Exhibit
10.32


Greenhill & Co., LLC

300 Park Avenue

New York, NY 10022 

(212) 389-1500

(212) 389-1700 Fax


Greenhill


CONFIDENTIAL


January 20, 2005


Mr. Jeffrey Mayer

Chief Executive Officer

MxEnergy, Inc.

20 Summer Street

5th Floor

Stamford, CT 06901


Dear Jeffrey:


The purpose of this letter is to confirm the
engagement of Greenhill & Co., LLC (“Greenhill”) to act as general
strategic and financial advisor to MxEnergy, Inc. (together with its affiliates
and subsidiaries, the “Company”) in connection with potential Transactions
involving (i) GEXA Energy Corp. and/or an affiliate or subsidiary thereof, (ii)
Commerce Energy Corp. and/or an affiliate or subsidiary thereof, and/or (iii)
any other entities identified in a supplement to this agreement executed by both
parties hereto (a “Supplement”). Each of the entities referred to by name in
the preceding sentence is referred to herein individually as a “Target” and
such entities are referred to hereunder collectively as “Targets”. For purposes
hereof, a “Transaction” shall mean the direct or indirect purchase or
acquisition by the Company of all or a significant portion of the stocks,
assets or business of a Target or any other business combination or
extraordinary corporate transaction involving the Company and a Target, whether
in one or a series of transactions, including, without limitation, by way of a
negotiated purchase, merger or consolidation, tender or exchange offer or
leveraged buyout, and shall not include any such transaction involving an
entity that is not a Target, as defined above, except, in each case, as may be
provided in a Supplement.


1.                          In
connection with its engagement hereunder, Greenhill proposes to undertake
certain services on behalf of the Company, including, to the extent requested
by the Company (which request shall be in writing, in the case of clause (h)
below):


(a).                 reviewing the
business, assets and operations of the Company and its historical and projected
financial condition;


 


 

















(b).                assisting the
Company in evaluating the business, assets and operations of the Target and its
historical and projected financial condition;


(c).                 evaluating and
recommending financial and strategic alternatives with respect to a proposed
Transaction;


(d).                advising the
Company as to the timing, structure and pricing of a proposed Transaction;


(e).                 assisting the
Company, to the extent requested, in negotiating and consummating a proposed Transaction;


(f).                   assisting the
Company in implementing a Transaction by acting as a dealer manager for the
Company in any Transaction structured as a tender or exchange offer, subject to
entering into a separate agreement or agreements that shall contain normal and
customary provisions (including separate compensation) for such services;


(g).                advising the
Company, to the extent requested, on raising equity or debt financing for the
proposed Transaction;


(h).                rendering an
opinion to the Board of Directors of the Company as to the fairness, from a
financial point of view, of the consideration to be paid by the Company in
connection with a proposed Transaction (an “Opinion”; it being understood that
the Opinion shall be in such form and with such assumptions and qualifications
as determined appropriate by Greenhill); and


(i).                    providing such
other financial advisory and investment banking services as are customary for
similar engagements and as may be mutually agreed upon by the Company and
Greenhill.


2.                          As
compensation for Greenhill s services hereunder (and except as may be otherwise
provided for in the separate agreement or agreements referred to in clause (f)
above or in any Supplement), the Company hereby agrees to pay Greenhill the
following fees:


(a).                 Retainer Fee.
A Retainer Fee for general strategic advisory services of $75,000 per quarter,
payable quarterly in advance, commencing January 1, 2005. This fee shall be
payable at the inception of each calendar quarter thereafter until the Company
shall terminate this agreement as provided in Section 4 hereof.


(b).                Transaction Fee.


(i).                     A Transaction
Fee of $1,500,000 in cash (a “Transaction Fee”), if during the term of
Greenhill s engagement


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hereunder or (except as provided in Section 2(b)(vi)
below) within 12 months thereafter (the “Tail Period”) a Transaction is
consummated or a definitive agreement is entered into that subsequently results
in the consummation of a Transaction within the meaning of section 2(b)(ii)
hereof. Separate Transaction Fees shall be payable for a Transaction with each
of the two Targets.


(ii).                  For purposes of
this letter agreement, a Transaction shall be deemed to have been consummated
upon the earliest of any of the following events to occur:


(A).             the acquisition by
the Company of a majority of the outstanding common stock of a Target
calculated on a fully-diluted basis;


(B).               a merger or
consolidation of a Target with the Company; or


(C).               the acquisition by
the Company of assets of a Target representing a majority of the Target’s book
value.


(iii).               Notwithstanding the
foregoing, in the event that the Company shall execute a definitive agreement
providing for a Transaction, such agreement shall subsequently be terminated
and the Company shall be paid a termination, “break-up”, liquidated damages or
similar fee (“Break-Up Fee”) upon such termination, then the Company shall pay
to Greenhill, promptly upon its receipt of such Break-Up Fee, an amount equal
to the greater of (x) $500,000 and (y) one-third of such Break-Up Fee net of
all out-of-pocket expenses incurred by the Company in connection with the Transaction
(provided, however, that the amount payable to Greenhill shall not in any event
exceed $1,500,000 per Transaction).


(iv).              All Retainer Fees,
to the extent previously paid, shall be credited against any Transaction Fee
payable to Greenhill hereunder (it being understood that in the event that more
than one Transaction Fee shall be payable hereunder, Retainer Fees shall only
be credited against one such Transaction Fee).


(v).                 No other fees
shall be payable to Greenhill for any services rendered to the Company by
Greenhill in connection with any Transaction.


(vi).              If the Company
retains any other financial advisor in connection with a Transaction and any
fee becomes payable


 


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to such other financial advisor by the Company in
connection with such Transaction, any Transaction Fee which would otherwise
have been payable to Greenhill during the Tail Period pursuant to Section
2(b)(i) above shall, if such Transaction is deemed to have been consummated
within the meaning of section 2(b)(ii) hereof more than nine months following
the Termination Date, be reduced by the lesser of:


(A).             50% of the amount of
the Transaction Fee otherwise payable to Greenhill hereunder except for this
section 2(b)(vi) and


(B).               the amount of any
fee payable to such other financial advisor in respect of such Transaction.


3.                          In
addition to any fees that may be payable to Greenhill hereunder (and regardless
of whether a Transaction occurs), the Company hereby agrees from time to time
upon request, to promptly reimburse Greenhill for its reasonable travel (coach
class) and other out-of-pocket expenses incurred by Greenhill in performing its
services hereunder, including the fees and expenses of legal counsel retained
by Greenhill in connection with any Opinion it may be asked to render by the
Company; provided, however, any such counsel shall have been approved in
advance by the Company (such approval not to be unreasonably withheld).
Greenhill understands that the Company monitors its expenses very closely and
agrees to submit to the Company, on a monthly basis, a reasonably detailed
statement of its expenses.


4.                          The
term of Greenhill’s engagement hereunder shall commence on the date hereof and
continue until terminated by either party upon 10 days’ written notice (the “Termination
Date”); provided, however, that no such termination shall affect
(i) the indemnification, contribution and confidentiality obligations of the
Company, (ii) the right of Greenhill to receive any fees payable hereunder (including
the right of Greenhill to receive, for the applicable period after any
expiration or termination of this letter agreement, a Transaction Fee) or fees
that have accrued prior to such termination or (iii) the right of Greenhill to
receive reimbursement for its out-of-pocket expenses as described above.


5.                          The
Company agrees to indemnify Greenhill and related persons in accordance with
the indemnification letter attached hereto as Schedule A, the provisions of
which are incorporated herein by reference in their entirety.


6.                          The
Company agrees to provide to Greenhill all financial and other information
requested by it for the purpose of its assignment hereunder.


 


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The Company agrees and represents that information
furnished to Greenhill pursuant to this letter agreement shall be accurate and
complete in all material respects at the time provided, and that if such
information becomes inaccurate, incomplete, or misleading during the term of
Greenhill’s engagement hereunder, the Company shall notify Greenhill in
writing. In performing its services hereunder, (including, without limitation,
in giving any Opinion), Greenhill shall be entitled to rely upon and assume,
without assuming any responsibility for independent verification, the accuracy
and completeness of all information that is publicly available and of all
information that has been furnished to it by the Company, the Target or
otherwise reviewed by Greenhill, and Greenhill shall not assume any responsibility
or have any liability therefor. Greenhill shall have no obligation to conduct
any valuation or appraisal of any assets or liabilities. For the execution of
its assignment, Greenhill shall establish a team of qualified individuals from
appropriate specialty areas within Greenhill.


7.                          Any
financial advice rendered by Greenhill or its representatives pursuant to this
letter agreement is intended solely for the benefit and use of management and
the Board of Directors of the Company in considering and evaluating a
Transaction, is not on behalf of, and shall not confer rights or remedies upon,
any person other than the Board of Directors of the Company, and may not be
used or relied upon for any other purpose. No such financial advice be
disclosed publicly in any manner without Greenhill’s prior written consent and
all such advice will be treated by the Company as confidential (except that
provided that such advice may be disclosed by the Company to its advisors and
financing sources and their advisors, subject to an obligation to keep such
advice confidential).


8.                          Following
the closing of a Transaction, Greenhill may, at its own expense and subject to
obtaining the Company’s prior approval as to content, which approval shall not
be unreasonably withheld, place announcements or advertisements in financial
newspapers and journals describing its services hereunder.


9.                          This
letter agreement (including Schedule A) (a) shall be governed by and construed
in accordance with the laws of the State of New York, regardless of the laws
that might otherwise govern under applicable principles of conflicts of law
thereof and no proceeding related directly or indirectly to this letter
agreement shall be commenced, prosecuted, or continued in any court other than
the courts of the State of New York located in the City and County of New York
or in the United States District Court for the Southern District of New York,
(b) incorporates the entire understanding of the parties with respect to the
subject matter hereof and supersedes all previous agreements should they exist
with respect thereto, (c) may not be amended or modified except in a writing
executed by the Company and Greenhill and (d) shall be binding upon and inure
to the benefit of the Company, Greenhill, the other Indemnified Parties and


 


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their respective successors and assigns. The Company
(on the Company’s behalf and, to the extent permitted by applicable law, on
behalf of the Company’s securityholders and creditors) and Greenhill agree to
waive, to the fullest extent permitted by law, any objection it may now or
hereafter have to the laying of venue of any such proceeding brought in any New
York court specified in this paragraph 9 and any claim that any such proceeding
brought in any such court has been brought in an inconvenient forum and to
waive all rights to trial by jury in any action, proceeding or counterclaim
brought by or on behalf of either party with respect to any matter whatsoever
relating to or arising out of any actual or proposed Transaction or the
engagement of or performance by Greenhill hereunder. The Company acknowledges
that Greenhill, in connection with its engagement hereunder, is acting as an
independent contractor with duties owing solely to the Company and that nothing
in this letter agreement is intended to confer upon any other person any rights
or remedies hereunder or by reason hereof.


10.                    If
at any time during our engagement or thereafter you have any questions relating
to billing or to regulatory compliance matters, you should contact either the
undersigned or Hal Rodriguez, Greenhill’s Chief Compliance Officer, who handles
financial and administrative matters for Greenhill in our New York office.


11.                    This
letter agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original, but all of which shall constitute one and
the same agreement. Please confirm that the foregoing is in accordance with
your understanding of our agreement by signing and returning to us a copy of
this letter.


12.                    All
notices or other communications under this agreement shall be sufficient if in
writing and delivered by hand or sent by telecopy, or sent, postage prepaid by
registered, certified or express mail, or by recognized overnight air courier
service and shall be deemed given when so delivered by hand or telecopied , or
if mailed or sent by overnight courier service, on the third business day after
mailing (one business day in the case of express mail or overnight courier
service) to the parties at the following addresses:


(a).                 If to the
Company, addressed to it at:


(i).                     physical
delivery address: 20 Summer Street, 5th Floor, Stamford, CT 06901,
Attention: President.


(ii).                  fax number:
203-975-9659


(b).                If to Greenhill,
addressed to it at:


 


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(i)                        physical
delivery address: 300 Park Avenue, New York, New York 10022, Attention: Gregory
G. Randolph


(ii)                     fax number:
212-389-1700.


Any party may change its address for receiving notices
by giving written notice of such change to the other party hereto.


 


	
   

  	
   

  	
  Very best regards,

  
	
   

  	
   

  	
  GREENHILL & CO.,
  LLC

  
	
   

  	
  By:

  	
  /s/ Gregory G. Randolph

  
	
   

  	
   

  	
  Gregory G. Randolph 

  Managing Director

  



Accepted and agreed to as of 

the date set forth above:


 


	
  MxEnergy, Inc.

  
	
  By:

  	
  /s/ Jeffrey Mayer

  
	
   

  	
  Jeffrey Mayer

  
	
   

  	
  Chief Executive Officer

  



 


 


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SCHEDULE A 


INDEMNIFICATION


Recognizing that transactions of the type contemplated in the attached
letter agreement sometimes result in litigation and that Greenhill’s role is
advisory, the Company agrees to indemnify and hold harmless Greenhill, its
affiliates and their respective officers, directors, employees, agents and each
other entity or person, if any, controlling Greenhill or any of its affiliates
(collectively, the “Indemnified Parties”), from and against any losses, claims,
damages, demands and liabilities (or actions or proceedings in respect
thereof), joint or several, related to or arising in any manner out of any
activities performed or services furnished pursuant to the attached letter
agreement, the transactions contemplated thereby or Greenhill’s role in
connection therewith (the “Indemnified Activities”). In addition, the Company
will promptly reimburse the Indemnified Parties for all expenses (including,
without limitation, (but subject to the limitation in the next paragraph on the
availability of indemnification) fees and expenses of legal counsel), as
incurred, in connection with the investigation of, preparation for or defense
of any pending or threatened investigative, administrative, judicial, or
regulatory claim, action or proceeding in any jurisdiction related to or
arising in any manner out of any Indemnified Activities, whether or not in
connection with pending or threatened litigation to which Greenhill (or any
other Indemnified Person) or the Company or any of its securityholders is a
party (collectively, “Proceedings”). Notwithstanding the foregoing, the Company
shall not be liable in respect of any losses, claims, damages, demands,
liabilities or expenses that a court of competent jurisdiction shall have
determined by final nonappealable judgment resulted solely from the gross
negligence or willful misconduct of an Indemnified Party.


Upon receipt by an Indemnified Person of actual notice of a Proceeding
against such Indemnified Person in respect of which indemnity may be sought
hereunder, such Indemnified Person shall promptly notify the Company with
respect thereto. In addition, an Indemnified Person shall promptly notify the
Company after any action is commenced (by way of service with a summons or
other legal process giving information as to the nature and basis of the claim)
against such Indemnified Person in respect of which indemnity may be sought
hereunder. In any event, failure to notify the Company shall not relieve the
Company from any liability which the Company may have on account of this
indemnity or otherwise, except to the extent the Company shall have been
materially prejudiced by such failure. The Company shall have the right to
assume the defense of any Proceeding in respect of which indemnity may be
sought hereunder, including the employment of counsel reasonably satisfactory
to Greenhill and the payment of the fees and expenses of such counsel, in which
event, except as provided below, the Company shall not be liable for the fees
and expenses of any other counsel retained by any Indemnified Person in
connection with such litigation or proceeding. In any such litigation or
proceeding the defense of which the Company shall have so assumed, any
Indemnified


 


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Person shall have the right to participate in such litigation or
proceeding and to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Company and such Indemnified Person shall have mutually agreed in writing to
the retention of such counsel or (ii) the named parties to any such litigation
or proceeding (including any impleaded parties) include the Company and such
Indemnified Person and representation of both parties by the same counsel
would, in the opinion of counsel to such Indemnified Person, be inappropriate
due to actual or potential differing interests between the Company and such
Indemnified Person. The Company shall not be liable for any settlement of any
litigation or proceeding effected without its written consent, but if settled
with such consent or if there is a final judgment against an Indemnified
Person, the Company agrees to indemnify the Indemnified Person from and against
any loss or liability by reason of such settlement or judgment subject to the
limitations on availability of indemnification referred to elsewhere herein.
The Company will not settle any Proceeding in respect of which Indemnity may be
sought hereunder, whether or not any Indemnified Person is an actual or
potential party to such Proceeding, unless such settlement shall include an
unconditional release of all claims against all Indemnified Parties involved in
such Proceeding.


The Company agrees that if any indemnification or reimbursement sought
pursuant to this Schedule A were for any reason not to be available to any
Indemnified Party or insufficient to hold it harmless as and to the extent
contemplated by this Schedule A, then the Company shall contribute to the
amount paid or payable by such Indemnified Party in respect of losses, claims,
damages and liabilities in such proportion as is appropriate to reflect the
relative benefits to the Company, on the one hand, and Greenhill, on the other,
in connection with the transactions contemplated by the attached letter
agreement (whether or not consummated) as well as any other equitable
considerations. It is hereby agreed that the relative benefits to the Company
and to Greenhill with respect to transactions contemplated by the attached
letter agreement shall be deemed to be in the same proportion as (i) the total
value paid or contemplated to be paid by the Company pursuant to transactions contemplated
by the attached letter agreement (whether or not consummated) bears to (ii) the
fees paid or to be paid to Greenhill under the attached letter agreement. In no
event shall the Indemnified Parties be required to contribute or otherwise be
liable for an amount in excess of the aggregate amount of fees actually
received by Greenhill pursuant to the attached letter agreement (excluding
amounts received by Greenhill as reimbursement of expenses).


The Company further agrees that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company or any of its securityholders or creditors for or in connection with
Greenhill’s engagement hereunder or the transactions contemplated by the
attached letter agreement except for losses, claims, damages, liabilities or
expenses that a court of competent jurisdiction shall have determined by final
nonappealable judgment resulted solely from the gross negligence or willful
misconduct of such


 


A-2

















Indemnified Party. The indemnity, reimbursement and contribution
obligations of the Company shall be in addition to any liability which the
Company may otherwise have to an Indemnified Party, shall not be limited by any
rights that an Indemnified Party may otherwise have and shall be binding upon
and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company or an Indemnified Party.


The indemnity, reimbursement and contribution provisions set forth
herein shall remain operative and in full force and effect regardless of (i)
any withdrawal, termination or consummation of or failure to initiate or
consummate any transaction contemplated by the attached letter agreement, (ii)
any investigation made by or on behalf of any party hereto or any person
controlling (within the meaning of Section 15 of the Securities Act of 1933, as
amended, or Section 20 of the Securities Exchange Act of 1934, as amended) any
party hereto, (iii) any termination or the completion or expiration of the
attached letter agreement or Greenhill’s engagement and (iv) whether or not
Greenhill shall, or shall not be called upon to, render any formal or informal
advice in the course of such engagement.


 


	
   

  	
  Very best regards,

  
	
   

  	
   

  	
   

  
	
   

  	
  GREENHILL & CO., LLC

  
	
   

  	
  By:

  	
  /s/ Gregory G. Randolph

  
	
   

  	
   

  	
  Gregory G. Randolph

  
	
   

  	
   

  	
  Managing Director

  



 


	
  Accepted and agreed to as of the date set forth
  above:

  	
   

  
	
   

  	
   

  	
   

  
	
  MxEnergy, Inc.

  	
   

  
	
  By:

  	
  /s/ Jeffrey Mayer

  	
   

  
	
   

  	
  Jeffrey Mayer

  	
   

  
	
   

  	
  Chief Executive Officer

  	
   

  



 


 


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