Document:

Exhibit 10.13

 

Martin Minnaugh

Virginia Power Energy Marketing, Inc.

120 Tredegar Street

Richmond, Virginia 23219

 

	
  Re: Letter of Agreement

  	
   

  	
  July 11,
  2006    

  

 

Dear Martin:

 

This confirms the agreement of Virginia Power Energy Marketing, Inc. (“VPEM”)
and MxEnergy Inc. (“MXenergy”)  with
respect to the amendment and restatement of the Amended and Restated Energy
Marketing Agreement, dated as of December 15, 2005. Specifically:

 

All forward physical and financial transactions between VPEM and
MXenergy will be novated to Societe Generale (“SG”) upon completion of and ISDA
Master Agreement between SG and VPEM, with such novation (the “Novation”) to
take place prior to September 1, 2006.

 

During the period from the date of this Letter of Agreement until the
Novation, MXenergy shall post dollar for dollar margin in the amount of any
negative marked to market amount. If the Novation is not completed by September
1, 2006 as a result of the failure of VPEM to behave in a commercially
reasonable manner, the margining reflected above will not be required.

 

MXenergy and VPEM shall amend the current ISDA Agreement & Schedule
to include margining provisions referenced in the prior bullet.

 

MXenergy will post commercially acceptable forms of credit support in
accordance with normal counterparty business arrangements for actual account
receivable exposure, but for no greater than 60 days of actual account
receivable exposure.

 

VPEM will evaluate, per VPEM’s credit policies, an open account status
for MXenergy to purchase physical gas.

 

Subject to the above items, MXenergy will purchase its physical natural
gas requirements from VPEM in the LDC territories set forth on Exhibit 6 of the
EMA, including without limitation the $0.04 adder set forth in Exhibit 8.

 

The parties do not otherwise waive any rights under the EMA and will
incorporate the provisions of this Letter of Agreement into an amended and
restated Energy Marketing Agreement no later than July 12, 2006.

 

Sincerely,

 

	
  /s/ Carole R. Artman-Hodge

  	
   

  
	
   

  
	
  Carole R. Artman-Hodge

  
	
  Executive Vice-Presdent

  
	
    and Chief Operating OfficerExhibit
10.14

 

EXECUTION COPY

 

 

MASTER TRANSACTION AGREEMENT

 

Dated as of August 1, 2006

 

Among

 

 

SOCIÉTÉ GÉNÉRALE,

 

 

as Hedge
Provider

 

 

MXENERGY INC.,

 

 

as Counterparty

 

 

and

 

 

MXENERGY HOLDINGS
INC.

AND CERTAIN OF ITS SUBSIDIARIES,

 

as Guarantors

 

 

 

 

Table of Contents

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS AND ACCOUNTING TERMS

  	
  1

  
	
  Section 1.01

  	
  Certain Defined Terms

  	
  1

  
	
  Section 1.02

  	
  Computation of Time Periods

  	
  18

  
	
  Section 1.03

  	
  Accounting Terms

  	
  18

  
	
  Section 1.04

  	
  Miscellaneous

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  THE HEDGING FACILITY

  	
  19

  
	
  Section 2.01

  	
  Natural Gas Hedging Transactions

  	
  19

  
	
  Section 2.02

  	
  Sleeved Natural Gas Hedging Transactions

  	
  20

  
	
  Section 2.03

  	
  MxEnergy-VPEM Natural Gas Hedging Transactions

  	
  21

  
	
  Section 2.04

  	
  SESCo Hedging Transactions

  	
  21

  
	
  Section 2.05

  	
  Natural Gas Put Options

  	
  22

  
	
  Section 2.06

  	
  Restrictions on Commitments; Hedging Position and
  Related Covenants; Hedging Disclosures; Exclusivity of Facility

  	
  23

  
	
  Section 2.07

  	
  Extension and Termination of Commitments;
  Termination of Agreement

  	
  24

  
	
  Section 2.08

  	
  Fees

  	
  25

  
	
  Section 2.09

  	
  Existing Hedge Provider – Counterparty Hedging
  Transactions

  	
  26

  
	
  Section 2.10

  	
  Increased Costs

  	
  26

  
	
  Section 2.11

  	
  Payments and Computations

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  CONDITIONS PRECEDENT

  	
  27

  
	
  Section 3.01

  	
  Initial Conditions Precedent

  	
  27

  
	
  Section 3.02

  	
  Conditions Precedent to MxEnergy-VPEM Novation
  Transactions

  	
  32

  
	
  Section 3.03

  	
  Conditions Precedent to Each Hedging Transaction

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  REPRESENTATIONS AND WARRANTIES

  	
  33

  
	
  Section 4.01

  	
  Existence; Subsidiaries

  	
  33

  
	
  Section 4.02

  	
  Power and Authority

  	
  34

  
	
  Section 4.03

  	
  Authorization and Approvals

  	
  34

  
	
  Section 4.04

  	
  Enforceable Obligations

  	
  34

  
	
  Section 4.05

  	
  Financial Statements; No Material Adverse Effect

  	
  35

  
	
  Section 4.06

  	
  Disclosure

  	
  35

  
				

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 4.07

  	
  Litigation

  	
  35

  
	
  Section 4.08

  	
  Compliance with Laws

  	
  36

  
	
  Section 4.09

  	
  No Default

  	
  36

  
	
  Section 4.10

  	
  Subsidiaries; Corporate Structure

  	
  36

  
	
  Section 4.11

  	
  Condition of Properties

  	
  36

  
	
  Section 4.12

  	
  MxEnergy – VPEM Hedging Transactions

  	
  36

  
	
  Section 4.13

  	
  Insurance

  	
  37

  
	
  Section 4.14

  	
  Taxes

  	
  37

  
	
  Section 4.15

  	
  Security Interests

  	
  37

  
	
  Section 4.16

  	
  Solvency

  	
  38

  
	
  Section 4.17

  	
  Senior Obligations

  	
  39

  
	
  Section 4.18

  	
  Investment Company Act

  	
  39

  
	
  Section 4.19

  	
  Names and Locations

  	
  39

  
	
  Section 4.20

  	
  Revisions or Updates to the Schedules

  	
  39

  
	
  Section 4.21

  	
  SESCo Acquisition

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  AFFIRMATIVE COVENANTS

  	
  40

  
	
  Section 5.01

  	
  Preservation of Existence, Etc

  	
  40

  
	
  Section 5.02

  	
  Compliance with Laws, Etc

  	
  40

  
	
  Section 5.03

  	
  Maintenance of Property

  	
  41

  
	
  Section 5.04

  	
  Maintenance of Insurance

  	
  41

  
	
  Section 5.05

  	
  Payment of Taxes, Etc

  	
  41

  
	
  Section 5.06

  	
  Reporting Requirements

  	
  42

  
	
  Section 5.07

  	
  Other Notices

  	
  44

  
	
  Section 5.08

  	
  Books and Records; Inspection

  	
  45

  
	
  Section 5.09

  	
  Nature of Business

  	
  45

  
	
  Section 5.10

  	
  Risk Management Policy

  	
  46

  
	
  Section 5.11

  	
  Additional Guarantors

  	
  46

  
	
  Section 5.12

  	
  Further Assurances

  	
  46

  
	
  Section 5.13

  	
  Account Control Agreement

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  NEGATIVE COVENANTS

  	
  47

  
					

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Credit Agreement Negative and Financial Covenants

  	
  47

  
	
  Section 6.02

  	
  Limitation on Natural Gas Hedge Agreements

  	
  47

  
	
  Section 6.03

  	
  Limitation on Speculative Hedge Agreements and
  Positions

  	
  47

  
	
  Section 6.04

  	
  Additional Limitations on Liens; Hedging Facility
  Collateral

  	
  47

  
	
  Section 6.05

  	
  Additional Limitations on Dispositions of Collateral
  Account Property

  	
  48

  
	
  Section 6.06

  	
  Restrictive Agreements

  	
  48

  
	
  Section 6.07

  	
  Sale and Leaseback Transactions and other
  Off-Balance Sheet Liabilities

  	
  48

  
	
  Section 6.08

  	
  Subordinated Debt

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  SPECIFIED EVENTS

  	
  48

  
	
  Section 7.01

  	
  Specified Events

  	
  48

  
	
  Section 7.02

  	
  Rights and Remedies

  	
  49

  
	
  Section 7.03

  	
  Non-Exclusivity of Rights and Remedies

  	
  49

  
	
  Section 7.04

  	
  Collateral Account

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  THE GUARANTY

  	
  50

  
	
  Section 8.01

  	
  Guaranteed Obligations

  	
  50

  
	
  Section 8.02

  	
  Nature of Guaranty

  	
  50

  
	
  Section 8.03

  	
  Hedge Provider’s Rights

  	
  51

  
	
  Section 8.04

  	
  Guarantor’s Waivers

  	
  51

  
	
  Section 8.05

  	
  Maturity of Obligations, Payment

  	
  52

  
	
  Section 8.06

  	
  Hedge Provider’s Expenses

  	
  52

  
	
  Section 8.07

  	
  Liability

  	
  52

  
	
  Section 8.08

  	
  Events and Circumstances Not Reducing or Discharging
  any Guarantor’s Obligations

  	
  53

  
	
  Section 8.09

  	
  Subordination of All Guarantor Claims.

  	
  55

  
	
  Section 8.10

  	
  Claims in Bankruptcy

  	
  56

  
	
  Section 8.11

  	
  Payments Held in Trust

  	
  56

  
	
  Section 8.12

  	
  Benefit of Guaranty

  	
  56

  
	
  Section 8.13

  	
  Reinstatement

  	
  56

  
	
  Section 8.14

  	
  Liens Subordinate

  	
  57

  
					

 

iii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 8.15

  	
  Guarantor’s Enforcement Rights

  	
  57

  
	
  Section 8.16

  	
  Limitation

  	
  57

  
	
  Section 8.17

  	
  Contribution Rights

  	
  57

  
	
  Section 8.18

  	
  Release of Guarantors

  	
  58

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  	
  MISCELLANEOUS

  	
  58

  
	
  Section 9.01

  	
  Amendments, Etc

  	
  58

  
	
  Section 9.02

  	
  Notices, Etc

  	
  58

  
	
  Section 9.03

  	
  No Waiver; Cumulative Remedies

  	
  60

  
	
  Section 9.04

  	
  Costs and Expenses

  	
  60

  
	
  Section 9.05

  	
  Indemnification

  	
  60

  
	
  Section 9.06

  	
  Successors and Assigns

  	
  61

  
	
  Section 9.07

  	
  Confidentiality

  	
  61

  
	
  Section 9.08

  	
  Execution in Counterparts

  	
  62

  
	
  Section 9.09

  	
  Survival of Representations, etc

  	
  62

  
	
  Section 9.10

  	
  Severability

  	
  62

  
	
  Section 9.11

  	
  Interest Rate Limitation

  	
  62

  
	
  Section 9.12

  	
  Governing Law

  	
  63

  
	
  Section 9.13

  	
  Submission to Jurisdiction

  	
  63

  
	
  Section 9.14

  	
  Waiver of Jury Trial

  	
  64

  
	
  Section 9.15

  	
  Entire Agreement

  	
  64

  
					

 

iv

 

	
  EXHIBITS:

  
	
   

  
	
  Exhibit A

  	
  -

  	
  Form of ISDA Master Agreement

  
	
  Exhibit B

  	
  -

  	
  Form of ISDA Schedule

  
	
  Exhibit C

  	
  -

  	
  Form of ISDA Credit Support Annex

  
	
  Exhibit D

  	
  -

  	
  Form of Security Agreement

  
	
  Exhibit E

  	
  -

  	
  Form of Pledge Agreement

  
	
  Exhibit F

  	
  -

  	
  Form of Closing Certificate

  
	
  Exhibit G

  	
  -

  	
  Form of Legal Opinion

  

 

	
  SCHEDULES:

  
	
   

  
	
  Schedule 1.01(a)

  	
  -

  	
  Guarantors

  
	
  Schedule 1.01(b)

  	
  -

  	
  Natural Gas Hedging
  Transaction Geographic Delivery Locations

  
	
  Schedule 1.01(c)

  	
  -

  	
  Existing Hedge
  Provider-Counterparty Hedging Transactions

  
	
  Schedule 4.01

  	
  -

  	
  Licensed Jurisdictions

  
	
  Schedule 4.10

  	
  -

  	
  Subsidiaries

  
	
  Schedule 4.12(a)

  	
   

  	
  MxEnergy-VPEM
  Financially-Settled Hedging Transactions

  
	
  Schedule 4.13

  	
  -

  	
  Insurance

  
	
  Schedule 4.19

  	
  -

  	
  Locations

  
	
  Schedule 9.02

  	
  -

  	
  Addresses for Notices

  

 

i

 

MASTER TRANSACTION AGREEMENT

 

This Master
Transaction Agreement dated as of August 1, 2006 (this “Agreement”) by
and among SOCIÉTÉ GÉNÉRALE, as Hedge Provider (together with its successors and
permitted assigns, the “Hedge Provider”), MXENERGY INC., a Delaware
corporation (the “Counterparty”), and the Guarantors specified herein.

 

WHEREAS, the Counterparty desires that the Hedge Provider establish a
committed exclusive natural gas hedging facility and enter into hedging
transactions with the Counterparty in respect of the Counterparty’s fixed price
natural gas trading and inventory positions, and other hedging transactions as
further provided herein; and

 

WHEREAS, the
Hedge Provider has agreed to establish such a hedging facility for the
Counterparty and to enter into such hedging transactions with the Counterparty on
the terms set forth herein and in the other Transaction Documents (as defined
herein).

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Hedge Provider, the Counterparty and the
Guarantors hereby agree as follows:

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

Section 1.01          Certain Defined Terms. Any
terms used in this Agreement that are defined in Article 9 of the Uniform
Commercial Code as adopted in the State of New York (“UCC”) shall have
the meanings assigned to those terms by the UCC as of the date of this
Agreement. As used in this Agreement, the terms defined above shall have the
meanings set forth therein and the following terms shall have the following
meanings (unless otherwise indicated, such meanings to be equally applicable to
both the singular and plural forms of the terms defined):

 

“Acceptable
Security Interest” means, with respect to any Property of any Person, any Lien
on such Property which (a) exists in favor of the Hedge Provider; (b) secures
the payment and performance of the Obligations; and (c) is perfected and valid
and enforceable against the Transaction Party that created such security
interest in preference to any Liens or other rights of any Person therein, except
as expressly provided in this Agreement or in the Intercreditor Agreement.

 

“Account
Control Agreement” means a securities account control agreement among the
Hedge Provider, the Counterparty, and the Custodian, in form and substance
satisfactory to the Hedge Provider.

 

“Additional
Termination Event” has the meaning specified in the ISDA Master Agreement
and the ISDA Schedule.

 

1

 

“Administrative
Agent” means Société Générale, in its capacity as administrative agent for
the Lenders under the Credit Agreement and the other Loan Documents, and any
successor in such capacity appointed pursuant to the Credit Agreement.

 

“Affected
Party” has the meaning specified in the ISDA Master Agreement.

 

“Affected
Transaction” has the meaning specified in the ISDA Master Agreement.

 

“Affiliate”
of any Person, means any other Person that, directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, such Person or any Subsidiary of such Person. The term “control”
(including the terms “controlled by” or “under common control with”) means the
possession, directly or indirectly, of the power to (a) vote or direct the
voting of 10% or more of the outstanding shares of Voting Stock of such Person
or (b) direct or cause the direction of the management and policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise.

 

“Aggregate
Fixed Price Open Position” means, as at any date of determination and for
any period, the sum of the aggregate notional volumes of natural gas forecasted
by the Counterparty to be covered by or subject to Natural Gas Hedging
Transactions between the Hedge Provider and the Counterparty for such period,
as agreed to by the Hedge Provider.

 

“Amendment
No. 1 to Intercreditor Agreement” means Amendment No. 1 to Intercreditor
and Subordination Agreement, dated on or about the Closing Date, among the
Administrative Agent, VPEM, Sowood, the Hedge Provider, the Counterparty and
the other Transaction Parties specified therein.

 

“Applicable
Hedging Transaction Spread” means, with respect to any Natural Gas Hedging
Transaction of any term to maturity, the execution/credit spread to be paid by
the Counterparty to the Hedge Provider for or in respect of such transaction,
expressed in cents per MMBtu, set forth opposite such term to maturity below:

 

All Spreads in Cents/MMBtu

 

	
  Term to Maturity (x)

  	
   

  	
  Nymex

  	
   

  	
  Additional Basis

  	
   

  	
  Basis Alone

  	
   

  
	
  x<=6
  months

  	
   

  	
  1.00

  	
   

  	
  0.25

  	
   

  	
  1.00

  	
   

  
	
  6 months
  < x <= 18 months

  	
   

  	
  1.50

  	
   

  	
  0.50

  	
   

  	
  1.50

  	
   

  
	
  18 months
  < x <= 30 months

  	
   

  	
  2.00

  	
   

  	
  0.75

  	
   

  	
  2.00

  	
   

  
	
  30 months
  < x <= 60 months

  	
   

  	
  2.50

  	
   

  	
  1.00

  	
   

  	
  2.50

  	
   

  

 

“Attributable
Indebtedness” means, on any date, (a) in respect of any Capital Lease or
any Person, the capitalized amount thereof that would appear on a balance sheet
of such Person prepared as of such date in accordance with GAAP and (b) in
respect of any Synthetic Lease Obligation, the capitalized amount of the
remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP
if such lease were accounted for as a capital lease.

 

“Audited
Financial Statements” means the audited consolidated balance sheet of (a) the
Counterparty and its Subsidiaries for each of the fiscal years ended June 30, 2002,
2003, and 

 

2

 

2004 and the
Parent and its Subsidiaries for the fiscal year ended June 30, 2005 and (b)
SESCo for each of the fiscal years ended December 31, 2003, 2004 and 2005, in
each case, together with the related consolidated statements of income or
operations, shareholders’ equity and cash flows for such fiscal year of the Counterparty,
the Parent and its Subsidiaries and SESCo, as applicable, including the notes
thereto and including an unaudited reconciliation from GAAP to Non-GAAP
Financial Reporting accounting.

 

“Bcf” means
billion cubic feet of natural gas.

 

“Beneficial
Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5
under the Securities and Exchange Act of 1934, as amended.

 

“Borrowers”
means MxEnergy Inc., a Delaware corporation and MxEnergy Electric Inc., a
Delaware corporation, and their permitted successors.

 

“Bridge
Commitment Letter” means that certain Bridge Commitment Letter dated as of
May 12, 2006 between the Parent and Deutsche Bank AG Cayman Islands Branch and
Morgan Stanley Senior Funding, Inc., as the lenders.

 

“Bridge Loan
Transaction” means the $190,000,000 senior, unsecured bridge loan transaction
contemplated by the terms and conditions of the term sheet attached to the
Bridge Commitment Letter.

 

“Business
Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the laws of, or are in fact
closed in, New York and, if such day relates to any Eurodollar Advance, means
any such day on which dealings in Dollar deposits are conducted by and between
banks in the London interbank eurodollar market.

 

“Capital
Lease” of a Person means any lease of any Property by such Person as lessee
that would, in accordance with GAAP, be required to be classified and accounted
for as a capital lease on the balance sheet of such Person.

 

“Cash
Equivalents” means:

 

(a)           direct obligations of, or obligations
the principal of and interest on which are unconditionally guaranteed by, the
United States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United States of
America), in each case maturing within one year from the date of acquisition
thereof;

 

(b)           investments in commercial paper
maturing within 270 days from the date of acquisition thereof and having, at
such date of acquisition, the highest credit rating obtainable from S&P or
from Moody’s;

 

(c)           investments in certificates of
deposit, banker’s acceptances and time deposits maturing within one year from
the date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, the Administrative Agent or
any domestic office of any commercial bank organized under the laws of the
United States of 

 

3

 

America or any State thereof that has a combined
capital and surplus and undivided profits of not less than $500,000,000;

 

(d)           fully collateralized repurchase
agreements with a term of not more than 30 days for securities described in
clause (a) above and entered into with a financial institution satisfying the
criteria of clause (c) above; and

 

(e)           investments in “money market funds”
within the meaning of Rule 2a-7 of the Investment Company Act of 1940, as
amended, substantially all of whose assets are invested in investments of the
type described in clauses (a) through (d) above.

 

“Change in
Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption of taking effect of any law, rule, regulation or
treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority (other
than any request, guideline or directive that provides that compliance is
optional and that there is no penalty or charge of any kind for failure to
comply).

 

“Change of
Control” means the occurrence of any of the following events:

 

(a)           prior to the consummation of an
Initial Public Offering, (i) the failure of either Jeffrey Mayer or Carole R.
Artman-Hodge (each, a “Key Executive”) to be employed by the Parent on a
full-time basis in his or her capacity as President and Chief Executive
Officer, and Executive Vice President, respectively, and involved in the
day-to-day operations of the Parent and its Subsidiaries and (ii) if such failure
is due to death, accident, illness, or legal incapacity of one of the Key
Executives and the other Key Executive remains employed as required under the
foregoing clause (i), the Key Executive failing to be employed is not replaced
within 90 days after such failure with an executive consented to by the
Majority Banks in writing;

 

(b)           the failure of the Counterparty to be
a Wholly-Owned Subsidiary of the Parent;

 

(c)           except for the consummation of an
Initial Public Offering, the direct or indirect sale, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the properties
or assets of the Parent and its Subsidiaries taken as a whole to any “person” (as
that term is used in Section 13(d) of the Securities and Exchange Act of 1934,
as amended, but excluding any employee benefit plan of the Parent or any of its
Subsidiaries, and any person or entity acting in its capacity as trustee, agent
or other fiduciary or administrator of any such plan);

 

(d)           except for the consummation of an
Initial Public Offering, the consummation of any transaction (including any
merger or consolidation) the result of which is that any “person” (as defined
above) (other than Sowood, Charterhouse Financial, Greenhill Capital Partners,
Jeffrey Mayer or Carole R. Artman-Hodge (or any of their Affiliates)) becomes
the Beneficial Owner, directly or indirectly, of more than 25% of the Voting
Stock of the Parent, measured by voting power rather than number of shares;

 

4

 

(e)           prior to the consummation of an
Initial Public Offering, Sowood fails to be the Beneficial Owner, directly or
indirectly, of at least 20% of the Voting Stock of the Parent;

 

(f)            prior to the consummation of an
Initial Public Offering, the first day on which a majority of the members of
the Board of Directors of the Parent are not Continuing Directors; or

 

(g)           the Parent consolidates with, or
merges with or into, any Person, or any Person consolidates with, or merges
with or into, the Parent, in any such event pursuant to a transaction in which
any of the outstanding Voting Stock of the Parent or such other Person is
converted into or exchanged for cash, securities or other property, other than
any such transaction where the Voting Stock of the Parent outstanding
immediately prior to such transaction is converted into or exchanged for Voting
Stock of the surviving or transferee Person constituting a majority of the
outstanding shares of such Voting Stock of such surviving or transferee Person
(immediately after giving effect to such issuance).

 

“Closing
Date” means August 1, 2006.

 

“Code”
means the United States Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any successor statute and all rules
and regulations promulgated thereunder.

 

“Collateral”
means the collective reference to any Collateral Account, all Collateral
Account Property, all First Lien Collateral, all Second Lien Collateral and all
products and proceeds of any of the foregoing.

 

“Collateral
Account” means any deposit account or securities account established by the
Hedge Provider or the Hedge Provider with the Custodian and otherwise subject
to this Agreement, the ISDA Credit Support Annex and, if desired by the Hedge
Provider, an Account Control Agreement.

 

“Collateral
Account Property” means all U.S. government securities constituting
Eligible Collateral (as defined in the ISDA Credit Support Annex) of the Counterparty
in its capacity as Pledgor under the ISDA Credit Support Annex and all other
Property of the Counterparty held or maintained in any Collateral Account from
time to time in accordance with this Agreement, the ISDA Credit Support Annex
and any Account Control Agreement.

 

“Commitment
Termination Date” means August 1, 2008 or such later date to which the
Commitment Termination Date may be extended from time to time pursuant to and
in accordance with Section 2.07.

 

“Commitment
Extension Agreement” means an agreement between the Counterparty and the
Hedge Provider to extend the maturity of one or more of the Commitments of the
Hedge Provider set forth in Article II of this Agreement, in form and substance
satisfactory to the Hedge Provider.

 

“Commitment
Extension Effective Date” has the meaning specified in Section 2.07(a).

 

5

 

“Commitments”
means the commitments of the Hedge Provider to (a) enter into Natural Gas
Hedging Transactions with the Counterparty pursuant and in accordance with Section
2.01, (b) enter into and provide Sleeved Natural Gas Hedging Transactions
with and for the benefit of the Counterparty pursuant to Section 2.02, (c)
novate one or more of the MxEnergy-VPEM Financially-Settled Hedging Transactions
pursuant to and in accordance with Section 2.03, and (d) enter into
SESCo Hedging Transactions with the Counterparty pursuant to Section 2.04,
in each case subject to the conditions and limitations set forth in this
Agreement.

 

“Confirmation”
has the meaning specified in the ISDA Master Agreement (including, without
limitation, each confirmation evidencing any Existing Hedge Provider –
Counterparty Hedging Transaction).

 

“Continuing
Directors” means, as of any date of determination, any member of the Board
of Directors of the Parent who (a) was a member of such Board of Directors on
the Closing Date or (b) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.

 

“Credit
Agreement” means the First Amended and Restated Credit Agreement dated as
of August 1, 2006 among the Borrowers, the Guarantors, the Lenders, and the
Administrative Agent.

 

“Debt,”
means, for any Person, without duplication, all of the following, whether or
not included as indebtedness or liabilities in accordance with GAAP:

 

(a)           all obligations of such Person for
borrowed money and all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;

 

(b)           obligations of such Person to pay the
deferred purchase price of property or services (other than trade accounts
payable in the ordinary course of business);

 

(c)           Capital Leases;

 

(d)           all obligations of such Person in
respect of letters of credit, bankers’ acceptances, bank guarantees, surety
bonds or similar instruments which are issued upon the application of such
Person or upon which such Person is an account party or for which such Person
is in any way liable;

 

(e)           net obligations of such Person under
any Hedge Agreement;

 

(f)            Off-Balance Sheet Liabilities;

 

(g)           indebtedness secured by a Lien on
Property now or hereafter owned or acquired by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse (provided, that if such Person has not assumed
or otherwise become liable in respect of such Debt, such Debt shall be deemed
to be in an amount equal to the lesser of the amount of such Debt and the fair
market value of the Property encumbered by such Lien); and

 

6

 

(h)           all Guarantees of such Person in
respect of any of the foregoing.

 

For all
purposes hereof, the Debt of any Person shall include the Debt of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person is a general
partner or a joint venturer, unless such Debt is expressly made non-recourse to
such Person. The amount of any net obligation under any Hedge Agreement on any
date shall be deemed to be the Hedge Termination Value thereof as of such date.
The amount of any Capital Lease or Off-Balance Sheet Liability as of any date
shall be deemed to be the amount of Attributable Indebtedness in respect
thereof as of such date.

 

“Defaulting
Party” has the meaning specified in the ISDA Master Agreement.

 

“Dollars”
and “$” means the lawful money of the United States of America.

 

“Domestic
Subsidiary” means a Subsidiary that is organized or incorporated under the
laws of the United States or a State thereof.

 

“End User”
means each retail residential, commercial, wholesale or industrial buyer of natural
gas from the Counterparty or any of its Subsidiaries.

 

“End User
Positions” means, on any date of determination, all natural gas sale,
supply and delivery agreements and obligations of the Counterparty or any of its
Subsidiaries with and to each End User on such date of determination.

 

“Environmental
Law” means all former, current and future Federal, state, local and foreign
laws (including common law), treaties, regulations, rules, ordinances, codes,
decrees, judgments, directives, orders (including consent orders), and
agreements in each case, relating to protection of the environment, natural
resources, human health and safety or the presence, Release of, or exposure to,
Hazardous Materials, or the generation, manufacture, processing, distribution, use,
treatment, storage, transport, recycling or handling of, or the arrangement for
such activities with respect to, Hazardous Materials.

 

“Equity
Interests” shall mean shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity interests in any person, or any obligations convertible
into or exchangeable for, or giving any person a right, option or warrant to
acquire, such equity interests or such convertible or exchangeable obligations.

 

“Excepted
Liens” has the meaning specified in the Credit Agreement as in effect on
the Closing Date.

 

“Event of
Default” has the meaning specified in the ISDA Master Agreement.

 

“Existing
VPEM Credit Support” has the meaning specified in the VPEM Release
Agreement.

 

7

 

“Existing
Hedge Provider–Counterparty Hedging Transactions” means the collective
reference to the Hedging Transactions between the Hedge Provider and the
Counterparty described on Schedule 1.01(c) attached hereto.

 

“Facility
Anniversary Date” means the Closing Date and the last Business Day of each
subsequent 364-day period occurring after the Closing Date, provided
that if any such day is not a Business Day, the Facility Anniversary Date shall
be the Business Day immediately preceding such day.

 

“FERC”
means the Federal Energy Regulatory Commission.

 

“Financial
Officer” for any Person means the chief financial officer, treasurer or
senior financial officer of such Person, as applicable.

 

“First Lien
Collateral” means all Collateral (as defined in the Security Agreement) and
all Eligible Collateral (as defined in the ISDA Credit Support Annex) that is
subject to a first priority Lien in favor of the Hedge Provider in accordance
with this Agreement and the Security Documents.

 

“First Lien
Negative Covenants” has the meaning specified in Section 6.01.

 

“First
Purchaser Lien” means all accounts and inventory which are subject to a Lien
securing the obligations of a “first purchaser” of oil and gas production as
provided in Texas Bus. & Com. Code Section 9.343, or any other similar law
in any other jurisdiction, except for inventory which has been purchased by the
Counterparty or any of its Subsidiaries pursuant to a Letter of Credit issued
pursuant to the Credit Agreement.

 

“Fixed
Price Natural Gas Positions” means all fixed price natural gas purchase,
sale, supply and inventory transactions and agreements between the Counterparty
and any End User or any other Person from time to time in the ordinary course
of business.

 

“Fixed
Price Natural Gas Volumes” means, on any date of determination, the sum
of the aggregate volumes of natural gas covered by or subject to agreements
between the Counterparty and its End Users or any other Person which provide
for fixed-price sales of natural gas to such End Users or such other Person on
such date of determination, as determined by the Hedge Provider.

 

“Foreign
Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

 

“GAAP”
means United States generally accepted accounting principles applied on a
consistent basis.

 

“Governmental
Authority” means the government of the United States of America or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central
bank, or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government
(including any supra-national bodies such as the European Union or the European
Central Bank).

 

8

 

“Governmental
Proceedings” means any action or proceedings by or before any Governmental
Authority, including, without limitation, the promulgation, enactment or entry
of any Legal Requirement.

 

“Guarantors”
means (a) the Parent and each of its Subsidiaries listed on Schedule 1.01(a)
and (b) any other Person that becomes a guarantor of all or a portion of the
Obligations.

 

“Guarantee”
means, as to any Person, (a) any obligation, contingent or otherwise, of such
Person guaranteeing or having the economic effect of guaranteeing any Debt
payable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Debt or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Debt, (ii) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Debt of the payment or performance of such Debt, (iii) to maintain working
capital, equity capital or any other financial statement condition or liquidity
or level of income or cash flow of the primary obligor so as to enable the
primary obligor to pay such Debt, or (iv) entered into for the purpose of
assuring in any other manner the owner of such Debt of the payment or
performance thereof or to protect such owner against loss in respect thereof
(in whole or in part), or (b) any Lien on any assets of such Person securing
any Debt of any other Person, whether or not such Debt is assumed by such
Person; provided, however, that the term “Guarantee” shall not
include endorsements for collection or deposit in the ordinary course of
business. The amount of any Guarantee shall be deemed to be an amount equal to
the stated or determinable amount of the related primary obligation, or portion
thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
as determined by the guaranteeing Person in good faith. The term “Guarantee” as
a verb has a corresponding meaning.

 

“Hazardous
Material” means (a) any petroleum products or byproducts and all other
hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, chlorofluorocarbons and all other ozone-depleting
substances and (b) any chemical, material, substance or waste that is
prohibited, limited or regulated by or pursuant to any Environmental Law.

 

“Hedge
Agreement” means (a) any and all rate swap transactions, basis swaps,
credit derivatives transactions, forward rate transactions, commodity swaps,
commodity options, forward purchase and sale transactions, forward commodity
contracts, commodity futures contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), in each case whether over-the-counter or
exchange-traded, financially settled or physically settled, and whether or not
any such transaction is governed by or subject to any master agreement, and (b)
any and all transactions of any kind, and the related confirmations, which are
subject to the terms and conditions of, or governed by, any form of master
agreement published by the International 

 

9

 

Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, any North American Energy Standards Board (“NAESB”) Base
Contract for the Sale/Purchase of Natural Gas (together with any NAESB
agreement, instrument, annex, addendum or other document relating thereto) or
any other master agreement (any such master agreement, together with any
related schedules, a “Master Agreement”), including any such obligations
or liabilities under any Master Agreement.

 

“Hedge
Reconciliation Report” means a report, in form and substance satisfactory
to the Hedge Provider, describing in reasonable detail all of the Counterparty’s
and its Subsidiaries’ then existing forward physical natural gas fixed price
End User Positions and Inventory Positions, together with a reconciliation of
each such End User Position and Inventory Position against any Hedge Agreement
entered into by the Counterparty with any Person for the purpose of hedging
(dynamically or otherwise) risks arising from such End User Position or such
Inventory Position (as applicable).

 

“Hedge
Termination Value” means, in respect of any one or more Hedge Agreements,
after taking into account the effect of any legally enforceable netting
agreement relating to such Hedge Agreements, (a) for any date on or after the
date such Hedge Agreements have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any date
prior to the date referenced in clause (a), the amount(s) determined as the
mark to market value(s) for such Hedge Agreements, as determined based upon one
or more mid market or other readily available quotations provided by any
recognized dealer in such Hedge Agreements.

 

“Hedging
Facility” means the hedging commitments established by the Hedge Provider
and the Counterparty under this Agreement.

 

“Hedging
Facility Collateral” means, at any time, the collective reference to (i) all
cash transferred by the Counterparty to and held by the Hedge Provider or the
Custodian pursuant to the ISDA Credit Support Annex at such time and subject to
a first priority perfected Lien in favor of the Hedge Provider at such time,
(ii) all Collateral Account Property deposited and maintained in the Collateral
Account at such time and subject to a first priority perfected Lien in favor of
the Hedge Provider at such time and (iii) the undrawn amount(s) of one or more
Letter(s) of Credit issued by an acceptable issuing bank to and for the benefit
of the Hedge Provider and for the account of the Counterparty in accordance
with the ISDA Credit Support Annex existing at such time, valued in accordance
with the ISDA Credit Support Annex and not subject to any Letter of Credit Default
at such time.

 

“Hedging
Transaction” means any “Transaction” (as such term is defined in the ISDA
Master Agreement) in effect from time to time between the Hedge Provider and
the Counterparty (including, without limitation, each Transaction between the Hedge
Provider and the Counterparty of the type described in Sections 2.01, 2.02,
2.03 or 2.04 and each Existing Hedge Provider – Counterparty
Hedging Transaction).

 

“High Yield
Notes Offering” means a private offering of unsecured debt securities with
gross cash proceeds to the Parent of at least $190,000,000 and which such debt
securities: (i) contain a maturity date that is at least one year after the
Maturity Date, (ii) do not provide for any 

 

10

 

scheduled
repayment of any principal amount thereof prior to maturity; (iii) contain
market high-yield covenants (any such high-yield covenants being more
restrictive than those contained in this Agreement shall be automatically
incorporated herein); and (iv) contain a market interest rate.

 

“Imbalances”
means, for any period, the difference between the amount of natural gas
delivered by the Counterparty and its Subsidiaries to an LDC during such period
and the amount of natural gas consumed by End Users that such LDC supplies
during the same period.

 

“Initial
Hedging Facility Collateral Requirement” means (i) the sum of all cash
transferred by the Counterparty to and held by the Hedge Provider or the
Custodian pursuant to the ISDA Credit Support Annex and subject to a first
priority perfected Lien in favor of the Hedge Provider, plus (ii) the
sum of the aggregate value of all Collateral Account Property deposited and
maintained in the Collateral Account on or prior to the Closing Date, valued in
accordance with the ISDA Credit Support Annex and subject to a first priority
perfected Lien in favor of the Hedge Provider, plus (iii) the sum of the
stated face amount(s) of one or more Letter(s) of Credit issued to and for the
benefit of the Hedge Provider and for the account of the Counterparty in
accordance with the ISDA Credit Support Annex on or prior to the Closing Date,
valued in accordance with the ISDA Credit Support Annex and not subject to any
Letter of Credit Default, being equal to $25,000,000 on the Closing Date.

 

“Initial
Management Fee” has the meaning specified in Section 2.08(a).

 

“Initial
Public Offering” means an underwritten public offering of shares of the
Parent wherein the aggregate net proceeds is at least $50,000,000.

 

“Intercreditor
Agreement” means the Subordination and Intercreditor Agreement dated as of
December 19, 2005 among the Administrative Agent, VPEM, Sowood, and the
Transaction Parties specified therein, as amended by Amendment No. 1 to
Intercreditor Agreement.

 

“Inventory
Positions” means, on any date of determination, all natural gas inventory
owned by the Counterparty or any of its Subsidiaries on such date of
determination.

 

“ISDA
Credit Support Annex” means the Credit Support Annex to Schedule to ISDA
Master Agreement, dated on or about the Closing Date, between the Hedge
Provider, as Party A, and the Counterparty, as Party B, including Paragraph 13
thereto, all in substantially the form of Exhibit C.

 

“ISDA
Documents” means the collective reference to the ISDA Master Agreement, the
ISDA Schedule, the ISDA Credit Support Annex, and each Confirmation between the
Hedge Provider and the Counterparty entered into from time to time under the
ISDA Master Agreement.

 

“ISDA
Master Agreement” means the ISDA Master Agreement, dated on or about the Closing
Date, between the Hedge Provider, as Party A, and the Counterparty, as Party B,
in substantially the form of Exhibit A, as amended, modified and
supplemented by the ISDA Schedule and the ISDA Credit Support Annex.

 

11

 

“ISDA
Schedule” means the Schedule to ISDA Master Agreement, dated on or about
the Closing Date, between the Hedge Provider, as Party A, and the Counterparty,
as Party B, in substantially the form of Exhibit B.

 

“LDC”
means a local distribution company that supplies natural gas or electricity beyond
the “citygate” or other specified delivery point to the End User on behalf of the
Counterparty or any of its Subsidiaries.

 

“LDC
Residual Contract Right” means, as at any date of determination, the
Counterparty’s or any of its Subsidiaries’ enforceable right to receive payment
for its natural gas that an LDC holds, or to obtain the return of its natural
gas from, an LDC, existing on such date.

 

“Legal
Requirement” means, as to any Person, any law, statute, ordinance, decree,
award, requirement, order, writ, judgment, injunction, rule, regulation (or
official interpretation of any of the foregoing) of, and the terms of any
license or permit issued by, any Governmental Authority which is binding on
such Person.

 

“Lenders”
means the lenders listed on the signature pages of the Credit Agreement and any
other Person that has become a party to the Credit Agreement pursuant to the
terms thereof.

 

“Letter of
Credit” has the meaning specified in the ISDA Credit Support Annex.

 

“Letter of
Credit Default” has the meaning specified in the ISDA Credit Support Annex.

 

“Lien”
shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien
(statutory or other), pledge, assignment, preference, deposit arrangement,
encumbrance, charge, security interest, priority or other security or
preferential arrangement of any kind or nature whatsoever, whether voluntary or
involuntary in or on such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.

 

“Loan
Documents” has the meaning specified in the Credit Agreement.

 

“Management
Fee” means (a) with respect to the management fee to be paid on or about the
Closing Date, the Initial Management Fee, and (b) thereafter with respect to
any management fee to be paid on any Facility Anniversary Date, the management
fee set forth below which shall be based on the forecasted Aggregate Fixed
Price Open Position for the twelve-month period succeeding such Facility
Anniversary Date, as further described in Section 2.08:

 

	
  Aggregate Fixed

  Price Open Position

  	
   

  	
  Management Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  < / =50
  Bcf

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  > 50 Bcf
  and < / =60 Bcf

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  > 60Bcf

  	
   

  	
  $

  	
  1,500,000

  	
   

  

 

12

 

“Material
Adverse Effect” shall mean a material adverse effect upon (a) the business,
results of operations, prospects, Properties or condition (financial or
otherwise) of the Parent and its Subsidiaries taken as a whole, (b) the ability
of the Counterparty or the Transaction Parties taken as a whole to perform its
or their respective material obligations under the Transaction Documents to
which it is a party or (c) the validity or enforceability against any Transaction
Party of any of the Transaction Documents or any of the material rights or
remedies of the Hedge Provider thereunder.

 

“Maximum
Rate” means the maximum nonusurious interest rate under applicable law
(determined under such laws after giving effect to any items which are required
by such laws to be construed as interest in making such determination,
including without limitation if required by such laws, certain fees and other
costs).

 

“MMBtu”
means million British thermal units of natural gas.

 

“Moody’s”
means Moody’s Investors Service, Inc., or any successor that is a nationally
recognized statistical rating organization.

 

“MxEnergy-Counterparty
Hedging Transactions” means, on any date, the collective reference to each
natural gas Hedge Agreement in effect between the Counterparty and any other
Person (other than VPEM and the Hedge Provider).

 

“MxEnergy-VPEM
Financially-Settled Hedging Transactions” means, on any date, the
collective reference to each natural gas Hedge Agreement in effect between VPEM
and the Counterparty on such date, the terms of which require cash payments to
be made by VPEM or the Counterparty in satisfaction of obligations arising from
time to time thereunder.

 

“MxEnergy-VPEM
Novation Agreement” means the ISDA Novation Agreement among the Hedge
Provider, the Counterparty and VPEM, in form and substance satisfactory to the
Hedge Provider, providing for the novation of one or more MxEnergy-VPEM
Financially-Settled Hedging Transactions, as determined by the Hedge Provider.

 

“MxEnergy-VPEM
Novation Hedging Transactions” has the meaning specified in Section 2.03.

 

“Natural
Gas Hedging Position Volumes” means, at any date of determination, the sum
of the aggregate notional volumes of natural gas covered by or subject to (a)
all Natural Gas Hedging Transactions between the Hedge Provider and the
Counterparty in effect on such date of determination, as determined by the
Hedge Provider and (b) all MxEnergy-VPEM Financially-Settled Hedging
Transactions that have been novated in accordance with Section 2.03 and are
in effect on such date of determination, as determined by the Hedge Provider.

 

“Natural
Gas Hedging Transactions” means cash-settled options for natural gas between
the Hedge Provider and the Counterparty based on NYMEX prices for natural gas and
cash-

 

13

 

settled swaps
for natural gas between the Hedge Provider and the Counterparty based on prices
for natural gas relating to one or more geographic delivery locations described
in Schedule 1.01(b) attached hereto and other natural gas or other derivative
products agreed upon by the Hedge Provider and the Counterparty in writing from
time to time.

 

“Natural
Gas Put Option Amounts” has the meaning specified in Section 2.05.

 

“Natural
Gas Put Options” has the meaning specified in Section 2.05.

 

“Non-GAAP
Financial Reporting” means financial reporting in accordance with GAAP that
has been adjusted to exclude (a) non-cash gains, losses or adjustments under
FASB Statement 133 (as amended, supplemented and in effect from time to time),
(b) settled hedge amounts related to purchases of inventory prior to the
inventory being sold to the end customer, and (c) other non-cash charges.

 

“NYMEX”
means the New York Mercantile Exchange, and any successor thereto.

 

“Obligations”
means all debts, liabilities, obligations, covenants and duties of, any Transaction
Party arising under this Agreement or any other Transaction Document with
respect to the Hedge Provider, including any Hedging Transaction to which the
Hedge Provider is a party, whether direct or indirect (including those acquired
by assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against any Transaction Party or any Affiliate thereof of
any proceeding under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.

 

“Off-Balance
Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) Synthetic Lease Obligations, or (c) any obligation arising
with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
balance sheets of such Person, other than any lease that constitutes an Operating
Lease.

 

“Operating
Lease” of a Person means any lease of Property (other than a Capital Lease)
by such Person as lessee which has an original term (including any required
renewals and any renewals effective at the option of the lessor) of one year or
more.

 

“Parent”
means MxEnergy Holdings Inc., a Delaware corporation, and any permitted
successor thereto.

 

“Permitted
Liens” has the meaning specified in the Credit Agreement as in effect on
the date hereof.

 

“Person”
means and includes natural persons, corporations, limited partnerships, general
partnerships, limited liability companies, limited liability partnerships,
joint stock companies, joint ventures, associations, companies, trusts, banks,
trust companies, land trusts, business trusts or other organizations, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.

 

14

 

“Pledge
Agreement” means the Pledge Agreement dated on or about the Closing Date in
substantially the form of Exhibit E among one or more of the Transaction
Parties as pledgors and the Hedge Provider as secured party, and each other
document, instrument or agreement executed by any Transaction Party in
connection therewith.

 

“Potential
Event of Default” has the meaning specified in the ISDA Master Agreement.

 

“Pro Forma
Financial Statements” means (a) the unaudited pro forma consolidated balance
sheet of the Parent, its Subsidiaries and SESCo as of March 31, 2006 prepared in
accordance with GAAP and (b) non-GAAP Financial Reporting consolidated balance
sheets of the Parent, its Subsidiaries and SESCo as of March 31, 2006,
including a reconciliation to GAAP, in each case giving effect to transactions
under, and consummated in connection with, this Agreement, the High Yield Notes
Offering, the Bridge Loan Transaction, and the SESCo Acquisition Agreement.

 

“Projections”
means the Parent’s forecasted consolidated annual spread with monthly breakdowns:
(a) balance sheets; (b) profit and loss statements; (c) cash flow statements;
and (d) capitalization statements, in each case for fiscal years 2007, 2008,
and 2009 incorporating the SESCo Acquisition Transaction, the Bridge Loan
Transaction, and the High Yield Notes Offering, together with supporting
details.

 

“Property”
of any Person means any interest of such Person in any property or asset
(whether real, personal or mixed, tangible or intangible).

 

“Related
Parties” means, with respect to any Person, such Person’s Affiliates and
the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates.

 

“Responsible
Officer” for any Person means, the Chief Executive Officer, President,
Chief Financial Officer, any Executive or Senior Vice President, Vice
President, Treasurer or any other member of senior management of such Person.

 

“Risk
Management Policy” has the meaning set forth in Section 3.01(a)(xv)
and shall include any amendment, modification or waiver thereto that is approved
by the Hedge Provider in its sole discretion.

 

“S&P”
means Standard & Poor’s Rating Agency Group, a division of McGraw-Hill
Companies, Inc., or any successor that is a nationally recognized statistical rating
organization.

 

“SEC”
means the Securities and Exchange Commission, and any successor entity.

 

“Second
Lien Collateral” means the collective reference to all Collateral (as
defined in the Security Agreement) and all Collateral (as defined in the Pledge
Agreement), other than the First Lien Collateral.

 

“Secured
Counterparty” has the meaning set forth in the Intercreditor Agreement.

 

15

 

“Security
Agreement” means the Security Agreement in substantially the form of Exhibit
D among one or more of the Transaction Parties as grantors and the Hedge
Provider as secured party, and each other document, instrument or agreement
executed by any Transaction Party in connection therewith.

 

“Security
Documents” means the collective reference to Section 7.04 of this
Agreement, Article VIII of this Agreement, the ISDA Credit Support Annex, the Security
Agreement, the Pledge Agreement, the Intercreditor Agreement, any Account
Control Agreement, each Letter of Credit issued for the benefit of the Hedge
Provider pursuant to the ISDA Credit Support Annex and each other document,
instrument or agreement executed or delivered in connection therewith to secure
the payment or performance of all or any portion of the Obligations or to perfect,
preserve or protect any Lien created by any of the foregoing.

 

“SESCo”
means Shell Energy Services Company, L.L.C., a Delaware limited liability
company.

 

“SESCo
Acquisition Agreement” means the Asset Purchase Agreement dated as of
May 12, 2006, between SESCo and the Counterparty, as in effect on the date
hereof.

 

“SESCo Acquisition
Transaction” means the transactions contemplated by the SESCo Acquisition
Agreement.

 

“SESCo
Hedging Transaction” has the meaning specified in Section 2.04.

 

“Shareholders’
Equity” means, as of any date of determination, consolidated shareholders
equity of the Parent and its Subsidiaries as of that date determined in
accordance with GAAP.

 

“Sowood”
means Sowood Commodity Partners Fund LP, a Delaware limited partnership.

 

“Sleeved Natural
Gas Hedging Transaction” means the collective reference to (i) a natural
gas Hedge Agreement entered into between the Hedge Provider and any Specified
Counterparty (arranged by the Counterparty in consultation with the Hedge
Provider) and (ii) a back-to-back offsetting Natural Gas Hedging Transaction entered
into between the Hedge Provider and the Counterparty containing the same or
substantially similar terms as the natural gas Hedge Agreement between the
Hedge Provider and the Specified Counterparty referenced in clause (i) above.

 

“Specified
Counterparty” means any Person selected by the Counterparty and acceptable
to the Hedge Provider in its sole discretion to enter into a Hedge Agreement
with the Hedge Provider as part of any Sleeved Natural Gas Hedging Transaction.

 

“Specified
Events” has the meaning set forth in Section 7.01.

 

“Subordinated
Indebtedness” means any Debt of the Parent or any of its Subsidiaries
(including the Counterparty) that is contractually subordinated to the
Obligations on terms and in form and substance reasonably acceptable to the
Hedge Provider.

 

16

 

“Subsidiary”
of a Person means any corporation, association, partnership or other business
entity of which more than 50% of the outstanding Equity Interests having by the
terms thereof ordinary voting power under ordinary circumstances to elect a
majority of the board of directors or Persons performing similar functions (or,
if there are no such directors or Persons, having general voting power) of such
entity (irrespective of whether at the time Equity Interests of any other class
or classes of such entity shall or might have voting power upon the occurrence
of any contingency) is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more Subsidiaries of such Person or
by one or more Subsidiaries of such Person. Unless otherwise indicated herein,
each reference to the term “Subsidiary” shall mean a Subsidiary of the Parent.

 

“Synthetic
Lease Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of Property creating obligations that do
not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment).

 

“Taxes”
means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

 

“Termination
Event” has the meaning specified in the ISDA Master Agreement (and shall
for the avoidance of doubt include each Additional Termination Event).

 

“Transaction”
has the meaning specified in the ISDA Master Agreement (including, without
limitation, each Existing Hedge Provider – Counterparty Hedging Transaction).

 

“Transaction
Documents” means this Agreement, the ISDA Documents, the Security
Documents, the MxEnergy-VPEM Novation Agreement, the VPEM Release Agreement, the
Confirmations, and all other agreements, instruments and documents governing,
evidencing or relating to any of the foregoing issued pursuant thereto, and
each other agreement, instrument or document executed by any Transaction Party
or any of their respective officers at any time in connection with this
Agreement, all as amended, restated, supplemented or modified from time to
time.

 

“Transaction
Party” means the Counterparty, the Parent, any Guarantor and any other
Person (other than the Hedge Provider) that is or becomes a party from time to
time to any Transaction Document.

 

“UCC”
means the Uniform Commercial Code as in effect on the date hereof in the State
of New York, as amended from time to time, and any successor statute.

 

“Variable
Price Natural Gas Volumes” means, on any date of determination, the sum
of the aggregate volumes of natural gas covered by or subject to agreements
between the Counterparty and its End Users or any other Person which provide
for variable-price sales of natural gas to such End Users or such other Persons
based on one or more market indices on such date of determination, as
determined by the Hedge Provider.

 

17

 

“Voting
Stock” means, with respect to any Person, Equity Interests of such Person
of any class or classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of members of the Board of
Directors (or Persons performing similar functions) of such Person.

 

“VPEM”
means Virginia Power Energy Marketing, Inc., a Virginia corporation.

 

“VPEM
Novation Date” means the date on which the Hedge Provider and the
Counterparty expect to enter into the MxEnergy-VPEM Novation Agreement.

 

“VPEM
Release Agreement” means the Release Agreement, dated on or about the VPEM
Novation Date, among the Hedge Provider, VPEM and the Counterparty.

 

“VPEM
Specified Event” means the occurrence of any event of default, termination
event or any other similar event or circumstance under any VPEM Transaction
Document.

 

“VPEM Transaction
Documents” means the collective reference to the Natural Gas Agreements and
the Natural Gas Derivatives Agreements (each as defined in the VPEM Release
Agreement) between VPEM and the Counterparty.

 

“Wholly-Owned
Subsidiary” of any Person shall mean a subsidiary of such Person of which
Equity Interests representing 100% of the Equity Interests are, at the time any
determination is being made, owned, controlled or held by such Person or one or
more Wholly-Owned Subsidiaries of such Person or by such Person and one or more
Wholly-Owned Subsidiaries of such Person.

 

Section 1.02          Computation of Time Periods. In
this Agreement in the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including” and the words “to”
and “until” each means “to but excluding”.

 

Section 1.03          Accounting Terms.

 

(a)           For purposes of this Agreement, all
accounting terms not otherwise defined herein shall be construed in conformity
with, and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time, applied in a manner consistent with that used in preparing
the Annual Financial Statements.

 

(b)           If at any time any Accounting Change
(as defined below) would affect the computation of any financial ratio or
requirement set forth in any Transaction Document, and either the Counterparty
or the Hedge Provider shall so request, the Hedge Provider and the Counterparty
shall negotiate in good faith to amend such ratio or requirement to preserve
the original intent thereof in light of such change in GAAP (subject to the approval
of the Hedge Provider); provided that, until so amended, (i) such ratio
or requirement shall continue to be computed in accordance with GAAP prior to
such change therein and (ii) the Counterparty shall provide to the Hedge
Provider financial statements and other documents required under this Agreement
or as reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect
to such change in 

 

18

 

GAAP. “Accounting Changes” means: (A) changes in
accounting principles required by GAAP and implemented by the Parent; (B)
changes in accounting principles recommended by the Parent’s accountants; and
(C) changes in carrying value of the Parent’s or any of its Subsidiaries’
assets, liabilities or equity accounts resulting from any adjustments that, in
each case, were applicable to, but not included in, the Audited Financial
Statements.

 

(c)           In addition, all calculations and defined
accounting terms used herein shall, unless expressly provided otherwise, when
referring to any Person, refer to such Person on a consolidated basis and mean
such Person and its consolidated subsidiaries.

 

Section 1.04          Miscellaneous. The definitions
of terms herein shall apply equally to the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation.” The word “will” shall be construed to have the same meaning and
effect as the word “shall.” Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications set
forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (c) the words “herein,” “hereof”
and “hereunder,” and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, (e) any reference to any law or regulation herein shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time and (f) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

 

ARTICLE II

THE HEDGING FACILITY

 

Section 2.01          Natural Gas Hedging Transactions.
Subject to the terms and conditions set forth in this Agreement, the Hedge
Provider agrees to enter into Natural Gas Hedging Transactions with the
Counterparty from time to time to enable the Counterparty to hedge risk arising
from or in connection with its Fixed Price Natural Gas Positions and Inventory
Positions. The Hedge Provider and the Counterparty shall negotiate the economic
terms of each Natural Gas Hedging Transaction on a market basis. The
consideration to be paid to the Hedge Provider by the Counterparty (or the
consideration to be paid by the Hedge Provider to the Counterparty, if
applicable) on the settlement date for any Natural Gas Hedging Transaction entered
into between the Hedge Provider and the Counterparty (or, in the case of any
Natural Gas Hedging Transaction that is an option, any such option sold by the
Hedge Provider to the Counterparty or purchased by the Hedge Provider from the
Counterparty) shall be determined by the Hedge Provider on the settlement date for
such transaction at cost and otherwise in a commercially reasonable manner, and
such consideration shall include or reflect amounts necessary to pay, 

 

19

 

compensate or reimburse (as applicable) the Hedge
Provider for (a) hedging transactions entered into (or to be entered into) by
the Hedge Provider in connection with entering into such Natural Gas Hedging
Transaction with the Counterparty and (b) the Applicable Hedging Transaction
Spread for such Natural Gas Hedging Transaction. Notwithstanding any term or
provision in any Transaction Document, no such Natural Gas Hedging Transaction
shall have a term to maturity or expiration in excess of thirty-nine (39)
months without the prior written consent of the Hedge Provider. Each such Natural
Gas Hedging Transaction shall constitute a Hedging Transaction under this
Agreement and a Transaction under the ISDA Documents in all respects and for
all purposes.

 

Section 2.02          Sleeved Natural Gas Hedging
Transactions. Subject to the terms and conditions set forth in this
Agreement, the Hedge Provider agrees to enter into Sleeved Natural Gas Hedging
Transactions with and for the benefit of the Counterparty from time to time to enable
the Counterparty to hedge risks arising from or in connection with its Fixed
Price Natural Gas Positions and Inventory Positions. The Counterparty may at
any time provide the Hedge Provider with economic and other material terms upon
which a Specified Counterparty is willing to enter into a natural gas Hedging
Agreement with the Counterparty and request that the Hedge Provider enter into
a Sleeved Natural Gas Hedging Transaction with respect to such Specified
Counterparty and such economic and other material terms. If the Specified
Counterparty and such economic and other material terms are acceptable to the
Hedge Provider in its sole discretion, the Hedge Provider shall negotiate and
finalize the economic and other material terms of that portion of the Sleeved
Natural Gas Hedging Transaction to which such Specified Counterparty and the
Hedge Provider will be parties (the “Specified Counterparty Sleeved Natural
Gas Hedging Transaction”) with such Specified Counterparty on a market
basis (in consultation with the Counterparty), and if such Specified
Counterparty and terms remain acceptable to the Hedge Provider, the Hedge
Provider will enter into the Specified Counterparty Sleeved Natural Gas Hedging
Transaction with such Specified Counterparty. The Hedge Provider and the
Counterparty shall then substantially contemporaneously enter into that portion
of the Sleeved Natural Gas Hedging Transaction to which the Counterparty and
the Hedge Provider will be parties (the “MxEnergy Counterparty Sleeved
Natural Gas Hedging Transaction”). All usual and customary fees, costs, expenses and other amounts arising
from or in connection with each Specified Counterparty Sleeved Natural Gas
Hedging Transaction (the “Specified Counterparty Sleeved Natural Gas Hedging
Transaction Amount”) shall be timely paid in full by the Hedge Provider,
and the Counterparty shall upon demand immediately reimburse the Hedge Provider
for such Specified Counterparty Sleeved Natural Gas Transaction Amount.  The consideration to be paid to the
Hedge Provider by the Counterparty (or the consideration to be paid by the
Hedge Provider to the Counterparty, if applicable) on the settlement date for
any MxEnergy Counterparty Sleeved Natural Gas Hedging Transaction entered into
between the Hedge Provider and the Counterparty (or, in the case of any
MxEnergy Counterparty Sleeved Natural Gas Hedging Transaction that is an
option, any such option sold by the Hedge Provider to the Counterparty or
purchased by the Hedge Provider from the Counterparty) shall be determined by
the Hedge Provider on the settlement date for such transaction at cost and such
consideration shall include or reflect amounts necessary to pay, compensate or
reimburse (as applicable) the Hedge Provider for (a) any hedging transactions entered into (or to be entered into)
by the Hedge Provider in connection with entering into any portion of Sleeved
Natural Gas Hedging Transaction and (b) with respect to entering into the MxEnergy
Counterparty Sleeved Natural Gas Hedging Transaction, the Applicable Hedging 

 

20

 

Transaction Spread for such transaction.
Notwithstanding any term or provision in any Transaction Document, no
Sleeved Natural Gas Hedging Transaction shall have a term to maturity or
expiration in excess of thirty-nine (39) months without the prior written
consent of the Hedge Provider. Each MxEnergy Counterparty Sleeved Natural Gas
Hedging Transaction shall constitute a Natural Gas Hedging Transaction and a Hedging
Transaction under this Agreement and a Transaction under the ISDA Documents in
all respects and for all purposes.

 

Section 2.03          MxEnergy-VPEM Natural Gas Hedging
Transactions.

 

(a)           Subject to the limitations and
conditions of this Agreement and following receipt by the Hedge Provider of the
fully executed VPEM Release Agreement, the Hedge Provider agrees that it shall,
on or about the VPEM Novation Date, enter into the MxEnergy-VPEM Novation
Agreement with the Counterparty and VPEM providing for the novation of MxEnergy-VPEM
Financially-Settled Hedging Transactions agreed upon by the Hedge Provider and
the Counterparty. The Hedge Provider and the Counterparty further acknowledge
and agree that, with respect to each MxEnergy-VPEM Financially-Settled Hedging
Transaction to be novated under the MxEnergy-VPEM Novation Agreement, the Hedge
Provider may in its sole discretion enter into an offsetting Natural Gas
Hedging Transaction with the Counterparty (or may enter into an offsetting
natural gas derivatives transaction evidenced by a Hedge Agreement with another
Person) for the purpose of hedging (or eliminating) market risk assumed or
incurred by the Hedge Provider in connection with or as a result of consummating
any such novated MxEnergy-VPEM Financially-Settled Hedging Transaction (each an
“MxEnergy-VPEM Novation Hedging Transaction”).

 

(b)           All fees, costs and expenses (other
than hedging costs) arising from or in connection with the negotiation,
preparation, issuance, execution, delivery and performance of, and the exercise
of any rights and remedies under the VPEM Release Agreement, the MxEnergy-VPEM
Novation Agreement and any other related instrument or document, and the novation
of any MxEnergy-VPEM Financially-Settled Hedging Transaction pursuant to the MxEnergy-VPEM
Novation Agreement and the entering into of any MxEnergy-VPEM Novation Hedging
Transaction, shall be timely paid in full by the Counterparty. Upon the
consummation of the novation of any MxEnergy-VPEM Financially-Settled Hedging
Transaction and the entering into by the Hedge Provider and the Counterparty of
any MxEnergy-VPEM Novation Hedging Transaction, such MxEnergy-VPEM Novation
Hedging Transaction shall constitute a Natural Gas Hedging Transaction and a
Hedging Transaction under this Agreement and a Transaction under the ISDA
Documents in all respects and for all purposes.

 

Section 2.04          SESCo Hedging Transactions. Subject
to the conditions and limitations set forth in this Agreement, the Hedge
Provider agrees to enter into Natural Gas Hedging Transactions with the
Counterparty, substantially contemporaneously with the effectiveness of or
within a reasonable period of time after the closing of the SESCo Acquisition
Transaction, to enable the Counterparty to hedge potential risks arising from
changes in the prices of natural gas relating to the Properties acquired or
assumed by the Counterparty from SESCo as a result of the consummation of the
SESCo Acquisition Transaction (each a “SESCo Hedging Transaction”). The
Hedge Provider and the Counterparty shall negotiate the economic terms of each SESCo
Hedging Transaction on a market basis. The consideration to be paid to the
Hedge Provider by the Counterparty (or the consideration to be paid by the
Hedge Provider to the Counterparty, if 

 

21

 

applicable) on the settlement date for any SESCo
Hedging Transaction entered into between the Hedge Provider and the
Counterparty (or, in the case of any SESCo Hedging Transaction that is an
option, any such option sold by the Hedge Provider to the Counterparty or
purchased by the Hedge Provider from the Counterparty) shall be determined by
the Hedge Provider on the settlement date for such transaction at cost and
otherwise in a commercially reasonable manner, and such consideration shall
include or reflect amounts necessary to pay, compensate or reimburse (as
applicable) the Hedge Provider for (a) hedging transactions entered into (or to
be entered into) by the Hedge Provider in connection with entering into such SESCo
Hedging Transaction with the Counterparty and (b) the Applicable Hedging
Transaction Spread for such SESCo Hedging Transaction. Notwithstanding any term
or provision in any Transaction Document, no SESCo Hedging Transaction shall
have a term to maturity or expiration which exceeds thirty-nine (39) months
without the prior written consent of the Hedge Provider. Each SESCo Hedging Transaction
shall constitute a Natural Gas Hedging Transaction and a Hedging Transaction
under this Agreement and a Transaction under the ISDA Documents in all respects
and for all purposes.

 

Section 2.05          Natural Gas Put Options. The
Hedge Provider and Counterparty hereby acknowledge and agree that the Hedge
Provider may at any time and from time to time, based on its review and
analysis of the existing Natural Gas Hedging Transactions in effect between the
Hedge Provider and the Counterparty at such time, the MxEnergy-VPEM Financially-Settled
Hedging Transactions novated pursuant to the MxEnergy-VPEM Novation Agreement
and in effect at such time and the natural gas and related spot, forward and
derivatives market conditions in effect at such time, determine that it would
be appropriate for the Hedge Provider to purchase one or more exchange-traded
or over-the-counter out-of-the-money natural gas put options, with stated
maturity or expiration dates and economic and other terms satisfactory to the
Hedge Provider, to hedge potential risks arising from material declines of
natural gas market prices which are or may be incurred or assumed by the Hedge
Provider in respect of any such Natural Gas Hedging Transaction or any such
MxEnergy-VPEM Financially-Settled Hedging Transactions (collectively, the “Natural
Gas Put Options”). The Hedge Provider may, with respect to any such Natural
Gas Put Option and irrespective of whether the Hedge Provider actually
purchases any such Natural Gas Put Option, in its discretion invoice and assess
the Counterparty for all or any portion of any actual or estimated Natural Gas
Put Option premium (it being understood and agreed by the Counterparty that any
such estimated Natural Gas Put Option premium may be calculated by the Hedge
Provider using theoretical put option pricing models and methodologies and
other relevant information deemed appropriate by the Hedge Provider for such
calculation) and other fees, costs, expenses and other amounts arising from or
in connection with any such Natural Gas Put Option (collectively, for any such
Natural Gas Put Option, a “Natural Gas Put Option Amount”), and each
such Natural Gas Put Option Amount shall be paid in full by the Counterparty to
the Hedge Provider upon delivery of an invoice therefor to the Counterparty by
the Hedge Provider. The Counterparty further agrees that the Hedge Provider
shall be solely entitled to receive and retain any and all residual put option premiums,
settlement amounts, or other values or financial benefits associated with or
arising from or in respect of any such Natural Gas Put Option (including,
without limitation, upon early termination of any such transaction), without
any further liability or obligation whatsoever to the Counterparty or any other
Person therefor or in respect thereof. Notwithstanding the foregoing, the
aggregate notional volumes of natural gas subject to or covered by all such Natural
Gas Put Options may, at the discretion of the Hedge Provider (in consultation
with the Counterparty) at 

 

22

 

any time be greater than thirty percent (30%) of, but
shall not at any time exceed fifty percent (50%) of, the Natural Gas Hedging
Position Volumes in effect at such time (as determined by the Hedge Provider). The
parties agree that nothing in this Section 2.05 shall restrict the Counterparty
from purchasing or obtaining the benefit of any natural gas put options in the
ordinary course of business for purposes not prohibited by the Transaction
Documents.

 

Section 2.06          Restrictions on Commitments; Hedging
Position and Related Covenants; Hedging Disclosures; Exclusivity of Facility.

 

(a)           Notwithstanding any term or provision
in this Agreement or any Transaction Document, the Counterparty covenants and agrees
that (i) the Natural Gas Hedging Position Volumes in respect of all Natural Gas
Hedging Transactions from time to time in effect between the Hedge Provider and
the Counterparty (as determined by the Hedge Provider) shall not at any time
exceed 65 Bcf without the prior written consent of the Hedge Provider, and (ii)
the ratio of Fixed Price Natural Gas Volumes to Variable Price Natural Gas
Volumes (as determined by the Hedge Provider) shall not at any time exceed
70:30 without the prior written consent of the Hedge Provider.

 

(b)           If at any time either party
determines that a violation of the covenant set forth in clause (a)(i) above
has occurred, (i) such party shall within one (1) Business Day of such
determination notify the other party of such violation, (ii) all Commitments of
the Hedge Provider to enter into any additional Hedging Transactions under this
Agreement shall cease to be effective against the Hedge Provider until such
violation is cured to the satisfaction of the Counterparty or the Hedge
Provider otherwise determines that such violation no longer exists, and (iii)
the Hedge Provider and the Counterparty shall within two (2) Local Business
Days after receipt of such notice agree on the action or actions to be taken by
the parties in order to cure such violation and thereupon take such action or
actions to cure such violation (including, without limitation, determining that
an Additional Termination Event has occurred under the ISDA Documents with
respect to one or more of the then existing Natural Gas Hedging Transaction(s) and
thereupon terminating such Natural Gas Hedging Transaction(s) in accordance
with the ISDA Documents); provided that if the Hedge Provider and the
Counterparty cannot agree on any such action or actions within such period, the
Hedge Provider may in its sole discretion determine, and under such
circumstances is hereby authorized by the Counterparty (without further action
by any other Person) to determine, that an Additional Termination Event has
occurred under the ISDA Documents with respect to one of more of the then
existing Natural Gas Hedging Transaction(s) and thereupon terminate such
Natural Gas Hedging Transaction(s) in accordance with the ISDA Documents, in
each case to the extent necessary to cure such violation. For purposes of any
such Additional Termination Event, the terminated Natural Gas Hedging
Transaction(s) shall be the sole Affected Transaction(s) under the ISDA
Documents and the Counterparty shall be the sole Affected Party under the ISDA
Documents.

 

(c)           The Counterparty acknowledges and
agrees that the Hedging Facility has been structured for the exclusive benefit
of the Counterparty and in consideration thereof agrees that it shall, from and
after the date of this Agreement until the Commitment Termination Date, enter
into natural gas Hedging Transactions only with the Hedge Provider (as further provided
in Section 6.02).

 

23

 

Section 2.07          Extension and Termination of
Commitments; Termination of Agreement.

 

(a)           So long as no Specified Event has
occurred, the Counterparty may request in writing to the Hedge Provider at
least sixty (60) days but no more than ninety (90) days prior to the applicable
Commitment Termination Date that the Hedge Provider extend the Commitment Date
for an additional 364-day period as herein provided, which request will be
granted or denied by the Hedge Provider in its sole discretion. The Hedge
Provider will promptly notify the Counterparty of its willingness or refusal to
extend the Commitment Termination Date. The Hedge Provider shall notify the Counterparty
of its response to such request. If the Hedge Provider agrees to extend the
Commitment Termination Date for such period, the Hedge Provider and the
Counterparty shall agree upon the date on which such extension is to be
effective (the “Commitment Extension Effective Date”) and, upon
satisfaction of the conditions set forth in Section 2.07(b), the Commitments
shall be extended to the date which is 364 days following the immediately
succeeding Commitment Termination Date or, if such date is not a Business Day,
the next preceding Business Day.

 

(b)           Conditions to Commitment Extension
Effective Date. Any agreement by the Hedge Provider to extend the
Commitments pursuant to Section 2.07(a) shall be subject to the
satisfaction of the following conditions precedent on or before the applicable
Commitment Extension Effective Date:  (i)
the Counterparty shall deliver to the Hedge Provider a certificate of each Transaction
Party dated as of the Commitment Extension Effective Date signed by a
Responsible Officer of such Person (A) certifying and attaching the resolutions
adopted by such Person approving or consenting to such extension, and (B) in
the case of the Counterparty, certifying that, before and after giving effect
to such extension, (I) the representations and warranties contained in Article
IV and the other Transaction Documents are true and correct in all material
respects on and as of the Commitment Extension Effective Date, except to the
extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct in all material respects as
of such earlier date, and except that for purposes of this Section 2.07,
the representations and warranties contained in Section 4.05 shall be
deemed to refer to the most recent statements furnished pursuant to clauses (a)
and (b), respectively, of Section 5.06, and (II) no Specified Event exists;
(ii) the Hedge Provider shall be satisfied that no Specified Event then exists;
and (iii) the Counterparty and the other Transaction Parties shall have duly
executed and delivered to the Hedge Provider a Commitment Extension Agreement with
respect to such extension.

 

(c)           Termination of Commitments by
Hedge Provider. Notwithstanding any term or provision in this Agreement or
any other Transaction Document, the Hedge Provider may terminate any or all of the
Commitments at any time upon the occurrence and during the continuance of a Specified
Event.

 

(d)           Termination of Commitments by
Counterparty. Notwithstanding any term or provision in this Agreement or
any other Transaction Document, the Counterparty may terminate any or all of the
Commitments at any time (i) upon the occurrence of a Change of Control or (ii)
with the prior written consent of the Hedge Provider.

 

(e)           Termination of Agreement. This
Agreement shall terminate by mutual agreement of the parties on or after the
date on which the Obligations shall have been paid and performed in 

 

24

 

full and all Commitments, Hedging Transactions and
Transaction Documents shall have expired or been terminated in accordance with
their respective terms.

 

Section 2.08          Fees.

 

(a)           Management Fees. The
Counterparty agrees to pay to the Hedge Provider for its own account a
Management Fee in advance on or prior to the date on which the first Natural
Gas Hedging Transaction shall have been entered into between the Hedge Provider
and the Counterparty or otherwise consummated under the Transaction Documents
(the “Initial Management Fee”) and additional Management Fees thereafter
on each Facility Anniversary Date, and each such Management Fee shall be deemed
to be fully earned by the Hedge Provider on the date when paid. The parties
agree that (i) the amount of the Initial Management Fee shall be $1,000,000 and
(ii) the Management Fee required to be paid on each Facility Anniversary Date
shall be based on the forecasted Aggregated Fixed Price Open Position provided
by the Counterparty on or prior to such Facility Anniversary Date and verified
by the Hedge Provider, which forecasted Aggregate Fixed Price Open Position
shall be based upon the Counterparty’s reasonable good faith projections of
maximum volumes of natural gas usage in its business for the twelve-month
period immediately succeeding such Facility Anniversary Date (which projections
shall be set forth in writing and delivered to the Hedge Provider and based
upon reasonable estimates and assumptions disclosed by the Counterparty to the
Hedge Provider prior to such Facility Anniversary Date), and such forecasted
Aggregate Fixed Price Open Position shall be set forth in one or more schedules
or other written instruments in form satisfactory to the Hedge Provider so as to
enable the Hedge Provider to calculate the Management Fee.

 

(b)           Structuring Fee. The Counterparty
agrees to pay to the Hedge Provider a fee, on or prior to the date on which the
first Natural Gas Hedging Transaction shall have been entered into between the
Hedge Provider and the Counterparty or otherwise consummated hereunder, in the
amount of $750,000 in connection with arranging and structuring the Hedging
Facility and for assuming risks in connection with the transactions
contemplated by and consummated under the MxEnergy-VPEM Novation Agreement, which
fee shall be deemed to be fully earned by the Hedge Provider when paid on the
Closing Date.

 

(c)           Other Fees. The Counterparty
agrees to pay to the Hedge Provider all other fees, costs and expenses reasonably
incurred or charged by the Hedge Provider (including, without limitation,
reasonable attorneys’ fees and costs) and its attorneys, agents and consultants
prior to or after the Closing Date from time to time in connection with the negotiation,
preparation, administration, execution, delivery and performance of the
Transaction Documents, the review, audit and implementation of risk management
policies, procedures, internal controls, and related systems relating to
establishing and maintaining Hedging Facility. All such other fees, costs and
expenses shall be due and payable on the date specified by the Hedge Provider in
any written invoice delivered by the Hedge Provider to the Counterparty in
connection therewith and shall be deemed to be fully earned by the Hedge
Provider on the date when paid.

 

(d)           Payment of Fees. All fees,
costs and expenses described in this Agreement (including each Applicable
Hedging Transaction Spread) shall be paid by the Counterparty to the Hedge
Provider on the dates when due and in immediately available Dollars, and all
such fees, costs or expenses, once paid, shall be fully earned and nonrefundable
absent manifest error.

 

25

 

Section 2.09          Existing Hedge Provider –
Counterparty Hedging Transactions. The parties hereby acknowledge and agree
that each Existing Hedge Provider – Counterparty Hedging Transaction (a) is
valid, enforceable, and in full force and effect and (b) as of the date hereof,
(i) is and shall be a “Natural Gas Hedging Transaction” and a “Hedging
Transaction” in all respects and for all purposes under and subject to this
Agreement and the other Transaction Documents (provided that each
Existing Hedge Provider – Counterparty Hedging Transaction that is a natural
gas put option purchased by the Counterparty from the Hedge Provider shall be
excluded for purposes of determining compliance with the hedging covenant set
forth in Section 2.06(a)(i)) and (ii) is and shall be a “Transaction” in all
respects and for all purposes under and subject to the ISDA Documents.

 

Section 2.10          Increased Costs.

 

(a)           Increased Costs Generally. If
any Change in Law shall:

 

(i)            impose, modify or deem applicable
any reserve, special deposit, compulsory transaction, insurance charge or
similar requirement against assets of, deposits with or for the account of, or
credit extended or participated in by, the Hedge Provider with respect to
natural gas Hedge Agreements; or

 

(ii)           impose on the natural gas market or
other relevant market any other condition, cost or expense affecting this
Agreement or the Natural Gas Hedging Transactions which the Hedge Provider is
obligated to enter into hereunder and under the ISDA Documents pursuant to the
Commitments;

 

and the result
of any of the foregoing shall be to materially increase the cost to the Hedge
Provider of entering into or maintaining any Natural Gas Hedging Transaction with
the Counterparty or to materially reduce the amount of any sum received or
receivable by the Hedge Provider hereunder or under any other Transaction
Document, then, upon request of the Hedge Provider, the Counterparty will pay
to the Hedge Provider such additional amount or amounts as will compensate the
Hedge Provider for such additional costs incurred or reduction suffered.

 

(b)           Capital Requirements. If the
Hedge Provider determines that any Change in Law affecting the Hedge Provider regarding
capital requirements has or would have the effect of materially reducing the
rate of return on the Hedge Provider’s capital as a consequence of this
Agreement, the Commitments or any Natural Gas Hedging Transactions entered into
between the Hedge Provider with the Counterparty to a level below that which the
Hedge Provider could have achieved but for such Change in Law (taking into
consideration the Hedge Provider’s policies with respect to capital adequacy),
then from time to time the Counterparty will pay to the Hedge Provider such
additional amount or amounts as will compensate the Hedge Provider for any such
reduction suffered.

 

(c)           Certificates for Reimbursement.
A certificate of the Hedge Provider setting forth the amount or amounts
necessary to compensate the Hedge Provider, as specified in paragraph (a) or
(b) of this Section and setting forth a reasonably detailed description of the
basis for calculating such amount delivered to the Counterparty shall be
conclusive absent manifest error. 

 

26

 

The Counterparty shall pay the Hedge Provider the
amount shown as due on any such certificate within thirty (30) days after
receipt thereof.

 

(d)           Delay in Requests. Failure or
delay on the part of the Hedge Provider to demand compensation pursuant to this
Section 2.10 shall not constitute a waiver of the Hedge Provider’s right
to demand such compensation, provided that the Counterparty shall not be
required to compensate the Hedge Provider pursuant to this Section for any
increased costs incurred or reductions suffered more than six (6) months prior to
the date that the Hedge Provider notifies the Counterparty of the Change in Law
giving rise to such increased costs or reductions and of the Hedge Provider’s intention
to claim compensation therefor (except that if any such Change in Law giving
rise to such increased costs or reductions is retroactive, then the six-month
period referred to above shall be extended to include the period of retroactive
effect thereof).

 

Section 2.11          Payments and Computations.

 

(a)           Payment Procedures. The Counterparty
and each other Transaction Party shall make each payment required to be made by
it under this Agreement not later than 12:00 p.m. (New York time) on the day
when due to the Hedge Provider in immediately available funds and in Dollars. All
payments shall be made without setoff, deduction, or counterclaim.

 

(b)           Computations. All computations
of fees shall be made by the Hedge Provider on the basis of a year of 360 days,
in each case for the actual number of days (including the first day, but excluding
the last day) occurring in the period for which such fees are payable.

 

(c)           Non-Business Day Payments. Whenever
any payment shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of payment of
interest or fees, as the case may be.

 

ARTICLE III

CONDITIONS PRECEDENT

 

Section 3.01          Initial Conditions Precedent. The
Commitments of the Hedge Provider to enter into any transactions or take any other
actions set forth in or contemplated by any of Sections 2.01, 2.02,
2.03, and 2.04 are subject to the satisfaction, prior to or
concurrently with the entering into of any such transaction or the taking of
any such action, of the following conditions precedent (in each case unless
waived in writing by the Hedge Provider):

 

(a)           Documentation. The Hedge
Provider shall have received the following, each of which shall be originals,
or, at the discretion of the Hedge Provider, telecopies (followed promptly by
originals) unless otherwise specified, each properly executed by a Responsible
Officer of the signing Transaction Party or other Person or Persons party
thereto, dated on or before the Closing Date (or, in the case of government
officials, a recent date before the Closing Date), and otherwise duly executed
by all the parties thereto, each in form and substance satisfactory to the Hedge
Provider:

 

27

 

(i)            this Agreement, duly executed and
delivered by the Counterparty and the Guarantors;

 

(ii)           the ISDA Master Agreement, the ISDA
Schedule and the ISDA Credit Support Annex, each duly executed and delivered by
the Counterparty;

 

(iii)          a Confirmation evidencing each initial
Natural Gas Hedging Transaction to be entered into between the Hedge Provider
and the Counterparty on or about the Closing Date, duly executed and delivered
by the Counterparty;

 

(iv)          the Security Agreement, duly executed and
delivered by the Counterparty and each of the other Transaction Parties,
together with any other documents, agreements and instruments necessary to
create an Acceptable Security Interest in the First Lien Collateral and the Second
Lien Collateral described therein;

 

(v)           the Pledge Agreement, duly executed and
delivered by the Parent and each of its Subsidiaries that has a Subsidiary, pledging
to the Hedge Provider all of the Equity Interests of the Domestic Subsidiaries
of such Transaction Party and 65% of the Equity Interest of the Foreign Subsidiaries
of such Transaction Party, together with any other documents, agreements and
instruments necessary to create an Acceptable Security Interest in such Equity
Interest and the other Second Lien Collateral described therein;

 

(vi)          Amendment No. 1 to the Intercreditor
Agreement, duly executed and delivered by the Hedge Provider, the Counterparty,
the Administrative Agent, Sowood and each other party thereto, in form and
substance acceptable to the Hedge Provider;

 

(vii)         the VPEM Release Agreement, duly
executed and delivered by VPEM and the Counterparty;

 

(viii)        the Credit Agreement, duly executed and
delivered by the Transaction Parties, the Administrative Agent and each Lender
party thereto, which Credit Agreement expressly permits and authorizes the
Transaction Parties to enter into, perform their respective obligations under,
and consummate the transactions contemplated by, the Transaction Documents to
which they are or will be a party, in form and substance satisfactory to the
Hedge Provider;

 

(ix)          a closing certificate dated as of the
Closing Date from a Responsible Officer of each Transaction Party, in
substantially the form of Exhibit F, certifying that (A) all
representations and warranties of each Transaction Party set forth in this
Agreement and in the other Transaction Documents to which it is a party are
true and correct in all material respects; (B) no Potential Event of Default
or Specified Event has occurred and is continuing; (C) the conditions precedent
in this Section 3.01 have been met; (D) attached thereto is a true
and complete copy of the organizational documents of such Transaction Party as
in effect on the Closing Date and at all times since a date prior to the date
of the resolutions described in clause (E) below; (E) that attached thereto is
a true and complete copy of resolutions duly adopted by the Board of Directors or
other managing Persons of such Transaction Party, in form and substance
satisfactory to the Hedge Provider, authorizing the execution, delivery and
performance of the Transaction 

 

28

 

Documents to which such
Transaction Party is a party (and in the case of the Counterparty, the Hedging
Transactions and the Natural Gas Put Options to be entered into, purchased and novated
under the Transaction Documents and the creation, perfection and priority of
the Liens under the Security Documents and, in the case of each other
Transaction Party, the guarantees made by such Transaction Party hereunder) that
such resolutions have not been modified, rescinded or amended and are in full
force and effect; (F) that the certificate or articles of incorporation or
other organizational documents of such Transaction Party have not been amended
since the date of the last amendment thereto shown on the certified copy
thereof furnished pursuant to clause (xi) below; and (G) as to the incumbency
and specimen signature of each officer of each Transaction Party executing any
Transaction Document or any other agreement, instrument, document or certificate
delivered in connection herewith or therewith by or on behalf of such
Transaction Party;

 

(x)           copies of the certificate or articles
of incorporation or other equivalent organizational documents of each Transaction
Party, certified as of a recent date by the Secretary of State of the state of
its incorporation or other organization;

 

(xi)          certificates from the appropriate
Governmental Authorities certifying as of a recent date acceptable to the Hedge
Provider to the good standing, existence and authority of each of the Transaction
Parties in all jurisdictions where required by the Hedge Provider;

 

(xii)         a favorable opinion dated as of the
Closing Date of Paul, Hastings, Janofsky & Walker LLP, counsel to the Transaction
Parties, in substantially the form of Exhibit G;

 

(xiii)        a certificate from a Financial Officer
of the Counterparty dated as of the Closing Date addressed to the Hedge
Provider regarding the matters set forth in Section 4.16;

 

(xiv)        a copy of, or a certificate as to
coverage under, the insurance policies required by Section 5.04 and the
applicable provisions of the Security Documents, each of which shall be
endorsed or otherwise amended to include a customary loss payable endorsement
and to name the Hedge Provider as an additional insured;

 

(xv)         a copy of the risk management policy of
the Counterparty as in effect on the Closing Date (the “Risk Management
Policy”) in form and substance satisfactory to the Hedge Provider; and

 

(xvi)        such other documents, governmental
certificates and agreements as the Hedge Provider may reasonably request.

 

(b)           Payment of Fees, Costs, Expenses
and Other Amounts. The Counterparty or other obligated Person shall have
paid (i) the Initial Management Fee, (ii) the Structuring Fee and (iii) all
other fees, costs, expenses and other payments or amounts required to be paid
to the Hedge Provider on or prior to the Closing Date pursuant to this
Agreement (including, without limitation, any payments or amounts described
under Sections 2.01, 2.02, 2.03, 2.04 or 2.05)
or 

 

29

 

any other Transaction Document, including, without
limitation, all costs and expenses (including attorneys’ fees and costs of the
Hedge Provider’s counsel) which have been invoiced and are payable pursuant to Section 2.08
or Section 9.04.

 

(c)           Due Diligence; Corporate Structure.
The Hedge Provider shall have completed satisfactory due diligence review of
the Properties, liabilities, business and operations acquired or assumed in
connection with the SESCo Acquisition Transaction, and all legal, financial,
accounting, governmental, tax and regulatory matters, and fiduciary aspects of
the proposed Hedging Facility and the terms and conditions of all material
obligations of the Transaction Parties arising from the Assumed Liabilities (as
described in the SESCo Acquisition Agreement). The documentation reflecting the
ownership, capital, corporate, tax, organizational and legal structure of the Transaction
Parties shall be acceptable to the Hedge Provider.

 

(d)           Security Documents. The Hedge
Provider shall have received all appropriate evidence required by the Hedge
Provider in its sole discretion necessary to determine that arrangements have
been made for the Hedge Provider to have an Acceptable Security Interest in all
of the Collateral, including, without limitation, (i) the delivery to the Hedge
Provider of such financing statements under the Uniform Commercial Code for
filing in such jurisdictions as the Hedge Provider may require, and (ii) Lien,
Tax and judgment searches conducted on each Transaction Party and SESCo
reflecting (A) no Liens other than Permitted Liens against any of the First
Lien Collateral and the Second Lien Collateral as to which perfection of a Lien
is accomplished by the filing of a financing statement and (B) no Liens against
any Collateral Account or any of the Collateral Account Property that are prior
to the Liens of the Hedge Provider in and to such Property.

 

(e)           Financial Statements. The Hedge
Provider shall have received true and correct copies of (i) the Audited
Financial Statements, (ii) the unaudited consolidated balance sheets and
related statements of operations, cash flows and stockholders’ equity of the
Parent and its Subsidiaries, each as of and for the periods ended March 31,
2006 and June 30, 2006 and including a reconciliation from GAAP to Non-GAAP
Financial Reporting, (iii) the Pro Forma Financial Statements, (iv) the Projections
in form and substance reasonably satisfactory to the Hedge Provider and (v) such
other financial information as the Hedge Provider may reasonably request.

 

(f)            Authorizations and Approvals. The Hedge Provider shall be
satisfied that all other governmental and third party approvals, consents,
permits, and licenses necessary in connection with the execution, delivery and
performance of, and the consummation of the transactions contemplated by, this
Agreement and the other Transaction Documents, and by the SESCo Acquisition Transaction
shall have been obtained and be in full force and effect, and all applicable
waiting periods shall have expired without any action being taken or threatened
that would restrain, prevent or otherwise impose adverse conditions on this
Agreement and the actions contemplated hereby.

 

(g)           ISDA Documents. The Hedge
Provider shall be satisfied that all applicable conditions to effectiveness of
the ISDA Documents have been satisfied.

 

30

 

(h)           MxEnergy-VPEM Hedging Transactions.
The Hedge Provider shall have received correct and complete executed copies of all
Hedge Agreements governing or evidencing all of the MxEnergy-VPEM Financially-Settled
Hedging Transactions, together with a certificate from a Responsible Officer of
the Counterparty dated as of the Closing Date addressed to the Hedge Provider
regarding such Hedge Agreements in form and substance satisfactory to the Hedge
Provider.

 

(i)            Existing VPEM Credit Support.
The Hedge Provider shall have received evidence satisfactory to the Hedge
Provider in its sole discretion that all Existing VPEM Credit Support has been terminated
and released of record pursuant to agreements, instruments and documents
satisfactory to the Hedge Provider.

 

(j)            Restated Credit Facility. All
conditions precedent set forth in Section 3.01 of the Credit Agreement
shall have been satisfied.

 

(k)           SESCO Acquisition Transaction.
(i) the SESCo Acquisition Agreement shall be in full force and effect and all
conditions precedent to the SESCo Acquisition Transaction shall have been
satisfied, (ii) the funding of the loans under the Bridge Loan Transaction or
the placement of the senior debt securities under the High Yield Notes Offering
shall have occurred and (iii) the SESCo Acquisition Transaction shall have been
consummated in accordance with the terms of the SESCo Acquisition Agreement and
applicable laws.

 

(l)            No Proceeding or Litigation; No
Injunctive Relief. No action, suit, investigation or other proceeding
(including, without limitation, the enactment or promulgation of a statute or
rule) by or before any arbitrator or any Governmental Authority shall be
threatened or pending and no preliminary or permanent injunction or order by a
state or federal court shall have been entered (i) in connection with this
Agreement, any other Transaction Document or the SESCo Acquisition Agreement or
any transaction contemplated hereby or thereby or (ii) which, in any case, in
the reasonable judgment of the Hedge Provider, could reasonably be expected to have
a Material Adverse Effect.

 

(m)          No Potential Event of Default or Specified
Event. No Potential Event of Default or Specified Event shall have occurred
and be continuing or would result from any entering into Natural Gas Hedging
Transaction on or about the Closing Date.

 

(n)           Initial Hedging Facility
Collateral Requirement. The Hedge Provider shall have determined in its
sole discretion that the Counterparty has satisfied the Initial Hedging Facility
Collateral Requirement.

 

(o)           Representations and Warranties.
The representations and warranties of the Transaction Parties contained in
Article IV hereof and in each other Transaction Document then in effect shall
be true and correct before and after giving effect to any Hedging Transactions
to be entered into on or about the Closing Date, as though made on and as of
such date.

 

(p)           No Material Adverse Effect. Since
June 30, 2005, the Hedge Provider shall be satisfied that (i) there has been no
material adverse change in the condition (financial or otherwise), results of
operations, assets, properties, business or prospects of the Transaction
Parties, taken as a whole, after giving effect to the SESCo Acquisition Transaction,
but 

 

31

 

excluding any change resulting from the SESCo Acquisition
Transaction, the Bridge Loan Transaction or the High Yield Notes Offering and
(ii) no Material Adverse Effect (as defined in the SESCo Acquisition Agreement)
shall have occurred.

 

Section 3.02          Conditions Precedent to
MxEnergy-VPEM Novation Transactions. The obligation of the Hedge Provider
to enter into the MxEnergy–VPEM Novation Agreement pursuant to Section 2.03
and consummate the novation transactions contemplated thereunder is subject to
the satisfaction, prior to the entering into of the MxEnergy–VPEM Novation
Agreement, of the conditions precedent set forth in Section 3.01 and the
following additional conditions precedent (in each case unless waived in
writing by the Hedge Provider):

 

(a)           Documentation. The Hedge
Provider shall have received the following, each of which shall be originals, or,
at the discretion of the Hedge Provider, telecopies (followed promptly by
originals) unless otherwise specified, each properly executed by a Responsible
Officer of the signing Transaction Party or other Person or Persons party
thereto, and otherwise duly executed by all the parties thereto, each in form
and substance satisfactory to the Hedge Provider:

 

(i)            the MxEnergy-VPEM Novation
Agreement, duly executed by the Counterparty and VPEM;

 

(ii)           a new Confirmation between the Hedge
Provider and the Counterparty evidencing each MxEnergy-VPEM Novation Settled Hedging
Transaction to be entered into between the Hedge Provider and the Counterparty
in connection with the MxEnergy-VPEM Novation Agreement, each duly executed and
delivered by the Counterparty; and

 

(iii)          a confirmation between the Hedge
Provider and VPEM evidencing each MxEnergy-VPEM Financially-Settled Hedging
Transaction to be novated by the Counterparty to the Hedge Provider under the
MxEnergy-VPEM Novation Agreement, duly executed by VPEM.

 

(b)           MxEnergy-VPEM Novation Hedging
Transactions. The Hedge Provider shall in its sole discretion have entered
into (or made arrangements to enter into) any MxEnergy-VPEM Novation Hedging
Transactions with respect to any MxEnergy-VPEM Financially-Settled Hedging
Transaction to be novated under the MxEnergy-VPEM Novation Agreement.

 

(c)           No Potential Event of Default or
Specified Event. No Potential Event of Default or Specified Event shall
have occurred and be continuing or would result from entering into the MxEnergy-VPEM
Novation Agreement or consummating any of the novation transactions
contemplated thereby or entering into any MxEnergy-VPEM Novation Hedging
Transaction.

 

(d)           Payment of Fees, Costs, Expenses
and Other Amounts. The Counterparty or other obligated Person shall have paid
all fees, costs, expenses and other payments or amounts required to be paid to
the Hedge Provider on or prior to the VPEM Novation Date pursuant to this
Agreement (including any payment or amount under Sections 2.01, 2.02,
2.03, 2.04 or 2.05) or any other Transaction Document, including,
without limitation, all fees, costs and expenses (including attorneys’ fees and
costs of the Hedge Provider’s counsel) which have been invoiced and are payable
pursuant to Section 2.08 or Section 9.04.

 

32

 

Section 3.03          Conditions Precedent to Each Hedging
Transaction. The commitment of the Hedge Provider to enter into any Hedging
Transaction with the Counterparty described in Article II or any other transaction
or take any other action under Sections 2.01, 2.02, 2.03
or 2.04 on any date (including any initial Hedging Transaction to be
entered into on or about the Closing Date) shall be subject to the satisfaction
of the following additional conditions precedent:

 

(a)           each of the representations and
warranties contained in this Agreement and each other Transaction Document shall
be true and correct on and as of such date as if made on such date except to
the extent that such representations and warranties specifically refer to an
earlier date, in which case, such representations and warranties shall be true
and correct as of such earlier date;

 

(b)           each applicable condition precedent set
forth in any ISDA Document shall have been satisfied;

 

(c)           no Potential Event of Default or Specified
Event shall have occurred and be continuing;

 

(d)           no event or circumstance has occurred
that could reasonably be expected to result in a Material Adverse Effect; and

 

(e)           all corporate and other proceedings,
and all documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Transaction Documents
shall be satisfactory in form and substance to the Hedge Provider, and the
Hedge Provider shall have received such other documents and legal opinions in
respect of any aspect or consequence of the transactions contemplated hereby or
thereby as it shall reasonably request.

 

Each Hedging
Transaction entered into under the Transaction Documents shall be deemed to be
a representation and warranty by the Counterparty that the conditions specified
in this Section 3.03 have been satisfied on and as of the trade date of such
Hedging Transaction.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

To induce the
Hedge Provider to enter into this Agreement and the other Transaction Documents
and to enter into Hedging Transactions hereunder and thereunder, each Transaction
Party jointly and severally represents and warrants to the Hedge Provider as
follows:

 

Section 4.01          Existence; Subsidiaries. Each
of the Transaction Parties is (a) duly formed, validly existing, and in good
standing under the laws of the jurisdiction of its formation, (b) duly qualified
as a foreign entity and is licensed and in good standing in each jurisdiction
where its ownership, lease or operation of Property or conduct of its business
requires such qualification or license other than such failures to so qualify
that could not, individually or in the aggregate reasonably be expected to have
a Material Adverse Effect. Each of the Transaction Parties is licensed and in
good standing to purchase, sell, supply and deliver natural gas or related
products and to enter into physically-settled and financially-settled Hedge
Agreements 

 

33

 

related thereto by each of the state public utility
commissions identified on Schedule 4.01, as the same may be updated from
time to time.

 

Section 4.02          Power and Authority. Each of
the Transaction Parties has the requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (a) own its
assets and carry on its business, including without limitation, to supply
natural gas or related products to End Users in each of the jurisdictions
identified in Schedule 4.01, and (b) execute, deliver and perform the Transaction
Documents to which it is a party and to perform its obligations thereunder. The
execution, delivery, and performance by each Transaction Party of this
Agreement and the other Transaction Documents to which it is a party and the
consummation of the transactions contemplated hereby (a) have been duly
authorized by all necessary organizational action, (b) do not and will not
(i) contravene the terms of any such Person’s organizational documents,
(ii) violate any material Legal Requirement, or (iii) conflict with or
result in any breach or contravention of, or the creation of any Lien under (A)
the provisions of any indenture, instrument or material agreement to which such
Transaction Party is a party or is subject, or by which it, or its Property, is
bound or (B) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is
subject.

 

Section 4.03          Authorization and Approvals. No
authorization, approval, consent, exemption, or other action by, or notice to
or filing with, any Governmental Authority or any other Person is necessary or
required on the part of any Transaction Party in connection with (a) the
execution, delivery and performance by, or enforcement against, any Transaction
Party of this Agreement and the other Transaction Documents to which it is a
party or the consummation of the Transactions or the transactions contemplated
hereby or thereby, (b) the grant by any Transaction Party of the Liens granted
by it pursuant to the Transaction Documents, or (c) the perfection or
maintenance of the Liens created under the Transaction Documents (including the
first priority nature thereof) (other than the filing of UCC-1 Financing
Statements), all of which have been duly obtained, taken, given or made and are
in full force and effect, except actions by, and notices to or filings with,
Governmental Authorities (including, without limitation, the SEC) that may be
required in the ordinary course of business from time to time or that may be
required to comply with the express requirements of the Transaction Documents
(including, without limitation, to release existing Liens on the Collateral or
to comply with requirements to perfect, and/or maintain the perfection of,
Liens created for the benefit of the Hedge Provider).

 

Section 4.04          Enforceable Obligations. This
Agreement has been, and each other Transaction Document, when delivered
hereunder, will have been, duly executed and delivered by each Transaction
Party that is a party thereto. This Agreement constitutes, and each other Transaction
Document when so delivered will constitute, a legal, valid and binding
obligation of such Transaction Party, enforceable against each Transaction Party
that is party thereto in accordance with its terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, or similar law affecting
creditors’ rights generally or general principles of equity.

 

34

 

Section 4.05          Financial Statements; No Material
Adverse Effect.

 

(a)           The Audited Financial Statements (i)
were prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein; (ii) fairly
present in all material respects the financial condition of the Parent and its Subsidiaries
as of the date thereof and their results of operations for the period covered
thereby in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein; and (iii) show
all material indebtedness and other liabilities, direct or contingent, of the Parent
and its Subsidiaries as of the date thereof, including liabilities for Taxes,
material commitments and Debt.

 

(b)           The Pro Forma Financial Statements and
the Projections have been prepared in good faith by the Parent, based on
assumptions believed by the Parent to be reasonable on the date hereof, and the
Pro Forma Financial Statements present fairly, in all material respects, on a
pro forma basis the estimated consolidated financial position of the Parent and
its consolidated Subsidiaries as of the Closing Date.

 

(c)           Schedule 4.05 sets forth all
material indebtedness and other liabilities, direct or contingent, of the Parent
and its Subsidiaries as of the date of such financial statements, including
liabilities for Taxes, contingent liabilities and Debt.

 

(d)           Since June 30, 2005, there has been
no event or circumstance, either individually or in the aggregate, that has had
or could reasonably be expected to have a Material Adverse Effect.

 

Section 4.06          Disclosure. As of the Closing
Date, each Transaction Party has disclosed to the Hedge Provider all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. No information, report, financial statement, exhibit
or schedule furnished by or on behalf of any Transaction Party to the Hedge
Provider in connection with the negotiation of any Transaction Document or
included therein or delivered pursuant thereto contained, contains or will
contain any misstatement of material fact or omitted, omits or will omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were, are or will be made, not
misleading; provided that, with respect to projected financial
information, the Transaction Parties represent and warrant only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.

 

Section 4.07          Litigation. There are no
actions, suits, proceedings, claims or disputes pending or, to the knowledge of
any Responsible Officer of any Transaction Party after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against any Transaction Party or any
of their Subsidiaries or against any of their properties or revenues that (a)
purport to affect or pertain to this Agreement or any other Transaction
Document, or any of the transactions contemplated hereby or thereby, or (b)
either individually or in the aggregate, if determined adversely, could
reasonably be expected to have a Material Adverse Effect. No regulatory
commission is currently conducting and has conducted within the five-year
period immediately preceding the date hereof, an investigation of the Parent or
any of its Subsidiaries, other than an investigation conducted by such
regulatory commission in its routine general administrative practice.

 

35

 

Section 4.08          Compliance with Laws. None of
the Transaction Parties or any of their Subsidiaries or any of the Transaction
Parties’ operation of their respective material properties is (a) in violation
of, nor will the continued operation by the Transaction Parties of their
material properties as currently conducted violate, any Legal Requirement
(including any Environmental Law, but excluding any Legal Requirement with
respect to their ability to supply natural gas or electricity or related
products to End Users in each of the jurisdictions identified in Schedule
4.01) the violation of which could reasonably be expected to have a
Material Adverse Effect, (b) in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority the default of which
could reasonably be expected to have a Material Adverse Effect, or (c) in
material violation of any Legal Requirement with respect to their ability to
purchase, sell, supply or deliver natural gas or related products to End Users
or enter into and perform its obligations under any physically-settled or
financially-settled Hedge Agreement in each of the jurisdictions identified in Schedule
4.01.

 

Section 4.09          No Default. None of the Transaction
Parties nor any of their Subsidiaries is a party to any agreement or instrument
or subject to any corporate restriction that has resulted or could, either
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect. None of the Transaction Parties nor any of their
Subsidiaries is in default in any manner under any provision of any indenture
or other agreement or instrument evidencing Debt, any Material Contract or any
other material agreement or instrument to which it is a party or by which it or
any of its properties or assets are or may be bound, where such default could
reasonably be expected to result in a Material Adverse Effect. No Specified
Event has occurred and is continuing or would result from the consummation of
the transactions contemplated by this Agreement or any other Transaction
Document.

 

Section 4.10          Subsidiaries; Corporate Structure.
Schedule 4.10 sets forth as of the Closing Date a list of all
Subsidiaries of the Transaction Parties and, as to each such Subsidiary, the
jurisdiction of formation and the outstanding Equity Interests therein and the
percentage of each class of such Equity Interests owned by the Transaction
Parties and the Subsidiaries. The Equity Interests indicated to be owned by the
Transaction Parties and the Subsidiaries on Schedule 4.10 are fully paid
and non-assessable and are owned by the persons indicated on such Schedule,
free and clear of all Liens (other than Permitted Liens).

 

Section 4.11          Condition of Properties. Each Transaction
Party has good record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of
its business, except for such minor defects in title that do not materially interfere
with its ability to conduct its business as currently conducted or to utilize
such properties and assets for their intended purposes. None of the properties
of any Transaction Party is subject to any Liens, other than Permitted Liens.

 

Section 4.12          MxEnergy – VPEM Hedging Transactions.

 

(a)           Schedule 4.12(a) sets forth a
true, complete and correct description of all MxEnergy-VPEM Financially-Settled
Hedging Transactions in effect as of the Closing Date. As of the Closing Date, each
MxEnergy-VPEM Financially-Settled Hedging Transaction is in full force and
effect, and no potential event of default, event of default, termination event or
other similar event or circumstance has occurred and is continuing under any VPEM
Transaction 

 

36

 

Document. All payments required to be made by VPEM or
the Counterparty under or in respect of each MxEnergy-VPEM Financially-Settled Hedging
Transaction prior to the Closing Date have been duly paid in full.

 

(b)           As of the Closing Date, no MxEnergy-Counterparty
Hedging Transactions are in effect.

 

Section 4.13          Insurance.

 

(a)           Schedule 4.13 sets forth a
true, complete and correct description of all Existing insurance maintained by
the Transaction Parties as of the Closing Date. As of such date, such insurance
is in full force and effect and all premiums have been duly paid.

 

(b)           The properties of the Transaction
Parties are insured with financially sound and reputable insurance companies
not Affiliates of any Transaction Party, in such amounts, with such deductibles
and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where applicable
Transaction Party operates.

 

Section 4.14          Taxes. Each Transaction Party
has filed all material Federal, state and other Tax returns and reports
required to be filed, and have paid all material Federal, state and other Taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable, except those
which are being contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves have been provided in accordance with
GAAP. There is no written proposed Tax assessment against the Transaction Party
that would, if made, have a Material Adverse Effect.

 

Section 4.15          Security Interests.

 

(a)           Section 7.04 of this
Agreement, the Security Agreement, the ISDA Credit Support Annex and the Intercreditor
Agreement are effective to create in favor of the Hedge Provider a legal,
valid, enforceable, perfected, first priority security interest in each Collateral
Account and all Collateral Account Property from time to time held or contained
therein, in each case subject to no other Liens of any other Person. The
aggregate value or amount of the Hedging Facility Collateral is equal to
$25,000,000.

 

(b)           The Pledge Agreement is effective to
create in favor of the Hedge Provider a legal, valid and enforceable security
interest in the Collateral (as defined in the Pledge Agreement), and, when such
Collateral (to the extent such Collateral constitutes a certificated security
under the applicable Uniform Commercial Code) is delivered to the
Administrative Agent or the Hedge Provider (as applicable) and UCC financing
statements in appropriate form are filed in the offices specified on Schedule
1 to the Pledge Agreement, such Pledge Agreement shall constitute a fully
perfected second priority Lien on, and security interest in, all right, title
and interest of the pledgors thereunder in such Collateral, in each case prior
and superior in right to any other Person, other than (i) the Administrative
Agent and the Lenders to the extent expressly provided in the Intercreditor
Agreement and (ii) Permitted Liens.

 

37

 

(c)           The Security Agreement is effective
to create in favor of the Hedge Provider a legal, valid, and enforceable security
interest in the Collateral (as defined in the Security Agreement) and, when UCC
financing statements in appropriate form are filed in the offices specified on Schedule
1 to the Security Agreement, such Security Agreement shall constitute a
fully perfected (i) first priority Lien on, and security interest in, all
right, title and interest of the Counterparty in such portion of the First Lien
Collateral in which a security interest may be perfected by the filing of a
financing statement under the applicable Uniform Commercial Code, in each case
prior and superior in right to any other Person, and (ii) second priority Lien
on, and security interest in, all right, title and interest of the grantors
thereunder in such portion of the Second Lien Collateral in which a security
interest may be perfected by the filing of a financing statement under the
applicable Uniform Commercial Code, in each case prior and superior in right to
any other Person, other than (A) the Administrative Agent and the Lenders to
the extent expressly provided in the Intercreditor Agreement and (B) Permitted
Liens.

 

(d)           Upon the execution
and delivery of Amendment No. 1 to Intercreditor Agreement by the Hedge
Provider and each other party thereto, the Hedge Provider (i) shall be a “Secured
Counterparty” and a “Credit Agreement Secured Party”, the Obligations shall be “Secured
Counterparty Obligations” and “Credit Agreement Obligations”, and the ISDA
Credit Support Annex, the Security Agreement and the Pledge Agreement shall each
be a “Secured Counterparty Security Document” (each such enquoted term having
the meaning specified in the Intercreditor Agreement), (ii) shall pursuant to
the Security Agreement and the Intercreditor Agreement have a first priority
security interest in and to the First Lien Collateral, and such First Lien
Collateral shall constitute the Hedge Provider’s Secured Counterparty Primary
Collateral (as defined in the Intercreditor Agreement), and (iii) shall pursuant
to the Security Agreement and the Pledge Agreement conclusively have a second
priority security interest in and to all of the Second Lien Collateral, and all
such Second Lien Collateral shall also constitute the Hedge Provider’s Credit
Agreement Primary Collateral (as defined in the Intercreditor Agreement). The
Intercreditor Agreement and the Loan Documents do not establish or impose any prohibition,
restriction or limitation, or right or interest of any other Person in or to,
on any Collateral Account, any Collateral Account Property or any Letter of
Credit constituting part of the Hedging Facility Collateral or the exercise or
enforcement of any rights or remedies of the Hedge Provider under this
Agreement or any other Transaction Document with respect to any of the Hedging
Facility Collateral.

 

Section 4.16          Solvency. Immediately following
the entering into of each Hedging Transaction under the Transaction Documents
and the making of any payment by the Hedge Provider to the Counterparty or by
the Counterparty to the Hedge Provider in respect of any Hedging Transaction, (a) the
fair value of the assets of each Transaction Party will exceed its debts and
liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of each Transaction Party will be greater than
the amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each Transaction Party will
be able to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (d)
each Transaction Party will not have unreasonably small capital with which to
conduct the business in which it is engaged as such business is now conducted
and is proposed to be conducted following the Closing Date.

 

38

 

Section 4.17          Senior Obligations. Except to
the extent expressly provided in the Intercreditor Agreement, the obligations
of the Transaction Parties hereunder and under any Transaction Document are not
subordinated or junior in right of payment to any Debt or other payment obligations
of any Transaction Party.

 

Section 4.18          Investment Company Act. None of
the Parent, any Person controlling the Parent, or any Subsidiary is required to
be registered as an “investment company” under the Investment Company Act of
1940.

 

Section 4.19          Names and Locations. As of the
Closing Date, Schedule 4.19 sets forth (a) all legal names and all other
names (including trade names, fictitious names and business names) under which
the Transaction Parties currently conduct business, or has at any time during
the past five years conducted business, (b) the name of any entity which any Transaction
Party has acquired in whole or in part or from whom any Transaction Party has
acquired a significant amount of assets within the past five years, (c) the
state or other jurisdiction of organization or incorporation for each Transaction
Party and sets forth each Transaction Party’s organizational identification
number or specifically designates that one does not exist, and (d) the location
of all offices of the Transaction Parties and the locations of all inventory of
the Transaction Parties.

 

Section 4.20          Revisions or Updates to the
Schedules. Should any of the information or disclosures provided on Schedules
1.01(a),  4.01, 4.10, 4.13 or 4.19 originally
attached hereto become outdated or incorrect in any material respect, the Counterparty
shall from time to time deliver to the Hedge Provider such revisions or updates
to such schedule(s) whereupon such schedules shall be deemed to be amended by
such revisions or updates, as may be necessary or appropriate to update or
correct such schedule(s), provided that, notwithstanding the foregoing, no such
revisions or updates shall be deemed to have amended, modified, or superseded
any such schedules as originally attached hereto, or to have cured any breach
of warranty or representation resulting from the inaccuracy or incompleteness
of any such schedules, unless and until the Hedge Provider shall have accepted
in writing such revisions or updates to any such schedules.

 

Section 4.21          SESCo Acquisition.

 

(a)           The SESCo Acquisition Agreement is in
full force and effect, no material breach, default or waiver of any term or
provision thereof by the Counterparty or, to the best of the Counterparty’s
knowledge, the other parties thereto, has occurred and no action has been taken
by any competent authority which restrains, prevents or imposes any material
adverse condition upon, or seeks to restrain, prevent or impose any material
adverse condition upon, any component of the SESCo Acquisition Transaction.

 

(b)           At the time of consummation of the
SESCo Acquisition Transaction, each component of the SESCo Acquisition Transaction
shall have been consummated in accordance with the terms of the SESCo Acquisition
Agreement and all applicable laws.

 

(c)           At the time of consummation of the
SESCo Acquisition Transaction, all consents and approvals of, and filings and
registrations with, and all other actions in respect of, all Governmental Authorities
and third parties required in order to make or consummate each component of the
SESCo Acquisition Transaction shall have been obtained, given, filed or taken 

 

39

 

and are or will be in full force and effect (or
effective judicial relief with respect thereto has been obtained).

 

(d)           All applicable waiting periods with
respect to the SESCo Acquisition Transaction have or, prior to the time when
required, will have, expired without, in all such cases, any action being taken
by any competent authority which restrains, prevents, or imposes material
adverse conditions upon the consummation of any component of the SESCo Acquisition
Transaction.

 

(e)           At the time of consummation of the
SESCo Acquisition Transaction, no action, suit or proceeding (including,
without limitation, any inquiry or investigation) is pending or threatened
against any Transaction Party or with respect to the SESCo Acquisition
Agreement, the SESCo Acquisition Transaction, the financing contemplated hereby
or any documentation executed in connection therewith, unless such action, suit
or proceeding could not reasonably be expected to result in a Material Adverse
Effect, and no injunction or other restraining order is issued or a hearing
therefore pending or noticed with respect to the SESCo Acquisition Agreement,
the SESCo Acquisition Transaction, this Agreement or any other Transaction
Document or the transactions contemplated hereby or thereby.

 

ARTICLE V

AFFIRMATIVE COVENANTS

 

The
Transaction Parties hereby jointly and severally covenant and agree that, so long
as the Hedge Provider shall have any Commitment hereunder, any Obligations
remain outstanding or any Hedging Transaction or Transaction Document remains
in effect, unless the Hedge Provider shall otherwise consent in writing, each Transaction
Party shall:

 

Section 5.01          Preservation of Existence, Etc.
Except as permitted under Article VI, (a) preserve, renew and maintain in full
force and effect its legal existence and good standing under the Legal
Requirements of the jurisdiction of its formation, (b) in the case of the Counterparty
and its Subsidiaries, be licensed and in good standing to purchase, sell or
supply and deliver natural gas or related products and enter into physically-settled
and financially-settled Hedge Agreements by FERC and each of the state public
utility commissions identified on Schedule 4.01 so long as the
Counterparty or any of its Subsidiaries, as the case may be, is still engaging
in such activities in the relevant jurisdiction, (c) take all reasonable action
to obtain, preserve, renew, extend, maintain and keep in full force and effect
all rights, privileges, permits, licenses, authorizations and franchises
necessary or desirable in the normal conduct of its business, including, in the
case of the Counterparty and its Subsidiaries, those rights, privileges,
permits, licenses, authorizations and franchises necessary to supply natural
gas or related products to End Users in each of the jurisdictions identified in
Schedule 4.01, and (d) qualify and remain qualified as a foreign entity
in each jurisdiction in which qualification is necessary in view of its
business and operations or the ownership of its Properties, other than in the
case of clause (d) such failures to so qualify that could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 5.02          Compliance with Laws, Etc. Comply
(a) with all Legal Requirements (excluding, in the case of the Counterparty and
its Subsidiaries, any Legal Requirement with 

 

40

 

respect to their ability to supply natural gas or
electricity or related products to End Users in each of the jurisdictions
identified in Schedule 4.01) applicable to it or to its business or
property, except in such instances in which such Legal Requirement is being
contested in good faith by appropriate proceedings diligently conducted and for
which the failure to so comply could not reasonably be expected to have a Material
Adverse Effect and (b) in all material respects with, in the case of the Counterparty
and its Subsidiaries, any Legal Requirement with respect to their ability to
purchase, sell, supply or deliver natural gas or related products to End Users
or enter into physically-settled or financially-settled Hedge Agreements of
FERC and in each of the jurisdictions identified in Schedule 4.01.

 

Section 5.03          Maintenance of Property. (a)
Maintain and preserve all Property material to the conduct of its business and
keep such Property in good repair, working order and condition, (b) from time
to time make, or cause to be made, all needful and proper repairs, renewals,
additions, improvements and replacements thereto necessary in order that the
business carried on in connection therewith may be properly conducted at all
times and (c) use the standard of care typical in the industry in the operation
and maintenance of its facilities.

 

Section 5.04          Maintenance of Insurance.

 

(a)           Maintain with financially sound and
reputable insurance companies not Affiliates of any Transaction Party,
insurance with respect to its Properties and business, to the extent and
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons and
such other insurance as may be required by law.

 

(b)           (i) Cause all such policies covering
any Collateral to be endorsed or otherwise amended to include a customary loss
payable endorsement, in form and substance reasonably satisfactory to the Hedge
Provider, which endorsement shall provide that, from and after the Closing
Date, if the insurance carrier shall have received written notice from the Hedge
Provider of the occurrence of an Event of Default or Termination Event, the
insurance carrier shall pay all proceeds otherwise payable to a Transaction
Party under such policies directly to the Hedge Provider; (ii) deliver original
or certified copies of all such policies to the Hedge Provider; cause each such
policy to provide that it shall not be canceled, modified or not renewed upon
not less than 30 days’ prior written notice thereof by the insurer to the Hedge
Provider; and (iii) deliver to the Hedge Provider, prior to the cancellation,
modification or nonrenewal of any such policy of insurance, a copy of a renewal
or replacement policy (or other evidence of renewal of a policy previously
delivered to the Hedge Provider) together with evidence satisfactory to the Hedge
Provider of payment of the premium therefor.

 

Section 5.05          Payment of Taxes, Etc. Pay and
discharge as the same shall become due and payable, all its obligations and
liabilities in accordance with their terms, including (a) all material Taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its Property, unless the same are being
contested in good faith by appropriate proceedings diligently conducted and
adequate reserves in accordance with GAAP are being maintained by the
applicable Transaction Party; (b) all lawful claims which, if unpaid,
might by law become a Lien upon its Property in violation of this Agreement;
and (c) all Debt, as and when due and payable, but subject to any subordination
provisions contained in any 

 

41

 

instrument or agreement evidencing such Debt,
including, without limitation, the Intercreditor Agreement.

 

Section 5.06          Reporting Requirements. Deliver
to the Hedge Provider, in form and substance satisfactory to the Hedge Provider:

 

(a)           Audited Annual Financial
Statements. As soon as available and in any event not later than 120 days
after the end of each fiscal year of the Parent (beginning for the fiscal year
ending June 30, 2006), copies of (i) the audited consolidated and
unaudited consolidating balance sheets of the Parent and its Subsidiaries, in
each case, as at the end of such fiscal year, together with, in each case, the
related audited consolidated and unaudited consolidating statements of income
or operations, shareholders’ equity and cash flows for such fiscal year, and
the notes thereto, all in reasonable detail and setting forth in each case in
comparative form the audited consolidated and unaudited consolidating figures as
of the end of and for the previous fiscal year, all in reasonable detail and
prepared in accordance with GAAP (subject only to normal year-end audit
adjustments and the absence of footnotes with respect to any consolidating
statements) and (x) in the case of each of such audited consolidated financial
statements (excluding any statements in comparative form to be corresponding
figures from the consolidated budget), accompanied by a report and opinion of
an independent certified public accountant of nationally recognized standing
reasonably acceptable to the Hedge Provider, which report and opinion shall be
prepared in accordance with generally accepted auditing standards and shall not
be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit and shall state that
such consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Parent and its respective
Subsidiaries as at the end of such fiscal year and their consolidated results
of operations and cash flows for such fiscal year in conformity with GAAP; or
words substantially similar to the foregoing and that the examination by such accountants
in connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards, and (y) in the case of
such unaudited consolidating financial statements, certified by a Financial
Officer of the Parent that such financial statements have been prepared in
accordance with GAAP consistently applied and presents fairly, in all material
respects, the information contained therein as at the date and for the periods
covered thereby; and (ii) the consolidated and consolidating unaudited Non-GAAP
Financial Reporting financial statements of the Parent and its Subsidiaries for
such fiscal year including a reconciliation to the GAAP financial statements;

 

(b)           Monthly Financial Statements. As
soon as available and in any event not later than 45 days after the end of each
month (beginning with the month ending June 30, 2006), (i) a consolidated and
consolidating balance sheet of the Parent and its Subsidiaries as at the end of
such month, and the related consolidated and consolidating statements of income
or operations, shareholders’ equity and cash flows for such month and for the
portion of the Parent’s fiscal year then ended, and setting forth in each case with
respect to such consolidated statements, in comparative form the consolidated figures
for the corresponding month of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail and certified by a
Financial Officer of the Parent as fairly presenting in all material respects
the financial condition, results of operations, shareholders’ equity and cash
flows of the Parent and its Subsidiaries in accordance with GAAP, subject only
to normal year-end audit adjustments 

 

42

 

and the absence of footnotes and (ii) the Parent’s and
its Subsidiaries’ consolidated and consolidating Non-GAAP Financial Reporting financial
statements including a reconciliation with the GAAP financial statements
described in the foregoing clause (i) and a management discussion and analysis
of the financial results;

 

(c)           Daily Actual and Forecasted End
User Requirements. On each day, a detailed comprehensive daily position
report, in form and substance satisfactory to the Hedge Provider, setting forth
the Counterparty’s existing contractual and projected natural gas physical purchase,
sale, supply and delivery (including forward fixed price and variable price) requirements
and commitments to its End Users (such projected requirements and commitments and
material assumptions being reasonably determined by the Counterparty based on
its natural gas pre-sale marketing efforts and actual demand forecasts);

 

(d)           Commodity Hedge Agreements. On
each day, a detailed comprehensive daily report, in form and substance
satisfactory to the Hedge Provider, describing all commodity Hedge Agreements of
the Counterparty and its Subsidiaries then in effect with any other Person
(other than the Hedge Provider), including the mark-to-market value of each
such commodity Hedge Agreement determined by the Counterparty in accordance
with GAAP, together with all collateral, Guarantees, letters of credit or other
credit support provided by or on behalf of the Counterparty or any such
Subsidiary with respect to such commodity Hedge Agreements;

 

(e)           End User and Inventory Positions.
On each day, a detailed comprehensive summary, in form and substance
satisfactory to the Hedge Provider, describing each then existing End User Position
and Inventory Position and the agreements and contracts governing, evidencing
or relating to such positions, including the mark-to-market value of each such End
User Position and Inventory Position determined by the Counterparty in
accordance with GAAP, together with a reconciliation of each such End User Position
and Inventory Position against any Hedge Agreement entered into by the Counterparty
with the Hedge Provider or any other Person for the purpose of hedging
(dynamically or otherwise) risks arising from such End User Position or such Inventory
Position (as applicable);

 

(f)            Collateral Valuation Reports.
On the first Business Day following each immediately preceding week, a detailed
comprehensive report, in form and substance satisfactory to the Hedge Provider,
dated as of the last Business Day of such applicable week, together with
supporting documentation reasonably requested by the Hedge Provider, setting
forth the aggregate account receivables for each LDC and of End Users by LDC, a
schedule of Imbalances and LDC Residual Contract Rights, cash reconciliations, a
schedule of the mark-to-market values with respect to each of the Counterparty’s
then existing forward physical fixed price and variable price transactions
(determined in accordance with GAAP), and a description of all cash and other
collateral, Guarantees, letters of credit or similar instruments or other credit
support provided by or on behalf of the Counterparty to any other Person in
respect of any such End User Position and Inventory Position, in each case in
such reasonable detail and in a format as the Hedge Provider may reasonably require;

 

(g)           Hedge Reconciliation Reports. On
the first Business Day following each immediately preceding week, a Hedge
Reconciliation Report, executed by a Financial Officer of the Counterparty, in
form and substance satisfactory to the Hedge Provider;

 

43

 

(h)           Risk Management Policy
Certification and Report. (i) Within seven (7) Business Days after the
fifteenth (15th) and last Business Day of each calendar month, a
certificate in form satisfactory to the Hedge Provider from a Financial Officer
of the Counterparty certifying that the Counterparty is in compliance with the Risk
Management Policy; and (ii) within seven (7) days after the last Business Day
of each calendar month, a monthly comprehensive risk management report, in form
and substance reasonably acceptable to the Hedge Provider, setting forth (A) a
description of all of the Counterparty’s hedging positions, forward book, Inventory
Positions, and transportation and storage capacities and (B) a separate description
of each of the foregoing items with respect to the Properties acquired in the
SESCo Acquisition Transaction;

 

(i)            Customer Forecasts. Upon the
reasonable request of the Hedge Provider, a detailed comprehensive report, in
form and substance reasonably satisfactory to the Hedge Provider, containing
descriptions of the Counterparty’s long-term and short-term natural gas load
forecasts, new End User forecasts, End User migration and losses attributable
to End Users, and all material assumptions relating thereto;

 

(j)            USA Patriot Act. Promptly,
following a request by the Hedge Provider, all documentation and other
information that the Hedge Provider reasonably requests in order to comply with
its ongoing obligations under applicable “know your customer” and anti-money
laundering rules and regulations, including the USA Patriot Act; and

 

(k)           Other Information. Such other
information respecting the business, Properties, Hedge Agreements or Collateral,
or the condition or operations, financial or otherwise, of any Transaction
Party as the Hedge Provider may from time to time reasonably request.

 

The Hedge
Provider acknowledges and agrees that each report prepared by the Counterparty described
in this Section 5.06 may initially be based upon spreadsheets generated
and used by the Counterparty in the ordinary course of its business and that
the Counterparty will exercise commercially reasonable efforts to thereafter
cause such reports to be based upon the Sunguard System “Integrate” by the end
of 2006. Notwithstanding any term or provision in Sections 5.06(c), (d), (e), (f),
and (g), the Hedge Provider and the Counterparty acknowledge and agree that
each of them shall cooperate in good faith to establish reports consistent with
the data retrieval capability of the Counterparty so as to enable the
Counterparty to satisfy its obligations to the Hedge Provider under such
provisions.

 

Section 5.07          Other Notices. Deliver to the Hedge
Provider prompt written notice of the following:

 

(a)           Defaults. The occurrence of
any Potential Event of Default or Specified Event or any Debt of any Transaction
Party being declared when due and payable before its expressed maturity, or any
holder of such Debt having the right to declare such Debt due and payable
before its expressed maturity, because of the occurrence of any default (or any
event which, with notice and/or the lapse of time, shall constitute any default)
under such Debt;

 

(b)           Credit Agreement Notices. A
copy of each other notice delivered to the Administrative Agent pursuant to
Section 5.07 of the Credit Agreement (as in effect on the date hereof); and

 

44

 

(c)           Material Changes. Any other
event, development or circumstance that has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect or that would materially or
adversely affect the rights or remedies of the Hedge Provider under any
Transaction Document.

 

Each notice pursuant to
this Section shall be accompanied by a statement of a Responsible Officer of
the Counterparty setting forth details of the occurrence referred to therein
and stating what action the Counterparty has taken and proposes to take with
respect thereto. Each notice pursuant to Section 5.07(a) shall describe
with particularity any and all provisions of this Agreement and any other Transaction
Document that have been breached.

 

Section 5.08          Books and Records; Inspection. (a)
Keep proper records and books of account in which full, true and correct
entries will be made in accordance with GAAP and all Legal Requirements,
reflecting all financial transactions and matters involving the assets and
business of the Transaction Parties and their Subsidiaries; (b) maintain such
books and records of account in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
the Transaction Parties and their Subsidiaries, as the case may be; (c) from
time to time during regular business hours upon reasonable prior notice to the Counterparty,
permit representatives and designated third party advisors of the Hedge
Provider (i) to visit and inspect any of the Counterparty’s Properties or
systems or any of the Collateral, (ii) to examine the Counterparty’s corporate,
financial and operating records, and make copies thereof or abstracts therefrom
and (iii) to discuss the Counterparty’s affairs, finances and accounts with its
directors, officers, employees, and independent public accountants, all at the expense of the Counterparty and at such
reasonable times during normal business hours and as often as may be reasonably
requested; (d) permit the Hedge Provider, upon request, to conduct (or hire a
third party advisor to conduct, on behalf of the Hedge Provider), a review of
reports and summaries referenced in Section 5.06 and the Risk Management
Policy; (e) as soon as possible but in any event not more than thirty (30) days
after the installation and implementation by the Counterparty of the Sunguard
System “Integrate” referenced in Section 5.06 (or such other date as the
Hedge Provider may reasonably require) and thereafter not more than one (1)
time during each succeeding twelve (12) month period, permit the Hedge Provider
or its representative or designated third party advisor to perform, at the sole
cost and expense of the Counterparty, an independent audit of the Counterparty’s
procedures, policies, reporting and systems relating to the Risk Management
Policy; and (f) permit the Hedge Provider or its representative or designated
third party advisors or to audit at any time upon request the Counterparty’s infrastructure,
analytics, and historical and long-term projected data associated with the
Counterparty’s business; provided that unless a Potential Event of
Default or Specified Event has occurred and is continuing, the inspections,
examinations, and other actions described in clause (c) above shall be
performed no more often than on a semi-annual basis commencing on the date which
is three (3) months following the Closing Date at the Counterparty’s sole cost
and expense and any additional such inspections, examinations or actions shall
be performed at the Hedge Provider’s sole cost and expense unless a Potential
Event of Default or Specified Event has occurred and is continuing at the time
of such inspection, examination or action (as applicable).

 

Section 5.09          Nature of Business. Maintain
and operate such business in substantially the manner in which it is presently
conducted and operated.

 

45

 

Section 5.10          Risk Management Policy. (a)
Comply with the Risk Management Policy delivered to the Hedge Provider on the
Closing Date and (b) amend, modify or supplement the Risk Management Policy
only upon the prior written consent of the Hedge Provider.

 

Section 5.11          Additional Guarantors. Notify
the Hedge Provider at the time that any Person becomes a Subsidiary of the
Parent, and promptly thereafter (and in any event within 30 days), (a) cause
such Person to (i) become a Guarantor by executing and delivering to the Hedge
Provider a counterpart of the Guaranty or such other document as the Hedge
Provider shall deem appropriate for such purpose, (ii) deliver to the Hedge
Provider documents of the types referred to in clauses Section 3.01(a)(ix),
(x) and (xi) and favorable opinions of counsel to such Person
(which shall cover, among other things, the legality, validity, binding effect
and enforceability of the documentation referred to in clause (i)), all in form,
content and scope reasonably satisfactory to the Hedge Provider and (iii)
execute such other Security Documents as the Hedge Provider may reasonably
request, in each case to secure the payment and performance of the Obligations
and (b) cause the holder of the Equity Interests of such Person to execute a
Pledge Agreement pledging 100% of its interests in the Equity Interest of such
Person to secure the Obligations and such evidence of corporate authority to
enter into and such legal opinions in relation to such Pledge Agreement as the Hedge
Provider may reasonably request, along with certificates evidencing the Equity
Interests pledged thereby and appropriately executed stock powers in blank; provided
that, no new Subsidiary that is a controlled foreign corporation under Section
957 of the Code shall be required to become a Guarantor or enter into any
Security Documents if such Guaranty or the entering into of such Security
Documents would reasonably be expected to result in any material incremental
income tax liability and the Parent or any Subsidiary domiciled in the United
States that is an equity holder of a controlled foreign corporation under
Section 957 of the Code shall only be required to pledge 65% of the Equity
Interest of such controlled foreign corporation pursuant to the applicable
Pledge Agreement.

 

Section 5.12          Further Assurances. Execute any
and all further documents, financing statements, agreements and instruments,
and take all such further actions (including the filing and recording of financing
or continuation statements or amendments thereto (or similar documents required
by any laws of any applicable jurisdiction)), which may be required under any
Legal Requirement, or which the Hedge Provider may reasonably request, all at
the sole cost and expense of the Counterparty. The Counterparty also agrees to
provide to the Hedge Provider, from time to time upon request, evidence
reasonably satisfactory to the Hedge Provider as to the perfection and priority
of the Liens created or intended to be created by the Security Documents. Each Counterparty
agrees not to effect or permit any change of the type referred to in Section
5.07(e)(i)(A) of the Credit Agreement as in effect on the Closing Date unless
all filings have been made under the Uniform Commercial Code or otherwise that
are required in order for the Hedge Provider to continue at all times following
such change to have, and each Transaction Party agrees to take all necessary
action to ensure that the Hedge Provider does continue at all times to have, a
valid, enforceable and perfected security interest in all of the Collateral. The
Counterparty also agrees promptly to notify the Hedge Provider if any material
portion of the Collateral is damaged or destroyed.

 

Section 5.13          Account Control Agreement. Cause
the Counterparty to (a) execute and deliver the Account Control Agreement, in
form and substance reasonably satisfactory to the Hedge Provider, promptly upon
the request of the Hedge Provider and (b) substantially 

 

46

 

contemporaneously therewith deliver (or cause to be
delivered) a favorable opinion of counsel to the Counterparty relating to the
Account Control Agreement, in form reasonably satisfactory to the Hedge
Provider.

 

ARTICLE VI

NEGATIVE COVENANTS

 

The
Transaction Parties hereby jointly and severally covenant and agree that, so
long as any Hedging Transaction or Transaction Document remains in effect, the
Hedge Provider shall have any Commitment hereunder, or any Obligations remain
outstanding, unless the Hedge Provider shall otherwise consent in writing, no
Transaction Party shall, directly or indirectly:

 

Section 6.01          Credit Agreement Negative and
Financial Covenants. Take or fail to take any action which causes a
violation of any of the negative covenants or financial covenants set forth in
Article VI of the Credit Agreement, each as in effect on the Closing Date, each
such negative covenant and financial covenant, and all defined terms set forth
in the Credit Agreement and referenced therein in their respective entireties
(in each case as in effect on the Closing Date), being hereby incorporated
herein by reference as if fully set forth herein (all such negative covenants,
financial covenants and related defined terms being collectively referred to
herein as the “First Lien Negative Covenants”).

 

Section 6.02          Limitation on Natural Gas Hedge
Agreements. Permit the Counterparty to enter into, assume, purchase or hold
any natural gas Hedge Agreement, other than Natural Gas Hedging Transactions
entered into with the Hedge Provider in accordance with this Agreement and the
other Transaction Documents.

 

Section 6.03          Limitation on Speculative Hedge
Agreements and Positions. (a) Permit the Counterparty to enter into, assume,
purchase or hold a speculative position in any exchange-traded or
over-the-counter commodities market or futures market or enter into any Hedge
Agreement (including any Hedging Transaction) for speculative purposes, (b) be
party to or otherwise enter into any Hedge Agreement (including any Hedging
Transaction) which (i) is entered into for reasons other than as a part of its
normal business operations as a risk management strategy and/or hedge against
changes resulting from market conditions related to the Counterparty’s or its
Subsidiaries’ operations in accordance with the Risk Management Policy, or obligates
the Counterparty to provide any margin, collateral or other credit support not
permitted under this Agreement or any Transaction Document, or (c) amend,
modify, waive or supplement the Risk Management Policy without the Hedge
Provider’s prior written consent.

 

Section 6.04          Additional Limitations on Liens;
Hedging Facility Collateral. Without limiting any term or provision of any
First Lien Negative Covenant or any ISDA Document, (a) permit the Counterparty or
any other Person to create, incur, assume or permit to exist any Lien on the
Collateral Account or any Hedging Facility Collateral, (b) permit the aggregate
amount of Hedging Facility Collateral to at any time be less than $25,000,000
or (c) permit any other Person to become a Secured Counterparty (as defined in
the Intercreditor Agreement) under the Intercreditor Agreement without the
prior written consent of the Hedge Provider.

 

47

 

Section 6.05          Additional Limitations on
Dispositions of Collateral Account Property. Without limiting any term or
provision of any First Lien Negative Covenant, assign, sell, transfer, convey
or otherwise dispose of any Collateral Account Property, except for the sale of
Cash Equivalents contained in the Collateral Account from time to time (subject
to and in accordance with Section 7.04), provided that all net
proceeds of any such sale shall be held and maintained in, or reinvested in
other Cash Equivalents held or maintained in, the Collateral Account.

 

Section 6.06          Restrictive Agreements. Create,
assume or otherwise permit or suffer to exist any prohibition, encumbrance or
restriction which prohibits or otherwise restricts the ability of the
Counterparty to enter into Natural Gas Hedging Transactions or any of the other
transactions contemplated by, or to perform any of its obligations under, any
Transaction Document, other than the Credit Agreement and the Intercreditor
Agreement, each as in effect on the Closing Date.

 

Section 6.07          Sale and Leaseback Transactions and
other Off-Balance Sheet Liabilities. Enter into, assume, purchase or suffer
to exist any (a) Sale and Leaseback Transaction or (b) any other transaction
pursuant to which it incurs or has incurred Off-Balance Sheet Liabilities,
except for Hedge Agreements permitted to be incurred under the terms of Sections
6.02 and 6.03.

 

Section 6.08          Subordinated Debt. Except as
expressly permitted in Section 2 of the Intercreditor Agreement: (a) make any
optional, mandatory or scheduled payments on account of principal or interest
(whether by redemption, purchase, retirement, defeasance, set-off or otherwise)
in respect of Subordinated Indebtedness; or (b) permit any waiver, supplement,
modification, amendment, termination or release of any indenture, instrument or
agreement pursuant to which any Subordinated Indebtedness is outstanding if
such waiver, supplement, modification, amendment, termination or release would
(i) increase the maximum principal amount of such Subordinated Indebtedness or
the ordinary interest rate or the default interest rate on such Subordinated
Indebtedness; (ii) change the dates upon which payments of principal or
interest are due on such Subordinated Indebtedness; (iii) change any event of
default or add any covenant with respect to such Subordinated Indebtedness;
(iv) change the payment, redemption or prepayment provisions of such
Subordinated Indebtedness; (v) change the subordination provisions thereof; or
(vi) change or amend any other term if such change or amendment would
materially increase the obligations of the obligor or confer additional
material rights on the holder of such Subordinated Indebtedness in any manner
adverse to the interests of the Hedge Provider under the Transaction Documents.

 

ARTICLE VII

SPECIFIED EVENTS

 

Section 7.01          Specified Events. The
occurrence of any of the following events shall constitute a “Specified Event” hereunder:

 

(a)           The occurrence of (i) an Event of
Default under any ISDA Document with respect to which the Counterparty is the
Defaulting Party, (ii) any Termination Event under any ISDA 

 

48

 

Document with respect to which the Counterparty is an
Affected Party or (iii) any VPEM Specified Event; or

 

(b)           The Counterparty or any other
Transaction Party shall fail to pay any amount due and payable solely under
this Agreement to the Hedge Provider within two (2) Business Days after the same becomes due and payable; or

 

(c)           Any representation or statement made
or deemed to be made by the Counterparty or any other Transaction Party (or any
of their respective officers) in this Agreement, in any other Transaction Document,
or in connection with this Agreement or any other Transaction Document, shall
prove to have been incorrect in any material respect when made or deemed to be
made; or

 

(d)           Any Transaction Party shall (i) fail
to perform or observe any covenant contained in (or incorporated by reference
in) Sections 5.01, 5.07(a), 5.10 or 5.12 of this
Agreement or in Article VI of this Agreement or (ii) fail to
perform or observe any other term or covenant set forth in this Agreement which
is not covered by clause (i) above or any other provision of this Section 7.01
if such failure shall remain unremedied for ten (10) days; or

 

(e)           The occurrence of any violation of
any covenant specified in Section 2.06(a) of this Agreement; or

 

(f)            The occurrence of a Change in
Control; or

 

(g)           The occurrence of any Event of
Default (as defined in the Credit Agreement); or

 

(h)           This Agreement, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder, ceases to be in full force and effect; or any Transaction Party or
any other Person contests in any manner the validity or enforceability of any of
this Agreement; or any Transaction Party denies that it has any or further
liability or obligation under this Agreement, or purports to revoke, terminate
or rescind, this Agreement; or

 

(i)            The Hedge Provider shall fail to
have an Acceptable Security Interest in any of the Collateral, in each case
with the relative priorities described in this Agreement and the Intercreditor
Agreement.

 

Section 7.02          Rights and Remedies. If any Specified
Event shall have occurred and be continuing, then, and in any such event, the Hedge
Provider may (a) by notice to the Counterparty, declare any or all of the
Commitments of the Hedge Provider under Article II of this Agreement to be
terminated, whereupon the same shall forthwith terminate, and (b) exercise any
and all other rights, remedies, powers and privileges available to the Hedge
Provider in respect of such Specified Event under any Transaction Document, applicable
laws or otherwise.

 

Section 7.03          Non-Exclusivity of Rights and Remedies.
No right or remedy conferred upon the Hedge Provider is intended to be
exclusive of any other right or remedy, and each right or remedy shall be
cumulative of all other rights and remedies existing by contract, at law, in
equity, by statute or otherwise.

 

49

 

Section 7.04          Collateral Account. Each Transaction
Party hereby acknowledges that in connection with the ISDA Credit Support Annex
the Counterparty and the Hedge Provider may establish one or more Collateral
Accounts with the Hedge Provider and the Custodian. The Counterparty shall
execute and deliver any documents and agreements (in addition to the ISDA
Credit Support Annex and the Account Control Agreement) that the Hedge Provider
reasonably requests in connection therewith to establish any such Collateral
Account and grant the Hedge Provider first priority perfected security interest
in and to any such Collateral Account and the Collateral Account Property. Without
limiting the generality of the foregoing, the Counterparty hereby pledges to
the Hedge Provider and grants the Hedge Provider a security interest in and to each
Collateral Account and all Collateral Account Property held from time to time
therein to secure the prompt and complete payment and performance of the
Obligations. Without limiting any term or provision in any of the ISDA
Documents, after the occurrence and during the continuance of an Event of
Default or a Termination Event, the Hedge Provider may exercise any and all
rights and remedies under any Transaction Document and applicable law with respect
to any Collateral Account and any Collateral Account Property. Cash from time
to time held in any Collateral Account may be invested in any other Eligible
Collateral (as defined in the ISDA Credit Support Annex) maintained with the Custodian,
and under the sole dominion and control of the Hedge Provider, as further
provided in the ISDA Credit Support Annex and the Account Control Agreement,
and the Hedge Provider shall have no other obligation to make any other investment
of any Property therein.

 

ARTICLE VIII

THE GUARANTY

 

Section 8.01          Guaranteed Obligations. Each
Guarantor hereby, jointly and severally, absolutely, irrevocably and
unconditionally guarantees the prompt payment and performance of the
Obligations.

 

Section 8.02          Nature of Guaranty. This
guaranty is an absolute, irrevocable, unconditional, completed and continuing
guaranty of payment and not a guaranty of collection, and no notice of the
Obligations or any extension of credit already or hereafter contracted by or
extended to the Counterparty need be given to any Guarantor. This guaranty may
not be revoked by any Guarantor and shall continue to be effective with respect
to the Obligations arising or created after any attempted revocation by such
Guarantor and shall remain in full force and effect until the Obligations are
paid and performed in full and all of the Commitments, Hedging Transactions and
Transaction Documents are terminated, notwithstanding that from time to time
prior thereto no Obligations may be outstanding. The Counterparty and Hedge
Provider may modify, alter, rearrange, extend for any period and/or renew from
time to time, the Obligations, and the Hedge Provider may waive any or
Potential Event of Default, Event of Default, Termination Event or other
Specified Event without notice to any Guarantor and in such event each
Guarantor will remain fully bound hereunder on the Obligations. This guaranty
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of the Obligations is rescinded or must otherwise be returned
by the Hedge Provider upon the insolvency, bankruptcy or reorganization of any Transaction
Party or otherwise, all as though such payment had not been made. This guaranty
may be enforced by the Hedge Provider and any subsequent assignee of any Transaction
Document or any subsequent holder of any of the 

 

50

 

Obligations and shall not be discharged by the
assignment or negotiation of all or part of the Obligations. Each Guarantor
hereby expressly waives presentment, demand, notice of non-payment, protest and
notice of protest and dishonor, notice of Potential Default, Event of Default, Termination
Event or other Specified Event and also notice of acceptance of this guaranty,
acceptance on the part of the Hedge Provider being conclusively presumed by the
Hedge Provider’s request for this guaranty and the Guarantors’ being party to
this Agreement.

 

Section 8.03          Hedge Provider’s Rights. Each
Guarantor authorizes the Hedge Provider, without notice or demand and without
affecting any Guarantor’s liability hereunder, to take and hold security for
the payment of its obligations under this Article VIII and/or the
Obligations, and exchange, enforce, waive and release any such security; and to
apply such security and direct the order or manner of sale thereof as the Hedge
Provider in its discretion may determine, and to obtain a guaranty of the
Obligations from any one or more Persons and at any time or times to enforce,
waive, rearrange, modify, limit or release any of such other Persons from their
obligations under such guaranties.

 

Section 8.04          Guarantor’s Waivers.

 

(a)           General. Each Guarantor waives
any right to require the Hedge Provider to (i) proceed against the Counterparty
or any other person liable on the Obligations, (ii) enforce any of their rights
against any other guarantor of the Obligations, (iii) proceed or enforce any of
their rights against or exhaust any Collateral or other security given to
secure the Obligations, (iv) have the Counterparty joined with any Guarantor in
any suit arising out of this Article VIII and/or the Obligations, or (v)
pursue any other right or remedy available to the Hedge Provider whatsoever. It
is agreed between the Guarantors and the Hedge Provider that the foregoing
waivers are of the essence of the transactions contemplated by this Agreement
and the other Transaction Documents and that, but for this Guaranty and such
waivers, the Hedge Provider would not enter into this Agreement or any other
Transaction Document or continue to enter into any Hedging Transaction. The Hedge
Provider shall not be required to mitigate damages or take any action to
reduce, collect or enforce the Obligations. Each Guarantor waives any defense
arising by reason of any disability, lack of corporate authority or power, or
other defense of any Transaction Party or any other guarantor of the
Obligations, and shall remain liable hereunder regardless of whether any Transaction
Party or any other guarantor be found not liable thereon for any reason.
Whether and when to exercise any of the rights and remedies of the Hedge
Provider under any of the Transaction Documents or applicable law shall be in
the sole and absolute discretion of the Hedge Provider, and no delay by the Hedge
Provider in enforcing any right or remedy, including delay in conducting a
foreclosure sale, shall be a defense to any Guarantor’s liability under this Article
VIII.

 

(b)           Marshalling, etc. In addition
to the waivers contained in Section 8.04(a) hereof, the Guarantors
hereby irrevocably and unconditionally waive, and agree that they shall not at
any time insist upon, plead or in any manner whatsoever claim or take the
benefit or advantage of, any appraisal, valuation, stay, extension, marshaling
of assets or redemption laws, or exemption, whether now or at any time
hereafter in force, which may delay, prevent or otherwise affect the
performance by the Guarantors of their obligations under, or the enforcement by
the Hedge Provider of, this Guaranty. The Guarantors hereby irrevocably and
unconditionally waive diligence, presentment and demand (whether for nonpayment
or protest or of acceptance, 

 

51

 

maturity, extension of time, change in nature or form
of the Obligations, any amendment, modification, extension or waiver of any
Transaction Document, acceptance of further security, release of further
security, composition or agreement arrived at as to the amount of, or the terms
of, the Obligations, notice of adverse change in any Transaction Party’s
financial condition or any other fact which might materially increase the risk
to the Guarantors) with respect to any of the Obligations or all other demands
whatsoever and waive the benefit of all provisions of law which are or might be
in conflict with the terms of this Article VIII. The Guarantors hereby jointly
and severally represent, warrant and covenant and agree that, as of the date of
this Guaranty, their obligations under this Guaranty are not subject to any
offsets or defenses or counterclaims of any kind against the Hedge Provider,
the Counterparty or any other Person. The Guarantors further jointly and
severally agree and covenant that their obligations under this Guaranty shall
not be subject to any counterclaims, offsets, defenses of any kind which may
arise in the future against the Hedge Provider, the Counterparty or any other
Person.

 

(c)           Subrogation. Until the
Obligations have been paid and performed in full, each Guarantor hereby
irrevocably and unconditionally waives all rights of subrogation or
reimbursement against the Counterparty, whether arising by contract or
operation of law (including, without limitation, any such right arising under
any federal, state or other applicable bankruptcy or insolvency laws) and
hereby irrevocably and unconditionally waives any right to enforce any right or
remedy which the Hedge Provider now have or may hereafter have against the
Counterparty or any other Transaction Party, and waives any benefit or any
right to participate in any Collateral or other security now or hereafter held
by Hedge Provider.

 

Section 8.05          Maturity of Obligations, Payment.
Each Guarantor agrees that if the maturity of any of the Obligations is
accelerated by bankruptcy or otherwise, such maturity shall also be deemed
accelerated for the purpose of this Article VIII without demand or
notice to any Guarantor. Each Guarantor will, forthwith upon notice from time
to time from the Hedge Provider, jointly and severally pay to the Hedge
Provider all amounts due and unpaid by the Counterparty under any Transaction
Document and guaranteed hereunder. The failure of the Hedge Provider to give any
such notice shall not in any way release any Guarantor from its obligations
hereunder.

 

Section 8.06          Hedge Provider’s Expenses. If
any Guarantor fails to pay or perform the Obligations after notice from the Hedge
Provider of the Counterparty’s failure to pay or perform any Obligations at
maturity, and if the Hedge Provider obtains the services of an attorney for
collection of amounts owing by any Guarantor hereunder, or obtaining advice of
counsel in respect of any of its rights or remedies under this Article VIII,
or if suit is filed to enforce this Article VIII, or if proceedings are
had in any bankruptcy, probate, receivership or other judicial proceedings for
the establishment or collection of any amount owing by any Guarantor hereunder,
or if any amount owing by any Guarantor hereunder is collected through such
proceedings, each Guarantor jointly and severally agrees to pay to the Hedge
Provider the Hedge Provider’s reasonable attorneys’ fees.

 

Section 8.07          Liability. It is expressly
agreed that the liability of each Guarantor for the payment and performance of the
Obligations guaranteed hereby shall be primary and not secondary.

 

52

 

Section 8.08          Events and Circumstances Not
Reducing or Discharging any Guarantor’s Obligations. Each Guarantor hereby
consents and agrees to each of the following to the fullest extent permitted by
law, and agrees that each Guarantor’s obligations under this Article VIII
shall not be released, diminished, impaired, reduced or adversely affected by
any of the following, and hereby irrevocably and unconditionally waives any
rights or remedies (including, without limitation, rights to notice) which each
Guarantor might otherwise have as a result of or in connection with any of the
following:

 

(a)           Modifications, etc. Any
renewal, extension, modification, increase, decrease, alteration or
rearrangement of all or any part of the Obligations, or this Agreement or any other
Transaction Document, or any contract or understanding between the Counterparty
and the Hedge Provider or any Person, pertaining to the Obligations, or the
waiver or consent by the Hedge Provider with respect to any of the provisions
hereof or thereof, or any modification or termination of the terms of the
Intercreditor Agreement or any other intercreditor or subordination agreement
pursuant to which claims of other creditors against any Guarantor or the
Counterparty are subordinated to the claims of the Hedge Provider or pursuant
to which the payment or performance of the Obligations are subordinated to
claims of other creditors;

 

(b)           Adjustment, etc. Any
adjustment, indulgence, forbearance or compromise that might be granted or
given by the Hedge Provider to the Counterparty or any other Transaction Party or
any Person liable on or for the Obligations;

 

(c)           Condition of the Counterparty or
any Guarantor. The insolvency, bankruptcy, arrangement, adjustment,
composition, liquidation, disability, dissolution, death or lack of power of the
Counterparty, any other Transaction Party or any other Person at any time
liable for the payment or performance of all or any part of the Obligations; or
any dissolution of the Counterparty or any other Transaction Party, or any
sale, lease or transfer of any or all of the assets of the Counterparty or any other
Transaction Party, or any changes in the shareholders, partners, or members of the
Counterparty or any other Transaction Party; or any reorganization of the
Counterparty or any other Transaction Party;

 

(d)           Invalidity of Obligations. The
invalidity, illegality or unenforceability of all or any part of the
Obligations, any Transaction Document or any other document or agreement
executed in connection with the Obligations, for any reason whatsoever,
including, without limitation, the fact that the Obligations, or any part
thereof, exceed the amount permitted by law, the act of creating the
Obligations or any part thereof is ultra vires, the officers or representatives
executing the documents or otherwise creating the Obligations acted in excess
of their authority, the Obligations violate applicable usury laws, the
Counterparty has valid defenses, claims or offsets (whether at law, in equity
or by agreement) which render the Obligations wholly or partially uncollectible
from the Counterparty, the creation, performance or repayment of the Obligations
(or the execution, delivery and performance of any Transaction Document or any
other document or instrument representing part of the Obligations or executed
in connection with the Obligations, or given to secure the payment of the
Obligations) is illegal, uncollectible, legally impossible or unenforceable, or
this Agreement or other documents or instruments pertaining to the Obligations
have been forged or otherwise are irregular or not genuine or authentic;

 

53

 

(e)           Release of Obligors. Any full
or partial release of the liability of the Counterparty or any other
Transaction Party from the Obligations or any part thereof, of any
co-guarantors, or any other Person now or hereafter liable, whether directly or
indirectly, jointly, severally, or jointly and severally, to pay, perform,
guarantee or assure the payment of the Obligations or any part thereof, it
being hereby recognized, acknowledged and agreed by each Guarantor that such
Guarantor may be required to pay and perform the Obligations in full without
assistance or support of any other Person, and no Guarantor has been induced to
enter into this Article VIII on the basis of a contemplation, belief,
understanding or agreement that other parties other than the Counterparty will
be liable to pay or perform the Obligations, or the Hedge Provider will look to
other parties to pay or perform the Obligations;

 

(f)            Other Security. The taking or
accepting of any Collateral other security, or guaranty, or other assurance of
payment or performance, for all or any part of the Obligations;

 

(g)           Release of Collateral etc. Any
release, surrender, exchange, subordination, deterioration, waste, loss or
impairment (including without limitation negligent, willful, unreasonable or
unjustifiable impairment) of any Collateral, or other property or security, at
any time existing in connection with, or assuring or securing payment or
performance of, all or any part of the Obligations;

 

(h)           Care and Diligence. The
failure of the Hedge Provider or any other Person to exercise diligence or
reasonable care in the preservation, protection, enforcement, sale or other
handling or treatment of all or any part of such Collateral, or other property
or security;

 

(i)            Status of Liens. The fact that
any Collateral, or other security, security interest or lien contemplated or
intended to be given, created or granted as security for the payment or
performance of the Obligations shall not be properly perfected or created, or
shall prove to be unenforceable or subordinate to any other security interest
or Lien, it being hereby recognized and agreed by each Guarantor that no
Guarantor is entering into this Article VIII in reliance on, or in
contemplation of the benefits of, the validity, enforceability, collectibility
or value of any of the Collateral or other security for the Obligations;

 

(j)            Payments Rescinded. Any
payment by the Counterparty or any other Transaction Party to the Hedge
Provider is held to constitute a preference or fraudulent transfer under any
applicable laws, or for any reason the Hedge Provider is required to refund
such payment or pay such amount to the Counterparty or any other Transaction
Party; or

 

(k)           Other Actions Taken or Omitted.
Any other action taken or omitted to be taken with respect to this Agreement,
any other Transaction Document, the Obligations, or the Collateral or other
security therefor, whether or not such action or omission prejudices any
Guarantor or increases the likelihood that any Guarantor will be required to
pay the Obligations pursuant to the terms hereof, it being the unambiguous and
unequivocal intention of each Guarantor that each Guarantor shall be obligated
to jointly and severally pay and perform all the Obligations when due,
notwithstanding any occurrence, circumstance, event, action, or omission
whatsoever, whether contemplated or uncontemplated, and whether or not
otherwise or particularly described herein, except for the full and final
payment and performance of the Obligations.

 

54

 

Section 8.09           Subordination of All Guarantor
Claims.

 

(a)           As used herein, the term “Guarantor
Claims” shall mean all Debts and liabilities of any Transaction Party or any
Subsidiary of any Transaction Party to any Guarantor, whether such Debts and
liabilities now exist or are hereafter incurred or arise, or whether the
obligation of such Transaction Party or such Subsidiary thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such Debts or liabilities be evidenced by note,
contract, open account, or otherwise, and irrespective of the Person or Persons
in whose favor such Debts or liabilities may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may
hereafter be acquired by any Guarantor. The Guarantor Claims shall include,
without limitation, all rights and claims of any Guarantor against any other
Transaction Party or any Subsidiary of any other Transaction Party arising as a
result of subrogation or otherwise as a result of such Guarantor’s payment or
performance of all or any part of the Obligations. Until the Obligations shall
be paid and performed in full, all Commitments have expired or been terminated,
all Hedging Transactions and Transaction Documents have expired or been
terminated and each Guarantor shall have paid and performed all of its
obligations hereunder, no Guarantor shall receive or collect, directly or
indirectly, from any other Transaction Party or any Subsidiary of any other
Transaction Party or any other party any amount upon the Guarantor Claims.

 

(b)           The Counterparty and each Guarantor
hereby (i) authorizes the Hedge Provider to demand specific performance of the
terms of this Section 8.09, whether or not the Counterparty or any
Guarantor shall have complied with any of the provisions hereof applicable to
it, at any time when it shall have failed to comply with any provisions of this
Section 8.09 which are applicable to it and (ii) irrevocably and unconditionally
waives any defense, offset or counterclaim based on the adequacy of a remedy at
law, which could be asserted as a bar to such remedy of specific performance.

 

(c)           Upon any distribution of assets of
any Transaction Party in any dissolution, winding up, liquidation or
reorganization (whether in bankruptcy, insolvency or receivership proceedings
or upon an assignment for the benefit of creditors or otherwise):

 

(i)            The Hedge Provider shall first be
entitled to receive payment in full of the Obligations before the Counterparty or
any Guarantor is entitled to receive any payment on account of the Guarantor
Claims.

 

(ii)           Any payment or distribution of assets
of any Transaction Party of any kind or character, whether in cash, property or
securities, to which the Counterparty or any Guarantor would be entitled except
for the provisions of this Section 8.09(c), shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution directly to the Hedge Provider, to the extent necessary to make payment
in full of all Obligations remaining unpaid after giving effect to any
concurrent payment or distribution or provisions therefor to the Hedge Provider.

 

(d)           No right of the Hedge Provider or any
other present or future assignees or holders of any Obligations to enforce the
subordination provisions herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of any Transaction Party or
by any 

 

55

 

act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Counterparty or any Guarantor with the
terms hereof, regardless of any knowledge thereof which any such holder may
have or be otherwise charged with.

 

Section 8.10           Claims in Bankruptcy. Except
to the extent expressly provided in the Intercreditor Agreement, in the event
of receivership, bankruptcy, reorganization, arrangement, debtor’s relief, or
other insolvency proceedings involving the Counterparty or any other
Transaction Party or any of their respective Subsidiaries, as debtor, the Hedge
Provider shall have the right to prove their claim in any proceeding, so as to
establish their rights hereunder and receive directly from the receiver,
trustee or other court custodian, dividends and payments which would otherwise
be payable upon Guarantor Claims. Each Guarantor hereby assigns such dividends
and payments to the Hedge Provider. If the Hedge Provider receives, for
application towards the Obligations, any such dividend or payment which is
otherwise payable to any Guarantor, and which, as between either the
Counterparty or any Subsidiary of the Counterparty and any Guarantor, shall
constitute a credit upon the Guarantor Claims, then upon payment and
performance in full of the Obligations, the termination or expiration of the
Commitments, and the termination or expiration of all Hedging Transactions and
all Transaction Documents, such Guarantor shall become subrogated to the rights
of the Hedge Provider to the extent that such payments to the Hedge Provider on
the Guarantor Claims have contributed toward the liquidation of the Obligations
and such subrogation shall be with respect to that proportion of the
Obligations which would have been unpaid if the Hedge Provider had not received
dividends or payments upon the Guarantor Claims.

 

Section 8.11           Payments Held in Trust. In the
event that notwithstanding Sections 8.09 and 8.10 above, any
Guarantor should receive any funds, payments, claims or distributions which are
prohibited by such Sections, such Guarantor shall hold in trust for the Hedge
Provider an amount equal to the amount of all funds, payments, claims or
distributions so received, and agrees that it shall have absolutely no dominion
over the amount of such funds, payments, claims or distributions except to pay
them promptly to the Hedge Provider, and each Guarantor covenants promptly to
pay the same to the Hedge Provider.

 

Section 8.12           Benefit of Guaranty. The
provisions of this Article VIII are for the benefit of the Hedge Provider,
its successors and permitted transferees, endorsees and assigns. In the event
all or any part of the Obligations are transferred, endorsed or assigned by the
Hedge Provider, as the case may be, to any other Person or Persons in
accordance with the terms applicable Transaction Document, any reference to the
“Hedge Provider” herein, as the case may be, shall be deemed to refer equally
to such Person or Persons.

 

Section 8.13           Reinstatement. This Article
VIII shall remain in full force and effect and continue to be effective in
the event any petition is filed by or against the Counterparty, any Guarantor
or any other Transaction Party for bankruptcy, liquidation or reorganization,
in the event that any of them becomes insolvent or makes an assignment for the
benefit of creditors or in the event a receiver, trustee or similar Person is
appointed for all or any significant part of any of their assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof, is, pursuant
to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by the Hedge Provider, whether as a “voidable preference,”
“fraudulent conveyance,” or otherwise, all as 

 

56

 

though such payment or performance had not been made. In
the event that any payment, or any part thereof, is rescinded, reduced,
restored or returned, the Obligations shall be reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced, restored or returned.

 

Section 8.14           Liens Subordinate. Each
Guarantor agrees that any Liens, security interests, judgment liens, charges or
other encumbrances upon the Counterparty’s or any Subsidiary of the
Counterparty’s assets securing payment of the Guarantor Claims shall be and
remain inferior and subordinate to any Liens, security interests, judgment
liens, charges or other encumbrances upon the Counterparty’s or any Subsidiary
of the Counterparty’s assets securing payment and/or performance of the
Obligations, regardless of whether such encumbrances in favor of any Guarantor,
the Hedge Provider presently exist or are hereafter created or attach.

 

Section 8.15           Guarantor’s Enforcement Rights.
Without the prior written consent of the Hedge Provider, no Guarantor shall (a)
exercise or enforce any creditor’s right it may have against either the
Counterparty or any other Transaction Party, or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceeding
(judicial or otherwise, including without limitation the commencement of or
joinder in any liquidation, bankruptcy, rearrangement, debtor’s relief or
insolvency proceeding) to enforce any lien, mortgages, deeds of trust, security
interest, collateral rights, judgments or other encumbrances on assets of the
Counterparty or any held by Guarantor.

 

Section 8.16           Limitation. It is the
intention of the Guarantors and the Hedge Provider that the amount of the
Obligations guaranteed by each Guarantor shall be in, but not in excess of, the
maximum amount permitted by fraudulent conveyance, fraudulent transfer and
similar Legal Requirements applicable to such Guarantor. Accordingly,
notwithstanding anything to the contrary contained in this Article VIII
or in any other agreement or instrument executed in connection with the payment
of any of the Obligations guaranteed hereby, the amount of the Obligations
guaranteed by a Guarantor under this Article VIII shall be limited to an
aggregate amount equal to the largest amount that would not render such
Guarantor’s obligations hereunder subject to avoidance under Section 548 of the
United States Bankruptcy Code or any comparable provision of any other
applicable law.

 

Section 8.17           Contribution Rights.

 

(a)           To the extent that any payment is
made under this Guaranty (a “Guarantor Payment”), by a Guarantor, which
Guarantor Payment, taking into account all other Guarantor Payments then
previously or concurrently made by all other Guarantors, exceeds the amount
which such Guarantor would otherwise have paid if each Guarantor had paid the
aggregate Obligations satisfied by such Guarantor Payment in the same
proportion that such Guarantor’s Allocable Amount (as defined below) (in effect
immediately prior to such Guarantor Payment) bore to the aggregate Allocable
Amounts of all of the Guarantors in effect immediately prior to the making of
such Guarantor Payment, then, following the date on which the Obligations shall
have been paid and performed in full, all Commitments, Hedging Transactions and
Transaction Documents have expired or been terminated and each Guarantor shall
have paid and performed all of its obligations hereunder, such Guarantor shall
be entitled to receive contribution and indemnification payments from, and be
reimbursed by, each of the other Guarantors for the 

 

57

 

amount of such excess, pro rata based upon their
respective Allocable Amounts in effect immediately prior to such Guarantor
Payment.

 

(b)           As of any date of determination, the “Allocable
Amount” of any Guarantor shall be equal to the maximum amount of the claim
which could then be recovered from such Guarantor under this Guaranty without
rendering such claim voidable or avoidable under Section 548 of Chapter 11 of
the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer
Act, Uniform Fraudulent Conveyance Act or similar statute or common law.

 

(c)           This Section 8.17 is intended
to define the relative rights of the Guarantors and nothing set forth in this Section
8.17 is intended to or shall impair the obligations of the Guarantors,
jointly and severally, to pay any amounts as and when the same shall become due
and payable in accordance with the terms of this Guaranty.

 

(d)           The rights of the parties under this Section
8.17 shall be exercisable on the date on which the Obligations shall be
paid and performed in full, all Commitments, Hedging Transactions and
Transaction Documents shall have expired or been terminated, and each Guarantor
shall have performed all of its obligations hereunder.

 

(e)           The parties hereto acknowledge that
the right of contribution and indemnification hereunder shall constitute assets
of any Guarantor to which such contribution and indemnification is owing.

 

Section 8.18           Release of Guarantors. Upon
the sale or disposition of any Guarantor to a Third Person pursuant to the
terms of this Agreement and the Credit Agreement to any Person other than any
other Guarantor, the Hedge Provider shall, at the Counterparty’s sole cost and expense,
execute and deliver to such Guarantor such documents as such Guarantor shall
reasonably require and take any other actions reasonably required to evidence
or effect the release of such Guarantor from this Article VIII.

 

ARTICLE IX

MISCELLANEOUS

 

Section 9.01           Amendments, Etc. No amendment or waiver of any provision
of this Agreement or any other Transaction Document (other than the Fee
Letter), and no consent to any departure by any Transaction Party therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Hedge Provider and the Counterparty and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.

 

Section 9.02           Notices, Etc.

 

(a)           General. Except in the case of
notices and other communications expressly permitted to be given by telephone
(and except as provided in paragraph (c) below), all notices and other
communications provided for herein shall be in writing and shall be delivered
by hand or overnight courier service, mailed by certified or registered mail,
sent by telecopier or (subject to subsection (c) below) electronic mail address
to the Counterparty, any other Transaction Party, 

 

58

 

or the Hedge Provider, to the address, facsimile
number, electronic mail address or telephone number specified for such Person
on Schedule 9.02 or to such other address, facsimile number, electronic
mail address or telephone number as shall be designated by such party in a
notice to the other parties.

 

Notices sent
by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by
telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given on the next Business Day for the recipient) and confirmed received.
Notices delivered through electronic communications to the extent provided in
paragraph (c) below, shall be effective as provided in said paragraph (c). In
no event shall a voicemail message be effective as a notice, communication or
confirmation hereunder.

 

(b)           Effectiveness of Facsimile
Documents and Signatures. Transaction Documents may be transmitted and/or
signed by facsimile. The effectiveness of any such documents and signatures
shall, subject to applicable Legal Requirements, have the same force and effect
as manually-signed originals and shall be binding on all Transaction Parties, and
the Hedge Provider. The Hedge Provider may also require that any such documents
and signatures be confirmed by a manually-signed original thereof; provided,
however, that the failure to request or deliver the same shall not limit
the effectiveness of any facsimile document or signature.

 

(c)           Limited Use of Electronic Mail.
Notices and other communications to the Hedge Provider hereunder may be
delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the Hedge
Provider in its sole discretion. The Hedge Provider may, in its sole
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it, provided
that approval of such procedures may be limited to particular notices or
communications. Unless the Hedge Provider otherwise prescribes, (i) notices and
other communications sent to an e-mail address shall be deemed received upon
the sender’s receipt of an acknowledgement from the intended recipient (such as
by the “return receipt requested” function, as available, return e-mail or
other written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the recipient,
such notice or communication shall be deemed to have been sent at the opening
of business on the next business day for the recipient, and (ii) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.

 

(d)           Reliance by Hedge Provider. The
Hedge Provider shall be entitled to rely and act upon any notices purportedly
given by or on behalf of a Transaction Party even if (i) such notices were not
made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof. THE COUNTERPARTY HEREBY AGREES TO INDEMNIFY AND HOLD
HARMLESS THE HEDGE PROVIDER AND EACH OF ITS RELATED PARTIES FROM ALL LOSSES,
COSTS, EXPENSES AND LIABILITIES RESULTING FROM THE RELIANCE BY SUCH PERSON ON
EACH NOTICE PURPORTEDLY GIVEN BY OR ON BEHALF OF THE COUNTERPARTY; PROVIDED
THAT SUCH INDEMNITY SHALL NOT BE AVAILABLE TO THE EXTENT 

 

59

 

THAT
SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS ARE DETERMINED BY A
COURT OF COMPETENT JURISDICTION BY FINAL AND NON-APPEALABLE JUDGMENT TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON SEEKING
INDEMNIFICATION. All telephonic notices to and other
communications with the Hedge Provider may be recorded by the Hedge Provider,
and each of the parties hereto hereby consents to such recording.

 

Section 9.03           No Waiver; Cumulative Remedies.
No failure on the part of the Hedge Provider to exercise, and no delay by any
such Person in exercising, any right, remedy, power or privilege hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. The rights, remedies, powers
and privileges herein provided in this Agreement are cumulative and not
exclusive of any rights, remedies, powers and privileges provided under any
other Transaction Document or applicable law.

 

Section 9.04           Costs and Expenses. The Counterparty
shall pay (i) all reasonable out-of-pocket expenses incurred by the Hedge
Provider (including the reasonable fees, charges and disbursements of counsel
for the Hedge Provider) in connection with the preparation, negotiation,
execution, delivery and administration of this Agreement and the other Transaction
Documents or any amendments, modifications or waivers of the provisions hereof
or thereof (whether or not the transactions contemplated hereby or thereby
shall be consummated), and (ii) all out-of-pocket expenses incurred by the Hedge
Provider (including the fees, charges and disbursements of any counsel for the Hedge
Provider) in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Transaction Documents, including
its rights under this Section, or (B) in connection with any Hedging
Transaction hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Hedging
Transactions. The foregoing costs and expenses shall include all search,
filing, and recording, title insurance and appraisal charges and fees and Taxes
related thereto, and other out-of-pocket expenses incurred by the Hedge
Provider and the cost of independent public accountants and other outside
experts retained by the Hedge Provider. All amounts due under this Section 9.04
shall be payable within ten (10) Business Days after demand therefor. The
agreements in this Section shall survive the payment and performance of the
Obligations, and the expiration or termination of all of the Commitments,
Hedging Transactions and Transaction Documents.

 

Section 9.05           Indemnification. The Counterparty
shall indemnify the Hedge Provider and each of its Related Parties (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all liabilities, obligations,
losses, damages, penalties, claims, demands, actions, judgments, suits, costs,
expenses, or disbursements (including all reasonably incurred fees, expenses
and disbursements of any law firm or other external counsel) of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against any
Indemnitee in any way relating to or arising out of or in connection with (a)
the execution, delivery, enforcement, performance, or administration of this
Agreement, any Transaction Document, or any other agreement, letter or
instrument delivered in connection with the transactions contemplated hereby
and thereby or the consummation of the transactions contemplated hereby and thereby,
(b) any Commitment, 

 

60

 

(c) any action taken or omitted
by the Hedge Provider under this Agreement or any other Transaction Document
(including the Hedge Provider’s own negligence), or (d) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory (including
any investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified
Liabilities”);  provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses or disbursements are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee.

 

TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, NO TRANSACTION PARTY SHALL ASSERT,
AND HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, ANY CLAIM AGAINST ANY
INDEMNITEE, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN
CONNECTION WITH, OR AS A RESULT OF, THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, OR ANY HEDGING TRANSACTION. NO INDEMNITEE SHALL
BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY UNINTENDED RECIPIENTS OF ANY
INFORMATION OR OTHER MATERIALS DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS,
ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS
AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.

 

ALL
AMOUNTS DUE UNDER THIS SECTION 9.05 SHALL BE PAYABLE WITHIN TEN (10)
BUSINESS DAYS AFTER DEMAND THEREFOR. THE AGREEMENTS IN THIS SECTION SHALL
SURVIVE THE PAYMENT AND PERFORMANCE OF THE OBLIGATIONS AND THE EXPIRATION RO
TERMINATION OF ALL OF THE COMMITMENTS, HEDGING TRANSACTIONS AND TRANSACTION
DOCUMENTS.

 

Section 9.06           Successors and Assigns. The
terms and provisions of this Agreement and the Transaction Documents shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and the assigns permitted hereby, except that no Transaction
Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Hedge Provider and the Hedge
Provider may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Counterparty. Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason
of this Agreement.

 

Section 9.07           Confidentiality. Each party
hereto and hereby agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such 

 

61

 

Information confidential), (b) to the extent requested
by any regulatory authority (including any self-regulatory authority), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with
the exercise of any rights and remedies hereunder or under any other Transaction
Document or any action or proceeding relating to this Agreement or any other Transaction
Document or the enforcement of rights or remedies hereunder or thereunder, (f)
subject to an agreement containing provisions substantially the same as those
of this Section, to the Administrative Agent and any Lender to the extent expressly
required under the Credit Agreement, (g) with the consent of the other party or
(h) to the extent such Information (x) becomes publicly available other than as
a result of a breach of this Section or (y) becomes available to the either
party on a nonconfidential basis from a source other than the other party. For
purposes of this Section, “Information” means all information received by any
party hereto and from any other party hereto relating to any such party or any
of its respective businesses, other than any such information that is available
to the party to whom such information is disclosed on a nonconfidential basis
prior to disclosure by any such party. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

 

Section 9.08           Execution in Counterparts. This
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute
one and the same agreement.

 

Section 9.09           Survival of Representations, etc.
All representations and warranties made in this Agreement and in any other Transaction
Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery
hereof and thereof. All such representations and warranties have been or will
be relied upon by the Hedge Provider, regardless of any investigation made by
the Hedge Provider and notwithstanding that the Hedge Provider may have had notice
or knowledge of any Potential Event of Default or Specified Event, and shall
continue in full force and effect as long as any Obligation hereunder shall remain
unpaid or unsatisfied, or any Commitment, any Hedging Transaction or any Transaction
Document shall remain in effect.

 

Section 9.10           Severability. If any provision
of this Agreement or the other Transaction Documents is held to be illegal,
invalid or unenforceable, (a) the legality, validity and enforceability of the
remaining provisions of this Agreement and the other Transaction Documents
shall not be affected or impaired thereby and (b) the parties shall endeavor in
good faith negotiations to replace the illegal, invalid or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the illegal, invalid or unenforceable provisions. The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

Section 9.11           Interest Rate Limitation. Notwithstanding
anything to the contrary contained in any Transaction Document, the interest
paid or agreed to be paid under the Transaction Documents shall not exceed the
maximum rate of non-usurious interest permitted by 

 

62

 

applicable Law (the “Maximum Rate”). If the Hedge
Provider shall receive interest in an amount that exceeds the Maximum Rate, the
excess interest shall at the Hedge Provider’s option be maintained in the
Collateral Account or refunded to the Counterparty. In determining whether the
interest contracted for, charged, or received by the Hedge Provider exceeds the
Maximum Rate, such Person may, to the extent permitted by applicable Law, (a)
characterize any payment that is not principal as an expense, fee, or premium
rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.

 

Section 9.12           Governing Law. THIS AGREEMENT AND EACH
OF THE OTHER TRANSACTION DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW).

 

Section 9.13           Submission to Jurisdiction.

 

(A)          ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT MAY
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR
OF THE UNITED STATES FOR THE EASTERN DISTRICT OF SUCH STATE, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, THE TRANSACTION PARTIES AND THE HEDGE PROVIDER
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE COUNTERPARTY, THE HEDGE PROVIDER AND EACH
OTHER TRANSACTION PARTY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF ANY TRANSACTION DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE
HEDGE PROVIDER, COUNTERPARTY AND ANY GUARANTOR WAIVE PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.

 

(b)           Each Transaction Party has
irrevocably appointed CT Corporation System (the “Process Agent”), with
an office on the date hereof at 111 Eighth Ave., New York, New York, 10011, as
its agent to receive on its behalf and on behalf of its property service of
copies of any summons or complaint or any other process which may be served in
any action. Such service may be made by mailing or delivering a copy of such
process to such Transaction Party in care of the Process Agent at the Process
Agent’s above address, and each Transaction Party hereby irrevocably authorizes
and directs the Process Agent to accept such service on its behalf. As an
alternative method of service, each Transaction Party also irrevocably consents
to the service of any and all process in any such action or proceeding by the
mailing of copies of such process to it at the address specified for it on the
signature pages of this Agreement.

 

(c)           Nothing in this Section 9.13
shall affect the right of the Hedge Provider to serve legal process in any
other manner permitted by law or affect the right of the Hedge Provider to 

 

63

 

bring any action or proceeding against any Transaction
Party (as the Counterparty or as a Guarantor) in the courts of any other
jurisdiction.

 

Section 9.14           Waiver of Jury Trial. EACH PARTY TO
THIS AGREEMENT HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY
TRANSACTION DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY
TRANSACTION DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

Section 9.15           Entire Agreement. THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS REPRESENT THE
FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

64

 

                IN
WITNESS WHEREOF, each of the undersigned has caused this Master Transaction
Agreement to be duly executed and delivered as of the date first above written.

 

 

	
   

  	
  HEDGE PROVIDER:

  
	
   

  	
   

  
	
   

  	
  SOCIÉTÉ GÉNÉRALE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Francois-Xavier Saint-Macary

  
	
   

  	
  Name:

  	
  Francois-Xavier Saint-Macary

  
	
   

  	
  Title:

  	
  Managing Director, Global Head

  
	
   

  	
   

  	
  of Commodities Trading

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COUNTERPARTY:

  
	
   

  	
   

  
	
   

  	
  MXENERGY INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carole R. Artman-Hodge

  
	
   

  	
  Name:

  	
  /s/ Carole R. Artman-Hodge

  
	
   

  	
  Title:

  	
  Executive Vice President, Chief Operating

  
	
   

  	
   

  	
  Officer and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MXENERGY ELECTRIC INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carole R. Artman-Hodge

  
	
   

  	
  Name: Carole R. Artman-Hodge

  
	
   

  	
  Title: Chief Operating Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MXENERGY HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carole R. Artman-Hodge

  
	
   

  	
  Name: Carole R. Artman-Hodge

  
	
   

  	
  Title: Executive Vice President, Chief Operating

  Officer and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ONLINE CHOICE INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carole R. Artman-Hodge

  
	
   

  	
  Name: Carole R. Artman-Hodge

  
						

 

 

Signature Page to Master Transaction Agreement

 

 

	
   

  	
  Title: Vice President, Secretary and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MXENERGY GAS CAPITAL HOLDINGS

  
	
   

  	
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carole R. Artman-Hodge

  
	
   

  	
  Name: Carole R. Artman-Hodge

  
	
   

  	
  Title: Vice President, Secretary and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MXENERGY ELECTRIC CAPITAL HOLDINGS

  
	
   

  	
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carole R. Artman-Hodge

  
	
   

  	
  Name: Carole R. Artman-Hodge

  
	
   

  	
  Title: Vice President, Secretary and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MXENERGY GAS CAPITAL CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carole R. Artman-Hodge

  
	
   

  	
  Name: Carole R. Artman-Hodge

  
	
   

  	
  Title: Vice President, Secretary and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MXENERGY ELECTRIC CAPITAL CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carole R. Artman-Hodge

  
	
   

  	
  Name: Carole R. Artman-Hodge

  
	
   

  	
  Title: Vice President, Secretary and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TOTAL GAS & ELECTRIC INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carole R. Artman-Hodge

  
	
   

  	
  Name: Carole R. Artman-Hodge

  
	
   

  	
  Title: Chief Operating Officer

  
				

 

 

Signature Page to Master Transaction Agreement

 

 

	
   

  	
  TOTAL GAS & ELECTRICITY (PA) INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carole R. Artman-Hodge

  
	
   

  	
  Name: Carole R. Artman-Hodge

  
	
   

  	
  Title: Chief Operating Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MXENERGY CAPITAL HOLDINGS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carole R. Artman-Hodge

  
	
   

  	
  Name: Carole R. Artman-Hodge

  
	
   

  	
  Title: Vice President, Secretary and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MXENERGY CAPITAL CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carole R. Artman-Hodge

  
	
   

  	
  Name: Carole R. Artman-Hodge

  
	
   

  	
  Title: Vice President, Secretary and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MXENERGY ENERGY SERVICES INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carole R. Artman-Hodge

  
	
   

  	
  Name: Carole R. Artman-Hodge

  
	
   

  	
  Title: Chief Operating Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INFOMETER.COM INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carole R. Artman-Hodge

  
	
   

  	
  Name: Carole R. Artman-Hodge

  
	
   

  	
  Title: Vice President, Secretary and Treasurer

  

 

 

Signature Page to Master Transaction Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}]]