Document:

Exhibit 10.3

 

FIRST AMENDED AND RESTATED SECURITY AGREEMENT

 

This First Amended and Restated Security Agreement dated as of August 1,
2006 (this “Agreement”) is by and among MxEnergy Inc., a Delaware corporation,
MxEnergy Electric Inc., a Delaware corporation (each individually, a “Borrower”
and collectively, the “Borrowers”), MxEnergy Holdings Inc. (the “Parent”)
and certain Subsidiaries thereof (together with the Parent, each individually,
a “Guarantor” and collectively, the “Guarantors”, and together
with the Parent and the Borrowers, each individually a “Grantor” and collectively,
the “Grantors”) and Société Générale, as Administrative Agent (the “Administrative
Agent”) for the ratable benefit of itself and the other Secured Parties (as
defined in the Credit Agreement described below).

 

INTRODUCTION

 

A.            This Agreement is entered into in
connection with the First Amended and Restated Credit Agreement dated as of August
1, 2006 (as it may be amended, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among the Borrowers, the Guarantors, the
lenders from time to time party thereto (individually, a “Lender” and
collectively, the “Lenders”), and Administrative Agent.

 

B.            Each Grantor (other
than the Borrowers) is a Subsidiary or Affiliate of the Borrowers and will
derive substantial direct and indirect benefit from (i) the transactions
contemplated by the Credit Agreement and the other Loan Documents and (ii) the Swap
Contracts entered into by any Loan Party with a Lender or an Affiliate of a
Lender.

 

C.            Each of the Grantors
previously executed the Security Agreement dated December 19, 2005 (the “Existing
Security Agreement”) in favor of the Administrative Agent for the ratable
benefit of the Secured Parties, and it is a condition to the making of the
Revolving Advances and the Swingline Advances and the issuance of the Letters
of Credit that the Existing Security Agreement be amended and restated in its
entirety as set forth herein.

 

NOW, THEREFORE, each Grantor hereby agrees with the Administrative
Agent for the benefit of the Secured Parties as follows:

 

Section 1.               Definitions; Interpretation.
(a) All capitalized terms not otherwise defined in this Agreement that are
defined in the Credit Agreement shall have the meanings assigned to such terms
by the Credit Agreement. Any terms used in this Agreement that are defined in
the UCC (as defined below) and not otherwise defined herein or in the Credit
Agreement, shall have the meanings assigned to those terms by the UCC. All
meanings to defined terms, unless otherwise indicated, are to be equally
applicable to both the singular and plural forms of the terms defined. The
following terms shall have the meanings specified below:

 

“Accounts” means an “account” as defined in the
UCC, including, without limitation, all of any Grantor’s rights to payment for
goods or electricity sold or leased, services performed, or otherwise, whether
now in existence or arising from time to time hereafter, including, without
limitation, all rights arising under any of the Contracts or evidenced by

 

 

an account, note, contract, security agreement,
Chattel Paper (including, without limitation, tangible Chattel Paper and
electronic Chattel Paper), or other evidence of indebtedness or security,
together with all of the right, title and interest of any Grantor in and to (i)
all security pledged, assigned, hypothecated or granted to or held by any
Grantor to secure the foregoing, (ii) all of any Grantor’s right, title
and interest in and to any goods or services, the sale of which gave rise
thereto, (iii) all guarantees, endorsements and indemnifications on, or of, any
of the foregoing, (iv) all powers of attorney granted to any Grantor for
the execution of any evidence of indebtedness or security or other writing in
connection therewith, (v) all books, correspondence, credit files, records,
ledger cards, invoices, and other papers relating thereto, including without
limitation all similar information stored on a magnetic medium or other similar
storage device and other papers and documents in the possession or under the
control of any Grantor or any computer bureau from time to time acting for any
Grantor, (vi) all evidences of the filing of financing statements and other
statements granted to any Grantor and the registration of other instruments in
connection therewith and amendments thereto, notices to other creditors or
secured parties, and certificates from filing or other registration officers,
(vii) all credit information, reports and memoranda relating thereto, and (viii)
all other writings related in any way to the foregoing.

 

“Agreement” means this First Amended and
Restated Security Agreement, as the same may be modified, supplemented or
amended from time to time in accordance with its terms.

 

“Cash Collateral” means all amounts from time
to time held in any checking, savings, deposit or other account of such
Grantor, including, if applicable, the Administrative Agent’s Account and the
LC Cash Collateral Account, all monies, proceeds or sums due or to become due
therefrom or thereon and all documents (including, but not limited to
passbooks, certificates and receipts) evidencing all funds and investments held
in such accounts.

 

“Collateral” has the meaning set forth in
Section 2 of this Agreement.

 

“Contracts” means all contracts to which any
Grantor now is, or hereafter will be bound, or to which such Grantor is or
hereafter will be a party, beneficiary or assignee, all Insurance Contracts,
and all exhibits, schedules and other attachments to such contracts, as the same
may be amended, supplemented or otherwise modified or replaced from time to
time.

 

“Contract Documents” means all Instruments,
Chattel Paper, letters of credit, bonds, guarantees or similar documents
evidencing, representing, arising from or existing in respect of, relating to,
securing or otherwise supporting the payment of, the Contract Rights.

 

“Contract Rights” means (i) all (A) of any
Grantor’s rights to payment under any Contract or Contract Document and (B)
payments due and to become due to any Grantor under any Contract or Contract
Document, in each case whether as contractual obligations, damages or
otherwise; (ii) all of any Grantor’s claims, rights, powers, or privileges and

 

2

 

remedies under any Contract or Contract Document; and
(iii) all of any Grantor’s rights under any Contract or Contract Document to
make determinations, to exercise any election (including, but not limited to,
election of remedies) or option or to give or receive any notice, consent,
waiver or approval together with full power and authority with respect to any
Contract or Contract Document to demand, receive, enforce or collect any of the
foregoing rights or any property which is the subject of any Contract or
Contract Document, to enforce or execute any checks, or other instruments or
orders, to file any claims and to take any action which, in the opinion of the Administrative
Agent, may be necessary or advisable in connection with any of the foregoing.

 

“Document” means a bill of lading, dock
warrant, dock receipt, warehouse receipt or order for the delivery of goods,
and also any other document which in the regular course of business or
financing is treated as adequately evidencing that the person in possession of
it is entitled to receive, hold and dispose of the document and the goods it
covers.

 

“General Intangibles” means all general
intangibles now or hereafter owned by any Grantor, or in which any Grantor
holds or acquires any other right, title or interest, constituting “general
intangibles” or “payment intangibles” under the UCC, including, but not limited
to, all trademarks, trademark applications, trademark registrations,
tradenames, fictitious business names, business names, company names, business
identifiers, prints, labels, trade styles and service marks (whether or not
registered), trade dress, including logos and/or designs, copyrights, patents,
patent applications, goodwill of any Grantor’s business symbolized by any of
the foregoing, trade secrets, license rights, license agreements, permits,
franchises, and any rights to tax refunds to which any Grantor is now or
hereafter may be entitled.

 

“Insurance Contracts” means all contracts and
policies of insurance and re-insurance maintained or required to be maintained
by or on behalf of any Grantor under the Loan Documents.

 

“Inventory” means all inventory of any Grantor,
or in which any Grantor holds or acquires any right, title or interest, of
every type or description, now owned or hereafter acquired and wherever
located, whether raw, in process or finished, and all materials usable in
processing the same and all documents of title covering any inventory,
including, without limitation, work in process, materials used or consumed in
any Grantor’s business, now owned or hereafter acquired or manufactured by any
Grantor and held for sale in the ordinary course of its business, all present
and future substitutions therefor, parts and accessories thereof and all
additions thereto, all Proceeds thereof and products of such inventory in any
form whatsoever, and any other item constituting “inventory” under the UCC.

 

“Inventory Records” means all books, records,
other similar property, and General Intangibles at any time relating to
Inventory.

 

“Proceeds” means all proceeds (as defined in
the UCC) of any or all of the Collateral, including without limitation (i) any
and all proceeds of, all claims for, and all rights of any Grantor to receive
the return of any premiums for, any insurance, indemnity,

 

3

 

warranty or guaranty payable from time to time with
respect to any of the Collateral, (ii) any and all payments (in any form
whatsoever) made or due and payable from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting
under color of any Governmental Authority), (iii) all proceeds received or
receivable when any or all of the Collateral is sold, exchanged or otherwise
disposed, whether voluntarily, involuntarily, in foreclosure or otherwise, (iv)
all claims of any Grantor for damages arising out of, or for breach of or
default under, any Collateral, (v) all rights of any Grantor to terminate, amend,
supplement, modify or waive performance under any Contracts, to perform
thereunder and to compel performance and otherwise exercise all remedies
thereunder, and (vi) any and all other amounts from time to time paid or
payable under or in connection with any of the Collateral.

 

“Secured Obligations” means all Obligations now
or hereafter existing under the Loan Documents or any Swap Contract to which a
Lender or its Affiliate is a party, including any extensions, modifications,
substitutions, amendments and renewals thereof, whether for principal,
interest, fees, expenses, indemnification, or otherwise.

 

“Swap Contract” has the meaning set forth in
the Credit Agreement.

 

“UCC” shall mean the Uniform Commercial Code as
the same may, from time to time, be in effect in the State of New York;
provided, however, in the event that, by reason of mandatory provisions of law,
any or all of the attachment, perfection or priority of the security interest
in any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term “UCC” shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.

 

(b)           All meanings to
defined terms, unless otherwise indicated, are to be equally applicable to both
the singular and plural forms of the terms defined. Article, Section, Schedule,
and Exhibit references are to Articles and Sections of and Schedules and
Exhibits to this Agreement, unless otherwise specified. All references to
instruments, documents, contracts, and agreements are references to such
instruments, documents, contracts, and agreements as the same may be amended,
supplemented, and otherwise modified from time to time, unless otherwise
specified. The words “hereof”, “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. As used herein, the term “including”
means “including, without limitation,”. Paragraph headings have been inserted
in this Agreement as a matter of convenience for reference only and it is
agreed that such paragraph headings are not a part of this Agreement and shall
not be used in the interpretation of any provision of this Agreement.

 

Section 2.               Grant of Security Interest.

 

(a)           As collateral security for the prompt
and complete payment and performance when due of all Secured Obligations, each
Grantor hereby grants to the Administrative Agent for the benefit of the Secured
Parties a security interest in all of such Grantor’s right, title and

 

4

 

interest in, to and under,
all items described in this Section 2, whether now owned or hereafter acquired
by such Grantor and wherever located and whether now owned or hereafter
existing or arising (collectively, the “Collateral”):

 

	
  (i)

  	
   

  	
  all
  Contracts, all Contract Rights, Contract Documents and Accounts associated
  with such Contracts and each and every document granting security to such
  Grantor under any such Contract;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  all
  Accounts;

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  all
  Inventory;

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  all
  Equipment;

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  all
  General Intangibles;

  
	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  all
  Investment Property;

  
	
   

  	
   

  	
   

  
	
  (vii)

  	
   

  	
  all
  Fixtures;

  
	
   

  	
   

  	
   

  
	
  (viii)

  	
   

  	
  all
  Cash Collateral;

  
	
   

  	
   

  	
   

  
	
  (ix)

  	
   

  	
  any
  right to receive a payment under any Swap Contract in connection with a
  termination thereof;

  
	
   

  	
   

  	
   

  
	
  (x)

  	
   

  	
  (A)
  all policies of insurance and Insurance Contracts, now or hereafter held by
  or on behalf of such Grantor, including casualty and liability, business
  interruption, and any title insurance, (B) all Proceeds of insurance, and (C)
  all rights, now or hereafter held by such Grantor to any warranties of any
  manufacturer or contractor of any other Person;

  
	
   

  	
   

  	
   

  
	
  (xi)

  	
   

  	
  any
  and all liens and security interests (together with the documents evidencing
  such security interests) granted to such Grantor by an obligor to secure such
  obligor’s obligations owing under any Instrument, Chattel Paper, or Contract
  which is pledged hereunder or with respect to which a security interest in
  such Grantor’s rights in such Instrument, Chattel Paper, or Contract is
  granted hereunder;

  
	
   

  	
   

  	
   

  
	
  (xii)

  	
   

  	
  any
  and all guaranties given by any Person for the benefit of such Grantor which
  guarantees the obligations of an obligor under any Instrument, Chattel Paper
  or Contract, which are pledged hereunder;

  
	
   

  	
   

  	
   

  
	
  (xiii)

  	
   

  	
  without
  limiting the generality of the foregoing, all other personal property, goods,
  Instruments, Chattel Paper, Documents, Fixtures, credits, claims, demands and
  assets of such Grantor whether now existing or hereafter acquired from time
  to time; and

  

 

5

 

	
  (xiv)

  	
   

  	
  any
  and all additions, accessions and improvements to, all substitutions and
  replacements for and all products and Proceeds of or derived from all of the
  items described above in this Section 2.

  

 

Notwithstanding any of the other provisions set
forth in this Section 2(a), this Agreement shall not constitute a grant of a
security interest in any property to the extent that such grant of a security
interest is prohibited by any Legal Requirement of a Governmental Authority,
requires a consent not obtained pursuant to such Legal Requirement or is
prohibited by, or constitutes a breach or default under or results in the
termination of or requires any consent not obtained under, any contract,
license, agreement, instrument or other document evidencing or giving rise to
such property except to the extent that such Legal Requirement or the term in
such contract, license, agreement, instrument or other document or shareholder
or similar agreement providing for such prohibition, breach, default or
termination or requiring such consent is ineffective under applicable law.

 

(b)           Notwithstanding anything contained
herein to the contrary, it is the intention of each Grantor, the Administrative
Agent and the other Secured Parties that the amount of the Secured Obligations
secured by each Grantor’s interests in any of its Property shall be in, but not
in excess of, the maximum amount permitted by fraudulent conveyance, fraudulent
transfer and other similar law, rule or regulation of any Governmental
Authority applicable to such Grantor. Accordingly, notwithstanding anything to
the contrary contained in this Agreement in any other agreement or instrument
executed in connection with the payment of any of the Secured Obligations, the
amount of the Secured Obligations secured by each Grantor’s interests in any of
its Property pursuant to this Agreement shall be limited to an aggregate amount
equal to the largest amount that would not render such Grantor’s obligations
hereunder or the liens and security interest granted to the Administrative Agent
hereunder subject to avoidance under Section 548 of the United States
Bankruptcy Code or any comparable provision of any other applicable law.

 

Section 3.               Representations and Warranties.
Each Grantor hereby represents and warrants to the Administrative Agent and the
other Secured Parties as follows:

 

(a)           Records. Such Grantor’s sole
jurisdiction of formation and type of organization are as set forth in Schedule
1 attached hereto. All records concerning the Accounts, General
Intangibles, or any other Collateral applicable to such Grantor are located at
the address for such Grantor on such Schedule 1. None of the Accounts is
evidenced by a promissory note or other instrument.

 

(b)           Other Liens. Such Grantor is,
and will be the record, legal, and beneficial owner of all of the Collateral
pledged by such Grantor free and clear of any Lien, except for the Permitted
Liens and Liens contemplated or permitted by the Intercreditor Agreement. No
effective financing statement or other instrument similar in effect covering
all or any part of the Collateral is, or will be, on file in any recording
office, except such as may be filed in connection with this Agreement or in
connection with other Permitted Liens, Liens contemplated by the Intercreditor
Agreement or for which satisfactory releases have been received by the Administrative
Agent.

 

6

 

(c)           Lien Priority and Perfection.

 

(i)            Subject only to Permitted Liens and
Liens contemplated by the Intercreditor Agreement, this Agreement creates valid
and continuing security interests in the Collateral, securing the payment and
performance of all the Secured Obligations. Upon the filing of financing
statements with the jurisdictions listed in Schedule 1, the security
interests granted to the Administrative Agent hereunder will constitute valid
first-priority perfected security interests in all Collateral with respect to
which a security interest can be perfected by the filing of a financing
statement, subject only to Permitted Liens and Liens contemplated by the
Intercreditor Agreement.

 

(ii)           No consent of any other Person and no
authorization, approval, or other action by, and no notice to or filing with
any Governmental Authority is required (A) for the grant by such Grantor of the
pledge, assignment, and security interest granted hereby or for the execution,
delivery, or performance of this Agreement by such Grantor, (B) for the
validity, perfection, or maintenance of the pledge, assignment, lien, and
security interest created hereby (including the first-priority (subject to
Permitted Liens) nature thereof), except for security interests that cannot be
perfected by filing under the UCC, or (C) for the exercise by the Administrative
Agent of the rights provided for in this Agreement or the remedies in respect
of the Collateral pursuant to this Agreement, except (1) those consents to
assignment of licenses, permits, approvals, and other rights that are as a
matter of law not assignable, (2) those consents, approvals, authorizations, actions,
notices or filings which have been duly obtained or made and, in the case of
the maintenance of perfection, the filing of continuation statements under the
UCC, and (3) those filings and actions described in Section 3(c)(i).

 

(d)           Tax Identification Number and
Organizational Number. The federal tax identification number of such
Grantor and the organizational number of such Grantor are as set forth in Schedule
1.

 

(e)           Tradenames; Prior Names. Except
as set forth on Schedule 1, such Grantor has not conducted business
under any name other than its current name during the last five years prior to
the date of this Agreement.

 

Section 4.               Covenants.

 

(a)           Further Assurances.

 

(i)            Each Grantor agrees that from time
to time, at its expense, such Grantor shall promptly execute and deliver all
instruments and documents, and take all action, that may be reasonably
necessary or desirable, or that the Administrative Agent may reasonably
request, in order to perfect and protect any pledge, assignment, or security
interest granted or intended to be granted hereby or to enable the Administrative
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Collateral. Without limiting the generality of the foregoing, each Grantor
(A) at the request of Administrative Agent, shall execute such instruments,
endorsements or notices, as may be reasonably necessary or as the Administrative
Agent may reasonably request, in order to perfect and preserve the assignments
and security interests granted or purported to be granted hereby, (B) shall, at
the reasonable request of the

 

7

 

Administrative Agent, mark conspicuously each material
document included in the Collateral, each Chattel Paper included in the Accounts,
and each of its records pertaining to the Collateral with a legend, in form and
substance satisfactory to the Administrative Agent, including that such
document, Chattel Paper, or record is subject to the pledge, assignment, and
security interest granted hereby, (C) shall, if any Collateral shall be
evidenced by a promissory note or other instrument or chattel paper, deliver
and pledge to the Administrative Agent hereunder such note or instrument or
chattel paper duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to the Administrative
Agent, and (D) authorizes the Administrative Agent to file any financing
statements, amendments or continuations without the signature of such Grantor
to the extent permitted by applicable law in order to perfect or maintain the
perfection of any security interest granted under this Agreement (including,
without limitation, financing statements using an “all assets” or “all personal
property” collateral description).

 

(ii)           Each Grantor shall pay all filing,
registration and recording fees and all refiling, re-registration and
re-recording fees, and all other reasonable expenses incident to the execution
and acknowledgment of this Agreement, any assurance, and all federal, state,
county and municipal stamp taxes and other taxes, duties, imports, assessments
and charges arising out of or in connection with the execution and delivery of
this Agreement, any agreement supplemental hereto, any financing statements,
and any instruments of further assurance.

 

(iii)          Each Grantor shall promptly provide to
the Administrative Agent all information and evidence the Administrative Agent
may reasonably request concerning the Collateral to enable the Administrative
Agent to enforce the provisions of this Agreement.

 

(b)           Change of Name; State of Formation.
Each Grantor shall give the Administrative Agent at least 30 days’ prior
written notice before it (i) in the case of any Grantor that is not a “registered
organization” (as such term is defined in Section 9-102 of the UCC), changes
the location of its principal place of business and chief executive office,
(ii) changes the location of its jurisdiction of formation or organization,
(iii) changes the location of the Equipment, Inventory, or original copies of
any Chattel Paper evidencing Accounts, or (iv) uses a trade name other than its
current name used on the date hereof.

 

(c)           Right of Inspection. Subject
to the limitations set forth in Section 5.08 of the Credit Agreement, each
Grantor shall hold and preserve, at its own cost and expense satisfactory and
complete records of the Collateral, including, but not limited to, Instruments,
Chattel Paper, Contracts, and records with respect to the Accounts, and will
permit representatives of the Administrative Agent, upon reasonable advance
notice, at any time during normal business hours to inspect and copy them. Upon
the occurrence and during the continuation of any Event of Default, at the Administrative
Agent’s request, each Grantor shall promptly deliver copies of any and all such
records to the Administrative Agent.

 

(d)           Liability Under Contracts and
Accounts. Notwithstanding anything in this Agreement to the contrary, (i)
the execution of this Agreement shall not release any Grantor from its
obligations and duties under any of the Contract Documents, or any other Contract
or Instrument which are part of the Collateral and Accounts included in the
Collateral, (ii) the exercise by the Administrative Agent of any of its rights
hereunder shall not release any Grantor

 

8

 

from any of its duties or
obligations under any Contract Documents, or any other Contract or Instrument
which are part of the Collateral and Accounts included in the Collateral, and
(iii) the Administrative Agent shall not have any obligation or liability under
any Contract Documents, or any other Contract or Instrument which are part of
the Collateral and Accounts included in the Collateral by reason of the
execution and delivery of this Agreement, nor shall the Administrative Agent be
obligated to perform any of the obligations or duties of any Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder.

 

(e)           Transfer of Certain Collateral;
Release of Certain Security Interest. Each Grantor agrees that it shall not
sell, assign, or otherwise dispose of any Collateral, except as otherwise
permitted under the Credit Agreement. The Administrative Agent shall promptly,
at the Grantors’ expense, execute and deliver all further instruments and
documents, and take all further action that such Grantor may reasonably request
to release its security interest in any Collateral which is disposed of in compliance
with the terms of the Credit Agreement.

 

(f)            Accounts. Except as could not
reasonably be expected to have a Material Adverse Effect, each Grantor agrees
that it will use commercially reasonable efforts to ensure that each Account
(i) is and will be, in all material respects, the genuine, legal, valid, and
binding obligations of the account debtor in respect thereof, representing an
unsatisfied obligation of such account debtor, (ii) is and will be, in all
material respects, enforceable in accordance with its terms, is not and will not
be subject to any setoffs, defenses, taxes, counterclaims, except in the
ordinary course of business, (iii) is and will be, in all material respects, in
compliance with all applicable laws, whether federal, state, local or foreign,
and (iv) which if evidenced by Chattel Paper, will not require the consent of
the account debtor in respect thereof in connection with its assignment
hereunder.

 

(g)           Negotiable Instrument. If any
Grantor shall at any time hold or acquire any Negotiable Instruments, including
promissory notes, such Grantor shall forthwith endorse, assign and deliver the
same to the Administrative Agent, accompanied by such instruments of transfer
or assignment duly executed in blank as the Administrative Agent may from time
to time reasonably request.

 

(h)           Other Covenants of Grantor. Each
Grantor agrees that (i) any action or proceeding to enforce this Agreement may
be taken by the Administrative Agent either in such Grantor’s name or in the Administrative
Agent’s name, as the Administrative Agent may deem necessary, and (ii) such
Grantor will, until the payment in full of the Secured Obligations (including
all Letter of Credit Obligations), the termination of all obligations of the
Issuing Bank and the Lenders in respect of Letters of Credit, and the
termination or expiration of the Revolving Commitments, warrant and defend its
title to the Collateral and the interest of the Administrative Agent in the
Collateral against any claim or demand of any Persons (subject to Permitted
Liens and the terms of the Intercreditor Agreement) which could reasonably be
expected to materially adversely affect such Grantor’s title to, or the Administrative
Agent’s right or interest in, such Collateral.

 

Section 5.               Termination of Security
Interest. Upon the payment in full of the Secured Obligations (including
all Letter of Credit Obligations), the termination or expiration of all Letters
of Credit and the termination of all obligations of the Issuing Bank and the
Lenders in

 

9

 

respect of Letters of
Credit, and the termination or expiration of the Revolving Commitments, the
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the applicable Grantor to the extent such Collateral
shall not have been sold or otherwise applied pursuant to the terms hereof. Upon
any such termination, the Administrative Agent will, at the Grantors’ expense,
execute and deliver to the applicable Grantor such documents (including,
without limitation, UCC-3 termination statements) as such Grantor shall
reasonably request to evidence such termination.

 

Section 6.               Reinstatement. If, at any
time after payment in full of all Secured Obligations (including all Letter of
Credit Obligations), the termination or expiration of all Letters of Credit and
the termination of all obligations of the Issuing Bank and the Lenders in
respect of Letters of Credit, and the termination or expiration of the
Revolving Commitments, any payments on the Secured Obligations previously made
must be disgorged by the Administrative Agent for any reason whatsoever,
including, without limitation, the insolvency, bankruptcy or reorganization of
any Grantor or any other Person, this Agreement and the Administrative Agent’s
security interests herein shall be reinstated as to all disgorged payments as
though such payments had not been made, and each Grantor shall sign and deliver
to the Administrative Agent all documents, and shall do such other acts and
things, as may be necessary to reinstate and perfect the Administrative Agent’s
security interest. EACH GRANTOR SHALL DEFEND
AND INDEMNIFY EACH SECURED PARTY FROM AND AGAINST ANY CLAIM, DAMAGE, LOSS,
LIABILITY, COST OR EXPENSE UNDER THIS SECTION 6 (INCLUDING REASONABLE ATTORNEYS’
FEES AND EXPENSES) IN THE DEFENSE OF ANY SUCH ACTION OR SUIT INCLUDING SUCH
CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE ARISING AS A RESULT OF THE
INDEMNIFIED SECURED PARTY’S OWN NEGLIGENCE BUT EXCLUDING SUCH CLAIM, DAMAGE,
LOSS, LIABILITY, COST, OR EXPENSE THAT IS FOUND IN A FINAL, NON-APPEALABLE
JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM SUCH
INDEMNIFIED SECURED PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

Section 7.               Remedies upon Event of Default.

 

(a)           If any Event of Default has occurred
and is continuing, the Administrative Agent may (and shall at the written
request of the Majority Lenders), subject to the terms of the Intercreditor
Agreement, (i) proceed to protect and enforce the rights vested in it by this Agreement
or otherwise available to it, including but not limited to, the right to cause
all revenues and other moneys pledged hereby as Collateral to be paid directly
to it, and to enforce its rights hereunder to such payments and all other
rights hereunder by such appropriate judicial proceedings as it shall deem most
effective to protect and enforce any of such rights, either at law or in equity
or otherwise, whether for specific enforcement of any covenant or agreement
contained in any of the Contract Documents, or in aid of the exercise of any
power therein or herein granted, or for any foreclosure hereunder and sale
under a judgment or decree in any judicial proceeding, or to enforce any other
legal or equitable right vested in it by this Agreement or by law; (ii) cause
any action at law or suit in equity or other proceeding to be instituted and
prosecuted and enforce any rights hereunder or included in the Collateral,
subject to the provisions and requirements thereof; (iii) sell or otherwise
dispose of any or all of the Collateral or cause the Collateral to be sold or
otherwise disposed of in one or more sales or transactions, at

 

10

 

such prices and in such
manner as may be commercially reasonable, and for cash or on credit or for
future delivery, without assumption of any credit risk, at public or private
sale, without demand of performance or notice of intention to sell or of time
or place of sale (except such notice as is required by applicable statute and
cannot be waived), it being agreed that the Administrative Agent may be a
purchaser on behalf of the Secured Parties or on its own behalf at any such
sale and that the Administrative Agent, any other Secured Party, or any other
Person who may be a bona fide purchaser for value and without notice of any
claims of any or all of the Collateral so sold shall thereafter hold the same
absolutely free from any claim or right of whatsoever kind, including any
equity of redemption of any Grantor, any such demand, notice or right and
equity being hereby expressly waived and released to the extent permitted by
law; (iv) incur reasonable expenses, including reasonable attorneys’ fees,
reasonable consultants’ fees, and other costs appropriate to the exercise of
any right or power under this Agreement; (v) perform any obligation of any
Grantor hereunder and make payments, purchase, contest or compromise any
encumbrance, charge or lien, and pay taxes and expenses, without, however, any
obligation to do so; (vi) in connection with any acceleration and foreclosure,
take possession of the Collateral and render it usable and repair and renovate
the same, without, however, any obligation to do so, and enter upon any
location where the Collateral may be located for that purpose, control, manage,
operate, rent and lease the Collateral, collect all rents and income from the
Collateral and apply the same to reimburse the Secured Parties for any cost or
expenses incurred hereunder or under any of the Loan Documents and to the
payment or performance of any Grantor’s obligations hereunder or under any of
the Loan Documents, and apply the balance to the other Secured Obligations and
any remaining excess balance to whomsoever is legally entitled thereto; (vii)
secure the appointment of a receiver for the Collateral or any part thereof;
(viii) require any Grantor to, and each Grantor hereby agrees that it will at
its expense and upon request of the Administrative Agent forthwith, assemble
all or part of the Collateral as directed by the Administrative Agent and make
it available to the Administrative Agent at a place to be designated by the Administrative
Agent which is reasonably convenient to both parties; (ix) exercise any other
or additional rights or remedies of a secured party under the UCC; or (x) occupy
any premises owned or leased by any Grantor where the Collateral or any part
thereof is assembled for a reasonable period in order to effectuate its rights
and remedies hereunder or under law, without obligation to any Grantor in
respect of such occupation. If, pursuant to applicable law, prior notice of
sale of the Collateral under this Section is required to be given to any
Grantor, each Grantor hereby acknowledges that the minimum time required by
such applicable law, or if no minimum time is specified, 10 days, shall be
deemed a reasonable notice period. The Administrative Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Administrative Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which
it was so adjourned.

 

(b)           All reasonable costs
and expenses (including reasonable attorneys’ fees and expenses) incurred by
the Administrative Agent in connection with any suit or proceeding in
connection with the performance by the Administrative Agent of any of the
agreements contained in any of the Contract Documents, or in connection with
any exercise of its rights or remedies hereunder, pursuant to the terms of this
Agreement, shall constitute additional Secured Obligations secured by this Agreement
and shall be paid on demand by the Grantors to the Administrative Agent on
behalf of the Secured Parties.

 

11

 

Section 8.               Remedies Cumulative; Delay Not
Waiver.

 

(a)           No right, power or remedy herein
conferred upon or reserved to the Administrative Agent is intended to be
exclusive of any other right, power or remedy, and every such right, power and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right, power and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder or otherwise shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy. Resort to any
or all security now or hereafter held by the Administrative Agent may be taken
concurrently or successively and in one or several consolidated or independent
judicial actions or lawfully taken nonjudicial proceedings, or both.

 

(b)           No delay or omission
of the Administrative Agent to exercise any right or power accruing upon the
occurrence and during the continuance of any Event of Default as aforesaid
shall impair any such right or power or shall be construed to be a waiver of
any such Event of Default or an acquiescence therein; and every power and
remedy given by this Agreement may be exercised from time to time, and as often
as shall be deemed expedient, by the Administrative Agent.

 

Section 9.               Contract Rights. Subject
to the terms of the Intercreditor Agreement, the Administrative Agent may
exercise any of the Contract Rights and remedies of any Grantor under or in
connection with the Instruments, Chattel Paper, or Contracts which represent
Accounts, the General Intangibles, or which otherwise relate to the Collateral,
including, without limitation, any rights of any Grantor to demand or otherwise
require payment of any amount under, or performance of any provisions of, the
Instruments, Chattel Paper, or Contracts which represent Accounts, or the
General Intangibles.

 

Section 10.             Accounts.

 

(a)           Subject to the terms
of the Intercreditor Agreement, the Administrative Agent may, or may direct any
Grantor to, take any action the Administrative Agent deems necessary or
advisable to enforce collection of the Accounts, including, without limitation,
notifying the account debtors or obligors under any Accounts of the assignment
of such Accounts to the Administrative Agent and, upon the occurrence and
continuation of an Event of Default, directing such account debtors or obligors
to make payment of all amounts due or to become due directly to the Administrative
Agent. Upon such notification and direction, and at the expense of the
Grantors, the Administrative Agent may enforce collection of any such Accounts,
and adjust, settle, or compromise the amount or payment thereof in the same
manner and to the same extent as any Grantor might have done.

 

(b)           After receipt by any
Grantor of the notice referred to in Section 10(a) above that an Event of
Default has occurred and is continuing, all amounts and proceeds (including
instruments) received by such Grantor in respect of the Accounts shall be
received in trust for the benefit of the Administrative Agent hereunder, shall
be segregated from other funds of such Grantor, and shall promptly be paid over
to the Administrative Agent in the same form as so received (with any necessary
endorsement) to be held as Collateral. No Grantor shall adjust,

 

12

 

settle, or compromise the amount or payment of any Account, nor release
wholly or partly any account debtor or obligor thereof, nor allow any credit or
discount thereon.

 

Section 11.             Application of Collateral. Subject
to the terms of the Intercreditor Agreement, the proceeds of any sale of, or
other realization (other than that received from a sale or other realization
permitted by the Credit Agreement) upon all or any part of the Collateral
pledged by any Grantor shall be applied by the Administrative Agent as set
forth in Section 7.06 of the Credit Agreement.

 

Section 12.             Administrative Agent as
Attorney-in-Fact for Grantor. Each Grantor hereby constitutes and
irrevocably appoints the Administrative Agent, acting for and on behalf of
itself and the Secured Parties and each successor or assign of the Administrative
Agent and the Secured Parties, the true and lawful attorney-in-fact of such
Grantor, with full power and authority in the place and stead of such Grantor
and in the name of such Grantor, the Administrative Agent or otherwise to take
any action and execute any instrument at the written direction of the Secured
Parties and enforce all rights, interests and remedies of such Grantor with
respect to the Collateral, including the right:

 

(a)           to ask, require, demand, receive and
give acquittance for any and all moneys and claims for moneys due and to become
due under or arising out of the any of the other Collateral, including without
limitation, any Insurance Contracts;

 

(b)           to elect remedies thereunder and to
endorse any checks or other instruments or orders in connection therewith;

 

(c)           to file any claims or take any action
or institute any proceedings in connection therewith which the Administrative
Agent may deem to be necessary or advisable;

 

(d)           to pay, settle or compromise all
bills and claims which may be or become liens or security interests against any
or all of the Collateral, or any part thereof, unless a bond or other security
satisfactory to the Administrative Agent has been provided; and

 

(e)           upon foreclosure, to do any and every
act which any Grantor may do on its behalf with respect to the Collateral or
any part thereof and to exercise any or all of such Grantor’s rights and
remedies under any or all of the Collateral;

 

provided,
however, that such rights are subject to the terms of the Intercreditor
Agreement and that the Administrative Agent shall not exercise any such rights
except upon the occurrence and continuation of an Event of Default. THIS POWER OF ATTORNEY IS A POWER COUPLED WITH AN INTEREST AND SHALL BE
IRREVOCABLE.

 

Section 13.             Administrative Agent May Perform.
The Administrative Agent may from time-to-time perform any act which any
Grantor has agreed hereunder to perform and which such Grantor shall fail to
perform after being requested in writing so to perform (it being understood
that no such request need be given after the occurrence and during the continuance
of any Event of Default and after notice thereof by the Administrative Agent to
any Grantor) and the Administrative Agent may from time-to-time take any other
action which the Administrative Agent deems necessary for the maintenance,
preservation or protection of any of the Collateral

 

13

 

or of its security
interest therein, and the reasonable expenses of the Administrative Agent
incurred in connection therewith shall be part of the Secured Obligations and
shall be secured hereby.

 

Section 14.             Administrative Agent Has No Duty.
The powers conferred on the Administrative Agent hereunder are solely to
protect its interest in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Administrative Agent shall have no duty as to any Collateral or responsibility
for taking any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral.

 

Section 15.             Reasonable Care. The Administrative
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which the Administrative Agent accords
its own Property.

 

Section 16.             Payments Held in Trust. During
the continuance of an Event of Default, subject to the terms of the
Intercreditor Agreement, all payments received by any Grantor under or in
connection with any Collateral shall be received in trust for the benefit of
the Administrative Agent, and shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Administrative Agent in the
same form as received (with any necessary endorsement).

 

Section 17.             Miscellaneous.

 

(a)           Expenses. Each Grantor will
upon demand pay to the Administrative Agent for its benefit and the benefit of
the Secured Parties the amount of any reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of its counsel and of any
experts, which the Administrative Agent and the Secured Parties may incur in
connection with (i) the custody, preservation, use, or operation of, or the sale
of, collection from, or other realization upon, any of the Collateral, (ii) the
exercise or enforcement of any of the rights of the Administrative Agent or any
Secured Party hereunder, and (iii) the failure by any Grantor to perform or
observe any of the provisions hereof.

 

(b)           Amendments; Etc. No amendment
or waiver of any provision of this Agreement nor consent to any departure by
any Grantor herefrom shall be effective unless the same shall be in writing and
authenticated by each affected Grantor and the Administrative Agent. In
addition, no such amendment, waiver or consent shall be effective unless given
or entered into with the necessary approvals of either the Majority Lenders or
all Lenders as required under the terms of the Credit Agreement. Any such
amendment, waiver or consent, whether by the Administrative Agent or the
Administrative Agent and the Lenders shall be effective only in the specific
instance and for the specific purpose for which given.

 

(c)           Addresses for Notices. All
notices and other communications provided for hereunder shall be made in the
manner and to the addresses set forth in the Credit Agreement or on the
signature pages hereto.

 

14

 

(d)           Continuing Security Interest;
Transfer of Interest. This Agreement shall create a continuing security
interest in the Collateral and, unless expressly released by the Administrative
Agent, shall (i)  remain in full force and effect until the payment in
full of the Secured Obligations (including all Letter of Credit Obligations),
the termination or expiration of all Letters of Credit and the termination of
all obligations of the Issuing Bank and the Lenders in respect of Letters of
Credit other than if such Letters of Credit are collateralized in the manner
permitted by the Credit Agreement, and the termination or expiration of the Revolving
Commitments, (ii) be binding upon each Grantor and its successors, transferees
and assigns, and (iii) inure, together with the rights and remedies of the
Administrative Agent hereunder, to the benefit of and be binding upon, the Administrative
Agent, the Issuing Bank, and the Lenders and their respective successors,
transferees, and assigns, and to the benefit of and be binding upon, the Swap
Counterparties, and each of their respective successors, transferees, and
assigns to the extent such successors, transferees, and assigns of a Swap
Counterparty is a Lender or an Affiliate of a Lender. Without limiting the
generality of the foregoing clause, when any Lender assigns or otherwise
transfers any interest held by it under the Credit Agreement or other Loan
Document to any other Person pursuant to the terms of the Credit Agreement or
such other Loan Document, that other Person shall thereupon become vested with
all the benefits held by such Lender under this Agreement.

 

(e)           Severability. Wherever
possible each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under such law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.

 

(f)            Choice of Law. This Agreement
shall be governed by and construed and enforced in accordance with the laws of
the State of New York, except to the extent that the validity or perfection of
the security interests hereunder, or remedies hereunder, in respect of any
particular Collateral are governed by the laws of a jurisdiction other than the
State of New York.

 

(g)           Counterparts. The parties may
execute this Agreement in any number of duplicate originals, each of which
constitutes an original, and all of which, collectively, constitute only one
agreement. The parties may execute this Agreement in counterparts, each of
which constitutes an original, and all of which, collectively, constitute only
one agreement. Delivery of an executed counterpart signature page by facsimile
is as effective as executing and delivering this Agreement in the presence of
the other parties to this Agreement. In proving this Agreement, a party must
produce or account only for the executed counterpart of the party to be
charged.

 

(h)           Headings. Paragraph headings
have been inserted in this Agreement as a matter of convenience for reference
only and it is agreed that such paragraph headings are not a part of this Agreement
and shall not be used in the interpretation of any provision of this Agreement.

 

(i)            Conflicts. In
the event of any explicit or implicit conflict between any provision of this Agreement
and any provision of the Intercreditor Agreement, the terms of the
Intercreditor Agreement shall be controlling.

 

15

 

(j)            Additional Grantors. Pursuant to Section 5.12 of the Credit Agreement,
each Subsidiary of the Parent that was not a Subsidiary of the Parent on the
date of the Credit Agreement is required to enter into this Agreement as a
Grantor upon becoming a Subsidiary of the Parent. Upon execution and delivery
after the date hereof by the Administrative Agent and such Subsidiary of an
instrument in the form of Annex 1, such Subsidiary shall become a
Grantor hereunder with the same force and effect as if originally named as a
Grantor herein. The execution and delivery of any instrument adding an
additional Grantor as a party to this Agreement shall not require the consent
of any other Grantor hereunder. The rights and obligations of each Grantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Grantor as a party to this Agreement.

 

(k)           Intercreditor Agreement. To
the fullest extent possible, the terms and provisions of the Intercreditor
Agreement shall be read together with the terms and provisions of this
Agreement so that the terms and provisions of this Agreement do not conflict
with the terms and provisions of the Intercreditor Agreement; provided,
however, notwithstanding the foregoing, in the event that any of the terms or
provisions of this Agreement conflict with any terms or provisions of the
Intercreditor Agreement, the terms or provisions of the Intercreditor Agreement
shall govern and control for all purposes.

 

(l)            Entire Agreement. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS DEFINED IN THE CREDIT
AGREEMENT, 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 HERETO.

 

Section 18.             Acknowledgment and Restatement.

 

(a)           Acknowledgment of Security
Interests.

 

(i)            Each Grantor hereby acknowledges,
confirms and agrees that the Administrative Agent for the ratable benefit of
the Secured Parties shall continue to have a security interest in and lien upon
the Collateral heretofore granted to the Administrative Agent for the ratable
benefit of the Secured Parties pursuant to the Loan Documents to secure the
Secured Obligations, as well as any Collateral granted under this Agreement or
under any of the other Loan Documents or otherwise granted to or held by the
Administrative Agent or any Secured Party.

 

(ii)           The liens and security interests of
the Administrative Agent for the benefit of the Secured Parties in the Collateral
shall be deemed to be continuously granted and perfected from the earliest date
of the granting and perfection of such liens and security interests to the
Administrative Agent for the ratable benefit of the Secured Parties, whether
under this Agreement or any of the other Loan Documents.

 

(b)           Loan Documents. Each Grantor
hereby acknowledges, confirms and agrees that: (i) the Loan Documents have been
duly executed and delivered by such Grantor, the Borrowers

 

16

 

and the Guarantors and
are in full force and effect as of the date hereof and (ii) the agreements and
obligations of such Grantor contained in the Loan Documents constitute the
legal, valid and binding obligations of such Grantor enforceable against it in
accordance with its terms and such Grantor has no valid defense to the
enforcement of such obligations and (iii) the Administrative Agent on behalf of
the Secured Parties is entitled to all of the rights and remedies provided for
in favor of the Administrative Agent for the benefit of the Secured Parties in
the Loan Documents, as amended and restated by this Agreement.

 

(c)           Restatement. The amendment and
restatement contained herein shall not, in any manner, be construed to
constitute payment of, or impair, limit, cancel or extinguish, or constitute a
novation in respect of, the indebtedness and other obligations and liabilities
of any Grantor evidenced by or arising under the Loan Documents, and the liens
and security interests in the Collateral (as such term is defined herein) of
the Administrative Agent for the ratable benefit of the Secured Parties
securing such indebtedness and other obligations and liabilities, which shall
not in any manner be impaired, limited, terminated, waived or released, but
shall continue in full force and effect in favor of Administrative Agent for
the ratable benefit of Secured Parties.

 

[Signature Pages Follow]

 

17

 

The parties
hereto have caused this Security Agreement to be duly executed as of the date
first above written.

 

	
   

  	
  GRANTORS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MXENERGY INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  Carole R. Artman-Hodge

  	
   

  
	
   

  	
   

  	
   

  	
  Carole R. Artman-Hodge

  
	
   

  	
   

  	
   

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
  Operating Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MXENERGY ELECTRIC INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  Carole R. Artman-Hodge

  	
   

  
	
   

  	
   

  	
   

  	
  Carole R. Artman-Hodge

  
	
   

  	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MXENERGY HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  Carole R. Artman-Hodge

  	
   

  
	
   

  	
   

  	
   

  	
  Carole R. Artman-Hodge

  
	
   

  	
   

  	
   

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
  Operating Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ONLINE CHOICE INC.

  
	
   

  	
  MXENERGY SERVICES INC.

  
	
   

  	
  INFOMETER.COM INC.

  
	
   

  	
  MXENERGY CAPITAL HOLDINGS CORP.

  
	
   

  	
  MXENERGY CAPITAL CORP.

  
	
   

  	
  MXENERGY GAS CAPITAL HOLDINGS CORP.

  
	
   

  	
  MXENERGY ELECTRIC CAPITAL HOLDINGS

  
	
   

  	
  CORP.

  
	
   

  	
  MXENERGY GAS CAPITAL CORP.

  
	
   

  	
  MXENERGY ELECTRIC CAPITAL CORP.

  
	
   

  	
  TOTAL GAS & ELECTRIC INC.

  
	
   

  	
  TOTAL GAS & ELECTRICITY (PA) INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  Carole R. Artman-Hodge

  	
   

  
	
   

  	
   

  	
   

  	
  Carole R. Artman-Hodge

  
	
   

  	
   

  	
   

  	
  Vice President

  

 

Signature Page to First Amended and Restated
Security Agreement

 

 

	
   

  	
  ADMINISTRATIVE AGENT:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SOCIÉTÉ GÉNÉRALE, as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chung-Taek Oh

  	
   

  
	
   

  	
  Name: Chung-Taek Oh

  
	
   

  	
  Title: Associate

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barbara Paulsen

  	
   

  
	
   

  	
  Name: Barbara Paulsen

  
	
   

  	
  Title: DirectorExhibit 10.4

 

AMENDED AND RESTATED

LOAN AGREEMENT

 

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

 

RECITALS.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

AMENDMENT AND RESTATEMENT:

 

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

 

 

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

 

1.                                       The
Loans.

 

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

 

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

 

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

 

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

 

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

 

 

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

 

3.                                       Payment.

 

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

 

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

 

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

 

3

 

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

 

4.                                       Conditions
to Extending Credit.

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

4.2.1.                     Intentionally
Omitted.

 

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

 

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

 

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

 

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

 

6

 

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

 

5.1.                              Financial
Covenants.

 

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

 

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

 

7

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

7.                                       Defaults,
Events of Default.

 

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

 

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

 

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

 

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

 

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

 

7.2.4.                     Cross-Default.

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

	
  Defined Term

  	
   

  	
  Definition

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Amendment
  No. 1

  	
   

  	
  Recitals

  
	
  Asset Value
  Amount

  	
   

  	
  Section
  5.1.2

  
	
  Borrowing
  Request

  	
   

  	
  Section 1.2

  
	
  Credit
  Documents

  	
   

  	
  Section 6.2

  
	
  Consolidated
  EBITDA

  	
   

  	
  Section
  5.1.3

  
	
  Consolidated
  Net Income

  	
   

  	
  Section
  5.1.3

  
	
  Default

  	
   

  	
  Section 7.1

  
	
  Distribution

  	
   

  	
  Section 5.5

  
	
  Dominion

  	
   

  	
  Recitals

  
	
  Dominion
  Agreement

  	
   

  	
  Recitals

  
	
  Dominion
  Indebtedness

  	
   

  	
  Section
  5.1.1

  
	
  Dominion
  Indebtedness Amount

  	
   

  	
  Section
  5.1.1

  
	
  Eligible
  Buyer

  	
   

  	
  Section 5.9

  
	
  Event of
  Default

  	
   

  	
  Section 7.2

  
	
  Forward Book
  Value Amount

  	
   

  	
  Section
  5.1.1

  
	
  Funding Date

  	
   

  	
  Section 1.2

  
	
  GAAP

  	
   

  	
  Section
  5.1.3

  
	
  In-Balance
  Volume

  	
   

  	
  Section
  5.1.1

  
	
  Infometer

  	
   

  	
  Section 5.6

  
	
  Initial
  Funding Date

  	
   

  	
  Section 1.2

  
	
  Indemnitees

  	
   

  	
  Section 8

  
	
  Intercreditor
  Agreement

  	
   

  	
  Recitals

  
	
  Inventory
  Value Amount

  	
   

  	
  Section
  5.1.2

  
	
  Lathi

  	
   

  	
  Preamble

  
	
  License

  	
   

  	
  Section
  7.2.7

  
	
  Loan(s)

  	
   

  	
  Section 1.1

  
	
  Material
  Adverse Change

  	
   

  	
  Section
  4.2.4

  
	
  Maturity
  Date

  	
   

  	
  Section 3.1

  
	
  MXE

  	
   

  	
  Preamble

  
	
  MXEnergy
  Electric

  	
   

  	
  Section 5.6

  
	
  MXEnergy
  Ltd.

  	
   

  	
  Section 5.6

  

 

20

 

	
  Note

  	
   

  	
  Section 1.3

  
	
  OnlineChoice

  	
   

  	
  Section 5.6

  
	
  Original
  Loan Agreement

  	
   

  	
  Recitals

  
	
  Permitted
  Indebtedness

  	
   

  	
  Section 5.2

  
	
  Qualified
  Accounts

  	
   

  	
  Section
  5.1.1

  
	
  RCE

  	
   

  	
  Section
  5.1.2

  
	
  Restatement
  Date

  	
   

  	
  Preamble

  
	
  Security
  Agreement

  	
   

  	
  Section
  4.1.9

  
	
  Shareholders
  Agreement

  	
   

  	
  Section
  4.1.2

  
	
  Shareholders
  Agreement Amendment

  	
   

  	
  Section
  4.1.2

  
	
  Stock
  Purchase Agreement

  	
   

  	
  Section
  4.1.4

  
	
  Total Value
  Amount

  	
   

  	
  Section
  5.1.2

  
	
  Transaction

  	
   

  	
  Section 5.9

  
	
  Warrant
  Shares

  	
   

  	
  Section 6.9

  
	
  Warrants

  	
   

  	
  Section
  4.1.3

  

 

10.                                 Miscellaneous.

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

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

 

	
  If to MXE:

  	
  MxEnergy
  Inc.

  
	
   

  	
  20 Summer
  Street

  
	
   

  	
  5th
  Floor

  
	
   

  	
  Stamford, CT
  06901

  
	
   

  	
  Telephone
  No.: 203-356-1318

  
	
   

  	
  Facsimile
  No.: 203-425-9562

  
	
   

  	
  Attention:
  Robi Artman-Hodge

  
	
   

  	
   

  
	
  If to Lathi:

  	
  Lathi, LLC

  
	
   

  	
  600 Atlantic
  Avenue

  
	
   

  	
  Boston, MA
  02210

  
	
   

  	
  Telephone
  No.: 617-523-7698

  
	
   

  	
  Facsimile
  No.: 617-878-6916

  
	
   

  	
  Attention:
  Megan Kelleher

  

 

22

 

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

 

	
   

  	
  MXENERGY INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey
  A. Mayer

  	
   

  
	
   

  	
   

  	
  Name:
  Jeffrey A. Mayer

  
	
   

  	
   

  	
  Title:
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LATHI, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Harvard
  Management Company, Inc.,

  
	
   

  	
   

  	
  pursuant to delegated authority

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  [ILLEGIBLE]

  	
   

  
	
   

  	
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  [ILLEGIBLE]

  	
   

  
	
   

  	
  Authorized Signatory

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