Document:

Exhibit 10.5

 

AMENDED AND RESTATED SECURITY AGREEMENT

 

This
Agreement, dated as of November 14, 2003, between MxEnergy Inc., a Delaware
corporation (“MXE”), and Lathi, LLC, a Delaware limited liability
company (“Lathi”), amends and restates in its entirety the Security
Agreement dated September 6, 2001, as amended, between MXE and Lathi.

 

1.                                       Reference to Loan Agreement; Definitions;
Certain Rules of Construction. Reference is made to the Amended and Restated Loan Agreement between
MXE and Lathi dated the date hereof, as the same may be amended or
restated from time to time (the “Loan Agreement”) together with the Note
(as defined therein) issued thereunder (collectively, the “Documents”). Capitalized
terms defined in the Loan Agreement and not otherwise defined herein are used
herein with the meanings so defined. Certain other capitalized terms are used
in this Agreement as specifically defined below in this Section 1. Except
as the context otherwise explicitly requires, (a) the capitalized term “Section”
refers to sections of this Agreement, (b) the capitalized term “Exhibit”
refers to exhibits to this Agreement, (c) references to a particular Section shall
include all subsections thereof, (d) the word “including” shall be
construed as “including without limitation”, (e) terms defined in the UCC
and not otherwise defined herein have the meaning provided under the UCC, (f) references
to a particular statute or regulation include all rules and regulations
thereunder and any successor statute, regulation or rules, in each case as from
time to time in effect and (g) references to a particular Person include
such Person’s successors and assigns to the extent not prohibited by this
Agreement. References to “the date hereof” mean the date first set forth above.

 

1.1.                              “Accounts” is defined in Section 2.1.4.

 

1.2.                              “Agreement” means this Amended and
Restated Security Agreement as from time to time in effect.

 

1.3.                              “Contracts” is defined in Section 2.1.1.

 

1.4.                              “Distribution” means, with respect to
any Person, (a) the declaration or payment of any dividend or distribution
on or in respect of any shares of any class of capital stock of,
membership interest in, or other equity interests in such Person; (b)  the
purchase, redemption or other retirement of any shares of any class of
capital stock of, membership interest in, or other equity interest in such
Person or of options, warrants or other rights for the purchase of such
shares;  (c) any other distribution
on or in respect of any shares of any class of capital stock of, membership
interest in, or equity or other beneficial interest in such Person; (d) 
any payment of principal or interest with respect to, or any purchase,
redemption or defeasance of, any indebtedness of such Person; and (e) any
payment, loan or advance or other distribution by such Person to the holder of
any shares of any class of capital stock of, membership interest in, or
equity interest in such Person, or any affiliate of such holder.

 

1.5.                              “Dominion Liens” is defined in Section 3.3.

 

1.6.                              “Event of Default” means an “Event of
Default” under the Loan Agreement.

 

 

1.7.                              “Investment Property” is defined in Section 2.1.2.

 

1.8.                              “Lathi” is defined in the preamble.

 

1.9.                              “Lien” means, with respect to any
Person, any lien, encumbrance, mortgage, pledge, charge or security interest of
any kind upon any property or assets of such Person, whether now owned or
hereafter acquired, or upon the income or profits therefrom.

 

1.10.                        “MXE” is defined in the preamble.

 

1.11.                        “MXE Obligations” is defined in Section 2.1.

 

1.12.                        “Permitted Liens” is defined in Section 3.3.

 

1.13.                        “Person” means any present or future
natural person or any corporation, association, partnership, joint venture,
limited liability, joint stock or other company, business trust, trust,
organization, business or government or any governmental agency or political
subdivision thereof.

 

1.14.                        “Pledged Indebtedness” is defined in Section 2.1.8.

 

1.15.                        “Pledged Rights” is defined in Section 2.1.7.

 

1.16.                        “Pledged Securities” means the Pledged
Stock, the Pledged Rights and the Pledged Indebtedness, collectively.

 

1.17.                        “Pledged Stock” is defined in Section 2.1.6.

 

1.18.                        “Security” is defined in Section 2.1.

 

1.19.                        “Securities Act” is defined in Section 5.5.

 

1.20.                        “UCC” means the Uniform Commercial
Code as in effect in Connecticut on the date hereof; provided, however,
that with respect to the perfection of Lathi’s Lien on the Security and the
effect of nonperfection thereof, the term “UCC” means the Uniform Commercial
Code as in effect in any jurisdiction the laws of which are made applicable by section 9-103
of the Uniform Commercial Code as in effect in Connecticut.

 

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2.                                       Security. 

 

2.1.                              Security. In order to induce Lathi to enter into the Loan Agreement and to
provide extensions of credit under the Note, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
MXE is hereby granting to Lathi a security interest in all of its assets to
secure the obligations of MXE now or hereafter owed under the Loan Agreement
and the Note (collectively, the “MXE Obligations”), in accordance with
the terms thereof.

 

As
security for the payment and performance of the MXE Obligations, MXE mortgages,
pledges and collaterally grants and assigns to Lathi and the holders from time
to time of any MXE Obligation, and creates a security interest in favor of
Lathi and such holders in, all of MXE’s right, title and interest in and to
(but none of its obligations or liabilities with respect to) the items and
types of present and future property described in Sections 2.1.1 through 2.1.16
(subject, however, to Section 2.1.17), whether now owned or hereafter
created or acquired, all of which shall be included in the term “Security”:

 

2.1.1.                     Contracts. All contracts, including without limitation all contracts for the
purchase or sale of natural gas, including all such contracts involving spot
sales, whether or not such contracts are “commodity contracts” as defined in
the UCC (“Contracts”).

 

2.1.2.                     Investment Property. All “investment property,” including all “securities,”
whether certificated or uncertificated, “security entitlements,” “securities
accounts,” “commodity contracts,” or “commodity accounts” (as each of such
terms is defined in the UCC) (collectively, “Investment Property”).

 

2.1.3.                     Tangible Personal Property. All goods, machinery, equipment, and
inventory, including without limitation all natural gas purchased by MXE for
resale to customers, and all other tangible personal property of any nature
whatsoever, wherever located, including raw materials, work in process,
finished parts and products, supplies, spare parts, replacement parts,
merchandise for resale, computers, tapes, disks and computer equipment.

 

2.1.4.                     Rights to Payment of Money. All rights to receive the payment of money,
including accounts and receivables, rights to receive the payment of money
under contracts, franchises, licenses, permits, subscriptions or other
agreements (whether or not earned by performance), and rights to receive
payments from any other source (all such rights being referred to herein as “Accounts”).

 

2.1.5.                     Intangibles. All of the following (to the extent not included in Section 2.1.1):  

 

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(a) contracts,
franchises, licenses, permits, subscriptions and other agreements and all
rights thereunder; (b) rights granted by others which permit MXE to sell
or market items of personal property; (c) United States and foreign common
law and statutory copyrights and rights in literary property and rights and
licenses thereunder; (d) trade names, United States and foreign
trademarks, service marks, Internet domain names, registrations of any of the
foregoing and related goodwill; (e) United States and foreign patents and
patent applications; (f) computer software, designs, models, know- how,
trade secrets, rights in proprietary information, formulas, customer lists,
backlog, orders, subscriptions, royalties, catalogues, sales material,
documents, good will, inventions and processes; (g) judgments, causes in
action and claims, whether or not inchoate, and (h) all other general
intangibles and intangible property and all rights thereunder.

 

2.1.6.                     Pledged Stock. (a) All shares of capital stock or
other evidence of beneficial interest in any corporation, business trust or
limited liability company, (b) all limited partnership interests in any
limited partnership, (c) all general partnership interests in any general
or limited partnership, (d) all joint venture interests in any joint
venture and (e) all options, warrants and similar rights to acquire such
capital stock or such interests. All such capital stock, interests, options,
warrants and other rights are collectively referred to as the “Pledged Stock”.

 

2.1.7.                     Pledged Rights. All rights to receive profits or surplus
of, or other Distributions (including income, return of capital and liquidating
Distributions) from, any partnership, joint venture or limited liability
company, including any Distributions by any such Person to partners, joint
venturers or members. All such rights are collectively referred to as the “Pledged
Rights”.

 

2.1.8.                     Pledged Indebtedness. All indebtedness from time to time owing to
MXE from any Person (all such indebtedness being referred to as the “Pledged
Indebtedness”).

 

2.1.9.                     Chattel Paper, Instruments, etc. All chattel paper, non-negotiable
instruments, negotiable instruments, documents and investment property.

 

2.1.10.               Leases. All leases of personal property, whether MXE is the lessor or the
lessee thereunder.

 

2.1.11.               Deposit Accounts. All general or special deposit accounts,
including

 

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any
demand, time, savings, passbook or similar account maintained by MXE with any
bank, trust company, savings and loan association, credit union or similar
organization, and all money, cash and cash equivalents of MXE, whether or not
deposited in any such deposit account.

 

2.1.12.               Collateral. All collateral granted by third parties to, or held by, MXE with
respect to the Accounts, Pledged Securities, chattel paper, instruments, leases
and other items of Security.

 

2.1.13.               Books and Records. All books and records, including books of
account and ledgers of every kind and nature, all electronically recorded data
(including all computer programs, disks, tapes, electronic data processing
media and software used in connection with maintaining MXE’s books and
records), all files, correspondence, all containers for the foregoing, and all
documents and storage media related to any of the items pledged pursuant to
this Section 2.1.

 

2.1.14.               Insurance. All insurance policies which insure against any loss or damage to any
other Security or which are otherwise owned by MXE.

 

2.1.15.               All Other Property. All other property, assets and items of
value of every kind and nature, tangible or intangible, absolute or contingent,
legal or equitable.

 

2.1.16.               Proceeds and Products. All proceeds, including insurance proceeds,
and products of the items of Security described or referred to in Sections
2.1.1 through 2.1.15 and, to the extent not included in the foregoing, all
Distributions with respect to the Pledged Securities.

 

2.1.17.               Excluded Property. Notwithstanding Sections 2.1.1 through
2.1.16, the payment and performance of the MXE Obligations shall not be secured
by:

 

(a)                                  any contract, license, permit or franchise
that validly prohibits the creation by MXE of a security interest in such
contract, license, permit or franchise (or in any rights or property obtained
by MXE under such contract, license, permit or franchise); provided, however,
that the provisions of this Section 2.1.17 shall not prohibit the security
interests created by this Agreement from extending to the proceeds of such
contract, license, permit or franchise (or such rights or property) or to the
monetary value of the goodwill and other general intangibles of MXE relating
thereto; or

 

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(b)                                 any rights or property to the extent that any
valid contract or public utility tariff or any valid and enforceable law or
regulation applicable to such rights or property prohibits the creation of a
security interest therein; provided, however, that the provisions
of this Section 2.1.17 shall not prohibit the security interests created
by this Agreement from extending to the proceeds of such rights or property or
to the monetary value of the goodwill and other general intangibles of MXE
relating thereto.

 

MXE
expressly authorizes Lathi to file financing statements describing the Security
with the phrase “all assets.”

 

3.                                       Certain Covenants with Respect to Security. MXE covenants that:

 

3.1.                              Pledged Stock. All shares of capital stock, limited
partnership interests, membership interests and similar securities included in
the Pledged Stock shall be at all times duly authorized, validly issued, fully
paid and (in the case of capital stock and limited partnership interests)
nonassessable. If Lathi so requests, MXE will deliver to Lathi certificates
representing the Pledged Stock, accompanied by a stock transfer power executed
in blank and, if Lathi so requests, with the signature guaranteed, all in form and
manner reasonably satisfactory to Lathi. Pledged Stock that is not evidenced by
a certificate will be registered in the name of Lathi or its nominee on the
issuer’s records or an appropriate control statement with respect thereto shall
be provided to Lathi, all in form and substance reasonably satisfactory to
Lathi. Subject to compliance with applicable securities laws, upon the occurrence
of an Event of Default by MXE, Lathi may at any time transfer into its
name or the name of its nominee any Pledged Stock. In the event the Pledged
Stock includes any margin stock, MXE will furnish to Lathi Federal Reserve Form U-1
and take such other action as Lathi may reasonably request to ensure
compliance with applicable laws.

 

3.2.                              Accounts and Pledged Indebtedness. MXE will, promptly upon Lathi’s request
therefor, deliver to Lathi any promissory note or similar instrument
representing any Account or Pledged Indebtedness, after having endorsed such
promissory note or instrument in blank.

 

3.3.                              No Liens or Restrictions on Transfer or
Change of Control. All
Security shall be free and clear of any Liens, except for (a) Liens in
favor of Dominion to secure obligations of MXE to Dominion pursuant to the
Dominion Agreement between MXE and Dominion (“Dominion Liens”), (b) Liens
in favor of Lathi that secure the MXE Obligations, (c) Liens in respect of
judgments and awards but only to the extent that such Liens are junior to the
Lien on the Security securing the MXE Obligations, and (d) Liens securing
indebtedness described in clauses (iii), (iv) and (viii) of the
definition of Permitted Indebtedness (collectively, “Permitted Liens”). Without
limiting the generality of the foregoing and without the prior written consent
of

 

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Lathi,
which shall not be unreasonably withheld, MXE will not enter into any contract,
including without limitation any contract for the purchase or sale of energy,
agreement, deed or lease that purports to prevent or restrict MXE from creating
a security interest to Lathi in such contract, agreement, instrument, deed or
lease or any rights or property acquired thereunder as contemplated hereby,
provided that MXE shall be permitted to enter into agreements and become
subject to tariffs with public utilities that prohibit the creation of security
interests in natural gas within such utilities storage and pipeline systems. None
of the Pledged Stock shall be subject to any option to purchase or similar
rights of any Person. Except with the written consent of Lathi, which consent
will not be unreasonably withheld, or in the Loan Agreement, MXE will in good
faith attempt to exclude from any agreement, instrument, deed or lease
provisions that would restrict the change of control or ownership of MXE, or
the creation of a security interest in the ownership of MXE.

 

3.4.                              Jurisdiction of Incorporation; Location of
Security. MXE shall provide
Lathi with 10 days prior written notice of any change to its state of
incorporation. MXE shall at all times keep its records concerning the Security
at (a) its chief executive office and principal place of business or (b) so
long as MXE shall have taken all steps reasonably necessary to perfect Lathi’s
security interest in the Security with respect to such new address, at such
other address as MXE may specify by notice actually received by Lathi not
fewer than 10 business days prior to such change of address. MXE shall not at
any time keep tangible personal property of the type referred to in Section 2.1.3
in any jurisdiction other than the jurisdiction specified in the foregoing
clause (a) or, so long as MXE shall have taken all steps reasonably
necessary to perfect Lathi’s security interest in the Security with respect to
such other jurisdiction, other jurisdictions as MXE may specify by notice
actually received by Lathi not fewer than 10 days prior to moving such tangible
personal property into such other jurisdiction.

 

3.5.                              Trade Names. MXE will not adopt or do business under any name other than “MxEnergy”
or any other name specified by notice actually received by Lathi not less than
10 business days prior to the conduct of business under such additional name. Since
its inception, MXE has not changed its name or adopted or conducted business
under any trade name other than “MxEnergy. “

 

3.6.                              Delivery of Documents; Inspection Rights. Upon Lathi’s reasonable request, MXE shall
deliver to Lathi, promptly upon MXE’s receipt thereof, copies of any
agreements, instruments, documents or invoices comprising or relating to the
Security. Pending such request, MXE shall keep such items at its chief
executive office and principal place of business, and Lathi shall be entitled
to review any such materials during normal business hours.

 

3.7.                              Perfection of Security. This Agreement shall create in favor of
Lathi a legal, valid and enforceable first priority security interest in the
Security described herein (except for

 

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Dominion
Liens and Liens included within subsection (d) of the definition of
Permitted Liens), subject to no Liens other than Permitted Liens. In the case
of the Pledged Stock, when stock certificates representing such Pledged Stock
and stock powers related thereto duly executed in blank by the relevant pledgor
are delivered to Lathi, and in the case of the other Security described in this
Agreement, when financing statements in appropriate form are filed in the
jurisdictions and offices listed on Schedule 3.7, this Agreement shall
provide a fully perfected, first priority Lien on, and security interest in,
all right, title and interest of MXE in such Security, as security for the MXE
Obligations, in each case prior and superior in right to any other Person other
than Dominion. Upon Lathi’s reasonable request from time to time, MXE will
execute and deliver, and file and record in the proper filing and recording
places, all such instruments, including financing statements, mortgages or
deeds of trust and notations on certificates of title, and will take all such
other action, as Lathi deems reasonably necessary for confirming to it the
Security or to carry out any other purpose of this Agreement or any other
Document.

 

4.                                       Administration of Security. The Security shall be administered as
follows, and if an Event of Default shall have occurred and be continuing, Section 5
shall also apply.

 

4.1.                              Use of Security. Until an Event of Default has occurred and
is continuing, MXE may use, commingle and dispose of any part of the
Security in the ordinary course of its business (including without limitation
making distributions of income and profits), all subject to the provisions of
the Documents.

 

4.2.                              Accounts. To the extent specified by prior written notice from Lathi and
subject to the prior rights, if any, of Dominion set forth in the Intercreditor
Agreement, after the occurrence and during the continuance of an Event of
Default, all sums collected or received and all property recovered or possessed
by MXE in connection with any Security shall be received and held by MXE in
trust for and on Lathi’s behalf, shall be segregated from the assets and funds
of MXE, and shall be delivered to Lathi. Upon Lathi’s request after the
occurrence and during the continuance of an Event of Default, MXE will cause
its accounting books and records to be marked with such legends and segregated
in such manner as Lathi may specify.

 

4.3.                              Distributions on Pledged Securities.

 

4.3.1.                                                   Until an Event of Default shall occur and be
continuing, MXE shall be entitled, to the extent permitted by the Documents, to
receive all Distributions on or with respect to the Pledged Securities,
Contracts or Investment Property (other than Distributions constituting
additional Pledged Securities). All Distributions constituting additional
Pledged Securities will be retained by Lathi (or if received by MXE shall be
held by such Person in trust and shall be immediately delivered by such Person
to Lathi in the original form received, endorsed in blank) and held

 

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by
Lathi as part of the Security.

 

4.3.2.                                                   If an Event of Default shall have occurred
and be continuing, all Distributions on or with respect to the Pledged
Securities, Contracts or Investment Property shall be retained by Lathi (or if
received by MXE shall be held by such Person in trust and shall be immediately
delivered by it to Lathi in the original form received, endorsed in blank)
and held by Lathi as part of the Security or applied by Lathi to the
payment of the MXE Obligations in accordance with Section 5.6.

 

4.4.                              Voting Pledged Securities.

 

4.4.1.                                                   Until an Event of Default shall occur and be
continuing, MXE shall be entitled to vote or consent with respect to the Pledged
Securities in any manner not inconsistent with the terms of any Document, and
Lathi will, if so requested, execute appropriate revocable proxies therefor.

 

4.4.2.                                                   If an Event of Default shall have occurred
and be continuing, if and to the extent that Lathi shall so notify in writing
MXE pledging the Pledged Securities in question, only Lathi shall be entitled
to vote or consent or take any other action with respect to the Pledged
Securities (and MXE will, if so requested, execute appropriate proxies therefor).

 

5.                                       Right to Realize upon Security. Except to the extent prohibited by
applicable law that cannot be waived, this Section 5 shall govern Lathi’s
rights to realize upon the Security if any Event of Default shall have occurred
and be continuing. The provisions of this Section 5 are in addition to any
rights and remedies available at law or in equity and in addition to the
provisions of any other Document, subject to the prior rights, if any, of
Dominion, set forth in the Intercreditor Agreement. In the case of a conflict
between this Section 5 and any other Document, this Section 5 shall
govern.

 

5.1.                              Assembly of Security; Receiver. If an Event of Default shall have occurred
and be continuing, MXE shall, upon Lathi’s request, assemble the Security and
otherwise make it available to Lathi. Lathi may have a receiver appointed
for all or any portion of MXE’s assets or business which constitutes the
Security in order to manage, protect, preserve, sell and otherwise dispose of
all or any portion of the Security in accordance with the terms of the
Documents, to continue the operations of MXE and to collect all revenues and
profits therefrom to be applied to the payment of the MXE Obligations,
including the compensation and expenses of such receiver.

 

5.2.                              General Authority. If an Event of Default shall have occurred
and be continuing, to

 

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the
extent reasonably requested by written notice from Lathi to MXE, MXE grants
Lathi full and exclusive power and authority, subject to the other terms hereof
and applicable law, to take any of the following actions at MXE’s expense:

 

(a)               To ask for, demand, take, collect, sue for
and receive all payments in respect of any Contracts, Accounts, general
intangibles, Pledged Securities or leases which MXE could otherwise ask for,
demand, take, collect, sue for and receive for its own use.

 

(b)              To extend the time of payment of any
Accounts, general intangibles, Pledged Securities or leases and to make any
allowance or other adjustment with respect thereto.

 

(c)               To settle, compromise, prosecute or defend
any action or proceeding with respect to any Contracts, Accounts, general
intangibles, Pledged Securities or leases and to enforce all rights and
remedies thereunder which MXE could otherwise enforce.

 

(d)              To enforce the payment of any Contracts,
Accounts, general intangibles, Pledged Securities or leases, either in the name
of MXE or in its own name, and to endorse the name of MXE on all checks,
drafts, money orders and other instruments tendered to or received in payment
of any Security.

 

(e)               To notify the third party payor with respect
to any Accounts, general intangibles, Pledged Securities or leases of the
existence of the security interest created hereby and to cause all payments in
respect thereof thereafter to be made directly to Lathi; provided, however,
that whether or not Lathi shall have so notified such payor, MXE will at its
expense render all reasonable assistance to Lathi in collecting such items and
in enforcing claims thereon.

 

(f)                 To sell, transfer, assign or otherwise deal
in or with any Security or the proceeds thereof, as fully as MXE otherwise
could do.

 

5.3.                              Marshaling, etc. Lathi shall not be required to marshal the
Security or to resort to the Security in any particular order, and all of its
rights hereunder or under any other Document shall be cumulative. To the extent
it may lawfully do so, MXE absolutely and irrevocably waives and
relinquishes the benefit and advantage of, and covenants not to assert against
Lathi, any valuation, stay, appraisement, extension, redemption or similar laws
now or hereafter existing which, but for this provision, might be applicable to
the sale of any Security made under the judgment, order or decree of any court,
or privately under the power of sale conferred by this

 

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Agreement,
or otherwise, and agrees that it will not invoke any law relating to the
marshalling of collateral or any other law which might cause a delay in or
impede the enforcement of Lathi’s rights under this Agreement or under any
other instrument creating or evidencing any Security, and to the extent it may do
so, MXE hereby waives the benefit of all such laws. In addition, MXE waives any
right to prior notice (except to the extent expressly required by this
Agreement or the UCC) or judicial hearing in connection with foreclosure on or
disposition of any Security, including any such right which MXE would otherwise
have under the Constitution of the United States of America, any state or
territory thereof or any other jurisdiction.

 

5.4.                              Sales of Security. Subject to the prior rights, if any, of
Dominion set forth in the Intercreditor Agreement, all or any part of the
Security may be sold for cash or other value in any number of lots at
public or private sale, without demand, advertisement or notice; provided,
however, that unless the Security to be sold threatens to decline speedily in
value or is of a type customarily sold on a recognized market, Lathi shall give
MXE 20 days’ prior written notice of the time and place of any public sale, or
the time after which a private sale may be made, which notice MXE and
Lathi agree to be reasonable. Subject to the UCC, at any sale or sales of
Security, Lathi or any of its officers acting on its behalf, or its assigns, may bid
for and purchase all or any part of the property and rights so sold, may use
all or any portion of the MXE Obligations owed to Lathi as payment for the
property or rights so purchased, and upon compliance with the terms of such
sale may hold and dispose of such property and rights without further
accountability to MXE, except for the proceeds of such sale or sales pursuant
to Section 5.6. MXE acknowledges that any such sale will be made by Lathi
on an “as is” basis with disclaimers of all warranties, whether express or
implied. MXE will execute and deliver or cause to be executed and delivered
such instruments, documents, assignments, waivers, certificates and affidavits,
will supply or cause to be supplied such further information and will take such
further action, as Lathi shall reasonably request in connection with any such
sale.

 

5.5.                              Sale without Registration. If, at any time when Lathi shall determine
to exercise its rights hereunder to sell all or part of the securities
included in the Security, the securities in question shall not be effectively
registered under the Securities Act of 1933, as amended (the “Securities Act”)
(or other applicable law), Lathi may, in its sole discretion, sell such
securities by private or other sale not requiring such registration in such
manner and in such circumstances as Lathi may deem necessary or advisable
in order that such sale may be effected in accordance with applicable
securities laws without such registration and the related delays, uncertainty
and expense. Without limiting the generality of the foregoing, in any event
Lathi may, in its sole discretion, (a) approach and negotiate with a
single purchaser or one or more possible purchasers to effect such sale, (b) restrict
such sale to one or more purchasers each of whom will represent and agree that
such purchaser is purchasing for its own account, for investment and not with a
view to the distribution or sale of such securities and (c) cause to be
placed on certificates representing the securities in question a legend to the
effect that such securities have not been

 

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registered
under the Securities Act (or other applicable law) and may not be disposed
of in violation of the provisions thereof. MXE agrees that such manner of
disposition is commercially reasonable, that it will upon Lathi’s request give
any such purchaser access to such information regarding the issuer of the
securities in question as Lathi may reasonably request and that Lathi
shall not incur any responsibility for selling all or part of the
securities included in the Security at any private or other sale not requiring
such registration, notwithstanding the possibility that a substantially higher
price might be realized if the sale were deferred until after registration
under the Securities Act (or other applicable law) or until made in compliance
with certain other rules or exemptions from the registration provisions
under the Securities Act (or other applicable law). MXE acknowledges that no
adequate remedy at law exists for breach by it of this Section 5.5 and
that such breach would not be adequately compensable in damages and therefore
agrees that this Section 5.5 may be specifically enforced.

 

5.6.                              Application of Proceeds. Subject to the prior rights, if any, of
Dominion set forth in the Intercreditor Agreement, the proceeds of all sales
and collections in respect of any Security or other assets of MXE, all funds
collected from MXE and any cash contained in the Security, the application of
which is not otherwise specifically provided for herein, shall be applied as
follows:

 

(a)               First, to the payment of the costs and
expenses of such sales and collections, and the reasonable expenses of Lathi
and the reasonable fees and expenses of its special counsel incurred in
connection with such sales and collections;

 

(b)              Second, any surplus then remaining to the
payment of the MXE Obligations in such order and manner as Lathi may in
its reasonable discretion determine; and

 

(c)               Third, any surplus then remaining shall be
paid to MXE, subject, however, to the rights of the holder of any then existing
Lien of which Lathi has actual notice.

 

5.7.                              Custody of Security. Except as provided by applicable law that
cannot be waived, Lathi will have no duty as to the custody and protection of
the Security, the collection of any part thereof or of any income thereon
or the preservation or exercise of any rights pertaining thereto, including
rights against prior parties, except for the use of reasonable care in the
custody and physical preservation of any Security in its possession. Lathi will
not be liable or responsible for any loss or damage to any Security, or for any
diminution in the value thereof, by reason of the act or omission of any agent
selected by Lathi acting in good faith.

 

5.8.                              Termination. Following the expiration or termination of this Agreement or the
Documents, and upon satisfaction of all of the outstanding MXE Obligations,
Lathi hereby agrees that it will, within 10 business days following MXE’s
request, execute and deliver to

 

12

 

MXE
UCC-3 termination statements and any other instrument proffered by MXE which is
reasonably necessary to effect a release of the security interests created by
this Agreement.

 

5.9.                              General. Addresses for notices, consent to jurisdiction and numerous other
provisions applicable to this Agreement are contained in the Loan Agreement. The
invalidity or unenforceability of any provision hereof shall not affect the
validity or enforceability of any other provision hereof, and any invalid or
unenforceable provision shall be modified so as to be enforceable to the
maximum extent of its validity or enforceability. The headings in this Agreement
are for convenience of reference only and shall not limit, alter or otherwise
affect the meaning hereof. This Agreement and the other Documents constitute
the entire understanding of the parties with respect to the subject matter
hereof and thereof and supersede all prior and current understandings and
agreements, whether written or oral. This Agreement may be executed in any
number of counterparts, which together shall constitute one instrument. 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, except as may be
required by the UCC of other jurisdictions with respect to matters involving
the perfection of Lathi’s Lien on the Security located in such other jurisdictions.

 

13

 

Each
of the undersigned has caused this Agreement to be executed and delivered by
its duly authorized officer as an agreement under seal as of the date first
written above.

 

 

	
   

  	
  MXENERGY
  INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Jeffrey A. Mayer

  	
   

  
	
   

  	
   

  	
  Name:
  Jeffrey A. Mayer

  
	
   

  	
   

  	
  Title:
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LATHI
  LLC

  
	
   

  	
   

  
	
   

  	
  By:
  Harvard Management Company, Inc.,

  
	
   

  	
       
  pursuant to delegated authority

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  Authorized
  SignatoryExhibit
10.6

 

Execution Copy

 

MXENERGY
INC.

 

AMENDED
AND RESTATED

LOAN
AGREEMENT

 

Amendment No. 1

 

This
Agreement, dated as of March 22, 2004
(this “Agreement”), is between Lathi LLC, a Delaware limited
liability company (“Lathi”), and MxEnergy Inc., a Delaware corporation (“MXE”).
The parties agree as follows:

 

1. Loan Agreement; Definitions.
This Agreement amends the Amended and Restated Loan Agreement dated as of November
14, 2003, as in effect on the date hereof prior to giving effect to this
Agreement (the “Loan Agreement”), between
Lathi and MXE. Terms defined in the Loan Agreement as amended hereby (the “Amended
Loan Agreement”) and not otherwise defined herein are used
with the meaning so defined.

 

2. Amendment of Loan Agreement.
Effective upon the date all the conditions set forth in Section 5 hereof are
satisfied (the “Amendment Date”), which
conditions must be satisfied no later than March 31, 2004 or this Agreement
shall terminate, the Loan Agreement is amended as follows:

 

2.1. Amendment
of Section 1.1. Section 1.1 of the Loan Agreement is amended
to read in its entirety as follows:

 

“1.1.        Loans.

 

1.1.1.       Revolving 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 November 14, 2007,
Lathi will make loans to MXE (each, a “Revolving Loan”, and
collectively, the “Revolving Loans”) in such amounts as may be requested
by MXE in accordance with Section 1.2. The aggregate principal amount of Revolving
Loans outstanding under this Agreement at any one time shall not exceed
$12,000,000.

 

1.1.2.       Term Loan. Subject to all the
terms and conditions of this Agreement and so long as no Default exists, on one
or more occasions on and after March 22, 2004 and on or prior to March 21,
2005, Lathi will make loans to MXE (collectively, the “Term Loan”) in
such amounts as may be requested by MXE in accordance with Section 1.2. The
aggregate principal amount of all advances made by Lathi as part of the Term
Loan shall not exceed $9,000,000. The Term Loan and the Revolving Loans are
collectively referred to herein as the “Loans.”

 

 

2.2. Amendment of
Section 1.2. Section 1.2 of the Loan Agreement is amended to read in its
entirety as follows:

 

“1.2.        Borrowing Requests. MXE may from
time to time request a loan pursuant to 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 type of the requested loan, which
shall be a Revolving Loan or a Term Loan; (b) the amount of the requested loan,
which (i) shall, in the case of a Revolving Loan, be in an amount not less than
$100,000 and (ii) shall, in the case of a Term Loan, be in an amount not less
than $3,000,000; and (c) 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. 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.”

 

2.3. Amendment of
Section 1.3. Section 1.3 of the Loan Agreement is amended to read in its
entirety as follows:

 

“1.3.        Notes. MXE’s obligations to pay
the Revolving Loans shall be evidenced by a grid note of MXE in the form of Exhibit
1.3 (the “Revolving Note”). MXE’s obligations to pay the Term Loan
shall be evidenced by a grid note of MXE in the form of Exhibit 1.3A
(the “Term Note”). The Revolving Note and the Term Note are collectively
referred to herein as the “Notes.”“

 

2.4. Amendment of
Section 1.4. Section 1.4 of the Loan Agreement is amended to read in its
entirety as follows:

 

“1.4.        Use of Proceeds. MXE will use the
proceeds of the Revolving Loans for its working capital and other general
corporate purposes occurring in the ordinary course of business. MXE will use
the proceeds of the Term Loan for (a) the acquisition of all the outstanding equity of Total Gas
& Electric, Inc., a Florida corporation (“TGE”), and its subsidiary Total Gas &
Electric (PA) Inc., a Florida corporation, (b) to meet credit requirements
associated with the TGE acquisition, or (c) with the prior written consent of
Lathi, for the acquisition of customer contracts in markets served by MXE or
TGE.”

 

2.5. Amendment of
Section 2. Section 2 of the Loan Agreement is amended to read in its
entirety as follows:

 

“2.           Interest.
Subject to the last sentence of this Section 2, the Revolving Loans shall
accrue and bear interest at a rate of 9% per annum, computed based on actual
number of days elapsed over a year of 365 days. Subject to the last sentence of
this Section 2, the Term Loan shall accrue and bear interest at a rate of 14%
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 

 

2

 

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 the 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
Revolving Loans (and any overdue interest as set forth above) shall bear
interest at a rate of 12% per annum, computed and payable as provided above,
(y) the outstanding principal amount of the Term Loan (and any overdue interest
as set forth above) shall bear interest at a rate of 15% per annum, computed
and payable as provided above, and (z) Lathi may require accrued interest to be
payable on demand or at regular intervals more frequent than quarterly.”

 

2.6. Amendment of
Section 3.1. Section 3.1 of the Loan Agreement is amended to read in its
entirety as follows:

 

“3.1.        Payment at Maturity. On the Revolving
Loan Maturity Date or any accelerated maturity of the Loans, MXE will pay to
Lathi an amount equal to the Revolving Loan Loans then due, together with all
accrued and unpaid interest with respect thereto. “Revolving Loan Maturity
Date” means May 14, 2010, or such later date as is approved by Lathi in its
sole discretion. On the Term Loan Maturity Date or any accelerated maturity of
the Loans, MXE will pay to Lathi an amount in cash equal to the Term Loan then
due, together with all accrued and unpaid interest with respect thereto. “Term
Loan Maturity Date” means the earlier of (a) March 22, 2006, or (b) one
year from the initial funding date of the Term Loan, or such later date as is
approved by Lathi in its sole discretion.”

 

2.7. Amendment of
Section 3.2. The last sentence of Section 3.2 of the Loan Agreement is amended
to read in its entirety as follows:

 

“The amounts of the
Revolving Loan prepaid pursuant to this Section 3.2 may be reborrowed from
time to time prior to the Revolving Loan Maturity Date in accordance with
Section 1.1, subject to the limits set forth therein. No portion of the
Term Loan prepaid pursuant to this Section 3.2 may be reborrowed.”

 

2.8. Amendment of
Section 3.3. The last sentence of Section 3.3 of the Loan Agreement is
amended to read in its entirety as follows:

 

“The amounts of the
Revolving Loan prepaid pursuant to this Section 3.3 may be reborrowed from
time to time prior to the Revolving Loan Maturity Date in accordance with
Section 1.1, subject to the limits set forth therein. No portion of the
Term Loan prepaid pursuant to this Section 3.3 may be reborrowed.”

 

3

 

2.9. Addition of
Section 3.5. A new Section 3.5 is added to the Loan Agreement immediately
after Section 3.4 of the Loan Agreement to read in its entirety as follows:

 

“3.5.        Order of Application. Any
prepayment of the Loans pursuant to Sections 3.2 or 3.3 shall be applied as
directed by MXE to either the Revolving Loans or the Term Loan.”

 

2.10. Amendment of
Section 4.2.3. Section 4.2.3 of the Loan Agreement is amended to read in
its entirety as follows:

 

“4.2.3.     Commitment Not Exceeded. After
giving effect to any Revolving Loan, the aggregate principal amount of the
outstanding Revolving Loans shall not exceed $12,000,000. After giving effect
to any advance under the Term Loan, the aggregate principal amount of all
advances made by Lathi as part of the Term Loan shall not exceed $9,000,000.

 

2.11. Amendment of
Section 5.6. The last sentence of Section 5.6 of the Loan Agreement is
amended to read in its entirety as follows:

 

“Without the prior
written consent of Lathi, MXE will not own any interest in any subsidiaries
other than Infometer.com Inc., a Delaware corporation, OnlineChoice Inc., a
Delaware corporation, MxEnergy Electric Inc., a Delaware corporation, MxEnergy
(Canada) Ltd., a Canadian corporation, Total Gas & Electric, a Florida corporation, and Total Gas &
Electric (PA) Inc., a Pennsylvania corporation, all of which are wholly
owned subsidiaries of MXE; provided that MXE may increase its investment
in any of the foregoing subsidiaries with Lathi’s prior written consent, not to
be unreasonably withheld.”

 

2.12. Addition of
Section 5.10. A new Section 5.10 is added to the Loan Agreement immediately
after Section 5.9 of the Loan Agreement to read in its entirety as follows:

 

“5.10.      Issuance of Warrants. If, on the last
day of any calendar month commencing one (1) month after the date hereof, any
amount is outstanding under the Term Loan, then MXE shall issue to Lathi a warrant to purchase 15,000 shares of
MXE common stock at a per share exercise price equal to $15.00. If, on the Term
Loan Maturity Date, any amount is outstanding under the Term Loan, MXE shall
issue to Lathi a warrant to purchase a number of shares of MXE common stock equal
to the quotient of (a) the outstanding aggregate amount of principal of, and
accrued and unpaid interest on, the Term Loan divided by (b) 15, at a
per share exercise price equal to $15.00. Each warrant issued pursuant to this
Section 5.10 shall be in the form attached as Exhibit 5.10.”

 

2.13. Amendment of
Section 9. Section 9 of the Loan Agreement is amended by deleting the definitional
cross-references to the terms “Loan(s)”, 

 

4

 

“Maturity Date” and “Notes” from the table therein and
by inserting the following definitional cross-references in alphabetical order in
such table: 

 

	
  “Loans

  	
   

  	
  Section 1.1.2

  
	
   

  	
   

  	
   

  
	
  Notes

  	
   

  	
  Section 1.3

  
	
   

  	
   

  	
   

  
	
  Revolving
  Loan(s)

  	
   

  	
  Section 1.1.1

  
	
   

  	
   

  	
   

  
	
  Revolving Loan
  Maturity Date

  	
   

  	
  Section 3.1.1

  
	
   

  	
   

  	
   

  
	
  Revolving Note

  	
   

  	
  Section 1.3

  
	
   

  	
   

  	
   

  
	
  Term Loan

  	
   

  	
  Section 1.1.2

  
	
   

  	
   

  	
   

  
	
  Term Note

  	
   

  	
  Section 1.3

  
	
   

  	
   

  	
   

  
	
  Term Loan
  Maturity Date

  	
   

  	
  Section 3.1.2”

  

 

2.14. Amendment of References
to “Note”. All references to the defined term “Note” in the Loan Agreement are
hereby amended to read “Notes”.

 

2.15. Amendment of
Exhibit 1.2. Exhibit 1.2 to the Loan Agreement is amended to read in its
entirety as set forth in Exhibit 1.2 hereto.

 

2.16. Addition of
Exhibit 1.3A. A new Exhibit 1.3A is added to the Loan Agreement immediately
after Exhibit 1.3 to the Loan Agreement to read in its entirety as set forth in
Exhibit 1.3A hereto.

 

2.17. Addition of
Exhibit 5.10. A new Exhibit 5.10 is added to the Loan Agreement immediately
after Exhibit 4.2.2 to the Loan Agreement to read in its entirety as set forth
in Exhibit 5.10 hereto.

 

3. Amendment of Security Agreement. The Security Agreement is
hereby amended as follows: all references to the defined term “Note” in the
Security Agreement are hereby amended to read “Notes”.

 

4. Representations and Warranties.
MXE represents and warrants as follows:

 

4.1. Legal Existence,
Organization. MXE is a corporation duly organized and validly existing and
in good standing under the laws of the State of Delaware, with all corporate
power and authority necessary to enter into and perform this Agreement and the
Amended Loan Agreement. MXE has taken all corporate action required to authorize
the execution, delivery and performance of this Agreement.

 

4.2. Enforceability.
MXE has duly authorized, executed and delivered this Agreement. Each of this
Agreement and the Amended Loan Agreement is the 

 

5

 

legal, valid and binding obligation of MXE and is
enforceable against MXE in accordance with its 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).

 

4.3. Noncontravention.
The execution, delivery, and performance by MXE of this Agreement and the
Amended Loan Agreement 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.

 

4.4. Consents. All
material governmental and other consents that are required to have been obtained
by MXE with respect to the execution of this Agreement and the performance of
this Agreement and the Amended Loan Agreement have been obtained and are in
full force and effect.

 

4.5. Defaults. Immediately
before and after giving effect to the amendments set forth in Section 2 hereof,
no Default will exist.

 

4.6. Incorporation of
Representations and Warranties. The representations and warranties set
forth in Section 6 of the Amended Loan Agreement are true and correct in all
material respects on and as of the date hereof with the same effect as if originally
made on and as of the date hereof.

 

5. Conditions. The
effectiveness of this Agreement shall be subject to the satisfaction of the
following conditions, which conditions must be satisfied no later than March 31, 2004 or this Agreement shall terminate:

 

5.1. Note. MXE shall
have duly authorized, executed and delivered to Lathi a Term Note.

 

5.2. Issuance of
Warrants. MXE shall have issued to Lathi a warrant to purchase 75,000
shares of MXE common stock at a per share exercise price equal to $15.00 in the
form attached as Exhibit 5.2 hereto.

 

5.3. Legal Opinion.
On the Amendment 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
form and substance satisfactory to Lathi.

 

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

 

6

 

5.5. Payment of Lathi’s
Legal Fees and Expenses. MXE shall have paid to Lathi the reasonable legal
fees and expenses of Lathi with respect to this Agreement and the transactions
contemplated hereby.

 

5.6. 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.

 

6. Further Assurances. MXE
will, promptly upon the request of Lathi from time to time, execute,
acknowledge, deliver, file and record all such instruments and notices, and
take all such other action, as Lathi deems necessary or advisable to carry out
the intent and purposes of this Agreement.

 

7. General. The Amended Loan
Agreement and all of the Credit Documents are each confirmed as being in full
force and effect. This Agreement, the Amended Loan Agreement and the other
Credit Documents referred to herein or therein constitute the entire
understanding of the parties with respect to the subject matter hereof and
thereof and supersede all prior and current understandings and agreements,
whether written or oral. Each of this Agreement and the Amended Loan Agreement
is a Credit Document and may be executed in any number of counterparts, which
together shall constitute one instrument, and shall bind and inure to the
benefit of the parties and their respective successors and assigns, including as
such successors and assigns all holders of any Credit Obligation. This
Agreement shall be governed by and construed in accordance with the laws (other
than the conflict of law rules) of the State of Connecticut.

 

[The remainder of this page is
intentionally blank]

 

7

 

Each
of the undersigned has caused this Agreement to be executed and delivered by
its duly authorized officer as an agreement under seal as of the date first
above written.

 

	
   

  	
  MXENERGY INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carole R.
  Artman-Hodge

  
	
   

  	
   

  	
  Name: Carole R.
  Artman-Hodge

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice
  President and

  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LATHI LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Harvard Management
  Company, Inc.,

  
	
   

  	
   

  	
  pursuant to delegated
  authority

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  	
  Authorized Signatory

  

 

8

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