Experience and Skills:

Mr. Sass’ history in the oil shale industry demonstrates his significant experience in and knowledge of our unconventional oil and gas business.

Alan B. Rosenthal is the founding and managing partner of ABR Capital Financial Group LLC, an investment fund, founding partner and owner of NorthStar Travel, founding partner of Alaska Business Monthly and founding partner and owner of Master Dental Alliance. Mr. Rosenthalis the assistant clinical professor of Micro-Neurosurgical Treatment of Oral Pathology at New York University. Mr. Rosenthal is a board member of Yeshiva University and served on the board of directors of IDT Corporation from 1996-1997. He has a Bachelors of Science from Rutgers University and a DMD from the University of Pennsylvania.

Key Attributes, Experience and Skills:

Mr. Rosenthal’s strong financial background as founding partner and owner of various businesses and provides financial expertise to the Board, including an understanding of financial statements, corporate finance and accounting.

Harold Vinegar, PhD has served as Chief Scientist of IEI since December 2008. Prior to his position as Chief Scientist of IEI, Dr. Vinegar was Chief Scientist, Physics, of Royal Dutch Shell. Dr. Vinegar spent 32 years at Shell’s Bellaire Technology Center in Texas working on novel hydrocarbon exploration and production technologies. Dr. Vinegar has spent almost 30 years in developing novel thermal recovery processes to unconventional resources. Dr. Vinegar is a co-inventor of Shell’s In situ Conversion and In situ Upgrading Processes (ICP and IUP) that have been piloted successfully in Colorado oil shale and Alberta tar sands. Dr. Vinegar was elected a Fellow of the American Physical Society in 1999, cited “for contributions to the science and technology of oil exploration and environmental remediation, particularly thermal methods for extracting hydrocarbons from the ground and for applications of NMR methods to well logging.” In addition, Dr. Vinegar has published over 270 patents and 50 publications in fields such as the complex conductivity of shaly sands; Xray CT, NMR spectroscopy and NMR imaging of cores; NMR well logging; microseismic imaging of hydraulic fractures; and wireless power and communications for intelligent wells. In 2005, Dr. Vinegar was elected to the National Academy of Engineering. Dr. Vinegar received his BA in Physics from Columbia University and his MA and PhD degrees in physics from Harvard University.

Alan K. Burnham, PhD has served as Chief Technology Officer, American Shale Oil, LLC since March 2008. Prior to his position as CTO of AMSO, LLC, Dr. Burnham was employed at the Livermore National Laboratory (LLNL) in the areas of oil shale processing, petroleum geochemistry, laser fusion targets and large optics for the National Ignition Facility, and energetic materials. Dr. Burnham has published three patents and approximately 250 journal articles, conference proceedings, and publicly available LLNL technical reports. He has been active in numerous professional societies and won a Federal Laboratory Consortium award for excellence in technology transfer in 1990. Dr. Burnham received his BS in Chemistry from Iowa State University and a PhD in Physical Chemistry from the University of Illinois at Champaign-Urbana.

Board of Directors

Currently, our Board of Directors is composed of Howard Jonas and Jim Courter. Prior to the spin-off, we intend to designate, and IDT intends, acting as our sole stockholder, to elect W. Wesley Perry and other individuals to the Board of Directors such that a majority of our directors will be independent in accordance with our to-be-adopted Corporate Governance Guidelines, the rules of NYSE and other applicable laws. Each director has indicated a willingness to serve on our Board of Directors and will hold office, in accordance with our Certificate of Incorporation and By-laws until the next annual meeting of stockholders and until his or her successor is duly elected and qualified.

In addition, on August 31, 2010, we formed a Strategic Advisory Board to advise management on strategic, financial, operational, and public policy matters related to our oil shale ventures. Members of the Genie Strategic Advisory Board, who are not members of our Board of Directors, consist of:

Alan K. Burnham, PhD – see above.

Richard Cheney – 46th Vice President of the United States. Former President and CEO of Halliburton Company, and U.S. Secretary of Defense.

K. Rupert Murdoch – Founder, Chairman of the Board, and CEO of News Corporation, one of the world's largest diversified media companies.

Eugene A. Renna – Director of Ryder System, Inc., served as Executive Vice President and a member of its Exxon Mobil's Board of Directors before retiring in 2002. He was President and Chief Operating Officer of Mobil Corporation, and a member of its Board of Directors, until the time of its merger with Exxon Corporation in 1999.

Lord Jacob Rothschild, OM, GBE – Chairman of the J. Rothschild group of companies and of RIT Capital Partners plc (RITCP), the investment trust company. RITCP is listed on the London Stock Exchange and has a market cap of over £1.7 billion. Jacob Rothschild is also Chairman of Five Arrows Limited, a family investment company, and a number of other companies. Jacob Rothschild is a noted philanthropist, and serves as Chairman of the Rothschild Foundation.

Michael Steinhardt – Principal Manager, Steinhardt Management LLC. Renowned hedge fund investor and founder Steinhardt, Fine, Berkowitz & Co., and noted philanthropist.

Stephen M. Trauber – Vice Chairman and Global Head of Energy, Citigroup Investment Banking Division.

Harold Vinegar , PhD – see above.

CORPORATE GOVERNANCE

Director Independence

Following the spin-off, our Corporate Governance Guidelines will provide that a majority of our directors must be independent under criteria established by the NYSE. Prior to the spin-off, we intend to add Messrs. Perry, Rosenthal and Sass to our Board of Directors in addition to Messrs. Jonas and Courter, such that a majority of our directors will be independent in accordance with our Corporate Governance Guidelines and the rules of the NYSE and other applicable laws.

Controlled Company Exemption

Following the spin-off, we will be a “controlled company” as defined in section 303A of the NYSE Listed Company Manual because more than 50% of our voting power will be beneficially held by Howard S. Jonas, our Chairman of the Board. As a “controlled company,” we will be exempt from certain NYSE listing standards As discussed below, we intend to apply this “controlled company” exemption for our corporate governance practices only with respect to (i) the independence requirements of our Nominating Committee and (ii) not having a single Nominating/Corporate Governance Committee.

Committees of the Board of Directors

Prior to the distribution date, our Board of Directors will establish an Audit Committee, a Nominating Committee, a Compensation Committee, and a Corporate Governance Committee. All members of the Audit, Compensation and Corporate Governance Committees will meet the criteria for independence as established by NYSE and under the Sarbanes-Oxley Act of 2002. Each of the Committees is described in greater detail below. The Board will establish written charters for each of the Committees, which will be available on our website located at www.genie.com following the spin-off. Following the spin-off, any changes to the charters will be reflected on our website.

Audit Committee

We expect to designate members of our Audit Committee on or prior to the spin-off. The principal duties of the Audit Committee under its written charter will include: (i) responsibilities associated with our external and internal audit staffing and planning; (ii) accounting and financial reporting issues associated with our financial statements and filings with the SEC; (iii) financial and accounting organization and internal controls; (iv) auditor independence and approval of non-audit services; and (v) “whistle-blower” procedures for reporting questionable accounting and audit practices.

The Audit Committee charter will require that the Committee be comprised of at least three directors, all of whom must be independent under the NYSE listing standards and the Sarbanes-Oxley Act of 2002. In addition, each member of the Audit Committee will be financially literate within the meaning of the NYSE listing standards, and at least one member will have sufficient accounting or financial management expertise to qualify as an “audit committee financial expert,” as determined by the Board of Directors in accordance with SEC rules.

Nominating Committee

We expect to designate members of our Nominating Committee on or prior to the spin-off. The principal duties of the Nominating Committee under its charter will include: (i) developing the criteria and qualifications for membership on the Board of Directors; (ii) recommending candidates to fill new or vacant positions on the Board of Directors; and (iii) conducting appropriate inquiries into the backgrounds of potential candidates. We intend to apply the NYSE exemption related to a controlled company which allows a “controlled company” to be exempted from complying with rules requiring that only independent directors comprise our Nominating Committee.

Compensation Committee

We expect to designate members of our Compensation Committee on or prior to the spin-off. The principal duties of the Compensation Committee under its charter will include: (i) ensuring that a succession plan for the Chief Executive Officer is in place; (ii) reviewing management’s recommendations for executive officers and making recommendations to the Board of Directors; (iii) approving the compensation for the Chief Executive Officer; (iv) reviewing and approving compensation policies and practices for other executive officers including their annual salaries; (v) reviewing and approving major changes in employee benefit plans; (vi) reviewing short and long-term incentive plans and equity grants; and (vii) recommending to the full Board of Directors changes to the compensation of the independent members of the Board of Directors. The Compensation Committee charter will require that the Committee be comprised of at least three directors, all of whom must be independent under our Corporate Governance Guidelines.

Corporate Governance Committee

We expect to designate members of our Corporate Governance Committee on or prior to the spin-off. The principal duties of the Corporate Governance Committee under its charter will include: (i) reviewing our Corporate Governance Guidelines and other policies and governing documents and recommending revisions as appropriate; (ii) reviewing any potential conflicts of independent directors; (iii) reviewing and monitoring related person transactions; and (iv) overseeing the self-evaluations of the Board of Directors, the Audit Committee and the Compensation Committee. The Corporate Governance Committee charter will require that the Committee be comprised of at least three directors, all of whom must be independent under the NYSE listing standards.

Governance Practices

Following the spin-off, we will observe corporate governance practices and principal governance documents which are designed to ensure that we maximize stockholder value in a manner that is consistent with both the legal requirements applicable to us and a business model that requires our employees to conduct business with the highest standards of integrity. Prior to the spin-off, our Board of Directors will adopt and will adhere to corporate governance principles which the Board and senior management believe promote this purpose, are sound and represent best practices, and will review these governance practices, the corporate laws of the State of Delaware under which we were incorporated, the NYSE listing standards and the regulations of the SEC, as well as best practices recognized by governance authorities to benchmark the standards under which it operates. Our principal governance documents will be as follows:

·	Corporate Governance Guidelines;

·	Board of Directors committee charters, including:

§	Audit Committee charter;
§	Nominating Committee charter;

§	Compensation Committee charter; and
§	Corporate Governance Committee charter; and

·	Code of Business Conduct and Ethics.

Our governance documents will be available following the distribution date on our web site at www.genie.com .

Our Board of Directors, with assistance from its Corporate Governance Committee, will regularly assess our governance practices in light of legal requirements and governance best practices.

Executive Director Sessions

Under our Corporate Governance Guidelines, the outside directors will meet in regularly scheduled executive sessions without management. We expect that a lead independent director will be selected by the Board of Directors to serve as the presiding director at these meetings.

Communications with the Board of Directors

After the spin-off, stockholders and other interested persons seeking to communicate directly with the Board of Directors, with the lead independent director or the independent directors as a group, should submit their written comments c/o Lead Independent Director at our principal executive offices set forth on page 6. The lead independent director will review any such communication at the next regularly scheduled Board meeting unless, in his or her judgment, earlier communication to the Board is warranted.

If a stockholder communication raises concerns about the ethical conduct of us or our management, it should be sent directly to our Corporate Secretary at our principal executive offices set forth on page 6. The Corporate Secretary will promptly forward a copy of any such communication to the Chairman of the Audit Committee and, if appropriate our Chairman, and take such actions as they authorize to ensure that the subject matter is addressed by the appropriate committee of the Board of Directors, by management and/or by the full Board.

The Corporate Secretary may filter out and disregard or re-direct (without providing a copy to the directors or advising them of the communication), or may otherwise handle at his or her discretion, any director communication that falls into any of the following categories:

	•		Obscene materials;
	•		Unsolicited marketing or advertising material or mass mailings;

	•		Unsolicited newsletters, newspapers, magazines, books and publications;
	•		Surveys and questionnaires;

	•		Resumes and other forms of job inquiries;
	•		Requests for business contacts or referrals;

	•		Material that is threatening or illegal; or
	•		Any communications or materials that are not in writing.

In addition, the Corporate Secretary may handle in his or her discretion any director communication that can be described as an “ordinary business matter.” Such matters include the following:

	•		Routine questions, service and product complaints and comments that can be appropriately addressed by management; and
	•		Routine invoices, bills, account statements and related communications that can be appropriately addressed by management.

Code of Business Conduct and Ethics

Prior to the distribution date, we will adopt a Code of Business Conduct and Ethics which will apply to our directors, Chief Executive Officer, Chief Financial Officer and other Genie employees.

DIRECTOR COMPENSATION

There was no director compensation paid in fiscal 2011. Following the spin-off, each non-employee director of the Company who attends at least 75% of the regularly scheduled meetings of the Board of Directors and committees of which they are members during a calendar year will receive an annual cash retainer of $50,000. Such payment will be made in January of the calendar year following attendance of at least 75% of the Board of Directors meetings during the preceding year, and is pro-rated for non-employee directors who join the Board of Directors or depart from the Board of Directors during the prior year, if such director attended 75% of the applicable Board of Directors meetings for such partial year. The Company’s Chairman may, in his discretion, waive the requirement of 75% attendance by a director to receive the annual retainer in the case of mitigating circumstances. The Compensation Committee periodically reviews our director compensation practices. In addition, each member of our board of directors will receive an annual grant of restricted shares of our Class B common stock (pro rated based on the quarter in which they join the Board). The number of shares in the annual grant will be fixed following the spin-off to have a value of approximately $20,000 as of the spin-off. Shares will be vested immediately upon grant. The Compensation Committee believes that our director compensation is fair and appropriate in light of the responsibilities and obligations of our directors.

EXECUTIVE COMPENSATION

Compensation of our Named Executive Officers

Prior to the spin-off, all of the named executive officers were employees of IDT and all compensation for fiscal year 2011 disclosed in the table below was paid by IDT for services provided by the named executive officers to our business segments and other units of IDT. During fiscal year 2011, Howard Jonas served as the Chairman of the Board of Directors and CEO of IDT, Claude Pupkin served as Executive Vice President of IDT and Chief Financial Officer of Genie, Geoff Rochwarger served as the Chief Executive Officer of IDT Energy and Avi Goldin served as Vice President of IDT.

The historical compensation of Howard Jonas and Claude Pupkin were set by the Compensation Committee of the Board of Directors of IDT after discussions with management about the recommended levels and components of compensation for each of the individuals. The historical compensation of Messrs. Rochwarger and Goldin were set by the management of IDT.

Howard Jonas has an employment agreement with IDT and has had employment agreements with IDT in place throughout the periods covered by the Summary Compensation Table. Effective with the spin-off, Mr. Jonas and IDT will amend the employment agreement between Mr. Jonas and IDT and Mr. Jonas will also enter into an employment agreement with the Company. The terms of the agreement will be disclosed when it is finalized.

Mr. Jonas’ employment agreement with IDT does not govern his employment by or relationship with the Company, including his service as Chairman of the Board of the Company.

No other named executive officers currently have employment agreements with the Company or IDT. The Company intends to enter into employment agreements with each of Messrs. Pupkin, Goldin and Rochwarger effective as of the spin-off. The terms of those agreements will be disclosed when they are finalized. Mr. Jonas will continue to serve as the Chairman and Chief Executive Officer of IDT following the spin-off.

IDT provided competitive base salaries to its executives. In fiscal 2011, IDT’s named executive officers were awarded bonuses based on certain accomplishments during fiscal 2010 including: (i) exceeding IDT’s budgeted goal for Adjusted EBITDA by 59%; (ii) generating positive operating cash flow; (iii) securing an equity investment for IEI; (iv) achieving compliance with the standards and continued listing on the NYSE; and (v) exceeding targets for reducing corporate overhead. In fiscal 2010, IDT’s named executive officers were awarded bonuses based on certain accomplishments during fiscal 2009, including: (i) the successful implementation of IDT’s turn-around plan, which improved IDT’s operational performance and reduced selling, general and administrative expenses company-wide; (ii) securing and consummating the joint venture with Total in AMSO LLC; and (iii) the shedding of non-core assets. In addition, bonuses reflected the increased responsibilities and workload of IDT’s named executive officers as a result of management changes and reductions in personnel. IDT does not target any specific proportion of total compensation in setting base salary and bonus compensation.

The Company intends to follow the same general approach to executive compensation as was utilized by IDT. Executives will receive competitive base salaries. The base salary of the executives is expected to rise effective with the spin-off as the responsibilities of certain executives, particularly the Chief Executive Officer and Chief Financial Officer, will increase with the Company’s status as an independent publicly-owned entity. Mr. Pupkin’s annual base salary is expected to be $600,000 and Mr. Goldin’s annual base salary is expected to be $250,000, effective on the spin-off.

In addition, executives will be eligible to receive bonuses in the range of 20%-100% of base salary based upon performance, including the specific financial and other goals to be set by the Compensation Committee of our Board of Directors.

Executives will also receive equity grants and will be eligible for future grants under the Company’s Long-Term Incentive Plan, as set forth below.

SUMMARY COMPENSATION TABLE (With respect to IDT Corporation)

The table below summarizes the total compensation paid or awarded for Fiscal 2011 to our named executive officers. Prior to the spin-off, all of the named executive officers were employees of IDT and all compensation for fiscal year 2011 disclosed in the table below was paid by IDT for services provided by the named executive officers to our business segments and other units of IDT.

Delaware		45-2069276
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of each class to be registered		Name of each exchange on which registered
N/A		N/A

Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer	o	Smaller reporting company	o

Item No.	Item Caption	Location in Information Statement
1.	Business	“Executive Summary” and “Business”

1A.	Risk Factors	“Risk Factors”

2.	Financial Information	“Unaudited Pro Forma Consolidated Financial Data;” “Selected Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

3.	Properties	“Executive Summary” and “Business”

4.	Security Ownership of Certain Beneficial Owners and Management	“Security Ownership by Certain Beneficial Owners and Management”

5.	Directors and Executive Officers	“Management”

6.	Executive Compensation	“Executive Compensation”

7.	Certain Relationships and Related Transactions, and Director Independence	“Our Relationship with IDT After the Spin-Off and Related Person Transactions”

8.	Legal Proceedings	“Legal Proceedings”

9.	Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters	“Executive Summary;” “Risk Factors;” “The Spin-Off;” “Dividend Policy;” and “Description of Our Capital Stock”

10.	Recent Sale of Unregistered Securities	None

11.	Description of Registrant’s Securities to be Registered	“Description of Our Capital Stock”

12.	Indemnification of Directors and Officers	“Description of Our Capital Stock;” and “Our Relationship with IDT After the Spin-Off and Related Person Transactions”

13.	Financial Statements and Supplementary Data including the Consolidated Financial Statements	“Unaudited Pro Forma Consolidated Financial Data;” “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” and “Index to Consolidated Financial Statements”

14.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	None

15.	Financial Statements and Exhibits	“Unaudited Pro Forma Consolidated Financial Data”; “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; “Index to Financial Statements” and the financial statements referenced therein

Exhibit Number		Exhibit Description
2.1		Form of Separation and Distribution Agreement between IDT Corporation and Genie Energy Ltd.**
3.1		Certificate of Incorporation of Genie Energy Ltd.
3.1.A		Amended and Restated Certificate of Incorporation of Genie Energy Ltd.
3.2		By-Laws of Genie Energy Ltd.
4.1		Specimen common stock certificate of Genie Energy Ltd.**
*10.1		Form of 2011 Stock Option and Incentive Plan**
10.2		Form of Transition Services Agreement
10.3		Form of Tax Separation Agreement
10.4		Preferred Supplier Agreement between IDT Energy, Inc. and BP Energy Company, dated June 29, 2009, as amended***
21.1		List of Subsidiaries of Genie Energy Ltd.
23.1		Consent of Zwick and Banyai, PLLC
23.2		Consent of Zwick and Banyai, PLLC
99.1		Preliminary Information Statement of Genie Energy Ltd., subject to completion, dated October 6, 2011
99.2		Index to Audited Financial Statements for Significant Subsidiary (American Shale Oil, LLC)
99.3		Consent of Prospective Director – W. Wesley Perry
99.4		Consent of Prospective Director – Alan Rosenthal
99.5		Consent of Prospective Director – Allan Sass

	GENIE ENERGY LTD.

Dated: October 6, 2011	By:	/s/ Claude A. Pupkin
	Name	Claude A. Pupkin
	Title	Chief Executive Officer


Recipient:						Provider:

By:						By: [[[NAMER[NAME

Name:						Name:
Title:						Title:

	(a)	The defined term “Designated Region” is deleted in its entirety and replaced with the following:

		““ Designated Region ” means: {a) with respect to Energy, the geographic region in which each of NYISO and PJM operate, 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, KeySpan (now National Grid), and Public Service Gas & Electric Company, as applicable, operate. "

	(b)	The defined term “ISO” is deleted in its entirety and replaced with the following:

		““ ISO ” means an Independent System Operator thai coordinates, controls and monitors the operation of the electrical power system, usually within a single State, but sometimes encompassing multiple states, such as NYISO and PJM “

	(c)	The following definitions are added to Section 1.1:

		““ PJM ” means the Pennsylvania-New Jersey-Maryland System Operator or its successor. ”

	IDT ENERGY, INC.

	By:	/s/ Geoffrey Rochwarger
	Name	Geoffrey Rochwarger
	Title:	Chairman and CEO

	BP ENERGY COMPANY

	By:	/s/ Randall Prescott
	Name	Randall Prescott
	Title	V.P. Power Origination

	BP CORPORATION NORTH AMERICA INC

	By:	/s/ Herbert S. Vogel
	Name	Herbet S. Vogel
	Title	COO

IDT ENERGY, INC.			BP ENERGY COMPANY

By:	/s/ Geoff Rochwarger	By:	/s/ Eddie Pinkerton
Name	Geoff Rochwarger	Name	Eddie Pinkerton
Title	CEO and President	Title	Director-Origination



American Shale Oil Corporation (DE)
American Shale Oil, LLC (DE), Assumed Name in TX: AMSO, LLC
AMSO Holdings I, Inc. (DE)
AMSO Holdings, LLC (DE)
Genie Energy International Corporation (DE) Genie Oil and Gas, Inc. (DE)
IDT Energy, Inc. (DE) North American Energy, Inc. (DE) Virtual Power Hedging, LLC (DE)


Name	Country of Formation
Genie Dutch Holdings B.V.	Netherlands
Genie Energie B.V.	Netherlands
Genie Energy International (Genie Energy International is a registered trade name)	Netherlands
Israel Energy Initiatives Ltd.	Israel
T.C.T. Thermal Cleaning Technologies Ltd.	Israel

/s/ Zwick and Banyai, PLLC
Zwick and Banyai, PLLC
Southfield, Michigan

October 6, 2011

Name and Principal Position	Fiscal Year	Salary ($)			Bonus ($)		Stock Awards ($) (1)(2)			Option Awards ($)		All other Compensation ($)			Total ($)
Howard S. Jonas Chairman of the Board (3)	2011	$	36,004		$	350,000	$	-		$	-	$	350	(4)	$	411,394
	2010	$	35,000		$	350,000	$	-		$	-	$	-		$	385,000
	2009	$	347,740	(5)	$	925,000	$	3,743,002	(6)	$	-	$	3,217	(7)	$	5,016,959

Claude Pupkin Chief Executive Officer (8)	2011	$	485,000		$	225,000	$	1,514,160		$	-	$	2,450	(9)	$	2,226,610
	2010	$	485,000		$	200,000	$	-		$	-	$	-		$	685,000

Geoffrey Rochwarger Vice Chairman (10)	2011	$	528,650		$	517,675	$	1,514,160		$	-	$	14,500	(11)	$	2,574,985

Avi Goldin Chief Financial Officer	2011	$	175,000		$	20,000	$	140,200		$	-	$	-		$	335,200

(1)	The amounts shown in this column reflect the aggregate grant date fair value of stock option and restricted stock awards computed in accordance with FASB ASC Topic 718. In valuing such awards, IDT made certain assumptions. For a discussion of those assumptions, please see Note 13 to IDT’s Consolidated Financial Statements included in IDT’s Annual Report on Form 10-K for the Fiscal Year ended July 31, 2010.
(2)	Mr. Jonas received grants of stock in lieu of base compensation for certain periods including fiscal 2011. Because such grant was made prior to fiscal 2011, its value is not reflected in the table for that year. Prior to the entry into of an Amended Employment Agreement between IDT and Mr. Jonas, Mr. Jonas’ annual base compensation was set by IDT’s Board of Directors and Compensation Committee at $865,000, although prior to effectiveness of that agreement, Mr. Jonas had only accepted payment of base compensation at an annual rate of $750,000. The Amended Employment Agreement provides that Mr. Jonas’ compensation for all periods not covered by the equity grant was to be $1 million per annum.
(3)	Mr. Jonas has served as Chief Executive Officer of IDT since October 22, 2009. Mr. Jonas did not receive compensation for his role as a director of IDT nor will he be compensated by the Company for his role as the Company’s director.

(4)	IDT’s matching contribution to Mr. Jonas’ IDT stock account established under the IDT 401(k) plan.
(5)	Consists of cash compensation from August 1, 2008 through December 31, 2008 pursuant to Mr. Jonas’ Amended Employment Agreement with IDT, which sets forth an annual base salary of $856,000 through October 31, 2008, an annual base salary of $750,000 from November 1, 2008 through December 31, 2008 and an annual base salary of $1 million for all other periods not covered by the stock grant described in this note. Mr. Jonas’salary from January 1, 2009 to July 31, 2009 was paid in the form of restricted IDT common stock and restricted IDT Class B common stock as reflected in the Stock Awards column above.
(6)	Grant of 1,176,427 shares of IDT Class B common stock and 883,333 shares of IDT common stock in connection with Mr. Jonas’ IDT employment agreement.
(7)	Represents $1,492 paid for life insurance premiums, and a $1,725 matching contribution to Mr. Jonas’ IDT stock account established under the IDT Corporation 401(k) plan and invested in IDT’s stock.
(8)	Mr. Pupkin served as the Company’s Chief Financial Officer from inception to August 2011.
(9)	IDT’s matching contribution to Mr. Pupkin’s IDT stock account established under the IDT 401(k) plan.
(10)	Mr. Rochwarger served as the Company’s Chief Executive Officer from inception to August 2011.
(11)	Car, fuel, phone and internet expenses paid by the Company on behalf of Mr. Rochwarger.

Option Awards											Stock Awards
Name	Option Grant Date		Number of Securities Underlying Unexercised Options (#) Exercisable (2)		Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested (1) ($)
Claude Pupkin	4/23/07			8,333				33.99	4/22/17			54,000		1,303,020
	11/6/07			19,445				23.85	11/05/17			54,000		1,303,020
Geoffrey Rochwarger	12/13/01			8,333		-		36.18	12/12/11			54,000		1,303,020
	4/23/07			28,087				33.99	4/22/17
Howard Jonas		-		-		-		-		-		2,059,760		49,702,008
Avi Goldin				-								5,000		120,650

(1)	The market value of unvested Class B restricted stock (and for Mr. Rochwarger, Deferred Stock Units) is calculated by multiplying the number of unvested stock and DSUs held by the applicable named executive officer by the closing price of our Class B common stock on July 31, 2011, which was $24.13.
(2)	All options listed in the table are fully vested.

·	each person or entity known by us to be the beneficial owner of 5% or more of the outstanding shares each of IDT’s classes of common stock;
·	each person who we currently anticipate will be one of our directors at the time of the distribution;

·	each person who we currently anticipate will be one of our named executive officers at the time of the distribution; and
·	all persons who we currently anticipate will be our directors and executive officers at the time of the distribution as a group.

Name	Number of Shares of Class B Common Stock			Percentage of Ownership of Class B Common Stock			Percentage of Aggregate Voting Power d
Howard S. Jonas		5,370,210	(1)		24	%		74.4	%
520 Broad Street Newark, NJ 07102

James A. Courter		524,352	(2)		2.5	%		*

Geoff Rochwarger		3,6433	(3)		*			*

Claude Pupkin		82,880	(4)		*			*

Avi Goldin		5,000

W. Wesley Perry		39,582	(5)		*			*

Alan Rosenthal		233			*

Allan Sass		0			*				*

All directors, Named Executive Officers and as a group (7 persons) (6)		6,058,685			26	%		75.3	%

*	Less than 1%.
d	Voting power represents combined voting power of IDT Class A Common Stock ( three votes per share ) and IDT Class B Common Stock ( one-tenth of one vote per share ). Excludes stock options.

·	acquisition of us by means of a tender offer;
·	acquisition of us by means of a proxy contest or otherwise; or

Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements	F-2

Consolidated Balance Sheets as of July 31, 2011 and 2010	F-3

Consolidated Statements of Operations for the Years Ended July 31, 2011, 2010 and 2009	F-4

Consolidated Statements of Comprehensive Income for the Years Ended July 31, 2011, 2010 and 2009	F-5

Consolidated Statements of Equity for the Years Ended July 31, 2011, 2010 and 2009	F-6

Consolidated Statements of Cash Flows for the Years Ended July 31, 2011, 2010 and 2009	F-7

Notes to Consolidated Financial Statements	F-8 To F-30

July 31 (in thousands, except shares)	2011			2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	23,876		$	13,142
Restricted cash		164			473
Trade accounts receivable, net		26,124			26,717
Due from IDT Corporation		4,266			4,837
Inventory		2,756			2,694
Prepaid expenses		2,157			1,062
Deferred income tax assets—current portion		1,019			222
Other current assets		245			592
TOTAL CURRENT ASSETS		60,607			49,739
Property and equipment, net		335			256
Goodwill		3,663			3,663
Investment in AMSO, LLC		—			666
Deferred income tax assets—long-term portion		1,795			1,908
Other assets		1,006			766
TOTAL ASSETS	$	67,406		$	56,998
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Trade accounts payable	$	16,537		$	16,883
Accrued expenses		7,474			2,948
Income taxes payable		1,663			2,617
Other current liabilities		91			114
TOTAL CURRENT LIABILITIES		25,765			22,562
Other liabilities		60			200
TOTAL LIABILITIES		25,825			22,762
Commitments and contingencies
EQUITY:
Preferred stock, $.01 par value; authorized shares—10,000,000; no shares issued		—			—
Class A common stock, $.01 par value; authorized shares—35,000,000; 1,574,326 shares issued and outstanding		16			16
Class B common stock, $.01 par value; authorized shares—200,000,000; 21,108,970 shares issued and outstanding		211			211
Additional paid-in capital		11,577			—
Accumulated other comprehensive income (loss) – foreign currency translation adjustments		357			(24	)
Retained earnings		35,225			33,595
TOTAL GENIE ENERGY LTD. STOCKHOLDERS’ EQUITY		47,386			33,798
Noncontrolling interests:
Noncontrolling interests		(4,805	)		438
Receivable for issuance of equity		(1,000	)		—
Total noncontrolling interests		(5,805	)		438
TOTAL EQUITY		41,581			34,236
TOTAL LIABILITIES AND EQUITY	$	67,406		$	56,998

Year ended July 31 (in thousands)	2011			2010			2009
REVENUES	$	203,561		$	201,358		$	264,709
COSTS AND EXPENSES:
Direct cost of revenues (exclusive of depreciation)		149,714			143,532			192,550
Selling, general and administrative		33,768			21,181			26,863
Research and development		7,843			5,226			6,253
Depreciation		24			86			118
TOTAL COSTS AND EXPENSES		191,349			170,025			225,784
Equity in the net loss of AMSO, LLC		(5,238	)		(1,603	)		(731	)
Gain on sale of interest in AMSO, LLC		—			—			2,598
Income from operations		6,974			29,730			40,792
Interest (expense) income and financing fees, net		(1,974	)		(1,723	)		67
Other (expense) income, net		(610	)		24			117
Income before income taxes		4,390			28,031			40,976
Provision for income taxes		(6,945	)		(13,950	)		(18,248	)
NET (LOSS) INCOME		(2,555	)		14,081			22,728
Net loss attributable to noncontrolling interests		4,185			492			20
NET INCOME ATTRIBUTABLE TO GENIE ENERGY LTD.	$	1,630		$	14,573		$	22,748

															Genie Energy Ltd . Stockholders
	Noncontrolling			Noncontrolling Interests - Receivable for issuance of				Class A Common Stock				Class B Common Stock			Additional Paid-in			Accumulated Other Comprehensive Income			Retained			Total
	Interests			equity			Shares		Amount		Shares		Amount		Capital			(Loss)			Earnings			Equity
BALANCE AT JULY 31, 2008	$	—		$	—		$	1,574	$	16	$	21,109	$	211	$	1,258		$	(30	)	$	5,079		$	6,534
Stock-based compensation		—			—											34			—			—			34
Sales of stock of subsidiary		20			—											180			—			—			200
Other comprehensive income		—			—											—			29			—			29
Net income for the year ended July 31, 2009		(20	)		—											—			—			22,748			22,728
BALANCE AT JULY 31, 2009		—			—			1,574		16		21,109		211		1,472			(1	)		27,827			29,525
Stock-based compensation		—			—											315			—			—			315
Sales of stock of subsidiary		933			—											4,267			—			—			5,200
Forgiveness of amount due from IDT Corporation		—			—											(6,054	)		—			(8,805	)		(14,859	)
Other comprehensive loss		(3	)		—											—			(23	)		—			(26	)
Net income for the year ended July 31, 2010		(492	)		—											—			—			14,573			14,081
BALANCE AT JULY 31, 2010		438			—			1,574		16		21,109		211		—			(24	)		33,595			34,236
Stock-based compensation		—			—											710			—			—			710
Sales of stock of subsidiary		(200	)		(1,000	)										11,200									10,000
Exchange of stock of subsidiary		(969	)		—											(333	)		—			—			(1,302	)
Other comprehensive income		111			—											—			381			—			492
Net loss for the year ended July 31, 2011		(4,185	)		—											—			—			1,630			(2,555	)
BALANCE AT JULY 31, 2011	$	(4,805	)	$	(1,000	)		1,574		16		21,109		211	$	11,577		$	357		$	35,225		$	41,581

Year ended July 31	2011			2010			2009
Con Edison		46.7	%		50.3	%		53.6	%
National Grid USA		16.5	%		21.4	%		20.4	%
National Grid dba Keyspan		10.3	%		12.4	%		13.9	%

July 31	2011			2010
Con Edison		63.3	%		74.4	%
National Grid USA		12.0	%		14.8	%

Year ended July 31 (in thousands)	Balance at beginning of year		Additions charged to bad debt expense		Deductions(1)			Balance at end of year
2011
Reserves deducted from accounts receivable:
Allowance for doubtful accounts	$	170	$	66	$	(106	)	$	130
2010
Reserves deducted from accounts receivable:
Allowance for doubtful accounts	$	162	$	8	$	—		$	170
2009
Reserves deducted from accounts receivable:
Allowance for doubtful accounts	$	1,110	$	962	$	(1,910	)	$	162

Level 1 –	quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 –	quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
Level 3 –	unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value.

(in thousands)	Level 1(1)		Level 2(2)		Level 3(3)		Total
July 31, 2011:
Assets:
Derivative contracts	$	67	$	—	$	—	$	67
Liabilities:
Derivative contracts	$	3	$	—	$	101	$	104
July 31, 2010:
Liabilities :
Derivative contracts	$	87	$	—	$	200	$	287

July 31 (in thousands)	2011			2010
General	$	15,041		$	16,676
NYISO settlement		1,531			1,544
Unbilled receivables		9,682			8,555
Miscellaneous		—			112
		26,254			26,887
Less allowance for doubtful accounts		(130	)		(170	)
Trade accounts receivable, net	$	26,124		$	26,717