Exhibit 10.4


 


AMENDED AND RESTATED

LOAN AGREEMENT


 


This Loan
Agreement (this “Agreement”) is entered into this 14th day of November,
2003 between Lathi, LLC a Delaware limited liability company (“Lathi”),
and MxEnergy Inc. a Delaware corporation (“MXE”).


 


RECITALS.


 


1.                                       On
September 6, 2001, MXE and Lathi entered into a loan agreement (the “Original
Loan Agreement”) providing for certain extensions of credit from Lathi to
MXE.


 


2.                                       On
September 6, 2001, MXE and Lathi entered into a Security Agreement pursuant to
which MXE granted to Lathi a security interest in the Security (as defined
therein) to secure MXE’s obligations under the Original Loan Agreement.


 


3.                                       On
July 2, 2002, MXE and Lathi entered into Amendment No. 1 to the Loan Agreement
dated September 6, 2001 (“Amendment No. 1”) and Amendment No. 1 to the
Security Agreement dated September 6, 2001.


 


4.                                       On
September 18, 2002, MXE terminated its energy marketing agreement with Aquila
Energy Market Corporation and, to replace such agreement, MXE entered into an
energy marketing agreement (the “Dominion Agreement”) with Virginia
Power Energy Marketing Inc. (“Dominion”).


 


5.                                       On
September 18, 2002, Dominion and MXE entered into a Security Agreement pursuant
to which MXE granted to Dominion a security interest in the Security (as
defined therein) to secure MXE’s obligations under the Dominion Agreement


 


6.                                       On
September 18, 2002, Lathi entered into an Intercreditor Agreement (the “Intercreditor
Agreement”) with Dominion providing that all liens and security interest of
Lathi in the Dominion Collateral (as defined in the Intercreditor Agreement)
are junior to the liens and security interests of Dominion in the Dominion
Collateral until such time as all obligations of MXE to Dominion under the
Dominion Agreement have been paid in full in cash and all commitments to extend
further credit under the Dominion Agreement have been terminated.


 


7.                                       MXE
and Lathi desire to amend and restate the Original Loan Agreement, as amended
by Amendment No.1, to eliminate the term loan facility and increase the amount
available under the revolving loan facility to $12,000,000.


 


AMENDMENT AND RESTATEMENT:


 


Effective upon
the date all the conditions set forth in Section 4.1 hereof are satisfied (the “Restatement
Date”), which conditions must be satisfied no later than the date provided
therein, the Original Loan Agreement, as amended by Amendment No. 1,
and in effect on the date


 

















 


hereof, is
amended and restated in full as set forth in this Agreement. Terms defined in
this Agreement are cross-referenced in Section 9.


 


1.                                       The
Loans.


 


1.1.                              Loans.
Subject to all the terms and conditions of this Agreement and so long as no
Default exists, from time to time on and after the date hereof and prior to the
date that is forty-eight months after the date hereof, Lathi will make loans to
MXE (each, a “Loan” and collectively, the “Loans”) in such
amounts as may be requested by MXE in accordance with Section 1.2. The
aggregate principal amount of Loans outstanding under this Agreement at any one
time shall not exceed $12,000,000.


 


1.2.                              Borrowing
Requests. MXE may from time to time request a Loan under Section 1.1 by
providing Lathi a borrowing request in the form of Exhibit 1.2 (a “Borrowing
Request”) not later than noon on the business day prior to the requested
date for extension of such Loan (each such date a “Funding Date”)
specifying (a) the amount of the requested loan, which shall be in an amount
not less than $100,000 and (b) the requested Funding Date therefor, which shall
be a business day. Lathi will make such Loan to MXE by wire transfer in
accordance with the instructions set forth on Exhibit 1.2, and shall use its
best efforts to give wire instructions by no later than noon on the specified
Funding Date. Each Borrowing Request shall be accompanied by the documentation
required pursuant to Section 4.2; provided, that, with respect to the initial
Loan under this Agreement, it shall be a further requirement that on or before
the Funding Date thereof (the “Initial Funding Date”), all of the
conditions set forth in Section 4.1 shall have been satisfied.


 


1.3.                              Notes.
MXE’s obligations to pay the Loans shall be evidenced by a grid note of MXE in
the form of Exhibit 1.3 (the “Note”).


 


1.4.                              Use
of Proceeds. MXE will use the proceeds of the Loans for its working capital
and other general corporate purposes occurring in the ordinary course of
business.


 


2.                                       Interest.
The Loans shall accrue and bear interest at a rate of 9.0% per annum, computed
based on actual number of days elapsed over a year of 365 days. Interest shall
be payable quarterly, in arrears, on the last business day of each March, June,
September and December, beginning on the first such date after the Initial
Funding Date. In addition, on any partial or complete payment or prepayment of
principal of the Loans, MXE shall pay the accrued and unpaid interest on any
portion of the Loans so paid or prepaid. Any payment or prepayment on the Loans
shall be deemed to be applied first to interest and then to principal. To the
full extent permitted by law, any interest not paid when due shall bear
interest commencing on the 2nd business day after the due date
thereof at the rate specified for Loans hereunder; provided, that in the event
that applicable law does not permit the charging of interest on interest, or
limits the extent of the same, this sentence shall be deemed to impose such
interest on interest solely to the


 

















 


extent not
violative of such applicable law. Upon the occurrence and during the
continuance of an Event of Default, (x) the outstanding principal amount of the
Loans (and any overdue interest as set forth above) shall bear interest at a
rate of 12.0% per annum, computed and payable as provided above and (y) Lathi
may require accrued interest to be payable on demand or at regular intervals more
frequent than quarterly.


 


3.                                       Payment.


 


3.1.                              Payment
at Maturity. On the Maturity Date or any accelerated maturity of the Loans,
MXE will pay to Lathi an amount equal to the Loans then due, together with all
accrued and unpaid interest with respect thereto. “Maturity Date” means
the date that is sixty-six months after the date hereof, or such later date as
is approved by Lathi in its sole discretion.


 


3.2.                              Voluntary
Prepayments. MXE may from time to time prepay all or any portion of the
Loans (provided that the principal amount to be prepaid shall be in a minimum
amount of $100,000, or such lesser amount as is then outstanding), without
premium or penalty of any type. MXE shall give Lathi at least one business day’s
prior notice of its intention to prepay the Loans under this Section 3.2,
specifying the date of payment, the total amount of the Loans to be paid on
such date and the amount of interest to be paid with such prepayment. Notice of
prepayment having been given in accordance with this Section 3.2, the amount
specified to be prepaid shall become due on the date specified for such
prepayment. The amounts of the Loans prepaid pursuant to this Section 3.2 may
be reborrowed from time to time prior to the Maturity Date in accordance with this Agreement.


 


3.3.                              Mandatory
Prepayments. At any time that MXE fails to satisfy the financial covenants
set forth in Sections 5.1.1 and 5.1.2, MXE shall immediately prepay Loans,
together with all accrued and unpaid interest with respect thereto, to the
extent necessary to bring MXE into compliance with such financial covenants,
without premium or penalty of any type; provided, that the fact that MXE shall,
upon such prepayment, have cured the Event of Default arising from such
non-compliance with Sections 5.1.1 or 5.1.2 shall not affect Lathi’s
entitlement to recover default rate interest accrued during the pendency of
such Event of Default. MXE shall give Lathi at least one business day’s prior
notice of its intention to prepay the Loans under this Section 3.3, specifying
the date of payment and the total amount of the Loans to be paid on such date. Notice
of prepayment having been given in accordance with this Section 3.3, the amount
specified to be prepaid shall become due on the date specified for such
prepayment. The amounts of the Loans prepaid pursuant to this Section 3.3 may
be reborrowed from time to time prior to the Maturity Date in accordance with this Agreement.


 


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3.4.                              Termination
of Commitments. Provided that the Loans, including interest thereon, have
been paid in full, MXE may, in its sole discretion and upon notice to Lathi,
terminate this Agreement, whereupon Lathi’s commitment to lend hereunder shall
irrevocably terminate. Notwithstanding the foregoing, in the event of the
avoidance or recovery of any payment to Lathi hereunder, this Agreement shall
be reinstated as if the payment had not been made; and provided that no
termination of this Agreement shall affect MXE’s obligations under Sections 5.8
and 8 hereof, which shall survive.


 


4.                                       Conditions
to Extending Credit.


 


4.1.                              Conditions
to Initial Loan. The obligations of Lathi to make the initial Loan under
this Agreement shall be subject to the satisfaction, on or before the business
day prior to the Initial Funding Date, of the conditions set forth in this
Section 4.1 as well as the further conditions in Section 4.2. If the conditions
set forth in this Section 4.1 are not met on or prior to the Initial Funding
Date, Lathi shall have no obligation to make any extensions of credit
hereunder.


 


4.1.1.                     Note. MXE
shall have duly executed and delivered to Lathi a Note in the form attached as Exhibit
1.3.


 


4.1.2.                     Amendment
to Shareholders Agreement. The Second Amended and Restated Shareholders
Agreement dated March 5, 2001 by and among MXE, Lathi and the other holders of
capital stock of MXE party thereto, as amended (the “Shareholders Agreement”),
shall have been further amended (such amendment the “Shareholders Agreement
Amendment”) to provide that the date after which Lathi’s demand
registration rights may be exercised shall be March 5, 2005 and to provide that
the parties thereto consent to the Loans to be provided by Lathi hereunder,
which Shareholders Agreement Amendment shall be in substantially the form attached
hereto as Exhibit 4.1.2.


 


4.1.3.                     Issuance
of Warrants. MXE shall have issued to Lathi the following warrants to
purchase shares of MXE common stock (together, the “Warrants”):  (i) a warrant for 378,788 shares of MXE
common stock having an exercise price per share of $7.92; (ii) a warrant for
328,947 shares of MXE common stock having an exercise price per share of $9.12;
(iii) a warrant for 257,732 shares of MXE common stock having an exercise price
per share of $11.64; and (iv) a warrant for 218,341 shares of MXE common stock
having an exercise price per share of $13.74, which Warrants shall be in
substantially the form attached hereto as Exhibit 4.1.3.


 


4.1.4.                     Stock
Purchase Agreement. MXE and Lathi shall have entered into a Stock Purchase
Agreement providing for the purchase by Lathi of 378,788 shares


 


4

















 


of MXE common
stock at a purchase price of $7.92 per share (the “Stock Purchase Agreement”),
which Stock Purchase Agreement shall be in substantially the form attached
hereto as Exhibit 4.1.4.


 


4.1.5.                     Legal
Opinion. On the Restatement Date, Lathi shall have received from Paul, Hastings, Janofsky & Walker LLP,
counsel to MXE, their opinion with respect to the transactions contemplated by
this Agreement, which opinion shall be in substantially the form attached
hereto as Exhibit 4.1.5.


 


4.1.6.                     Officer’s
Certificate. The representations and warranties of MXE set forth or
incorporated by reference herein shall be true and correct as of the
Restatement Date as if originally made on and as of the Restatement Date; no
Default shall have occurred on or prior to the Restatement Date; and Lathi
shall have received a certificate to these effects signed by an officer in the
event the Restatement Date occurs after the date hereof.


 


4.1.7.                     Payment of
Lathi’s Legal Fees and Expenses. MXE shall have paid Lathi’s reasonable
legal fees and expenses incurred in connection with the preparation and
negotiation of this Agreement and in connection with the transactions contemplated
hereby.


 


4.1.8.                     Proper
Proceedings. This Agreement, each other Credit Document and the
transactions contemplated hereby and thereby shall have been authorized by all
necessary proceedings of MXE. All necessary material consents, approvals and
authorizations of any governmental or administrative agency or any other person
with respect to any of the transactions contemplated hereby or by any other
Credit Document shall have been obtained and shall be in full force and effect.


 


4.1.9.                     Amended
and Restated Security Agreement. MXE and Lathi shall have entered into an
Amended and Restated Security Agreement in substantially the form attached
hereto as Exhibit 4.1.9 (the “Security Agreement”).


 


4.1.10.               Payment of
Outstanding Interest. MXE shall have paid to Lathi in cash, by check or
wire transfer of immediately available funds, an amount equal to all accrued
and unpaid interest due under that certain Term Note dated July 2, 2002 in the
principal amount of $3,000,000 issued by MXE to Lathi.


 


4.1.11.               General. All
legal and corporate proceedings in connection with the transactions
contemplated by this Agreement shall be reasonably satisfactory in form and
substance to Lathi and Lathi shall have received copies of all documents,
including certified copies of the charter and by- laws of MXE, records


 


5

















 


of corporate
proceedings, certificates as to signatures and incumbency of officers and
opinions of counsel, which Lathi may have reasonably requested in connection
therewith, such documents where customary or reasonably appropriate to be
certified by proper corporate or governmental authorities.


 


4.2.                              Conditions
to Each Loan. The obligation of Lathi to make any Loan shall be subject to
the satisfaction, on or before the Funding Date therefor, of the following
conditions:


 


4.2.1.                     Intentionally
Omitted.


 


4.2.2.                     Financial
Covenant Compliance and Report. Both before and after giving effect to the
Loan requested to be made on the applicable Funding Date, MXE shall be in
compliance with the financial covenants prescribed in Sections 5.1.1, 5.1.2,
5.1.3 and 5.1.4 as of the close of business on the applicable Funding Date; provided,
that for purposes of calculating such compliance after giving effect to the
Loan, such calculation shall be made on a pro forma basis after giving effect
to the Loan to be made on the applicable Funding Date. MXE shall provide to
Lathi a certificate, substantially in the form of Exhibit 4.2.2, dated
as of such Funding Date, stating that MXE is in compliance with this Section
4.2.2 and setting forth, in reasonable detail, the calculations required by
this Section 4.2.2.


 


4.2.3.                     Commitment
not Exceeded. After giving effect to the Loan requested to be made on the
applicable Funding Date, the aggregate principal amount of the outstanding
Loans shall not exceed $12,000,000.


 


4.2.4.                     No
Default, etc. The representations and warranties contained in Section 6
hereof shall be true and correct in all material respects on and as of such
Funding Date with the same force and effect as though made on and as of such
date (except as to any representation or warranty which refers to a specific
earlier date); no Default shall exist on such Funding Date prior to or
immediately after giving effect to the requested extension of credit, including
that all reports required to be delivered pursuant to Section 5.7 shall have
been timely delivered; and no Material Adverse Change shall have occurred since
June 30, 2000. “Material Adverse Change” means a material adverse change
in the business, assets, financial condition, income or prospects of MXE.


 


4.2.5.                     Officer’s
Certificate. MXE shall have furnished to Lathi in connection with the
requested Loan an officer’s certificate dated as of the proposed Funding Date
certifying to the satisfaction of all of the conditions set forth in this
Section 4.2 in form satisfactory to Lathi.


 


6

















 


5.                                       Covenants.
MXE agrees that, until all Loans shall have been paid in full and until Lathi’s
commitment to extend credit under this Agreement shall have been irrevocably
terminated, MXE will comply with the following provisions:


 


5.1.                              Financial
Covenants.


 


5.1.1.                     Forward
Book Value. As of the close of business of each business day, there shall
be at least 300% coverage of (x) the outstanding balance of the Loans hereunder
(including accrued and unpaid interest) by (y) the difference between (i) the
Forward Book Value Amount minus (ii) the Dominion Indebtedness Amount, that is,
the result of the calculation in clause (y) shall be at least 100% of the
outstanding balance of the Loans; provided, for the avoidance of doubt,
that notwithstanding that this covenant applies on a daily basis, MXE shall
only be obligated to calculate and furnish reports concerning its compliance
with this covenant weekly, pursuant to Section 5.7.4, and as of each proposed
Funding Date. The “Forward Book Value Amount” shall mean the sum of (x)
the net present value of the projected cash flows from MXE’s then current base
of Qualified Accounts (calculated without assuming any renewals by such
customers and assuming a customer cancellation rate of 3% per annum and using
an annual discount rate of 10%) plus (y) the In- Balance Volume. The “Dominion
Indebtedness Amount” shall mean the sum of (a) all outstanding amounts owed
by MXE under the Dominion Agreement, including accrued and unpaid interest,
fees and principal (the “Dominion Indebtedness”) plus (b) any net
hedging obligations of MXE with respect to the Dominion Indebtedness. The “In-Balance
Volume” shall mean the amount of gas resulting from the difference between
(i) gas actually consumed by the MXE customer pool and (ii) gas actually
delivered to such customer pool upon the utility’s request. “Qualified
Accounts” shall mean residential and commercial customer accounts which are
in territories serviced by MXE.


 


5.1.2.                     Total
Asset Value. As of the close of business of each business day, there shall
be at least 200% coverage of (x) the outstanding balance of the Loans hereunder
(including accrued and unpaid interest) by (y) the difference between (i) the
Total Value Amount minus (ii) the Dominion Indebtedness Amount, that is,
the result of the calculation in clause (y) shall be at least 200% of the
outstanding balance of the Loans; provided, for the avoidance of doubt,
that notwithstanding that this covenant applies on a daily basis, MXE shall
only be obligated to calculate and furnish reports concerning its compliance
with this covenant weekly, pursuant to Section 5.7.4, and as of each proposed Funding
Date. The “Total Value Amount” shall mean the sum of (a) the Forward
Book Value Amount plus (b) the Asset Value Amount plus (c) the
Inventory Value Amount. The “Asset Value Amount” shall mean the sum of
the asset values of all


 


7

















 


of the
accounts in MXE’s then current base of Qualified Accounts, calculated using an
asset value for each Qualified Account of the lesser of (1) $100 per RCE or (2)
fair market value as determined by Lathi in its reasonable discretion;
provided, that in the event that Lathi determines, from time to time, that the
fair market value for any Qualified Accounts is less than $100 per RCE, it
shall provide written notice to MXE of such fair market value and, subject to
the requirement that Lathi have exercised reasonable discretion, the parties
shall adopt such fair market value as the basis for calculating the asset value
of such Qualified Accounts until such notice is modified or revoked. The “Inventory
Value Amount” shall mean the value of MXE’s inventory, which shall be equal
to the lesser of (1) the value attributed to such inventory by Dominion or (2)
the value of such inventory calculated using the weighted average accounting
method; provided, that it is understood and acknowledged that the value
of MXE’s inventory is calculated based, in whole or in part, on estimated
inventory valuations and MXE’s obligation hereunder shall be to make such
calculations based on the best information available to it, and MXE shall not
be obligated to re-calculate the Inventory Value Amount upon the receipt of
actual inventory valuations for dates which have already been reported, but
only to use the information concerning actual inventory values as part of the
information used by it to calculate current inventory values; and provided,
for the avoidance of doubt, that where estimated inventory data was utilized by
MXE in calculating its compliance with this covenant as of a particular date,
and such estimated data was the best information available to MXE as of such
date, and actual inventory data is subsequently received by MXE, no Default or
Event of Default shall arise solely by virtue of the fact that a recalculation
of the foregoing covenant for such date using such actual inventory data would
show a failure to meet the required coverage level. An “RCE” shall mean
Qualified Accounts (or portions thereof) which account for 100 MMBTUs of annual
natural gas consumption or 10MWH of electricity consumption.


 


5.1.3.                     Minimum
Account Base. MXE shall at all times have a customer base of not less than
81,000 Qualified Accounts.


 


5.1.4.                     Consolidated
EBITDA. For each period of four consecutive fiscal quarters of MXE,
Consolidated EBITDA shall equal or exceed $6,000,000. “Consolidated EBITDA”
means, for any period, the total of: (a) net income (or loss) of MXE and its
subsidiaries, on a consolidated basis (“Consolidated Net Income”); plus
(b) all amounts deducted in computing such Consolidated Net Income in respect
of: (i) depreciation, amortization and unusual noncash charges (other than the
write-down of current assets), (ii) interest expense, (iii) income tax expense,
and (iv) customer acquisition costs if MXE has chosen to change its accounting
policy and expense these costs in the period incurred, minus (c) all
cash payments made during such period on account of reserves, restructuring


 


8

















 


charges and
other noncash charges added back to Consolidated EBITDA in a previous period, minus
(d) all amo unts included in Consolidated Net Income in respect of deferred
income tax benefits and other noncash income items, in each case computed in
accordance with generally accepted accounting principles consistently applied (“GAAP”).


 


5.2.                              Incurrence
of Indebtedness. MXE shall not without the prior consent of Lathi create,
incur, assume, or otherwise become or remain liable with respect to liabilities
of any kind other than Permitted Indebtedness. “Permitted Indebtedness”
shall mean (i) Dominion Indebtedness; (ii) indebtedness to Lathi hereunder and
under the Note; (iii) indebtedness secured under purchase money security
interests (including mortgages, conditional sales, capital leases and other
title retention or deferred purchase devices) so long as (x) the lien is
limited to the property whose acquisition was funded, or refinanced, through
the incurrence of such indebtedness; (y) such indebtedness is limited in
recourse to the applicable financed property or the amount of such indebtedness
does not exceed the lesser of (a) the purchase price or construction cost of
said property and (b) the fair market value of said property; and (z) the
indebtedness was incurred within 60 days after the initial acquisition of the
applicable property; (iv) liabilities incurred in the ordinary course of
business secured by carriers, warehouses, mechanics and similar liens, so long
as MXE is paying on a timely and current basis all amounts due secured by such
liens (other than items which are the subject of a bona fide dispute and as to
which appropriate reserves exist); (v) liabilities represented by judgments and
awards, so long as the amount of same are fully insured and the insurer has
acknowledged coverage; (vi) trade payables for goods and services provided to
MXE in the ordinary course of business, which are being paid currently; (vii)
liabilities incurred under operating leases and contracts in the ordinary
course of MXE’s business as to which no default giving rise to acceleration or
a notice of acceleration has occurred; and (viii) tax liabilities incurred and
payable in the ordinary course of business, as to which all material reports,
filings and returns have been timely made or filed (taking into account any
extensions) and as to which all material taxes have been paid when due (other than
taxes which are the subject of a bona fide dispute and for which appropriate
reserves have been established). MXE shall not consent to any amendment to the
Dominion Agreement without the prior written consent of Lathi, which consent
shall not be unreasonably withheld.


 


5.3.                              Limitation
on Mergers and Similar Transactions. None of MXE or any of MXE’s
subsidiaries shall consolidate or amalgamate with, or merge into, or transfer
all or substantially all its assets to, another entity (other than a merger of one
wholly-owned subsidiary of MXE with another wholly-owned subsidiary of MXE or a
merger of a wholly-owned subsidiary of MXE with MXE) if, at the time of such
consolidation, amalgamation, merger or transfer, the transaction has not been
approved in advance by Lathi (which approval shall be in Lathi’s sole
discretion) and, if the transaction involves MXE or a transfer of all or
substantially of its assets (including interests in subsidiaries),


 


9

















 


the transferee
or survivor assumes all of MXE’s obligations hereunder and under the Note.


 


5.4.                              Compliance
with Applicable Law. MXE shall comply in all material respects with all
laws, statutes, rules, regulations, orders, and decrees applicable to it.


 


5.5.                              Limitation
on Distributions. Without the prior written consent of Lathi, MXE shall not
make any Distribution (as defined below) to any person (other than Lathi). “Distribution”
means (A) the declaration or payment of any dividend or other distribution of
any kind on or in respect of the capital stock of or other interest in MXE, (B)
the purchase, redemption, or other retirement of any capital stock or other
equity interest in MXE (or rights exercisable or exchangeable therefor), (C)
any other distribution on or in respect of any capital stock or other interest
in MXE (or rights exercisable or exchangeable therefor), including without
limitation any distributions made upon the liquidation or dissolution of MXE,
and (D) any payment of principal or interest with respect to, or any purchase,
redemption, or defeasance of, any indebtedness of MXE which is not Permitted
Indebtedness; provided, that any such dividends, distributions,
purchases, redemptions, retirements or payments which are in the form of
issuances of common equity not subject to mandatory repurchase by MXE shall not
be deemed to be a Distribution for purposes of this Section 5.5.


 


5.6.                              Limitation
on Business Activity. Without the prior written consent of Lathi, MXE will
not engage in any business other than the purchase and sale of natural gas and
electricity; provided that MXE may engage in businesses that are
complementary to the purchase and sale of natural gas with Lathi’s prior
written consent, not to be unreasonably withheld. MXE will not own any interest
in any subsidiaries other than Infometer.com Inc., a Delaware corporation (“Infometer”),
OnlineChoice Inc., a Delaware corporation (“OnlineChoice”), MxEnergy
Electric Inc., a Delaware corporation (“MxEnergy Electric”), MxEnergy
(Canada) Ltd., a Canadian corporation (“ MxEnergy Ltd.”) which are all
wholly owned subsidiaries of MXE, without the prior written consent of Lathi; provided
that MXE may create and/or increase its investment in Infometer, MxEnergy
Electric, OnlineChoice and MxEnergy Ltd. with Lathi’s prior written consent,
not to be unreasonably withheld.


 


5.7.                              Financial
Statements and Reports. MXE shall maintain a system of accounting in which
correct entries shall be made of all transactions in relation to their business
and affairs in accordance with GAAP. The fiscal year of MXE and its
subsidiaries shall end on June 30 in each year and the fiscal quarters of MXE
and its subsidiaries shall end on March 31, June 30, September 30 and December
31 in each year.


 


5.7.1.                     Annual
Reports. MXE shall furnish to Lathi as soon as available, and in any event
within 90 days after the end of each fiscal year, the balance sheet of


 


10

















 


MXE as of the
end of such fiscal year, and the statements of income, changes in shareholder
equity and cash flows of MXE for such fiscal year and comparative figures for
the immediately preceding fiscal year, all consistent in scope and detail to
the audited financial statements for MXE’s fiscal year ended June 30, 2000
previously provided to Lathi, and accompanied by: (i) reports of independent
certified public accountants of recognized national standing reasonably
satisfactory to Lathi containing no material qualification, to the effect that
they have audited the foregoing financial statements in accordance with
generally accepted auditing standards and that such financial statements
present fairly, in all material respects, the financial position of MXE at the
dates thereof and the results of their operations for the periods covered thereby
in conformity with GAAP; and (ii) a certificate of the chief financial officer
of MXE to the effect that such officer has caused this Agreement to be reviewed
and has no knowledge of any Default, or if such officer has such knowledge,
specifying such Default and the nature thereof, and what action MXE has taken,
is taking or proposes to take with respect thereto.


 


5.7.2.                     Monthly
Reports. MXE shall furnish to Lathi as soon as available and, in any event,
within 60 days after the end of each month, the internally prepared balance
sheet of MXE as at the end of such month and the statement of income for such
month (in substantially the form of Exhibit 5.7.2), all accompanied by a
certificate of the chief financial officer of MXE to the effect that such financial
statements were prepared in accordance with GAAP and present fairly, in all
material respects, on a summary basis the financial position of MXE at the
dates thereof and the results of their operations for the periods covered
thereby, subject only to normal year-end audit adjustments and the addition of
footnotes. In addition, for each month that is also the end of a fiscal
quarter, such monthly report shall also include a certificate of a duly
authorized officer of MXE providing a calculation of the covenant set forth in
Section 5.1.4 and setting forth a reasonably detailed calculation of the basis
for such calculation.


 


5.7.3.                     Customer
Reports. MXE shall furnish to Lathi within 20 days after the end of each
month a report (in substantially the form of Exhibit 5.7.3) listing the
states in which MXE is then operating, the total number of RCEs in each such
state and the amount of the receivables guarantee provided by the utilities
with which MXE conducts business in each such state.


 


5.7.4.                     Compliance
Report. MXE shall provide to Lathi on Wednesday of every week, a report, in
substantially the form as the weekly report provided by MXE to Lathi as of the
date hereof, dated as of the preceding Friday, providing calculations of the
covenants set forth in Section 5.1.1, 5.1.2 and 5.1.3, stating that MXE is in
compliance with such covenants set forth in Section 5.1.1, 5.1.2


 


11

















 


and 5.1.3
hereof and setting forth a reasonably detailed calculation of the basis for
such calculation.


 


5.7.5.                     Notice of
Litigation, Defaults, etc. MXE shall promptly furnish to Lathi notice of
any litigation or any administrative or arbitration proceeding (a) which
creates a material risk of resulting, after giving effect to any applicable
insurance, in the payment by MXE of more than $100,000 or (b) which results, or
creates a material risk of resulting, in a Material Adverse Change. Promptly
upon acquiring knowledge thereof, MXE shall notify Lathi of the existence of
any Default or Material Adverse Change, specifying the nature thereof and what
action MXE has taken, is taking or proposes to take with respect thereto.


 


5.8.                              Confidentiality.
MXE shall maintain confidential the identity of Lathi and its affiliates and
the existence and terms of this Agreement and the Loans: provided, however,
that MXE may disclose any such information with the prior consent of Lathi; and
provided further, however, that MXE may disclose such of the foregoing
information as is reasonably necessary in connection with the conduct of its
business in order to provide information to, and respond to requests for
information from, its customers, suppliers, lenders, investors, auditors,
regulatory bodies or other governmental authorities or in connection with any
subpoena or other legal process; provided that solely in connection with any
information sought through subpoena or other legal process, MXE will notify
Lathi prior to making any responsive disclosure in order to permit Lathi the
opportunity to contest such disclosure, and shall provide reasonable
cooperation in the same. None of Lathi or any of its affiliates shall have, and
MXE will in no event represent or otherwise in any way imply or intimate that
Lathi or any of its affiliates has, any involvement in or is in any way
responsible for or liable in respect of any obligation or liability of MXE. Notwithstanding
the foregoing, the parties may disclose to any and all persons, without
limitation of any kind, the tax treatment and any facts that may be relevant to
the tax structure of the transaction; provided, however, that no party shall
disclose any other information (including the identity of any party and any
information that could lead another to determine the identity of any party).


 


5.9.                              Covenant
to Negotiate in Good Faith. MXE covenants to negotiate in good faith with
any Eligible Buyer. “Eligible Buyer” means a potential buyer of all or
any portion of the outstanding capital stock of MXE, whether by stock purchase,
merger, consolidation or otherwise, or all or a substantial portion of the
assets of MXE (such a transaction, a “Transaction”) that shall have
proposed or indicated a willingness to propose a purchase price that is based
on a valuation of MXE equal to or in excess of $200 per Qualified Account; provided,
that nothing in this Agreement shall be deemed to require MXE to enter into a
Transaction that is conditioned upon the provision of non-competition covenants
from the selling stockholders or members of management as a condition to such
Transaction.


 


12

















 


6.                                       Representations
and Warranties of MXE. MXE represents and warrants to Lathi as of the date
hereof and as of each extension of credit hereunder as follows:


 


6.1.                              Organization.
MXE is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware.


 


6.2.                              Authorization;
Enforceability. MXE has the power to execute and deliver this Agreement,
the Note, the Shareholders Agreement Amendment, the Security Agreement and the
Warrants (collectively, the “Credit Documents”) and to perform its
obligations hereunder and thereunder, and has taken all necessary action to
authorize such execution, delivery, and performance. The obligations of MXE
under the Credit Documents constitute its legal, valid, and binding
obligations, enforceable in accordance with their respective terms (except to
the extent that enforcement may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium, or similar laws affecting creditors’
rights generally and by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies).


 


6.3.                              Noncontravention.
The execution, delivery, and performance by MXE of the Credit Documents do not
violate or conflict with any law applicable to MXE, any provision of its
charter documents, any order or judgment of any court or other government
agency applicable to it or any of its assets, or any contractual restriction
binding on or affecting it or any of its assets.


 


6.4.                              Consents.
All material governmental and other consents that are required to have been
obtained by MXE with respect to the execution of the Credit Documents and the
performance thereof have been obtained and are in full force and effect.


 


6.5.                              Litigation.
There is not pending or, to MXE’s knowledge after due inquiry, threatened
against MXE any action, suit, or proceeding at law or in equity or before any
court, tribunal, governmental body, agency, or official or any arbitrator that
has resulted, or creates a material risk of resulting, in a Material Adverse
Change or which seeks to enjoin the consummation of or which questions the
validity of any of the transactions contemplated by the Credit Documents.


 


6.6.                              Financial
Statements and Other Information. MXE has previously furnished to the Lathi
copies of the following:


 


6.6.1.                     The audited
balance sheet of MXE as at June 30, 2003 and the audited statements of income,
changes in shareholders’ equity and cash flows of MXE for the fiscal year of
MXE then ended.


 


13

















 


6.6.2.                     The audited
financial statements (including the notes thereto) referred to in Section 6.6.1
above were prepared in accordance with GAAP and fairly present in all material
respects the financial position of MXE at the date thereof and the results of
its operations for the period covered thereby. MXE has no contingent liability
material to MXE which is not reflected in the balance sheets referred to in
Section 6.6.1 above (or delivered pursuant to Sections 5.7.1 or 5.7.2) or in
the notes thereto.


 


6.7.                              Indebtedness.
MXE is not liable with respect to (a) any indebtedness for borrowed money
except for (i) indebtedness under the Dominion Agreement, (ii) indebtedness to
Lathi hereunder and under the Note, or (iii) indebtedness set forth on Schedule
6.7 hereto, or (b) any other liability other than Permitted Indebtedness.


 


6.8.                              Defaults.
MXE is not in default under any provision of its charter or by- laws or of the
Dominion Agreement (other than immaterial defaults under the Dominion
Agreement) or the Credit Documents. MXE is not in default under any provision
of any agreement, instrument, deed or lease to which it is party or by which it
or its property is bound so as to result, or create a material risk of
resulting, in any Material Adverse Change.


 


6.9.                              Warrants.
The shares of MXE common stock issuable upon exercise of the Warrants (the “Warrant
Shares”) have been duly authorized and reserved for issuance by MXE. The
issuance, sale and delivery of the Warrants and, upon the proper exercise of
the Warrants, the issuance and delivery of the Warrant Shares have been duly
authorized by all required corporate action. The Warrant Shares, when issued
upon the proper exercise of the Warrants and the payment of any applicable
exercise price thereunder, will be validly issued, fully paid and nonassessable
and will be free and clear of all liens, charges, restrictions, claims and
encumbrances imposed by or through MXE other than pursuant to the Shareholders
Agreement. Neither the issuance, sale or delivery of the Warrants nor the
issuance or delivery of the Warrant Shares is subject to any preemptive right
of stockholders of MXE arising under law or the Certificate of Incorporation or
By-laws of MXE, as amended, or to any contractual right of first refusal or
other right in favor of any person.


 


6.10.                        Disclosure.
Neither the Credit Documents nor any financial statement, report, notice,
mortgage, assignment or certificate furnished or to be furnished to Lathi on behalf
of MXE contains any untrue statement of material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.
No fact is actually known to MXE which has resulted, or in the future (so far
as MXE can reasonably foresee) will result, or creates a material risk of
resulting, in any Material Adverse Change, except to


 


14

















 


the extent
that present or future general economic conditions may result in a Material
Adverse Change.


 


7.                                       Defaults,
Events of Default.


 


7.1.                              Default.
As used herein, a “Default” is any Event of Default and any event or
condition which, with the passage of time or giving of notice or both, would
become an Event of Default, including the filing against MXE of a petition
commencing an involuntary case in bankruptcy.


 


7.2.                              Event
of Default. Each of the following events is herein referred to as an “Event
of Default”:


 


7.2.1.                     Payment.
MXE shall fail to make any payment (x) in respect of principal of the Loans as
the same shall become due, whether at maturity, upon required or scheduled
prepayment, by acceleration or otherwise, or (y) in respect of interest on the
Loans and, in the case of clause (y), such failure shall continue for a period
of two (2) business days; or


 


7.2.2.                     Breach of
Covenant. MXE shall fail to perform or observe (x) any of the provisions of
Section 1.4 or of Section 5 (other than defaults under any of Sections 5.2,
5.6, or 5.8 which are not material, individually or in the aggregate) of this
Agreement, or (y) in any material respect, any other covenant, agreement, or
provision to be performed or observed by it under the Credit Documents, and, in
the case of clause (y) such failure shall not be rectified or cured to the
satisfaction of Lathi within thirty (30) days of notice to MXE by Lathi; or


 


7.2.3.                     Breach of
Representation. Any representation or warranty of or with respect to MXE
made herein shall prove to have been false in any material respect on the date
as of which it was made or deemed to be made; or


 


7.2.4.                     Cross-Default.


 


(a)                                  MXE
shall fail to make any payment under the Dominion Agreement when due (after
giving effect to any applicable grace periods);


 


(b)                                 MXE
shall fail to perform or observe the terms of the Dominion Agreement, and such
failure shall continue, without having been duly cured, waived or consented to,
beyond the period of grace, if any, specified in such agreement or instrument,
and any notices required under the Dominion Agreement, if any, for such failure
to constitute an event of


 


15

















 


default under
the Dominion Agreement have been given, and such failure shall permit the
acceleration of any Dominion Indebtedness;


 


(c)                                  all
or any part of the amounts due under the Dominion Agreement shall be
accelerated or shall become due or payable prior to its stated maturity for any
reason whatsoever (except with respect to voluntary prepayments or mandatory
contingent payments that do not result from a default thereunder or the
occurrence of an event similar to an Event of Default hereunder);


 


(d)                                 any
foreclosure or other enforcement action shall be commenced with respect to any
lien on any property of MXE securing amounts due under the Dominion Agreement;
or


 


7.2.5.                     Bankruptcy,
etc. MXE shall be involved in financial difficulties as evidenced by: (a)
its commencement of a voluntary case under Title 11 of the United States Code
as from time to time in effect, or by its authorizing, by appropriate
proceedings of its board of directors or other governing body, the commencement
of such a voluntary case; (b) the commencement of an involuntary case under
said Title 11 and such case is not dismissed within 45 days; (c) its filing an
answer or other pleading admitting or failing to deny the material allegations
of a petition filed against it commencing an involuntary case under said Title
11, or seeking, consenting to, or acquiescing in the relief therein sought or provided,
or by failing to controvert timely the material allegations of any such
petition; (d) the entry of an order for relief in any involuntary case
commenced under said Title 11; (e) its seeking relief as a debtor under any
applicable law, other than said Title 11, of any jurisdiction, whether within
or without the United States of America, relating to the insolvency,
liquidation, or reorganization of debtors or the modification or alteration of
the rights of creditors, or by its consenting to or acquiescing in such relief
or any involuntary case or petition filed or made therefor (including without
limitation making or seeking to make any arrangement or composition with its
creditors, seeking any order or arrangement for rehabilitation or for the appointment
of any receiver, administrative receiver, administrator, trustee, or person
performing similar functions, or instituting supervisory proceedings or
proceedings for court administration or similar proceedings in any
jurisdiction); (f) the commencement of any involuntary case or proceeding of
the nature referred to in (e) above and such case is not dismissed within 45
days; (g) the passing of any resolution by its members, shareholders, partners,
or other controllers to effect, approve or seek its winding up, dissolution or
liquidation; (h) the entry of any order by a court, tribunal, or other
authority of competent jurisdiction finding it to be bankrupt or insolvent,
ordering or approving its liquidation, winding up, dissolution, or


 


16

















 


reorganization
or any modification or alteration of the rights of its creditors, or assuming
custody of, or appointing a receiver, administrator, administrative receiver,
trustee, custodian, or other person performing similar functions for all, or a
substantial part, of its property or business; (i) its making an assignment for
the benefit of, or entering into a composition or other arrangement with, its
creditors, or appointing or consenting to the appointment of a receiver,
administrator, administrative receiver, trustee, custodian, or other person
performing similar functions for all or a substantial part of its property or
business; or (j) its admission in writing of its inability to pay its debts as
they become due; or


 


7.2.6.                     Certain
Proceedings. Any federal or state agency, court, tribunal, or other
governmental entity or regulatory body of any kind of any jurisdiction within
or without the United States or any creditor of MXE shall file any petition or
seek any appointment specified in Section 11(d) or under the Securities
Investor Protection Act or under any applicable law or regulation, whether of
the United States of America or any other jurisdiction, providing for the
protection of investors, with respect to such party which petition is not
vacated within 60 days; or


 


7.2.7.                     Revocation
of License. Any authorization, consent, approval, license, exemption of, or
filing or registration with any court, tribunal, or governmental department,
commission, board, bureau, agency, or instrumentality, securities exchange, or
association, whether of the United States of America or any other jurisdiction
(each, a “License”), required for MXE’s execution of this Agreement or
the Note or performance of its obligations hereunder or thereunder or otherwise
required for MXE to engage in its business as now conducted or contemplated by
this Agreement or the Note shall be revoked or suspended or shall fail to be
renewed by any agency, court, tribunal, or other governmental entity or regulatory
body of any political subdivision of any kind in any jurisdiction whether or
not of or located in the United States, or if any such person or entity shall
take any disciplinary action against MXE, or make any order restricting the
activities of MXE or its ability to dispose of its assets, which in the opinion
of Lathi has or could have a materially adverse effect on the ability of MXE to
perform its obligations hereunder or result in a Material Adverse Change; or


 


7.2.8.                     Violation
of Law. MXE shall engage in any activity which is violative, in any
material respect, of any law, rule, or regulation (includ ing without
limitation any rule or by-law of any exchange, securities association, or
self-regulating organization) relating to any part of its business if such
violation could result in a penalty or revocation of license which is
materially adverse to its business; or


 


17

















 


7.2.9.                     Enforceability,
etc. Any of the Credit Documents shall cease for any reason (other than the
scheduled termination thereof in accordance with its terms) to be enforceable
in accordance with its terms or in full force and effect in an material
respect; or any party thereto shall so assert in a judicial or similar
proceeding; or the security interests created by the Security Agreement shall
cease to be enforceable and of the same effect and priority purported to be
created hereby.


 


7.3.                              Certain
Actions Following an Event of Default. If any one or more Events of Default
shall occur, then in each and every such case:


 


7.3.1.                     Terminate
Obligation to Extend Credit. Lathi may, in its sole discretion, terminate
its obligation to make any further extensions of credit under this Agreement by
furnishing notice of such termination to MXE; provided, however,
that if such Event of Default is triggered by the occurrence of any of the
events described in Section 7.2.5 hereof, Lathi’s obligation to make any
further extensions of credit under the Credit Documents shall automatically
terminate.


 


7.3.2.                     Specific
Performance; Exercise of Rights. Lathi may, in its sole discretion, proceed
to protect and enforce its rights by suit in equity, action at law and/or other
appropriate proceeding, either for specific performance of any covenant or
condition contained in the Credit Documents or in any instrument or assignment
delivered to Lathi pursuant to this Agreement or any other Credit Document.


 


7.3.3.                     Acceleration.
Lathi may, in its sole discretion, by notice in writing to MXE declare all or
any part of the unpaid balance of the Loans then outstanding to be immediately
due and payable; provided, however, that if such Event of Default
is triggered by the occurrence of any of the events described in Section 7.2.5
hereof, the unpaid balance of the Loans shall automatically become immediately
due and payable.


 


7.3.4.                     Enforcement
of Payment; Credit Security; Setoff. Lathi may, in its sole discretion,
proceed to enforce payment of the Loans in such manner as it may elect and to
realize upon any and all rights in the collateral pledged pursuant to the
Security Agreement. Lathi may offset and apply toward the payment of the Loans
(and/or toward the curing of any Event of Default) any indebtedness owing from
Lathi to MXE, regardless of the adequacy of any security for the Loans;
provided, that Lathi shall provide notice of any such offset to MXE within a
reasonable period following such offset. Lathi shall have no duty to determine
the adequacy of any such security in connection with any such offset.


 


18

















 


7.3.5.                     Cumulative
Remedies. To the extent not prohibited by applicable law which cannot be
waived, all of Lathi’s rights hereunder and under each other Credit Document
shall be cumulative.


 


7.3.6.                     Annulment
of Defaults. Once an Event of Default has occurred, such Event of Default
shall be deemed to exist and be continuing for all purposes of the Credit
Documents until Lathi shall have waived such Event of Default in writing, the
same has been manifestly cured or cured to Lathi’s reasonable satisfaction, or
Lathi and MXE shall have entered into an amendment to this Agreement which by
its express terms cures such Event of Default, at which time such Event of
Default shall no longer be deemed to exist or to have continued. No such action
by Lathi shall extend to or affect any subsequent Event of Default or impair
any of Lathi’s rights of upon the occurrence thereof or, unless expressly
stated, operate as a waiver of any default rate interest that has accrued
during the pendency of such Event of Default. The making of any extension of
credit during the existence of any Default or Event of Default shall not
constitute a waiver thereof.


 


7.3.7.                     Waivers.
To the extent that such waiver is not prohibited by the provisions of
applicable law that cannot be waived, MXE hereby waives:


 


(a)                                  all
presentments, demands for performance, notices of nonperformance (except to the
extent required by this Agreement or any other Credit Document), protests,
notices of protest and notices of dishonor;


 


(b)                                 any
requirement of diligence or promptness on the part of Lathi in the enforcement
of its rights under this Agreement or any other Credit Document;


 


(c)                                  any
and all notices of every kind and description which may be required to be given
by any statute or rule of law; and


 


(d)                                 any
defense (other than indefeasible payment in full) which it may now or hereafter
have with respect to its liability under this Agreement or any other Credit
Document.


 


8.                                       Indemnification.
MXE agrees to indemnify, defend, and hold and save harmless Lathi and its
employees, agents, directors, members, management, officers or other affiliates
(collectively, “Indemnitees”) from any and all losses, damages, claims,
actions, demands, or lawsuits of any kind whatsoever (including reasonable
attorneys’ fees) arising in any way directly


 


19

















 


or indirectly
out of the transactions contemplated by the Credit Documents, except such as
may be caused by the gross negligence or willful misfeasance of the applicable
Indemnitee.


 


Any remedy
provided to Lathi or its affiliates in this Agreement, in the Note or the
Security Agreement shall not be exclusive, and a party shall be entitled to
exercise all rights and take advantage of all remedies available to it under
applicable law.


 


9.                                       Definitional
Cross-References. Each of the following terms is defined in the Section or
reference set forth opposite such term below: 


 


	
  Defined Term

  	
   

  	
  Definition

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Amendment
  No. 1

  	
   

  	
  Recitals

  
	
  Asset Value
  Amount

  	
   

  	
  Section
  5.1.2

  
	
  Borrowing
  Request

  	
   

  	
  Section 1.2

  
	
  Credit
  Documents

  	
   

  	
  Section 6.2

  
	
  Consolidated
  EBITDA

  	
   

  	
  Section
  5.1.3

  
	
  Consolidated
  Net Income

  	
   

  	
  Section
  5.1.3

  
	
  Default

  	
   

  	
  Section 7.1

  
	
  Distribution

  	
   

  	
  Section 5.5

  
	
  Dominion

  	
   

  	
  Recitals

  
	
  Dominion
  Agreement

  	
   

  	
  Recitals

  
	
  Dominion
  Indebtedness

  	
   

  	
  Section
  5.1.1

  
	
  Dominion
  Indebtedness Amount

  	
   

  	
  Section
  5.1.1

  
	
  Eligible
  Buyer

  	
   

  	
  Section 5.9

  
	
  Event of
  Default

  	
   

  	
  Section 7.2

  
	
  Forward Book
  Value Amount

  	
   

  	
  Section
  5.1.1

  
	
  Funding Date

  	
   

  	
  Section 1.2

  
	
  GAAP

  	
   

  	
  Section
  5.1.3

  
	
  In-Balance
  Volume

  	
   

  	
  Section
  5.1.1

  
	
  Infometer

  	
   

  	
  Section 5.6

  
	
  Initial
  Funding Date

  	
   

  	
  Section 1.2

  
	
  Indemnitees

  	
   

  	
  Section 8

  
	
  Intercreditor
  Agreement

  	
   

  	
  Recitals

  
	
  Inventory
  Value Amount

  	
   

  	
  Section
  5.1.2

  
	
  Lathi

  	
   

  	
  Preamble

  
	
  License

  	
   

  	
  Section
  7.2.7

  
	
  Loan(s)

  	
   

  	
  Section 1.1

  
	
  Material
  Adverse Change

  	
   

  	
  Section
  4.2.4

  
	
  Maturity
  Date

  	
   

  	
  Section 3.1

  
	
  MXE

  	
   

  	
  Preamble

  
	
  MXEnergy
  Electric

  	
   

  	
  Section 5.6

  
	
  MXEnergy
  Ltd.

  	
   

  	
  Section 5.6

  



 


20

















 


	
  Note

  	
   

  	
  Section 1.3

  
	
  OnlineChoice

  	
   

  	
  Section 5.6

  
	
  Original
  Loan Agreement

  	
   

  	
  Recitals

  
	
  Permitted
  Indebtedness

  	
   

  	
  Section 5.2

  
	
  Qualified
  Accounts

  	
   

  	
  Section
  5.1.1

  
	
  RCE

  	
   

  	
  Section
  5.1.2

  
	
  Restatement
  Date

  	
   

  	
  Preamble

  
	
  Security
  Agreement

  	
   

  	
  Section
  4.1.9

  
	
  Shareholders
  Agreement

  	
   

  	
  Section
  4.1.2

  
	
  Shareholders
  Agreement Amendment

  	
   

  	
  Section
  4.1.2

  
	
  Stock
  Purchase Agreement

  	
   

  	
  Section
  4.1.4

  
	
  Total Value
  Amount

  	
   

  	
  Section
  5.1.2

  
	
  Transaction

  	
   

  	
  Section 5.9

  
	
  Warrant
  Shares

  	
   

  	
  Section 6.9

  
	
  Warrants

  	
   

  	
  Section
  4.1.3

  



 


10.                                 Miscellaneous.


 


10.1.                        Assignment.
Neither this Agreement nor the Note shall be assignable by MXE (nor any obligation
delegated) without the prior written consent of Lathi. This Agreement and the
Note shall be assignable by Lathi (i) with MXE’s consent, not to be
unreasonably withheld or (ii) following and during the pendency of an Event of
Default. Subject to the foregoing, this Agreement and the Note shall be freely
assignable, in whole or in part, and upon such assignment shall be binding upon
and shall inure to the benefit of the parties and their respective successors
and assigns.


 


10.2.                        Governing
Law. This Agreement shall be governed
by and construed in accordance with the laws (other than the conflict of laws
rules) of the State of Connecticut, and each of the parties hereto hereby
submits to the non-exclusive jurisdiction of the state courts of the State of
New York and to the non-exclusive jurisdiction of the United States District
Court for the Southern District of New York for the purpose of any suit,
action, or other proceeding arising out of or based upon this Agreement or the
Note or the subject matter hereof or thereof. Each party hereby (a) waives any
objection it may have at any time to the laying of venue of any claim, suit, or
proceedings brought in any such court, waives any claim that such claim, suit,
or proceedings have been brought in an inconvenient forum, and waives the right
to object, with respect to such claim, suit, or proceedings, that such court
does not have jurisdiction over such party and (b) consents to service of
process by means permitted under the applicable rules of any of the state
courts of such State or of such United States District Court at any time in
effect, including without limitation by means of certified or registered mail.


 


21

















 


10.3.                        Severability.
The invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of any other term or provision hereof.


 


10.4.                        Merger.
This Agreement, together with the Note, the Security Agreement, the
Shareholders Agreement Amendment, the Warrants, the Intercreditor Agreement,
the Warrant dated July 2, 2002 for 285,928 shares of MXE common stock, the
Stock Purchase Agreement, and Amendment No. 1 dated July 2, 2002 to the
Shareholders Agreement dated March 5, 2002 between MXE and the shareholders named
therein, constitute the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersedes all prior and contemporaneous
understandings and agreements, whether written or oral.


 


10.5.                        Counterparts.
This Agreement may be executed in counterparts, each of which will be deemed an
original, but all of which taken together shall constitute one instrument.


 


10.6.                        Amendments.
No amendment, modification, or waiver of or in respect of this Agreement or any
right arising under or in respect of this Agreement will be effective unless in
writing and executed by both parties hereto.


 


10.7.                        Notice.
All notices, requests, and demands to or upon MXE or Lathi shall be deemed
effective upon receipt and shall be given in writing (including by facsimile
transmission), as follows: 


 


	
  If to MXE:

  	
  MxEnergy
  Inc.

  
	
   

  	
  20 Summer
  Street

  
	
   

  	
  5th
  Floor

  
	
   

  	
  Stamford, CT
  06901

  
	
   

  	
  Telephone
  No.: 203-356-1318

  
	
   

  	
  Facsimile
  No.: 203-425-9562

  
	
   

  	
  Attention:
  Robi Artman-Hodge

  
	
   

  	
   

  
	
  If to Lathi:

  	
  Lathi, LLC

  
	
   

  	
  600 Atlantic
  Avenue

  
	
   

  	
  Boston, MA
  02210

  
	
   

  	
  Telephone
  No.: 617-523-7698

  
	
   

  	
  Facsimile
  No.: 617-878-6916

  
	
   

  	
  Attention:
  Megan Kelleher

  



 


22

















 


IN WITNESS
WHEREOF, the parties hereto have executed this Agreement on the date first
above written.


 


	
   

  	
  MXENERGY INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey
  A. Mayer

  	
   

  
	
   

  	
   

  	
  Name:
  Jeffrey A. Mayer

  
	
   

  	
   

  	
  Title:
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LATHI, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Harvard
  Management Company, Inc.,

  
	
   

  	
   

  	
  pursuant to delegated authority

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  [ILLEGIBLE]

  	
   

  
	
   

  	
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  [ILLEGIBLE]

  	
   

  
	
   

  	
  Authorized Signatory