Exhibit 10.1


 


	
   

  	
   

  	
  Sempra

  Commodities

  
	
   

  	
   

  
	
   

  	
  Sempra Energy Trading
  LLC

  
	
   

  	
  58 Commerce Road

  
	
   

  	
  Stamford, CT 06902

  
	
   

  	
   

  
	
  As
  of March 1, 2010

  	
  Telephone: (203)
  355-5000

  
	
   

  	
  Facsimile: (203) 355-5001

  
	
   

  	
   

  
	
  MXenergy
  Inc.

  	
  www.rbssempra.com

  
	
  595
  Summer Street, Suite 300

  	
   

  
	
  Stamford,
  CT 06901-1407

  	
   

  



 


Re:                  Agreement
Relating to the 2010 Columbia SSO


 


Ladies and Gentlemen:


 


We refer to the recently-held Columbia Gas of Ohio, Inc.
(“Columbia”) 2010 Standard
Services Offer (“SSO”). In connection
with the SSO, MXenergy Inc. (“MX”) was awarded two tranches of supply by
Columbia. The purpose of this letter agreement is to memorialize the agreement
between Sempra Energy Trading LLC (“Sempra”) and
MX as to the matters set forth herein that relate to the SSO. Capitalized terms
used in this letter agreement (this “Letter
Agreement”) without definition shall have the meaning ascribed to
such terms in the ISDA Master Agreement dated September 22, 2009 between
Sempra and MX (as amended, restated or otherwise modified from time to time,
the “Master Agreement”).


 


As a result of being awarded two tranches in
connection with the SSO, MX is obligated to supply approximately 10 bcf of Gas
to Columbia (i.e. approximately 5 bcf per tranche) to serve Columbia’s customer
load for the period April 1, 2010 through March 31, 2011 (the “SSO Term”). The precise quantity of Gas
required to be supplied by MX to Columbia will be based on the load
requirements of the customers associated with the tranches awarded to MX.


 


As has been discussed, Sempra hereby agrees to
waive, and Sempra and MX hereby agree to modify, certain provisions of the
Master Agreement to the extent, and only to the extent, expressly set forth
herein solely to enable MX to satisfy its obligations to Columbia in connection
with the SSO. Accordingly, as agreed between Sempra and MX, so long as MX is in
compliance with the agreements and covenants set forth herein and so long as no
Event of Default or Termination Event with respect to MX has occurred under the
Master Agreement, Sempra will sell Gas to MX, and enter into Gas Swaps with MX,
in connection with MX’s satisfaction of its supply obligation to Columbia under
the SSO on the following terms and otherwise subject to the terms of the Master
Agreement:


 


1.               Notwithstanding anything in
the Master Agreement to the contrary, the Contract Price for all Gas purchased
by MX from Sempra for sale to Columbia in connection with the SSO only (and no
other volumes) shall be


 

















 


determined using a Gas Adder of $0.02 in lieu of the
Gas Adder specified in the Agreement.


 


2.                                                               Notwithstanding
anything in the Master Agreement to the contrary, the fixed or floating price
for any Gas Swap entered into by MX with Sempra to hedge MX’s price exposure
related to its Gas supply obligation to Columbia in connection with the SSO
only (and no other Gas Swaps) shall be determined using a Gas Adder of $0.00 in
lieu of the Gas Adder specified in the Agreement except for swaps that
are related to a Sleeve Transaction, with respect to which the fixed or
floating price shall be determined using the same Sleeve Adder specified in the
Master Agreement.


 


3.                                                               Notwithstanding
the provisions of Part 7(e)(i) of the Schedule to the Master
Agreement, notional and actual volumes of Gas associated with physical Gas
purchase transactions and Gas Swaps entered into by Sempra with third parties
pursuant to Part 7(e)(i) that relate to Sleeve Transactions with MX
that arc used by MX to satisfy, or hedge, MX’s Gas supply obligations to
Columbia in connection with the SSO only (and no other of such third-party
transactions), shall be excluded in any determination by Sempra as to whether a
proposed transaction under Part 7(e)(i) complies with the volume
limitation described in clause (A) of the second proviso of Part 7(e)(i).


 


4.                                                               Notwithstanding
anything in the Master Agreement to the contrary, Financing Fees that accrue on
Outstanding Amounts in respect of (i) Gas purchased by MX for resale to
Columbia in connection with the SSO (including, without limitation, Storage
Gas) and (ii) Gas Swap settlement payments arising in connection with Gas
Swaps entered into by MX with Sempra to hedge MX’s price exposure related to
the SSO ((i) and (ii), collectively, “SSO-related
Amounts”), shall be calculated as set forth in the definition of “Financing
Fee” in the Master Agreement except that each reference to 5% in such
definition shall be replaced with a reference to 2.25% for purposes of
calculating the Financing Fees accruing on SSO-related Amounts only (and no
other Outstanding Amounts).


 


5.                                                               Volumes of Gas
purchased by MX from Sempra for resale to Columbia in connection with the SSO
shall be excluded from any calculation of whether MX has purchased the Minimum
Gas Quantity for any Contract Year.


 


6.                                                               Volumes of Gas
purchased by MX from Sempra for resale to Columbia in connection with the SSO
shall be excluded from any calculation of whether MX has purchased a quantity
of Gas equal to 3,500,000 MMBtus during any Contract Year to which the IT Gas
Adder is applicable for purposes of sub-clause (B) of the proviso to
clause (iii) on Exhibit l4(a)(i) to the Master Agreement.


 


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7.                                                               All cash
collateral posted by Sempra to Columbia as security for Sempra’s obligations
arising in connection with the SSO (“SSO
Credit Support”) shall be deemed to constitute Credit Support
provided by Sempra on behalf of MX for all purposes of the Master Agreement.
Notwithstanding the definition of “Credit Support Fee” contained in the Master
Agreement, Credit Support Fees on SSO Credit Support shall be calculated by
determining the product of the aggregate amount of SSO Credit Support
outstanding at the relevant time of determination and the higher of (i) the
Base Rate plus 2.25% per annum or (ii) Sempra’s relevant business unit’s
actual cost of funds plus 2.25% per annum (and such amount of SSO Credit
Support shall be excluded from any determination of whether the Aggregate
Credit Support Amount is greater or less than $27,000,000 for purposes of
clauses (i)-(iii) of the definition of Credit. Support Fee only). For the
avoidance of doubt (and without limitation), MX shall be obligated to reimburse
Sempra in accordance with Part 12(a)(xviii) for any SSO Credit Support
applied by Columbia.


 


In addition to the foregoing,
Sempra hereby waives the provisions of Part 13(a)(v)(A), Part 13(a)(xi)(B),
Part 13(b)(vi) and Part 13(b)(xiii) to the extent,
and only to the extent, necessary to permit MX to perform its obligations to
Columbia in connection with the SSO.


 


Without limiting the generality of the provisions of
Section 9(f) of the Master Agreement, the waiver set forth herein
shall be limited precisely as written and relates solely to the provisions of
the Master Agreement in the manner and to the extent described above. Nothing
in this Letter Agreement shall be deemed to (a) constitute a waiver of
compliance by MX with respect any other term, provision or condition of the
Master Agreement or any other instrument or agreement referred to therein or (b) prejudice
any right or remedy that Sempra may now have or may have in the future under or
in connection with the Master Agreement or any other instrument or agreement
referred to therein. Except as expressly set forth herein, the terms,
provisions and conditions of the Master Agreement and all other documents referenced
therein and related thereto shall remain in full force and effect and in all
other respects are hereby ratified and confirmed.


 


This Letter Agreement and the rights and duties of
the parties hereunder will be governed by and construed, enforced and performed
in accordance with the law of the Sate of New York, without giving effect to
principles of conflicts of laws (other than Section 5-1401 of the New York
General Obligations Law). Each of MX and Sempra hereby irrevocably submits to the
nonexclusive jurisdiction of the federal or state courts located in New York,
New York in any legal proceeding arising out of or relating to this Letter
Agreement or any of the transactions contemplated hereby and hereby irrevocably
waives, to the fullest extent permitted by law, any objection that any such
proceeding brought in such a court has been brought in an inconvenient forum.
Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this agreement or any of the transactions
contemplated hereby.


 


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Neither MX nor Sempra may assign this Letter
Agreement or its rights hereunder without the prior written consent of the
other party. This Letter Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns. No
amendment, modification or change to this Letter Agreement will be enforceable
unless reduced to writing and executed by duly authorized representatives of
both MX and Sempra.


 


This Letter Agreement constitutes the entire
understanding of MX and Sempra with respect to the subject matter hereof and
supercedes any prior negotiations, understandings, communications and
agreements with regard hereto.


 


This Agreement shall be considered for all purposes as prepared through
the joint efforts of MX and Sempra and shall not be construed against one party
or the other as a result of the preparation, submission or other event of
negotiation, drafting or execution hereof. This Letter Agreement may be
executed in several counterparts, including through facsimile or other
electronic signatures, each of which is an original and all of which constitute
one and the same agreement.


 


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Please indicate your agreement with the foregoing by
signing a copy of this Letter Agreement in the space provided below and
returning to Sempra a fully executed copy. Thank you very much.


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  SEMPRA
  ENERGY TRADING LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Wendy Lewis

  
	
   

  	
   

  
	
   

  	
  Name: Wendy Lewis

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED
  AND AGREED

  	
   

  
	
  AS OF THE
  DATE FIRST WRITTEN ABOVE

  	
   

  
	
   

  	
   

  
	
  MXENERGY
  INC.

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Chaitu Parikh

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name: Chaitu Parikh

  	
   

  
	
   

  	
  Title: Snr. VP and CFO

  	
   

  
					



 


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