Document:

Exhibit 10.1(a)

 

(Multicurrency — Cross Border)

 

ISDA®

 

International
Swap Dealers Association, Inc.

MASTER AGREEMENT

 

dated as of September 22,
2009

 

	
  SEMPRA ENERGY TRADING LLC

  	
   

  	
  MXENERGY INC.

  
	
  (“Party A”)

  	
   

  	
  (“Party B”)

  

 

have entered
and/or anticipate entering into one or more transactions (each a “Transaction”)
that are or will be governed by this Master Agreement, which includes the
schedule (the “Schedule”), and the documents and other confirming evidence
(each a “Confirmation”) exchanged between the parties confirming those
Transactions.

 

Accordingly,
the parties agree as follows:—

 

1.             Interpretation

 

(a)           Definitions.  The terms defined in Section 14 and in
the Schedule will have the meanings therein specified for the purpose of this
Master Agreement.

 

(b)           Inconsistency.  In the event of any inconsistency between the
provisions of the Schedule and the other provisions of this Master Agreement,
the Schedule will prevail. In the event of any inconsistency between the
provisions of any Confirmation and this Master Agreement (including the
Schedule), such Confirmation will prevail for the purpose of the relevant
Transaction.

 

(c)           Single
Agreement.  All
Transactions are entered into in reliance on the fact that this Master
Agreement and all Confirmations form a single agreement between the parties
(collectively referred to as this “Agreement”), and the parties would not
otherwise enter into any Transactions.

 

2.             Obligations

 

(a)           General Conditions.

 

(i)            Each party will make each payment or
delivery specified in each Confirmation to be made by it, subject to the other
provisions of this Agreement.

 

(ii)           Payments under this Agreement will be made
on the due date for value on that date in the place of the account specified in
the relevant Confirmation or otherwise

 

 

pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the required
currency. Where settlement is by delivery (that is, other than by payment),
such delivery will be made for receipt on the due date in the manner customary
for the relevant obligation unless otherwise specified in the relevant
Confirmation or elsewhere in this Agreement.

 

(iii)          Each obligation of each party under Section 2(a)(i) is
subject to (1) the condition precedent that no Event of Default or
Potential Event of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date in
respect of the relevant Transaction has occurred or been effectively designated
and (3) each other applicable condition precedent specified in this
Agreement.

 

(b)           Change of Account.
Either party may change its account for receiving a payment or delivery by
giving notice to the other party at least five Local Business Days prior to the
scheduled date for the payment or delivery to which such change applies unless
such other party gives timely notice of a reasonable objection to such change.

 

(c)           Netting. If on any date
amounts would otherwise be payable:—

 

(i)            in the same currency; and

 

(ii)           in respect of the same Transaction,

 

by each party
to the other, then, on such date, each party’s obligation to make payment of
any such amount will be automatically satisfied and discharged and, if the
aggregate amount that would otherwise have been payable by one party exceeds
the aggregate amount that would otherwise have been payable by the other party,
replaced by an obligation upon the party by whom the larger aggregate amount
would have been payable to pay to the other party the excess of the larger
aggregate amount over the smaller aggregate amount.

 

The parties
may elect in respect of two or more Transactions that a net amount will be
determined in respect of all amounts payable on the same date in the same
currency in respect of such Transactions, regardless of whether such amounts
are payable in respect of the same Transaction. The election may be made in the
Schedule or a Confirmation by specifying that subparagraph (ii) above will
not apply to the Transactions identified as being subject to the election, together
with the starting date (in which case subparagraph (ii) above will not, or
will cease to, apply to such Transactions from such date). This election may be
made separately for different groups of Transactions and will apply separately
to each pairing of Offices through which the parties make and receive payments
or deliveries.

 

(d)           Deduction or Withholding for Tax.

 

(i)            Gross-Up.
 All payments under this
Agreement will be made without any deduction or withholding for or on account
of any Tax unless such deduction or withholding is required by any applicable
law, as modified by the practice of any relevant governmental revenue
authority, then in effect. If a party is so required to deduct or withhold,
then that party (“X”) will:—

 

2

 

(1)           promptly notify the other party (“Y”) of
such requirement;

 

(2)           pay to the relevant authorities the full
amount required to be deducted or withheld (including the full amount required
to be deducted or withheld from any additional amount paid by X to Y under this
Section 2(d)) promptly upon the earlier of determining that such deduction
or withholding is required or receiving notice that such amount has been
assessed against Y;

 

(3)           promptly forward to Y an official receipt
(or a certified copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and

 

(4)           if such Tax is an Indemnifiable Tax, pay to
Y, in addition to the payment to which Y is otherwise entitled under this
Agreement, such additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes, whether assessed
against X or Y) will equal the full amount Y would have received had no such
deduction or withholding been required. However, X will not be required to pay
any additional amount to Y to the extent that it would not be required to be
paid but for:—

 

(A)          the failure by Y to comply with or perform
any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

 

(B)           the failure of a representation made by Y
pursuant to Section 3(f) to be accurate and true unless such failure
would not have occurred but for (I) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on or after the
date on which a Transaction is entered into (regardless of whether such action
is taken or brought with respect to a party to this Agreement) or (II) a
Change in Tax Law.

 

(ii)           Liability.  If: —

 

(1)           X is required by any applicable law, as
modified by the practice of any relevant governmental revenue authority, to
make any deduction or withholding in respect of which X would not be required
to pay an additional amount to Y under Section 2(d)(i)(4);

 

(2)           X does not so deduct or withhold; and (3) a
liability resulting from such Tax is assessed directly against X, then, except
to the extent Y has satisfied or then satisfies the liability resulting from
such Tax, Y will promptly pay to X the amount of such liability (including any
related liability for interest, but including any related liability for
penalties only if Y has failed to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

 

(e)           Default
Interest; Other Amounts. 
Prior to the occurrence or effective designation of an Early Termination
Date in respect of the relevant Transaction, a party that defaults in the
performance of any payment obligation will, to the extent permitted by law and
subject to Section 6(c), be required to pay interest (before as well as
after judgment) on the overdue amount

 

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to the other party on demand in
the same currency as such overdue amount, for the period from (and including)
the original due date for payment to (but excluding) the date of actual
payment, at the Default Rate. Such interest will be calculated on the basis of
daily compounding and the actual number of days elapsed. If, prior to the
occurrence or effective designation of an Early Termination Date in respect of
the relevant Transaction, a party defaults in the performance of any obligation
required to be settled by delivery, it will compensate the other party on
demand if and to the extent provided for in the relevant Confirmation or
elsewhere in this Agreement.

 

3.             Representations

 

Each party
represents to the other party (which representations will be deemed to be
repeated by each party on each date on which a Transaction is entered into and,
in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:—

 

(a)           Basic Representations.

 

(i)            Status.  It is duly organised and validly existing
under the laws of the jurisdiction of its organisation or incorporation and, if
relevant under such laws, in good standing;

 

(ii)           Powers.  It has the power to execute this Agreement and
any other documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this Agreement
that it is required by this Agreement to deliver and to perform its obligations
under this Agreement and any obligations it has under any Credit Support
Document to which it is a party and has taken all necessary action to authorise
such execution, delivery and performance;

 

(iii)          No
Violation or Conflict.  Such execution, delivery and performance do
not violate or conflict with any law applicable to it, any provision of its
constitutional documents, any order or judgment of any court or other agency of
government applicable to it or any of its assets or any contractual restriction
binding on or affecting it or any of its assets;

 

(iv)          Consents.
 All governmental and
other consents that are required to have been obtained by it with respect to
this Agreement or any Credit Support Document to which it is a party have been
obtained and are in full force and effect and all conditions of any such
consents have been complied with; and

 

(v)           Obligations
Binding.  Its obligations
under this Agreement and any Credit Support Document to which it is a party
constitute its legal, valid and binding obligations, enforceable in accordance
with their respective terms (subject to applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors’ rights generally
and subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding in
equity or at law)).

 

(b)           Absence
of Certain Events.  No
Event of Default or Potential Event of Default or, to its knowledge,
Termination Event with respect to it has occurred and is continuing and no such
event or circumstance would occur as a result of its entering into or
performing its obligations under this Agreement or any Credit Support Document
to which it is a party.

 

4

 

(c)           Absence
of Litigation.  There is
not pending or, to its knowledge, threatened against it or any of its
Affiliates any action, suit or proceeding at law or in equity or before any
court, tribunal, governmental body, agency or official or any arbitrator that
is likely to affect the legality, validity or enforceability against it of this
Agreement or any Credit Support Document to which it is a party or its ability
to perform its obligations under this Agreement or such Credit Support Document.

 

(d)           Accuracy
of Specified Information.  All
applicable information that is furnished in writing by or on behalf of it to
the other party and is identified for the purpose of this Section 3(d) in
the Schedule is, as of the date of the information, true, accurate and complete
in every material respect.

 

(e)           Payer
Tax Representation.  Each
representation specified in the Schedule as being made by it for the purpose of
this Section 3(e) is accurate and true.

 

(f)            Payee
Tax Representations.  Each
representation specified in the Schedule as being made by it for the purpose of
this Section 3(f) is accurate and true.

 

4.             Agreements

 

Each party
agrees with the other that, so long as either party has or may have any
obligation under this Agreement or under any Credit Support Document to which
it is a party:—

 

(a)           Furnish Specified
Information. It will deliver to the other party or, in certain cases under
subparagraph (iii) below, to such government or taxing authority as the
other party reasonably directs:—

 

(i)            any forms, documents or certificates
relating to taxation specified in the Schedule or any Confirmation;

 

(ii)           any other documents specified in the
Schedule or any Confirmation; and

 

(iii)          upon reasonable demand by such other party,
any form or document that may be required or reasonably requested in writing in
order to allow such other party or its Credit Support Provider to make a
payment under this Agreement or any applicable Credit Support Document without
any deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially prejudice
the legal or commercial position of the party in receipt of such demand), with
any such form or document to be accurate and completed in a manner reasonably
satisfactory to such other party and to be executed and to be delivered with
any reasonably required certification,

 

in each case
by the date specified in the Schedule or such Confirmation or, if none is
specified, as soon as reasonably practicable.

 

(b)           Maintain
Authorisations.  It will
use all reasonable efforts to maintain in full force and effect all consents of
any governmental or other authority that are required to be obtained by it

 

5

 

with respect to this Agreement
or any Credit Support Document to which it is a party and will use all
reasonable efforts to obtain any that may become necessary in the future.

 

(c)           Comply
with Laws.  It will comply
in all material respects with all applicable laws and orders to which it may be
subject if failure so to comply would materially impair its ability to perform
its obligations under this Agreement or any Credit Support Document to which it
is a party.

 

(d)           Tax
Agreement.  It will give
notice of any failure of a representation made by it under Section 3(f) to
be accurate and true promptly upon learning of such failure.

 

(e)           Payment
of Stamp Tax.  Subject to Section 11,
it will pay any Stamp Tax levied or imposed upon it or in respect of its
execution or performance of this Agreement by a jurisdiction in which it is
incorporated, organised, managed and controlled, or considered to have its
seat, or in which a branch or office through which it is acting for the purpose
of this Agreement is located (“Stamp Tax Jurisdiction”) and will indemnify the
other party against any Stamp Tax levied or imposed upon the other party or in
respect of the other party’s execution or performance of this Agreement by any
such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with
respect to the other party.

 

5.             Events of Default and Termination Events

 

(a)           Events
of Default.  The
occurrence at any time with respect to a party or, if applicable, any Credit
Support Provider of such party or any Specified Entity of such party of any of
the following events constitutes an event of default (an “Event of Default”)
with respect to such party:—

 

(i)            Failure
to Pay or Deliver.  Failure
by the party to make, when due, any payment under this Agreement or delivery
under Section 2(a)(i) or 2(e) required to be made by it if such
failure is not remedied on or before the third Local Business Day after notice
of such failure is given to the party;

 

(ii)           Breach
of Agreement.  Failure by
the party to comply with or perform any agreement or obligation (other than an
obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied
with or performed by the party in accordance with this Agreement if such
failure is not remedied on or before the thirtieth day after notice of such
failure is given to the party;

 

(iii)          Credit Support Default.

 

(1)           Failure by the party or any Credit Support
Provider of such party to comply with or perform any agreement or obligation to
be complied with or performed by it in accordance with any Credit Support
Document if such failure is continuing after any applicable grace period has
elapsed;

 

6

 

(2)           the expiration or termination of such Credit
Support Document or the failing or ceasing of such Credit Support Document to
be in full force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction of all
obligations of such party under each Transaction to which such Credit Support
Document relates without the written consent of the other party; or

 

(3)           the party or such Credit Support Provider
disaffirms, disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;

 

(iv)          Misrepresentation.
 A representation (other
than a representation under Section 3(e) or (f)) made or repeated or
deemed to have been made or repeated by the party or any Credit Support
Provider of such party in this Agreement or any Credit Support Document proves
to have been incorrect or misleading in any material respect when made or
repeated or deemed to have been made or repeated;

 

(v)           Default
under Specified Transaction.  The party, any Credit Support Provider of such
party or any applicable Specified Entity of such party (1) defaults under
a Specified Transaction and, after giving effect to any applicable notice
requirement or grace period, there occurs a liquidation of, an acceleration of
obligations under, or an early termination of, that Specified Transaction, (2) defaults,
after giving effect to any applicable notice requirement or grace period, in
making any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified Transaction (or
such default continues for at least three Local Business Days if there is no
applicable notice requirement or grace period) or (3) disaffirms,
disclaims, repudiates or rejects, in whole or in part, a Specified Transaction
(or such action is taken by any person or entity appointed or empowered to
operate it or act on its behalf);

 

(vi)          Cross
Default.  If “Cross
Default” is specified in the Schedule as applying to the party, the occurrence
or existence of (1) a default, event of default or other similar condition
or event (however described) in respect of such party, any Credit Support
Provider of such party or any applicable Specified Entity of such party under
one or more agreements or instruments relating to Specified Indebtedness of any
of them (individually or collectively) in an aggregate amount of not less than
the applicable Threshold Amount (as specified in the Schedule) which has
resulted in such Specified Indebtedness becoming, or becoming capable at such
time of being declared, due and payable under such agreements or instruments,
before it would otherwise have been due and payable or (2) a default by
such party, such Credit Support Provider or such Specified Entity (individually
or collectively) in making one or more payments on the due date thereof in an
aggregate amount of not less than the applicable Threshold Amount under such
agreements or instruments (after giving effect to any applicable notice
requirement or grace period);

 

(vii)         Bankruptcy.
 The party, any Credit
Support Provider of such party or any applicable Specified Entity of such
party: —

 

7

 

(1)           is dissolved (other than pursuant to a
consolidation, amalgamation or merger); (2) becomes insolvent or is unable
to pay its debts or fails or admits in writing its inability generally to pay
its debts as they become due; (3) makes a general assignment, arrangement
or composition with or for the benefit of its creditors; (4) institutes or
has instituted against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or insolvency law or other
similar law affecting creditors’ rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (A) results
in a judgment of insolvency or bankruptcy or the entry of an order for relief
or the making of an order for its winding-up or liquidation or (B) is not
dismissed, discharged, stayed or restrained in each case within 30 days of the
institution or presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes subject to
the appointment of an administrator, provisional liquidator, conservator,
receiver, trustee, custodian or other similar official for it or for all or
substantially all its assets; (7) has a secured party take possession of
all or substantially all its assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced or sued on or against all
or substantially all its assets and such secured party maintains possession, or
any such process is not dismissed, discharged, stayed or restrained, in each
case within 30 days thereafter; (8) causes or is subject to any event with
respect to it which, under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses (1) to (7) (inclusive);
or (9) takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts; or

 

(viii)        Merger
Without Assumption.  The
party or any Credit Support Provider of such party consolidates or amalgamates
with, or merges with or into, or transfers all or substantially all its assets
to, another entity and, at the time of such consolidation, amalgamation, merger
or transfer: —

 

(1)           the resulting, surviving or transferee
entity fails to assume all the obligations of such party or such Credit Support
Provider under this Agreement or any Credit Support Document to which it or its
predecessor was a party by operation of law or pursuant to an agreement
reasonably satisfactory to the other party to this Agreement; or

 

(2)           the benefits of any Credit Support Document
fail to extend (without the consent of the other party) to the performance by
such resulting, surviving or transferee entity of its obligations under this
Agreement.

 

(b)           Termination
Events.  The occurrence at
any time with respect to a party or, if applicable, any Credit Support Provider
of such party or any Specified Entity of such party of any event specified
below constitutes an Illegality if the event is specified in (i) below, a
Tax Event if the event is specified in (ii) below or a Tax Event Upon
Merger if the event is specified in (iii) below, and, if specified to be
applicable, a Credit Event (i) Illegality. Due to the adoption of, or 

 

8

 

any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court, tribunal or
regulatory authority with competent jurisdiction of any applicable law after
such date, it becomes unlawful (other than as a result of a breach by the party
of Section 4(b)) for such party (which will be the Affected Party): —

 

(1)           to perform any absolute or contingent
obligation to make a payment or delivery or to receive a payment or delivery in
respect of such Transaction or to comply with any other material provision of
this Agreement relating to such Transaction; or

 

(2)           to perform, or for any Credit Support
Provider of such party to perform, any contingent or other obligation which the
party (or such Credit Support Provider) has under any Credit Support Document
relating to such Transaction;

 

(ii)           Tax
Event.  Due to (x) any
action taken by a taxing authority, or brought in a court of competent
jurisdiction, on or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with respect to a party
to this Agreement) or (y) a Change in Tax Law, the party (which will be
the Affected Party) will, or there is a substantial likelihood that it will, on
the next succeeding Scheduled Payment Date (1) be required to pay to the
other party an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except
in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive
a payment from which an amount is required to be deducted or withheld for or on
account of a Tax (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) and no additional amount is required to be paid in respect of such Tax
under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or
(B));

 

(iii)          Tax
Event Upon Merger.  The
party (the “Burdened Party”) on the next succeeding Scheduled Payment Date will
either (1) be required to pay an additional amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a
payment from which an amount has been deducted or withheld for or on account of
any Indemnifiable Tax in respect of which the other party is not required to
pay an additional amount (other than by reason of Section 2(d)(i)(4)(A) or
(B)), in either case as a result of a party consolidating or amalgamating with,
or merging with or into, or transferring all or substantially all its assets
to, another entity (which will be the Affected Party) where such action does
not constitute an event described in Section 5(a)(viii);

 

(iv)          Credit
Event Upon Merger.  If “Credit
Event Upon Merger” is specified in the Schedule as applying to the party, such
party (“X”), any Credit Support Provider of X or any applicable Specified
Entity of X consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and such
action does not constitute an event described in Section 5(a)(viii) but
the creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action (and, in
such event, X or its successor or transferee, as appropriate, will be the
Affected Party); or

 

9

 

(v)           Additional
Termination Event.  If any
“Additional Termination Event” is specified in the Schedule or any Confirmation
as applying, the occurrence of such event (and, in such event, the Affected
Party or Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).

 

(c)           Event
of Default and Illegality.  If an event or circumstance which would otherwise
constitute or give rise to an Event of Default also constitutes an Illegality,
it will be treated as an Illegality and will not constitute an Event of
Default.

 

6.             Early Termination

 

(a)           Right
to Terminate Following Event of Default.  If at any time an Event of Default with
respect to a party (the “Defaulting Party”) has occurred and is then
continuing, the other party (the “Non-defaulting Party”) may, by not more than
20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as
an Early Termination Date in respect of all outstanding Transactions. If,
however, “Automatic Early Termination” is specified in the Schedule as applying
to a party, then an Early Termination Date in respect of all outstanding
Transactions will occur immediately upon the occurrence with respect to such
party of an Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or,
to the extent analogous thereto, (8), and as of the time immediately preceding
the institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous
thereto, (8).

 

(b)           Right to Terminate Following Termination Event.

 

(i)            Notice.  If a Termination Event occurs, an Affected
Party will, promptly upon becoming aware of it, notify the other party,
specifying the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as the other
party may reasonably require.

 

(ii)           Transfer
to Avoid Termination Event.  If either an Illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon
Merger occurs and the Burdened Party is the Affected Party, the Affected Party
will, as a condition to its right to designate an Early Termination Date under Section 6(b)(iv),
use all reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days after it
gives notice under Section 6(b)(i) all its rights and obligations
under this Agreement in respect of the Affected Transactions to another of its
Offices or Affiliates so that such Termination Event ceases to exist.

 

If the
Affected Party is not able to make such a transfer it will give notice to the
other party to that effect within such 20 day period, whereupon the other party
may effect such a transfer within 30 days after the notice is given under Section 6(b)(i).

 

Any such
transfer by a party under this Section 6(b)(ii) will be subject to
and conditional upon the prior written consent of the other party, which
consent will not be withheld if

 

10

 

such other
party’s policies in effect at such time would permit it to enter into
transactions with the transferee on the terms proposed.

 

(iii)          Two
Affected Parties.  If an
Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there
are two Affected Parties, each party will use all reasonable efforts to reach
agreement within 30 days after notice thereof is given under Section 6(b)(i) on
action to avoid that Termination Event.

 

(iv)          Right to
Terminate.  If: —

 

(1)           a transfer under Section 6(b)(ii) or
an agreement under Section 6(b)(iii), as the case may be, has not been
effected with respect to all Affected Transactions within 30 days after an
Affected Party gives notice under Section 6(b)(i); or

 

(2)           an Illegality under Section 5(b)(i)(2),
a Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax
Event Upon Merger occurs and the Burdened Party is not the Affected Party,

 

either party
in the case of an Illegality, the Burdened Party in the case of a Tax Event
Upon Merger, any Affected Party in the case of a Tax Event or an Additional
Termination Event if there is more than one Affected Party, or the party which
is not the Affected Party in the case of a Credit Event Upon Merger or an
Additional Termination Event if there is only one Affected Party may, by not
more than 20 days notice to the other party and provided that the relevant
Termination Event is then continuing, designate a day not earlier than the day
such notice is effective as an Early Termination Date in respect of all
Affected Transactions.

 

(c)           Effect of Designation.

 

(i)            If notice designating an Early Termination
Date is given under Section 6(a) or (b), the Early Termination Date
will occur on the date so designated, whether or not the relevant Event of
Default or Termination Event is then continuing.

 

(ii)           Upon the occurrence or effective designation
of an Early Termination Date, no further payments or deliveries under Section 2(a)(i) or
2(e) in respect of the Terminated Transactions will be required to be
made, but without prejudice to the other provisions of this Agreement. The
amount, if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).

 

(d)           Calculations.

 

(i)            Statement.
 On or as soon as
reasonably practicable following the occurrence of an Early Termination Date,
each party will make the calculations on its part, if any, contemplated by Section 6(e) and
will provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the
relevant account to which any amount payable to it is to be paid. In the
absence of written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the

 

11

 

party obtaining such quotation will be conclusive
evidence of the existence and accuracy of such quotation.

 

(ii)           Payment Date.  An amount calculated as being due in respect
of any Early Termination Date under Section 6(e) will be payable on
the day that notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on which
notice of the amount payable is effective (in the case of an Early Termination
Date which is designated as a result of a Termination Event). Such amount will
be paid together with (to the extent permitted under applicable law) interest
thereon (before as well as after judgment) in the Termination Currency, from
(and including) the relevant Early Termination Date to (but excluding) the date
such amount is paid, at the Applicable Rate. Such interest will be calculated
on the basis of daily compounding and the actual number of days elapsed.

 

(e)           Payments on Early Termination.  If an Early Termination Date occurs, the
following provisions shall apply based on the parties’ election in the Schedule
of a payment measure, either “Market Quotation” or “Loss”, and a payment
method, either the “First Method” or the “Second Method”. If the parties fail
to designate a payment measure or payment method in the Schedule, it will be
deemed that “Market Quotation” or the “Second Method”, as the case may be,
shall apply. The amount, if any, payable in respect of an Early Termination
Date and determined pursuant to this Section will be subject to any
Set-off.

 

(i)            Events of Default.  If the Early Termination Date results from an
Event of Default:—

 

(1)           First Method and Market Quotation.
 If the First Method and Market
Quotation apply, the Defaulting Party will pay to the Non-defaulting Party the
excess, if a positive number, of (A) the sum of the Settlement Amount
(determined by the Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party over (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party.

 

(2)           First Method and Loss.  If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive number,
the Non-defaulting Party’s Loss in respect of this Agreement.

 

(3)           Second Method and Market
Quotation.  If the Second
Method and Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the Non-defaulting Party) in
respect of the Terminated Transactions and the Termination Currency Equivalent
of the Unpaid Amounts owing to the Non-defaulting Party less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting
Party. If that amount is a positive number, the Defaulting Party will pay it to
the Non-defaulting Party; if it is a negative number, the Non-defaulting Party
will pay the absolute value of that amount to the Defaulting Party.

 

12

 

(4)           Second Method and Loss.  If the Second Method and Loss apply, an amount
will be payable equal to the Non-defaulting Party’s Loss in respect of this
Agreement. If that amount is a positive number, the Defaulting Party will pay
it to the Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting Party.

 

(ii)           Termination Events.  If the Early Termination Date results from a
Termination Event:—

 

(1)           One Affected Party.  If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies, except
that, in either case, references to the Defaulting Party and to the
Non-defaulting Party will be deemed to be references to the Affected Party and
the party which is not the Affected Party, respectively, and, if Loss applies
and fewer than all the Transactions are being terminated, Loss shall be
calculated in respect of all Terminated Transactions.

 

(2)           Two Affected Parties.  If there are two Affected Parties:—

 

(A)          if Market Quotation applies, each party will
determine a Settlement Amount in respect of the Terminated Transactions, and an
amount will be payable equal to (I) the sum of (a) one-half of the
difference between the Settlement Amount of the party with the higher
Settlement Amount (“X”) and the Settlement Amount of the party with the lower
Settlement Amount (“Y”) and (b) the Termination Currency Equivalent of the
Unpaid Amounts owing to X less (II) the Termination Currency Equivalent of
the Unpaid Amounts owing to Y; and

 

(B)           if Loss applies, each party will determine its Loss
in respect of this Agreement (or, if fewer than all the Transactions are being
terminated, in respect of all Terminated Transactions) and an amount will be
payable equal to one-half of the difference between the Loss of the party with
the higher Loss (“X”) and the Loss of the party with the lower Loss (“Y”).

 

If the amount payable is a
positive number, Y will pay it to X; if it is a negative number, X will pay the
absolute value of that amount to Y.

 

(iii)          Adjustment for Bankruptcy.  In circumstances where an Early Termination
Date occurs because “Automatic Early Termination” applies in respect of a
party, the amount determined under this Section 6(e) will be subject
to such adjustments as are appropriate and permitted by law to reflect any
payments or deliveries made by one party to the other under this Agreement (and
retained by such other party) during the period from the relevant Early
Termination Date to the date for payment determined under Section 6(d)(ii).

 

(iv)          Pre-Estimate.  The parties agree that if Market Quotation
applies an amount recoverable under this Section 6(e) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for the loss of
bargain and the loss of protection against future

 

13

 

risks and except as otherwise provided in this
Agreement neither party will be entitled to recover any additional damages as a
consequence of such losses.

 

7.             Transfer

 

Subject to Section 6(b)(ii),
neither this Agreement nor any interest or obligation in or under this Agreement
may be transferred (whether by way of security or otherwise) by either party
without the prior written consent of the other party, except that: —

 

(a)           a party may make such a transfer of this Agreement
pursuant to a consolidation or amalgamation with, or merger with or into, or
transfer of all or substantially all its assets to, another entity (but without
prejudice to any other right or remedy under this Agreement); and

 

(b)           a party may make such a transfer of all or any part
of its interest in any amount payable to it from a Defaulting Party under Section 6(e).

 

Any purported transfer that
is not in compliance with this Section will be void.

 

8.             Contractual Currency

 

(a)           Payment in the Contractual
Currency.  Each payment
under this Agreement will be made in the relevant currency specified in this
Agreement for that payment (the “Contractual Currency”). To the extent
permitted by applicable law, any obligation to make payments under this
Agreement in the Contractual Currency will not be discharged or satisfied by
any tender in any currency other than the Contractual Currency, except to the
extent such tender results in the actual receipt by the party to which payment
is owed, acting in a reasonable manner and in good faith in converting the
currency so tendered into the Contractual Currency, of the full amount in the
Contractual Currency of all amounts payable in respect of this Agreement. If
for any reason the amount in the Contractual Currency so received falls short
of the amount in the Contractual Currency payable in respect of this Agreement,
the party required to make the payment will, to the extent permitted by
applicable law, immediately pay such additional amount in the Contractual
Currency as may be necessary to compensate for the shortfall. If for any reason
the amount in the Contractual Currency so received exceeds the amount in the
Contractual Currency payable in respect of this Agreement, the party receiving
the payment will refund promptly the amount of such excess.

 

(b)           Judgments.  To the extent permitted by
applicable law, if any judgment or order expressed in a currency other than the
Contractual Currency is rendered (i) for the payment of any amount owing
in respect of this Agreement, (ii) for the payment of any amount relating
to any early termination in respect of this Agreement or (iii) in respect
of a judgment or order of another court for the payment of any amount described
in (i) or (ii) above, the party seeking recovery, after recovery in
full of the aggregate amount to which such party is entitled pursuant to the
judgment or order, will be entitled to receive immediately from the other party
the amount of any shortfall of the Contractual Currency received by such party
as a consequence of sums paid in such other currency and will refund promptly
to the other party any excess of the Contractual Currency received by such
party as a consequence of sums paid in such other currency if such shortfall or
such excess arises or results from any variation between the rate of exchange
at which the Contractual Currency is converted into the currency of the
judgment or 

 

14

 

order for the purposes of such judgment or
order and the rate of exchange at which such party is able, acting in a
reasonable manner and in good faith in converting the currency received into
the Contractual Currency, to purchase the Contractual Currency with the amount
of the currency of the judgment or order actually received by such party. The
term “rate of exchange” includes, without limitation, any premiums and costs of
exchange payable in connection with the purchase of or conversion into the
Contractual Currency.

 

(c)           Separate Indemnities. To the extent
permitted by applicable law, these indemnities constitute separate and
independent obligations from the other obligations in this Agreement, will be
enforceable as separate and independent causes of action, will apply
notwithstanding any indulgence granted by the party to which any payment is
owed and will not be affected by judgment being obtained or claim or proof
being made for any other sums payable in respect of this Agreement.

 

(d)           Evidence of Loss.  For tbe purpose of this Section 8, it
will be sufficient for a party to demonstrate that it would have suffered a
loss had an actual exchange or purchase been made.

 

9.             Miscellaneous

 

(a)           Entire Agreement.  This Agreement constitutes the entire
agreement and understanding of the parties with respect to its subject matter
and supersedes all oral communication and prior writings with respect thereto.

 

(b)           Amendments.  No amendment, modification or waiver in
respect of this Agreement will be effective unless in writing (including a
writing evidenced by a facsimile transmission) and executed by each of the
parties or confirmed by an exchange of telexes or electronic messages on an
electronic messaging system.

 

(c)           Survival of Obligations.  Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.

 

(d)           Remedies Cumulative.  Except as provided in this Agreement, the
rights, powers, remedies and privileges provided in this Agreement are
cumulative and not exclusive of any rights, powers, remedies and privileges
provided by law.

 

(e)           Counterparts and
Confirmations.

 

(i)            This Agreement (and each amendment, modification and
waiver in respect of it) may be executed and delivered in counterparts
(including by facsimile transmission), each of which will be deemed an
original.

 

(ii)           The parties intend that they are legally bound by
the terms of each Transaction from the moment they agree to those terms
(whether orally or otherwise). A Confirmation shall he entered into as soon as
practicable and may he executed and delivered in counterparts (including by
facsimile transmission) or be created by an exchange of telexes or by an
exchange of electronic messages on an electronic messaging system, which in
each case will be sufficient for all purposes to evidence a binding supplement
to 

 

15

 

this Agreement. The parties will specify therein or
through another effective means that any such counterpart, telex or electronic
message constitutes a Confirmation.

 

(f)            No Waiver of Rights.  A failure or delay in exercising any right,
power or privilege in respect of this Agreement will not be presumed to operate
as a waiver, and a single or partial exercise of any right, power or privilege
will not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.

 

(g)           Headings.  The headings used in this Agreement are for
convenience of reference only and are not to affect the construction of or to
be taken into consideration in interpreting this Agreement.

 

10.          Offices; Multibranch Parties

 

(a)           If Section 10(a) is specified in the
Schedule as applying, each party that enters into a Transaction through an
Office other than its head or home office represents to the other party that,
notwithstanding the place of booking office or jurisdiction of incorporation or
organisation of such party, the obligations of such party are the same as if it
had entered into the Transaction through its head or home office. This
representation will be deemed to be repeated by such party on each date on
which a Transaction is entered into.

 

(b)           Neither party may change the Office through which it
makes and receives payments or deliveries for the purpose of a Transaction
without the prior written consent of the other party.

 

(c)           If a party is specified as a Multibranch Party in
the Schedule, such Multibranch Party may make and receive payments or
deliveries under any Transaction through any Office listed in the Schedule, and
the Office through which it makes and receives payments or deliveries with
respect to a Transaction will be specified in the relevant Confirmation.

 

11.          Expenses

 

A Defaulting Party will, on
demand, indemnify and hold harmless the other party for and against all
reasonable out-of-pocket expenses, including legal fees and Stamp Tax, incurred
by such other party by reason of the enforcement and protection of its rights
under this Agreement or any Credit Support Document to which the Defaulting
Party is a party or by reason of the early termination of any Transaction,
including, but not limited to, costs of collection.

 

12.          Notices

 

(a)           Effectiveness.  Any notice or other
communication in respect of this Agreement may be given in any manner set forth
below (except that a notice or other communication under Section 5 or 6
may not be given by facsimile transmission or electronic messaging system) to
the address or number or in accordance with the electronic messaging system
details provided (see the Schedule) and will be deemed effective as indicated:—

 

(i)            if in writing and delivered in person or by courier,
on the date it is delivered;

 

16

 

(ii)           if sent by telex, on the date the recipient’s
answerback is received;

 

(iii)          if sent by facsimile transmission, on the date that
transmission is received by a responsible employee of the recipient in legible
form (it being agreed that the burden of proving receipt will be on the sender
and will not be met by a transmission report generated by the sender’s facsimile
machine);

 

(iv)          if sent by certified or registered mail (airmail, if
overseas) or the equivalent (return receipt requested), on the date that mail
is delivered or its delivery is attempted; or

 

(v)           if sent by electronic messaging system, on the date
that electronic message is received, unless the date of that delivery (or
attempted delivery) or that receipt, as applicable, is not a Local Business Day
or that communication is delivered (or attempted) or received, as applicable,
after the close of business on a Local Business Day, in which case that
communication shall be deemed given and effective on the first following day
that is a Local Business Day.

 

(b)           Change of Addresses.  Either party may by notice to the other change
the address, telex or facsimile number or electronic messaging system details
at which notices or other communications are to be given to it.

 

13.          Governing Law and
Jurisdiction

 

(a)           Governing Law.  This Agreement will be governed by and
construed in accordance with the law specified in the Schedule.

 

(b)           Jurisdiction.  With respect to any suit, action or
proceedings relating to this Agreement (“Proceedings”), each party
irrevocably:—

 

(i)            submits to the jurisdiction of the English courts,
if this Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New York and the
United States District Court located in the Borough of Manhattan in New York
City, if this Agreement is expressed to be governed by the laws of the State of
New York; and

 

(ii)           waives any objection which it may have at any time
to the laying of venue of any Proceedings brought in any such court, waives any
claim that such Proceedings have been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.

 

Nothing in this Agreement
precludes either party from bringing Proceedings in any other jurisdiction
(outside, if this Agreement is expressed to be governed by English law, the
Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.

 

17

 

(c)           Service of Process.  Each party irrevocably appoints the Process
Agent (if any) specified opposite its name in the Schedule to receive, for it
and on its behalf, service of process in any Proceedings. If for any reason any
party’s Process Agent is unable to act as such, such party will promptly notify
the other party and within 30 days appoint a substitute process agent
acceptable to the other party. The parties irrevocably consent to service of
process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.

 

(d)           Waiver of Immunities.  Each party irrevocably waives, to the fullest
extent permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the grounds
of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction
of any court, (iii) relief by way of injunction, order for specific
performance or for recovery of property, (iv) attachment of its assets
(whether before or after judgment) and (v) execution or enforcement of any
judgment to which it or its revenues or assets might otherwise be entitled in
any Proceedings in the courts of any jurisdiction and irrevocably agrees, to
the extent permitted by applicable law, that it will not claim any such
immunity in any Proceedings.

 

14.          Definitions

 

As used in this Agreement:—

 

“Additional Termination Event” has the meaning specified
in Section 5(b).

 

“Affected Party” has the meaning specified
in Section 5(b).

 

“Affected Transactions” means (a) with respect
to any Termination Event consisting of an Illegality, Tax Event or Tax Event
Upon Merger, all Transactions affected by the occurrence of such Termination
Event and (b) with respect to any other Termination Event, all
Transactions.

 

“Affiliate” means, subject to the Schedule, in relation
to any person, any entity controlled, directly or indirectly, by the person,
any entity that controls, directly or indirectly, the person or any entity
directly or indirectly under common control with the person. For this purpose, “control”
of any entity or person means ownership of a majority of the voting power of
the entity or person.

 

“Applicable Rate” means:—

 

(a)           in respect of obligations payable or deliverable (or
which would have been but for Section 2(a)(iii)) by a Defaulting Party,
the Default Rate;

 

(b)           in respect of an obligation to pay an amount under Section 6(e) of
either party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;

 

(c)           in respect of all other obligations payable or
deliverable (or which would have been but for Section 2(a)(iii)) by a
Non-defaulting Party, the Non-default Rate; and

 

(d)           in all other cases, the Termination Rate.

 

18

 

“Burdened Party” has the meaning specified in
Section 5(b).

 

“Change in Tax Law” means the enactment,
promulgation, execution or ratification of, or any change in or amendment to,
any law (or in the application or official interpretation of any law) that
occurs on or after the date on which the relevant Transaction is entered into.

 

“consent” includes a consent, approval, action,
authorisation, exemption, notice, filing, registration or exchange control
consent.

 

“Credit Event Upon Merger” has the meaning specified in
Section 5(b).

 

“Credit Support Document” means any agreement or
instrument that is specified as such in this Agreement.

 

“Credit Support Provider” has the meaning specified in
the Schedule.

 

“Default Rate” means a rate per annum equal
to the cost (without proof or evidence of any actual cost) to the relevant
payee (as certified by it) if it were to fund or of funding the relevant amount
plus 1% per annum.

 

“Defaulting Party” has the meaning specified in
Section 6(a).

 

“Early Termination Date” means the date determined in
accordance with Section 6(a) or 6(b)(iv).

 

“Event of Default” has the meaning specified in
Section 5(a) and, if applicable, in the Schedule.

 

“Illegality” has the meaning specified in Section 5(b).

 

“Indemnifiable Tax” means any Tax other than a
Tax that would not be imposed in respect of a payment under this Agreement but
for a present or former connection between the jurisdiction of the government
or taxation authority imposing such Tax and the recipient of such payment or a
person related to such recipient (including, without limitation, a connection
arising from such recipient or related person being or having been a citizen or
resident of such jurisdiction, or being or having been organised, present or
engaged in a trade or business in such jurisdiction, or having or having had a
permanent establishment or fixed place of business in such jurisdiction, but
excluding a connection arising solely from such recipient or related person
having executed, delivered, performed its obligations or received a payment
under, or enforced, this Agreement or a Credit Support Document).

 

“law” includes any treaty, law, rule or regulation
(as modified, in the case of tax matters, by the practice of any relevant
governmental revenue authority) and “lawful” and “unlawful” will be construed
accordingly.

 

“Local Business Day” means, subject to the
Schedule, a day on which commercial banks are open for business (including
dealings in foreign exchange and foreign currency deposits) (a) in
relation to any obligation under Section 2(a)(i), in the place(s) specified
in the relevant Confirmation or, if not so specified, as otherwise agreed by
the parties in writing or determined

 

19

 

pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in
relation to any other payment, in the place where the relevant account is
located and, if different, in the principal financial centre, if any, of the
currency of such payment, (c) in relation to any notice or other
communication, including notice contemplated under Section 5(a)(i), in the
city specified in the address for notice provided by the recipient and, in the
case of a notice contemplated by Section 2(b), in the place where the
relevant new account is to be located and (d) in relation to Section 5(a)(v)(2),
in the relevant locations for performance with respect to such Specified
Transaction.

 

“Loss” means, with respect to this Agreement or one or more
Terminated Transactions, as the case may be, and a party, the Termination
Currency Equivalent of an amount that party reasonably determines in good faith
to be its total losses and costs (or gain, in which case expressed as a
negative number) in connection with this Agreement or that Terminated Transaction
or group of Terminated Transactions, as the case may be, including any loss of
bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating, liquidating,
obtaining or reestablishing any hedge or related trading position (or any gain
resulting from any of them). Loss includes losses and costs (or gains) in
respect of any payment or delivery required to have been made (assuming
satisfaction of each applicable condition precedent) on or before the relevant
Early Termination Date and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or
(3) or 6(e)(ii)(2)(A) applies. Loss does not include a party’s legal
fees and out-of-pocket expenses referred to under Section 11. A party will
determine its Loss as of the relevant Early Termination Date, or, if that is
not reasonably practicable, as of the earliest date thereafter as is reasonably
practicable. A party may (but need not) determine its Loss by reference to
quotations of relevant rates or prices from one or more leading dealers in the
relevant markets.

 

“Market Quotation” means, with respect to one
or more Terminated Transactions and a party making the determination, an amount
determined on the basis of quotations from Reference Market-makers. Each
quotation will be for an amount, if any, that would be paid to such party
(expressed as a negative number) or by such party (expressed as a positive
number) in consideration of an agreement between such party (taking into account
any existing Credit Support Document with respect to the obligations of such
party) and the quoting Reference Market-maker to enter into a transaction (the “Replacement
Transaction”) that would have the effect of preserving for such party the
economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i) in
respect of such Terminated Transaction or group of Terminated Transactions that
would, but for the occurrence of the relevant Early Termination Date, have been
required after that date. For this purpose, Unpaid Amounts in respect of the
Terminated Transaction or group of Terminated Transactions are to be excluded
but, without limitation, any payment or delivery that would, but for the
relevant Early Termination Date, have been required (assuming satisfaction of
each applicable condition precedent) after that Early Termination Date is to be
included. The Replacement Transaction would be subject to such documentation as
such party and the Reference Market-maker may, in good faith, agree. The party
making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as
of the same day and time (without regard to different time zones) on or as soon
as reasonably practicable after the relevant Early Termination Date. The day
and time as of which those quotations are to be 

 

20

 

obtained will be selected in
good faith by the party obliged to make a determination under Section 6(e),
and, if each party is so obliged, after consultation with the other. If more
than three quotations are provided, the Market Quotation will be the arithmetic
mean of the quotations, without regard to the quotations having the highest and
lowest values. If exactly three such quotations are provided, the Market
Quotation will be the quotation remaining after disregarding the highest and
lowest quotations. For this purpose, if more than one quotation has the same
highest value or lowest value, then one of such quotations shall be
disregarded. If fewer than three quotations are provided, it will be deemed
that the Market Quotation in respect of such Terminated Transaction or group of
Terminated Transactions cannot be determined.

 

“Non-default Rate” means a rate per annum equal
to the cost (without proof or evidence of any actual cost) to the
Non-defaulting Party (as certified by it) if it were to fund the relevant
amount.

 

“Non-defaulting Party” has the meaning specified in
Section 6(a).

 

“Office” means a branch or office of a party, which
may be such party’s head or home office.

 

“Potential Event of Default” means any event which, with
the giving of notice or the lapse of time or both, would constitute an Event of
Default.

 

“Reference Market-makers” means four leading dealers
in the relevant market selected by the party determining a Market Quotation in
good faith (a) from among dealers of the highest credit standing which
satisfy all the criteria that such party applies generally at the time in
deciding whether to offer or to make an extension of credit and (b) to the
extent practicable, from among such dealers having an office in the same city.

 

“Relevant Jurisdiction” means, with respect to a
party, the jurisdictions (a) in which the party is incorporated,
organised, managed and controlled or considered to have its seat, (b) where
an Office through which the party is acting for purposes of this Agreement is
located, (c) in which the party executes this Agreement and (d) in
relation to any payment, from or through which such payment is made.

 

“Scheduled Payment Date” means a date on which a
payment or delivery is to be made under Section 2(a)(i) with respect
to a Transaction.

 

“Set-off” means set-off, offset, combination of
accounts, right of retention or withholding or similar right or requirement to
which the payer of an amount under Section 6 is entitled or subject (whether
arising under this Agreement, another contract, applicable law or otherwise)
that is exercised by, or imposed on, such payer.

 

“Settlement Amount” means, with respect to a
party and any Early Termination Date, the sum of: —

 

(a)           the Termination Currency Equivalent of the Market
Quotations (whether positive or negative) for each Terminated Transaction or
group of Terminated Transactions for which a Market Quotation is determined;
and

 

21

 

(b)           such party’s Loss (whether positive or negative and
without reference to any Unpaid Amounts) for each Terminated Transaction or
group of Terminated Transactions for which a Market Quotation cannot be
determined or would not (in the reasonable belief of the party making the
determination) produce a commercially reasonable result.

 

“Specified Entity” has the meanings specified
in the Schedule.

 

“Specified Indebtedness” means, subject to the
Schedule, any obligation (whether present or future, contingent or otherwise,
as principal or surety or otherwise) in respect of borrowed money.

 

“Specified Transaction” means, subject to the
Schedule, (a) any transaction (including an agreement with respect
thereto) now existing or hereafter entered into between one party to this
Agreement (or any Credit Support Provider of such party or any applicable
Specified Entity of such party) and the other party to this Agreement (or any
Credit Support Provider of such other party or any applicable Specified Entity
of such other party) which is a rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect to
any of these transactions), (b) any combination of these transactions and (c) any
other transaction identified as a Specified Transaction in this Agreement or
the relevant confirmation.

 

“Stamp Tax” means any stamp, registration, documentation
or similar tax.

 

“Tax” means any present or future tax, levy, impost, duty,
charge, assessment or fee of any nature (including interest, penalties and
additions thereto) that is imposed by any government or other taxing authority
in respect of any payment under this Agreement other than a stamp,
registration, documentation or similar tax.

 

“Tax Event” has the meaning specified in Section 5(b).

 

“Tax Event Upon Merger” has the meaning specified in
Section 5(b).

 

“Terminated Transactions” means with respect to any
Early Termination Date (a) if resulting from a Termination Event, all
Affected Transactions and (b) if resulting from an Event of Default, all
Transactions (in either case) in effect immediately before the effectiveness of
the notice designating that Early Termination Date (or, if “Automatic Early
Termination” applies, immediately before that Early Termination Date).

 

“Termination Currency” has the meaning specified in
the Schedule.

 

“Termination Currency Equivalent” means, in respect of any
amount denominated in the Termination Currency, such Termination Currency
amount and, in respect of any amount denominated in a currency other than the
Termination Currency (the “Other Currency”), the amount in the Termination
Currency determined by the party making the relevant determination as being
required to purchase such amount of such Other

 

22

 

Currency as at the relevant
Early Termination Date, or, if the relevant Market Quotation or Loss (as the
case may be), is determined as of a later date, that later date, with the
Termination Currency at the rate equal to the spot exchange rate of the foreign
exchange agent (selected as provided below) for the purchase of such Other
Currency with the Termination Currency at or about 11:00 a.m. (in the city
in which such foreign exchange agent is located) on such date as would be
customary for the determination of such a rate for the purchase of such Other
Currency for value on the relevant Early Termination Date or that later date.
The foreign exchange agent will, if only one party is obliged to make a
determination under Section 6(e), be selected in good faith by that party
and otherwise will be agreed by the parties.

 

“Termination Event” means an Illegality, a Tax
Event or a Tax Event Upon Merger or, if specified to be applicable, a Credit Event
Upon Merger or an Additional Termination Event.

 

“Termination Rate” means a rate per annum equal
to the arithmetic mean of the cost (without proof or evidence of any actual
cost) to each party (as certified by such party) if it were to fund or of funding
such amounts.

 

“Unpaid Amounts” owing to any party means,
with respect to an Early Termination Date, the aggregate of (a) in respect
of all Terminated Transactions, the amounts that became payable (or that would
have become payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on
or prior to such Early Termination Date and which remain unpaid as at such
Early Termination Date and (b) in respect of each Terminated Transaction,
for each obligation under Section 2(a)(i) which was (or would have
been but for Section 2(a)(iii)) required to be settled by delivery to such
party on or prior to such Early Termination Date and which has not been so
settled as at such Early Termination Date, an amount equal to the fair market
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or
would have been required to have been paid or performed to (but excluding) such
Early Termination Date, at the Applicable Rate. Such amounts of interest will
be calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the
average of the Termination Currency Equivalents of the fair market values
reasonably determined by both parties.

 

23

 

IN WITNESS WHEREOF the
parties have executed this document on the respective dates specified below
with effect from the date specified on the first page of this document.

 

 

	
   

  	
  SEMPRA
  ENERGY TRADING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael D. Mitchell

  
	
   

  	
   

  	
  Name:  Michael
  D. Mitchell

  
	
   

  	
   

  	
  Title:   
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MXENERGY
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jeffrey Mayer

  
	
   

  	
   

  	
  Name:  Jeffrey
  Mayer

  
	
   

  	
   

  	
  Title:   
  President and Chief Executive Officer

  

 

 

	
  Acknowledged
  and Agreed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MXENERGY
  HOLDINGS INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  	
   

  
	
   

  	
  Name:  Jeffrey
  Mayer

  	
   

  	
   

  
	
   

  	
  Title:   
  President and Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MXENERGY
  ELECTRIC INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  	
   

  
	
   

  	
  Name:  Jeffrey
  Mayer

  	
   

  	
   

  
	
   

  	
  Title:   
  President and Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MXENERGY
  (CANADA) LTD.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  	
   

  
	
   

  	
  Name:  Jeffrey
  Mayer

  	
   

  	
   

  
	
   

  	
  Title:   
  President and Chief Executive Officer

  	
   

  	
   

  

 

[Signature
Page to Gas ISDA Master Agreement]

 

 

	
  ONLINECHOICE,
  INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  	
   

  
	
   

  	
  Name:  Jeffrey
  Mayer

  	
   

  	
   

  
	
   

  	
  Title:   
  President and Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MXENERGY
  GAS CAPITAL HOLDINGS CORP.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  	
   

  
	
   

  	
  Name:  Jeffrey
  Mayer

  	
   

  	
   

  
	
   

  	
  Title:   
  President and Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MXENERGY ELECTRIC CAPITAL HOLDINGS CORP.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  	
   

  
	
   

  	
  Name:  Jeffrey
  Mayer

  	
   

  	
   

  
	
   

  	
  Title:   
  President and Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MXENERGY
  GAS CAPITAL CORP.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  	
   

  
	
   

  	
  Name:  Jeffrey
  Mayer

  	
   

  	
   

  
	
   

  	
  Title:   
  President and Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MXENERGY
  ELECTRIC CAPITAL CORP.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  	
   

  
	
   

  	
  Name:  Jeffrey
  Mayer

  	
   

  	
   

  
	
   

  	
  Title:   
  President and Chief Executive Officer

  	
   

  	
   

  

 

[Signature
Page to Gas ISDA Master Agreement]

 

 

	
  MXENERGY CAPITAL HOLDINGS CORP.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  	
   

  
	
   

  	
  Name:  Jeffrey
  Mayer

  	
   

  	
   

  
	
   

  	
  Title:   
  President and Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  INFOMETER.COM
  INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  	
   

  
	
   

  	
  Name:  Jeffrey
  Mayer

  	
   

  	
   

  
	
   

  	
  Title:   
  President and Chief Executive Officer

  	
   

  	
   

  

 

[Signature Page to Gas ISDA Master Agreement]

 

 

EXECUTION VERSION

 

(Multicurrency - Cross
Border)

 

Schedule to the

 

ISDA Master Agreement

 

dated as of

 

September 22, 2009

 

between SEMPRA ENERGY TRADING LLC, a Delaware

limited liability company (“Party A”), and MXENERGY INC.,

a Delaware corporation  (“Party B”).

 

Part 1.   Termination Provisions.

 

(a)           “Specified Entity” means in
relation to Party A for the purpose of:

 

Section 5(a)(v), none 

Section 5(a)(vi), none 

Section 5(a)(vii), none

Section 5(b)(iv), none

 

and means in relation to Party B for all purposes
under this Agreement:  each Affiliate of
Party B (other than shareholders of MX Holdings that are not Subsidiaries of MX
Holdings).

 

(b)           “Specified Transaction” will have the
meaning specified in Section 14 of this Agreement, except that such term
is amended on line 8 after the words “currency option” by adding a comma and
the words “agreement for the purchase, sale or transfer of any commodity or any
other commodity trading transaction”. 
For this purpose, “commodity” means any tangible or intangible commodity
of any type or description including electric energy and/or capacity, petroleum
and natural gas, the products or by-products thereof, coal, emissions, and base
or precious metals.

 

(c)           The “Cross Default” provisions of
Section 5(a)(vi) will not apply to Party A and will apply to Party B.

 

“Specified
Indebtedness” shall not apply to Party A, and with respect to Party
B and each Specified Entity of Party B, Specified Indebtedness shall have the
meaning specified in Section 14 and shall also include all Indebtedness,
including the Notes, the Old Notes, the Promissory Notes (if any) and the
Loans.

 

“Threshold
Amount” means, in the aggregate, with respect to Party B and all
Specified Entities of Party B, 
$1,000,000.

 

(d)           The “Credit Event Upon Merger” provisions of
Section 5(b)(iv) will not apply to Party A and will apply to Party B.

 

If such provisions
apply:  Section 5(b)(iv) is
hereby amended by inserting after the words “another entity” the phrase “or
another entity consolidates or amalgamates with, or merges into, or transfers
all or substantially all its assets to, X or any Credit Support Provider of X
or any applicable Specified Entity of X”.

 

(e)           The “Automatic Early Termination” provisions of Section 6(a) will
not apply to Party A or Party B.

 

(f)            Payments on Early Termination.  For the purpose of Section 6(e) of
this Agreement:

 

 

(i)            Loss will apply.

 

(ii)           The Second Method will apply.

 

(g)           “Termination Currency” means United
States Dollars.

 

(h)           “Additional Termination Event” will apply.

 

(i) The following event
shall constitute an Additional Termination Event with respect to Party B
pursuant to Section 5(b)(v) (for the purposes of which, Party B shall
be the sole Affected Party and all Transactions shall be Affected
Transactions):

 

The occurrence of February 28,
2014.

 

(ii)  The following
events shall also constitute Additional Termination Events with respect to
Party A pursuant to Section 5(b)(v) for the purposes of which Party A
shall be the sole Affected Party; provided, however, that, notwithstanding
anything to the contrary in Section 6 of the Agreement, the calculations
required by Section 6(e) and any other calculations to be made as the
result of the occurrence of such Additional Termination Event shall be made by
Party A:

 

(A)          If at any time The Royal Bank of Scotland plc’s
Credit Rating falls below BBB- from S&P or Baa3 from Moody’s, and Party A
fails to provide adequate assurances in an amount determined by Party B in a
commercially reasonable manner within two Business Days of a written request
therefor from Party B.

 

(B)           Any permit or license necessary for Party A to
perform its material obligations hereunder is revoked and such revocation is
not cured within ten Business Days of written notice from Party B.

 

(i)            Amendments.  The parties agree to the following changes to
this Agreement:

 

(i)            Section 2(a)(i) is amended by inserting “,
the Schedule or any Promissory Note” immediately after the term “Confirmation”.

 

(ii)           Section 2(a)(ii) is amended by inserting “,
Promissory Note, any other ISDA Document” immediately after the term
Confirmation in lines 2 and 6 of such Section.

 

(iii)          Section 2(e) is hereby amended by
inserting the phrase “and unless otherwise specified in this Agreement with
respect to any Loan” immediately after “Transaction” in the second line of such
Section.

 

(iv)          Section 5(a)(i) is amended by deleting “third”
and substituting “second”.

 

(v)           Section 5(a)(ii) is amended by inserting “or
under Part 12 or Part 13” immediately after “or 4(d)” in the
parenthetical.

 

(vi)          Section 5(a)(iv) is deleted in its
entirety and replaced with the following new Section:

 

“Misrepresentation. A
representation (other than a representation under Section 3(e) or (f) or
under Part 5(j)(xxiv) or (xxv)) made or repeated or deemed to have been
made or repeated by the party or any Credit Support Provider or Specified
Entity of such party in this Agreement or any Specified Agreement, or in any
report, certificate, financial statement or other document furnished pursuant
to or in connection with this Agreement or any Specified Agreement, proves to
have been incorrect or misleading in any material respect when made or repeated
or deemed to have been made or repeated.”

 

2

 

(vii)         Section 5(a)(v)(2) is amended by deleting
the parenthetical and substituting with “(unless with respect to a performance
default, the exclusive remedy for such failure to perform under the terms of
the Specified Transaction is the payment of damages as defined in such Specified
Transaction)”.

 

(viii)        Section 5(a)(vi) is amended by deleting
the words “becoming capable at such time of being declared,” in the seventh
line and substituting with the words “becoming capable at such time or with the
passage of time or the giving of notice (regardless of whether such time has
elapsed or such notice has been given) of being declared,”.

 

(ix)           Section 5(a)(vii)(4) is amended by
deleting it in its entirety and replacing with the following:

 

“Institutes or has instituted
against it proceedings seeking a judgment of insolvency or bankruptcy or any
other relief under any bankruptcy or insolvency law or other similar law
affecting creditors’ rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition instituted or
presented against it, that proceeding or petition:

 

(A)          results in a judgment of insolvency or bankruptcy or
the entry of an order for relief or the making of an order for its winding-up
or liquidation, or

 

(B)           is not withdrawn, dismissed, discharged, stayed or
restrained, in each case within:

 

(1)           thirty (30) days of its institution or presentation
if as of and during the pendency of such proceeding or petition, the party or
its Credit Support Provider (such reference to Credit Support Provider shall be
applicable if all such party’s financial obligations under the Agreement are
fully guaranteed or assured under a Credit Support Document provided by such
Credit Support Provider) has a Credit Rating of at least BBB+ by S&P or Baa1
by Moody’s; or

 

(2)           fifteen (15) days of its institution or presentation
in all cases other than those set out under Section 5 (a)(vii) (4) (B) (1) above;”

 

(x)            Section 14 is amended by deleting the existing
definition of “Default Rate” contained therein and replacing it in its entirety
as follows:

 

“Default Rate” means
the Base Rate plus 9%, or, if a rate is specified in this Agreement to be
applicable prior to a Default, such rate plus 2%.

 

(xi)           Additional Events of Default.  The occurrence at any time with respect to
Party B or, if applicable, any Specified Entity of Party B of any of the
following events will constitute an additional Event of Default under Section 5(a) with
respect to Party B and such Events of Default shall be in addition to, and not
in limitation of, any other Events of Default or Termination Events in this
Agreement:

 

(A)          Failure by Party B or any Specified Entity of Party
B to comply with or perform any agreement or obligation  to be complied with or performed by such
party in accordance with Part 12 (“Affirmative Covenants”), if such
failure is not remedied within 3 Business Days (or, in the case of Part 12(a)(vi) and
Part 12(a)(vii), 5 Business Days) after notice of such failure is given to
Party B;

 

(B)           Failure by Party B or any Specified Entity of Party
B  to comply with or perform any
agreement or obligation  to be complied
with or performed by Party B or such Specified Entity in accordance with Part 13
(“Negative Covenants”);

 

3

 

(C)           At any time the outstanding Aggregate Unpaid Value
exceeds the amount of Margin then held or (if Party A is required to establish
replacement custodial accounts pursuant to Part 11(f)) controlled by Party
A pursuant to any Master ISDA by $45,000,000 or more;

 

(D)          A Change of Control shall have occurred;

 

(E)           Any money judgment, writ or warrant of attachment or
similar process involving in any individual case or in the aggregate at any
time an amount in excess of  the lower of
(1) 5% of Party B’s or any Specified Entity of Party B’s total assets as
reflected on its most recent balance sheet (not adequately covered by insurance
as to which a solvent and unaffiliated insurance company has acknowledged
coverage) or (2) $1,000,000 shall be entered or filed against Party B or
any Specified Entity of Party B or any of their respective assets;

 

(F)           (1) At any time after the execution and
delivery thereof, any Specified Agreement, or any provision thereof, shall
cease to be in full force and effect, shall be terminated or shall be declared
to be null and void, (2) Party A shall not have or shall cease to have a
valid and perfected first-priority lien in any Collateral with a fair market
value in excess of $500,000, except as permitted hereunder or under the ISDA Security
Documents (or as to which Party A may grant consent from time to time),
purported to be covered by the ISDA Security Documents hereunder, or (3) Party
B or any Specified Entity of Party B shall repudiate or contest the validity or
enforceability of any Specified Agreement or any provision thereof in writing
or deny in writing that it has any further liability under any Specified
Agreement or any provision thereof to which it is a party;

 

(G)           Any time there occurs an “Event of Default” or “Termination
Event” with respect to MX Electric under, and as defined in the MX Electric
Agreement, or at any time there occurs an event of default or termination event
(however defined) with respect to MX Canada under any MX Canada Transaction;

 

(H)          Any time the Collateral Coverage Ratio is less than
1.25:1.00 when determined in respect of the months of October through March (inclusive),
or is less than 1.4:1.00, when determined for any other month;

 

(I)            [Intentionally Omitted];

 

(J)            There is, at any time, a material adverse change (as
reasonably determined by Party A) in (A) the financial condition, the
results of operations, business, prospects or results of Party B and Party B’s
Specified Entities taken as a whole, or (B) the collection rate or aging
of accounts receivable for Party B or any Specified Entity of Party B;

 

(K)          At any time, (1) the rights of the holders of Class B
Common Stock (included in MX Holdings’ Second Amended and Restated Certificate
of Incorporation, Bylaws and otherwise set forth in a Specified Agreement)
shall have been modified in any manner (regardless of whether such modification
is written or whether it occurs due to an action or a failure to act) adverse
to the holders of Class B Common Stock without the prior written consent
of Party A or (2) MX Holdings or any of its Affiliates shall take any
action or omit to take any action inconsistent with the continued existence of,
or the ability of the holders of Class B Common Stock to exercise, the
rights afforded to such holders and referred to in clause (1) of this Part 1(i)(xi)(K);

 

(L)           Jeff Mayer shall cease to be the Chief Executive
Officer and President of MX Holdings or Chaitu Parikh shall cease to be the
Chief Financial Officer of MX Holdings, or either of them shall cease to be
involved in the day-to-day management of Party B, MX Electric or MX Canada in
substantially the same roles as of the date hereof and, 60 days

 

4

 

following any such person leaving such position, such person is not replaced
in such position by a person or persons that is/are approved by Party A in
writing;

 

(M)         [Intentionally Omitted];

 

(N)          Any default, event of default or termination event
(or terms of like import) by Party B or any Specified Entity of Party B shall occur
under any Specified Agreement or any other agreement between any such party and
Party A and such default, event of default, termination event or similar event
shall not have been fully and completely cured within the grace period provided
for in such agreement, or if no grace period is so provided, within three
Business Days;

 

(O)          An ERISA Event shall have occurred that, when taken
together with all other ERISA Events that have occurred, could reasonably be
expected to result in a Material Adverse Effect;

 

(P)           The terms of the Notes, the Indenture, the Old Notes
or the Old Notes Indenture shall be amended, restated or otherwise modified in
a manner that is adverse to Party A;

 

(Q)          Principal or interest on the Notes or the Old Notes
shall have been paid or any of such notes have been purchased by Party B or its
Specified Entities in whole or in part, prior to the respective due dates,
except (with respect to the Notes) as permitted by the Intercreditor Agreement
or (with respect to the Old Notes) as permitted by this Agreement.

 

(xii)          Section 6(c) is amended by adding the
following new paragraph (iii):

 

“(iii)        Notwithstanding the
foregoing, the Non-defaulting Party shall not be obligated to terminate and
liquidate Transactions to the extent that, in the good faith opinion of the
Non-defaulting Party, (A) such termination and liquidation is not
permitted under applicable law or (B) the Non-defaulting Party cannot
enter into or liquidate offsetting transactions (including Specified
Transactions) in a commercially reasonable manner or at commercially reasonable
prices.  In addition, the Non-defaulting
Party may, at its election, take a reasonable amount of time to complete any
aspect of the termination and liquidation.”

 

Part 2.    Tax Representations.

 

(a)            Payer Representations.  For the purpose of Section 3(e), Party A
will make the following representation and, for the purpose of Part 5(j)(xxiv)
Party B will make the following representation:

 

It is not required by any
applicable law, as modified by the practice of any relevant governmental
revenue authority, of any Designated Jurisdiction to make any deduction or
withholding for or on account of any Tax from any payment (other than interest
under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be
made by it to the other party under this Agreement.  In making this representation, it may rely
on:  (i)  the accuracy of any
representations made by the other party pursuant to Section 3(f) of
this Agreement, (ii) the satisfaction of the agreement contained in Section 4(a)(i) or
4(a)(iii) of this Agreement and the accuracy and effectiveness of any
document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement, and (iii) the satisfaction of the
agreement of the other party contained in Section 4(d) of this
Agreement, provided that it shall not be a breach of this representation
where reliance is placed on clause (ii) and the other party does not
deliver a form or document under Section 4(a)(iii) by reason of
material prejudice to its legal or commercial position.

 

5

 

(b)           Payee Representations.  For the purpose of Section 3(f) of
this Agreement with respect to Party A and for the purpose of Part 5(j)(xxv)
with respect to Party B, Party A and Party B make the representations specified
below, if any:

 

(i)            The following representation will apply to Party A
and will apply to Party B:

 

It is entering into this
Agreement, including each Transaction, as principal and not as agent of any
Person.

 

Part 3.    Agreement to Deliver Documents.

 

For the purpose of Sections
4(a)(i) and (ii) of this Agreement, each party agrees to deliver the
following documents, as applicable:

 

(1)           Tax forms,
documents or certificates to be delivered are:

 

	
  Party required to

  deliver document

  	
   

  	
  Form/Document/Certificate

  	
   

  	
  Date by which to be delivered

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  A

  	
   

  	
  An
  executed United States Internal Revenue Service Form W-8ECI (or any
  successor thereto).

  	
   

  	
  (i) Upon
  the execution of this Agreement; (ii) promptly upon reasonable demand by
  the other Party; and (iii) promptly upon learning that any such form
  previously provided has becomes obsolete, incorrect or expired.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  B

  	
   

  	
  An
  executed United States Internal Revenue Service Form W-9 (or any
  successor thereto).

  	
   

  	
  (i) Upon
  the execution of this Agreement; (ii) promptly upon reasonable demand by
  the other Party; and (iii) promptly upon learning that any such form
  previously provided has becomes obsolete, incorrect or expired.

  

 

(2)           Other documents to be delivered are:

 

	
  Party Required to

  Deliver Document

  	
   

  	
  Form/Document/

  Certificate

  	
   

  	
  Date by which

  to be delivered

  	
   

  	
  Covered by Section

  3(d) or Part

  5(j)(xxiii) (as

  applicable)

  Representation

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MX
  Holdings and Party A

  	
   

  	
  An
  executed subscription agreement for the Class B Common Stock

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  B

  	
   

  	
  Guarantee
  and Collateral Agreement

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Wachovia
  Control Agreements

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Huntington
  Control Agreement

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Trademark
  Security Agreements for filing with the United States Patent

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  

 

6

 

	
   

  	
   

  	
  and
  Trademark Office

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UCC-1
  Financing Statements as required by Party A; and assignments by SocGen of
  UCC-1 Financing Statements as required by Party A.

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Novation
  Agreement(s) with respect to the novation of the interest rate swaps set
  forth on Exhibit 12(a)(xix)

  	
   

  	
  As
  soon as practicable, but in any event not later than 30 days after the Closing
  Date

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Intercreditor
  Agreement

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Certificate
  of Incorporation

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Registration
  Rights Agreement

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Stockholders
  Agreement

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The
  Financial Statements specified in Part 12(a)(vi)

  	
   

  	
  As
  provided in Part 12(a)(vi)

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The
  Budgets specified in Part 12(a)(xiii)

  	
   

  	
  As
  provided in Part 12(a)(xiii)

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The
  Notices and Reports specified in Part 12(a)(v) and Part 12(a)(vii)

  	
   

  	
  As
  provided in Part 12(a)(v) and Part 12(a)(vii)

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Capacity
  Releases and related documents required to be executed pursuant to
  Part 8(b)(ii)

  	
   

  	
  As
  soon as practicable, but in any event not later than 90 days after the
  Closing Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Copies
  of information technology infrastructure systems (including, without
  limitation, billing systems)

  	
   

  	
  As
  provided in Part 12(a)(xvi)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  An
  opinion of New York legal counsel, in form and substance satisfactory to
  Party A, covering such matters as Party A shall reasonably require.

  	
   

  	
  Upon
  Execution

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  An
  Officers’ Certificate from MX Holdings certifying that the 

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  

 

7

 

	
   

  	
   

  	
  aggregate
  principal amount of the Old Notes outstanding following the consummation of
  the Exchange Offer does not exceed $10,000,000 and that aggregate principal
  amount of the Notes outstanding following the Exchange Offer does not exceed
  $75,000,000.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  An
  Officers’ Certificate from Party B and each Specified Entity of Party B
  certifying that each of the representations and warranties of Party B and
  each of the Specified Entities of Party B contained in this Agreement is true
  and correct in all material respects as of the date of this Agreement (except
  for any such representations and warranties made as of a specific date, which
  shall remain true and correct in all material respects as of such date)

  	
   

  	
  Upon
  Execution

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A
  proposed consolidated operating Budget for Party B, its Subsidiaries and MX
  Electric, for fiscal year 2010 which shall be in form and substance
  satisfactory to Party A.

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A
  proposed consolidated business plan for Party B, its Subsidiaries and MX
  Electric, for the first two years of the term of this Agreement which shall
  be in form and substance satisfactory to Party A.

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Evidence,
  satisfactory to Party A, that each LDC and all other payers have been
  instructed to make all payments owing to Party B or to any Specified Entity
  of Party B directly to the 

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  

 

8

 

	
   

  	
   

  	
  Lockbox
  Accounts.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Evidence,
  satisfactory to Party A, that each LDC and all other payers have been
  instructed to make all payments owing to Party B or to any Specified Entity
  of Party B directly to the Lockbox Accounts and not to any other accounts
  without the prior written consent of Party A.

  	
   

  	
  As
  soon as practicable, but in any event not later than 10 Business Days after
  the Closing Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Evidence
  satisfactory to Party A that all master agreements between Party B or any
  Specified Entity of Party B and any third party have been terminated.

  	
   

  	
  As
  soon as practicable, but in any event not later than 30 days after the
  Closing Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Evidence,
  satisfactory to Party A, that (i) Party B and each Specified Entity of
  Party B has in place the types of insurance set forth on
  Exhibit 12(a)(iii), and (ii) all such insurance names Party A as an
  additional insured and/or loss payee, as appropriate.

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  A&B:

  	
   

  	
  Certified
  copies of board resolutions approving this Agreement and the Transactions
  contemplated by this Agreement and any exhibits or supplements attached
  hereto and the Confirmations hereunder.

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  A&B:

  	
   

  	
  Evidence
  of authority of signatories

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  

 

Part 4.    Miscellaneous

 

(a)            Addresses for Notices.  For the purpose of Section 12(a) of
this Agreement:

 

Address for notices or communications with
respect to Confirmations only to Party A:

 

Address: 
600 Washington Blvd, Mail Code CS0930, Stamford, Connecticut 06901

 

Attention: 
Energy Operations

 

9

 

 

	
  For
  electric energy and/or capacity invoices and Confirmations:

  
	
  Facsimile
  No.: 203-355-6614

  	
   

  	
  Telephone
  No.: 203-897-5926 

  E-mail: PowerTeam@RBSSempra.com

  
	
   

  	
   

  	
   

  
	
  For
  petroleum:

  	
   

  	
   

  
	
  Facsimile
  No.:

  	
  Invoices:
  203-355-6615

  	
   

  	
  Telephone
  No.: 203-897-5632

  
	
   

  	
  Confirmations:
  203-355-6617

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  For natural gas:

  	
   

  	
   

  
	
  Facsimile
  No.:

  	
  Invoices:
  203-355-6612

  	
   

  	
  Telephone
  No.: 203-897-5647

  
	
   

  	
  Confirmations:
  203-355-6630

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:
  FX or Metals Operations

  	
   

  	
   

  
	
  Facsimile
  No.: 203-355-6605

  	
   

  	
  Telephone
  No.: 203-355-5607

  
	
   

  	
   

  	
   

  
	
  Electronic
  Messaging System details:  None until
  mutually agreed otherwise.

  
	
   

  	
   

  	
   

  
	
  And
  for notices or communications other than Confirmations:

  
	
   

  	
   

  	
   

  
	
  Address:
  600 Washington Blvd, Stamford, CT 06901

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention
  of the Legal Department.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile
  No.: 203-355-5410

  	
   

  	
  Telephone
  No.: 203-897-5510

  
	
   

  	
   

  	
   

  
	
  Address
  for notices to, or Gas Confirmations for, Party B:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:
  

  	
  510 Thornall Street,
  Suite 270  

  	
   

  	
   

  
	
   

  	
  Edison, NJ 08837-2207

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:
  Eve Hoffman, Manager
  Supply Administration

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile
  No.: 732-805-4044

  	
   

  	
  Telephone
  No.: 732-805-0300
  ext. 6812

  
	
   

  	
   

  	
   

  
	
  Address
  for any other notices for Party B:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:
  595 Summer Street, Suite 300

  Stamford, CT 06901-1407

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:
  

  	
  Chief
  Financial Officer 

  	
   

  	
   

  
	
   

  	
  Chief
  Legal Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile
  No.: 203-975-9659

  	
   

  	
  Telephone
  No.: 203-356-1318

  
						

 

Electronic Messaging System Details:  None until mutually agreed otherwise.

 

(b)                                 Process Agent.  For the purpose of Section 13(c) of
this Agreement:  Party B appoints as its
Process Agent Not Applicable.

 

(c)                                  Offices.  The provisions of Section 10(a) will
apply to this Agreement.

 

(d)                                 Multibranch Party.  For the purpose of Section 10(c) of
this Agreement:

 

10

 

Party A is not a Multibranch Party.

 

Party B is not a Multibranch Party.

 

(e)                                  Calculation Agent.  The Calculation
Agent is Party A.

 

(f)                                    Credit
Support Document.  With respect to Party A means, none.   With respect to Party B means the ISDA
Security Documents and the Intercreditor Agreement.

 

(g)                                 Credit Support Provider.  Credit Support
Provider means, in relation to Party A, none. 
Credit Support Provider means, in relation to Party B, each Specified
Entity of Party B.

 

(h)                                 Governing Law.  THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO CHOICE OF LAW DOCTRINE, OTHER THAN SECTION 5-1401 AND SECTION 5-1402
OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.  THE UNITED NATIONS CONVENTION ON CONTRACTS
FOR THE INTERNATIONAL SALE OF GOODS SHALL NOT IN ANY WAY APPLY TO, OR GOVERN,
THIS AGREEMENT.

 

(i)                                     Waiver of Certain Damages.  FOR BREACH OF ANY
PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH
EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE
REMEDY.  A PARTY’S LIABILITY HEREUNDER
SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR
DAMAGES AT LAW OR IN EQUITY ARE WAIVED. 
IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN OR IN
ANY TRANSACTION, A PARTY’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES
ONLY.  SUCH DIRECT ACTUAL DAMAGES SHALL
BE THE SOLE AND EXCLUSIVE REMEDY, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR
IN EQUITY ARE WAIVED.  UNLESS EXPRESSLY
HEREIN PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL,
PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS
INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY
PROVISION OR OTHERWISE.  IT IS THE INTENT
OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE
OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING
THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR
CONCURRENT, OR ACTIVE OR PASSIVE.  TO THE
EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES
ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR
OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES
CALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS.

 

(j)                                     Waiver of Jury Trial.  Each Party waives
its respective right to any jury trial with respect to any litigation arising
under or in connection with this Agreement, any Specified Agreement or any
Transaction.

 

(k)                                  Netting of Payments.  Subparagraph (ii) of
Section 2(c) of this Agreement will not apply to all Transactions
starting from the date of this Agreement.

 

(l)                                     “Affiliate” will have the meaning set forth below:

 

“Affiliate” means, with
respect to any specified Person, any other Person who directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, such specified Person. The term “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by agreement or otherwise; and the terms
“controlling” and “controlled” have meanings correlative of the foregoing;
provided that beneficial ownership of 10% or more of the voting securities of a
Person shall be 

 

11

 

deemed to be a controlling
interest; provided further that (i) Party A shall be deemed not to be an
Affiliate of Party B and its Specified Entities; and (ii) no Holder of
Notes shall be deemed to be an Affiliate of Party B or any Specified Entity of
Party B solely by reason of holding the shares of Class A Exchange Common
Stock such Holder has received in the Exchange Offer and being party to the
equity agreements entered into in connection with the Exchange Offer.

 

Part 5.           Other Provisions.

 

(a)                                  Definitions.  Any capitalized terms used herein and not
otherwise defined herein shall have the respective meanings ascribed to them in
the 2006 ISDA Definitions and the 2005 Commodity Definitions (as published by
the International Swaps and Derivatives Association, Inc.) (collectively,
the “Definitions”), which are incorporated into this Agreement.  In the event of any inconsistency between the
Definitions and the provisions of this Agreement, this Agreement will
prevail.  Capitalized terms used herein
and not defined in this Agreement or in the Definitions shall have the meanings
set forth in the Intercreditor Agreement.

 

(b)                                 Events of Default; Termination Events.  The parties
acknowledge and agree that, with the exception of the Event of Default
specified in Section 5(a)(vii) and the Additional Termination Events
specified in Part 1(h)(ii), no other Events of Default or Termination
Events will apply to Party A.

 

(c)                                  Agreed Changes.  The parties agree to the following changes in
this Agreement:

 

(i)                                     Section 1(b) is amended by deleting the period at
the end and substituting “except for Sections 5 and 6, which may only be
amended by a written amendment executed by the parties.”

 

(ii)                                  Section 1(c) is deleted in its entirety and
replaced with the following new Section:

 

“ (c) All Transactions
(including any Loans) are entered into in reliance on the fact that the Master
ISDAs, all Confirmations thereunder, all Promissory Notes thereunder, the ISDA
Security Documents and each other ISDA Document form a single agreement between
the parties (collectively referred to as this “Agreement”), and the
parties would not otherwise enter into any Transactions (including any Loans)
contemplated by the Master ISDAs, the other ISDA Documents and the Specified
Agreements.”

 

(iii)                               Section 3 is amended by deleting the first paragraph
thereof and replacing it with the following new paragraph:

 

“Party A represents to Party
B (which representations will be deemed to be repeated by Party A on each date
on which a Transaction is entered into and, in the case of the representations
in Section 3(f), at all times until the termination of this Agreement)
that:—“

 

(iv)                              Add the following paragraphs at the end of Section 9:

 

(h)           Consent to Recording.  The parties agree that each may
electronically record all telephone conversations between them and that any
such recordings may be submitted in evidence to any court or in any proceeding
for the purpose of establishing any matters pertinent to any Transaction.

 

(i)            Severability.  In the event that any provision of this
Agreement is declared to be illegal, invalid or otherwise unenforceable by a
court of competent jurisdiction, the remainder of this Agreement shall not be
affected except to the extent necessary to delete such illegal, invalid or
unenforceable provision, unless the deletion of such provision shall
substantially impair the benefits of the remaining portions of this Agreement.

 

12

 

(j)            Dealer Market Practices.  To the extent applicable, the obligations of
the parties are to be construed in accordance with practices in the
international financial or commodity, as applicable, dealer market.

 

(k)           Trader Authority.  The parties hereby expressly waive all rights
to, and expressly agree not to contest, any Transaction, or assert or otherwise
raise any defenses or arguments related to any Transaction to the effect that
such is not binding, valid or enforceable in accordance with its terms because
either the employee(s) or representative(s) who entered into the
Transaction on behalf of a party, and who appeared to have the requisite
authority to do so, did not, in fact, have such authority or because the
provisions of certain applicable laws require the Transaction to be in writing
and/or executed by one or both parties.

 

(v)                                 Section 7 is amended by (1) deleting “and” at the
end of clause (a) of such section, (2) deleting the period at the end
of clause (b) and replacing it with “; and”, and (3) inserting the
following new clause (c) immediately after clause (b):

 

“Party A may at any time assign
and transfer this Agreement (i) by novation to any Affiliate of Party A,
to The Royal Bank of Scotland plc or any Affiliate thereof, and, upon such
novation, such Affiliate of Party A, The Royal Bank of Scotland plc or any such
Affiliate of The Royal Bank of Scotland plc will assume all of Party A’s rights
and obligations under this Agreement and Party A shall be released and
discharged from all liabilities under this Agreement; provided, however,
that any such Affiliate shall have a Credit Rating of at least BBB- by S&P
or Baa3 by Moody’s or the obligations of such Affiliate shall be guaranteed by
The Royal Bank of Scotland plc or (ii) pursuant to a Wholesale Transfer.”

 

(vi)                              Section 9(e)(ii) is amended by adding the
following new sentence at the end thereof: “Notwithstanding the foregoing,
Party A shall promptly confirm each Transaction and unless objected to in
writing within two Local Business Days, the Confirmation shall be final and
binding on the parties, absent manifest error. 
Failure to send or agree upon a Confirmation shall not affect a
Transaction entered into by the parties.”

 

(vii)                           Section 13(b) shall be deleted in its entirety and
replaced with the following new Section:

 

“(b)         Consent
to Arbitration.

 

(i)            Any dispute, controversy, or claim arising out of,
relating to, or in connection with this Agreement, or the breach, termination, or
validity thereof, shall be finally settled by arbitration.  The arbitration shall be conducted in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the “AAA”) in effect at the time of the
arbitration, except as they may be modified herein or by mutual agreement of
the parties.  Notwithstanding the
provisions of Part 4(h), the arbitration and this clause shall be governed
by Title 9 (Arbitration) of the United States Code.  The seat of the arbitration shall be New York,
New York, United States of America, and it shall be conducted in the English
language.  The parties submit to
jurisdiction in the state and federal courts in the State, County and City of
New York for the limited purpose of enforcing this agreement to arbitrate.

 

(ii)           The arbitration shall be conducted by three neutral
arbitrators, who shall be appointed by the AAA. 
The arbitrators shall be impartial and independent.

 

(iii)          In order to facilitate the comprehensive resolution of
related disputes, and upon request of any party to the arbitration proceeding,
the arbitration tribunal may consolidate the arbitration proceeding with any
other arbitration proceeding involving any of the parties hereto relating to
this Agreement or to the Related Agreements (whether or not such other
proceeding involves all of the parties hereto). 
The arbitration tribunal shall not consolidate such arbitrations unless
it determines that (x) there are issues of fact or law common to the
various arbitrations so that a consolidated 

 

13

 

proceeding would be more
efficient than separate proceedings and (y) no party would be prejudiced
as a result of such consolidation through undue delay or otherwise.  In the event of different rulings on this
question by the arbitration tribunal constituted hereunder and the tribunal
constituted under any other Related Agreement, the ruling of the arbitration
tribunal governing the first proceeding to have been filed shall control.  In the event of the consolidation of one or
more proceedings pursuant to this subsection, the arbitration tribunal
governing the first such proceeding to have been filed shall govern the
consolidated proceeding unless otherwise agreed by all parties to the
proceedings being consolidated.  Solely
for purposes of this subsection (iii), (x) a proceeding shall be deemed to
have been filed when the related demand for arbitration is served by the
complaining party and (y) in the event that two proceedings shall have
been filed on the same day, the proceeding involving the largest dollar amount
in dispute shall be deemed to have been the first filed.

 

(iv)          The arbitration award shall be final and binding on the
parties.  Judgment upon the award may be
entered by any court having jurisdiction thereof or having jurisdiction over
the relevant party or its assets.”

 

(viii)                        In Section 14: “Terminated Transactions” is amended on
line 2 by deleting “all Transactions” and substituting “any or all Transactions
terminated in accordance with Section 6(c)(ii)”.

 

(ix)                                The definition of “Loss” in Section 14 is deleted in
its entirety and replaced with the following new definition:

 

“‘Loss’ means, with respect
to this Agreement or one or more Terminated Transactions, as the case may be,
and a party, the Termination Currency Equivalent of an amount that party
reasonably determines in good faith to be its total losses and costs (or gain,
in which case expressed as a negative number) in connection with this Agreement
or that Terminated Transaction or group of Terminated Transactions, as the case
may be, including an amount equal to 100% of the Credit Support Amount
outstanding on the Early Termination Date, any losses and costs relating to the
provision of Credit Support to any third party, any losses and costs relating
to any Loan, any losses or costs relating to any financing or similar fees,
loss of bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating, liquidating,
obtaining or reestablishing any hedge or related trading position (or any gain
resulting from any of them).  Loss
includes losses and costs (or gains) in respect of any payment or delivery
required to have been made (assuming satisfaction of each applicable condition
precedent) on or before the relevant Early Termination Date and not made,
except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or
6(e)(ii)(2)(A) applies.  Loss does
not include a party’s legal fees and out-of-pocket expenses referred to under Section 11.  A party will determine its Loss as of the
relevant Early Termination Date, or, if that is not reasonably practicable, as
of the earliest date thereafter as is reasonably practicable.  A party may (but need not) determine its Loss
by reference to quotations of relevant rates or prices from one or more leading
dealers in the relevant markets.”

 

(x)                                   Section 11 is deleted in its entirety and replaced with
the following new Section 11:

 

“A Defaulting Party will, on
demand, indemnify and hold harmless the other party for and against all
reasonable out-of-pocket expenses, including legal fees and Stamp Tax, incurred
by such other party by reason of (i) the enforcement and protection of its
rights under this Agreement or any Credit Support Document to which the
Defaulting Party is a party, (ii) the enforcement or protection of its
rights with respect to any outstanding Credit Support Amount, including any
costs incurred in recovering any such amounts, or (iii) the early
termination of any Transaction, including, but not limited to, costs of
collection.”

 

(d)                                 Set-Off.  Section 6 of this Agreement shall be
amended by the insertion of the following additional provision:

 

14

 

“(f)          Set-Off.  At any time or from time to time after an
Event of Default or Termination Event occurs, 
the party (“X”) that is the Non-defaulting Party or the party other than
the Affected Party (and without prior notice to the Defaulting Party or the
Affected Party (“Y”)) may, at X’s election, set off any or all amounts which Y
or any Affiliate of Y owes to X or any Affiliate of X against any or all
amounts which X or any Affiliate of X 
owes to Y or any Affiliate of Y (in each case, whether under this
Agreement, any other agreement or otherwise, and whether or not then due, and
irrespective of the currency, place of payment or booking office of the
obligation); provided that any amount not then due which is included in such
setoff shall be discounted to present value as at the time of setoff (to take
account of the period between the time of setoff and the date on which such
amount would have otherwise been due) at the applicable rate for that period
determined by X in any commercially reasonable manner.  X may give notice to the other party of any
set-off effected under this Section  6(f).

 

For this purpose, any
amount  (or the relevant portion of such
amounts) may be converted by X into the currency in which the other is
denominated at the rate of exchange at which such party would be able, acting
in a reasonable manner and in good faith, to purchase the relevant amount of
such currency.

 

If an obligation is
unascertained, X may in good faith estimate that obligation and set-off in
respect of the estimate, subject to the relevant party accounting to the other
when the obligation is ascertained.

 

Nothing in this Section 6(f) shall
be effective to create a charge or other security interest.  This Section 6(f) shall be without
prejudice and in addition to any Lien to which any party is at any time
otherwise entitled (whether by operation of law, contract or otherwise).”

 

(e)                                  Imaged Agreement.  Any fully executed
Agreement, Confirmation, Specified Agreement or other related document, or
recording may be scanned and stored electronically, or stored on computer tapes
and disks, as may be practicable   (the “Imaged
Agreement”).  The Imaged Agreement,
if introduced as evidence on paper, the Confirmation if introduced as evidence
in automated facsimile form, any recording, if introduced as evidence in its
original form and as transcribed onto paper, and all computer records of the
foregoing, if introduced as evidence in printed format, in any judicial,
arbitration, mediation or administrative proceedings, will be admissible as
between the Parties to the same extent and under the same conditions as other
business records originated and maintained in documentary form.  Neither Party shall object to the
admissibility of any Imaged Agreement (or photocopies of the transcription of
such Imaged Agreement) on the basis that such were not originated or maintained
in documentary form under either the hearsay rule, the best evidence rule or
other rule of evidence.  However,
nothing herein shall be construed as a waiver of any other objection to the
admissibility of such evidence.

 

(f)                                    (1) Market
Disruption Events.   Each of the following events shall
constitute a Market Disruption Event hereunder:

 

(i)                                     Price Source Disruption

 

(ii)                                  Trading Disruption

 

(iii)                               Disappearance of Commodity Reference Price

 

(iv)                              Material Change in Formula

 

(v)                                 Material Change in Content

 

(2) Disruption Fallbacks.   If a Market Disruption Event occurs on a
Pricing Date, then the Commodity Reference Price for such day (a “Missing
Day”) shall be determined in accordance with the provisions of the 2005
Commodity Definitions as if no elections had been made.

 

15

 

(g)                                 Illegality.  For purposes of Section 5(b)(i), the
obligation of either Party to comply with any official directive issued or given
by any government agency or authority with competent jurisdiction which has the
result referred to in Section 5(b)(i) will be deemed to be an “Illegality”.

 

(h)                                 Term.  
Subject to the earlier
occurrence of an Early Termination Date, Party A shall not be obliged to enter
into further Transactions under this Agreement commencing on August 31,
2012 (the “Termination Date”); provided, however, that Party A, on or
before the date that is 180 days prior to the then current Termination Date but
no sooner than April 1, 2011, shall have the right to extend the
Termination Date on the then current terms and conditions to August 31,
2013 (the “Extended Term”) (in which case Party A shall not be obliged
to enter into further Transactions beyond the Termination Date so extended).
For the avoidance of doubt, this Agreement and the Specified Agreements shall
otherwise remain in full force and effect until the Discharge of ISDA
Obligations.  Neither Party B, nor any
Specified Entity of Party B, shall enter into any agreement or series of
agreements which provide for transactions similar to those contemplated by any
one or more of the Specified Agreements unless such agreement or agreements do
not become effective until after the Termination Date and after the Discharge of
ISDA Obligations has occurred.

 

(i)                                     No Obligation.  Notwithstanding
any other provision in this Agreement to the contrary, Party A (A) shall
have no obligation to enter into any Transaction with Party B or to provide
Credit Support that has a term, calculation period, delivery period, maturity
or expiration which extends beyond the date that is 12 months prior to the
maturity date of the Notes, and (B) shall not be obligated to enter into
any transaction (including any Transaction hereunder) with Party B or any
Specified Entity of Party B following the occurrence of a Default or Potential
Termination Event (however defined) by Party B or any Specified Entity of Party
B under any of the Specified Agreements, which Default or Potential Termination
Event has not been cured or waived by Party A in accordance with the terms of
the applicable Specified Agreement.

 

(j)                                     Further Representations of Party B and its
Specified Entities.  Each Specified Entity of Party B, Party B in respect of each
of its Specified Entities and Party B as to itself as set forth below,
represents and warrants to Party A (which representations will be deemed to be
represented by Party B and each such Specified Entity on each date on which a
Transaction is entered into and on each date that Party A issues or arranges
for the issuance of Credit Support and, other than in respect of Part 5(j)(iii) and
Part 5(j)(iv), at all times until this Agreement is terminated):

 

(i)                                     Existence and Authorization.

 

(A)                              Such party is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and is qualified as a foreign corporation in each
jurisdiction where it conducts business where such qualification is required,
except where the failure to be so qualified could not reasonably be expected to
result in a Material Adverse Effect;

 

(B)                                Such party has delivered to
Party A true and complete copies of its organizational documents as amended or
amended and restated through the date hereof and as in effect on the date hereof;

 

(C)                                Such party has the full
corporate power and corporate authority to execute and deliver this Agreement
and the other Specified Agreements and to perform its obligations hereunder and
thereunder; and

 

(D)                               The execution, delivery and
performance of this Agreement and any other Specified Agreement by such party
have been and remain duly authorized by all necessary corporate, limited
liability company or partnership action, as applicable, and do not contravene (i) any
provision of its organizational documents, (ii) Applicable Law, or (iii) the
terms of any Material Contract.

 

16

 

(ii)                                  Enforceability.  This Agreement and each Specified Agreement
to which it is a party constitute the legal, valid and binding obligations of
such party, enforceable against such party in accordance with their respective
terms, except as enforcement hereof or thereof may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors’ rights generally or by general equity principles.

 

(iii)                               Capitalization, Indebtedness and Hedging Transactions.

 

(A)                              Exhibit 5(j)(iii)(A) sets
forth the capitalization of such party as of the date hereof, including (i) the
authorized capital, (ii) the equity interests outstanding and (iii) each
Person owning, of record or beneficially, 10% or more of any class of such
party’s equity interests, together with the number of equity interests of each
such class and the percentage so held by each such Person.  All outstanding equity interests are duly and
validly issued, fully paid and non-assessable. Except for options and warrants
of MX Holdings outstanding on the date hereof or which may be issued pursuant to
the Management Incentive Plan, such party does not have outstanding any
securities convertible into or exchangeable for its equity interests or any
rights to subscribe for or to purchase, or any option for the purchase of, or
any agreement, arrangement or understanding providing for the issuance
(contingent or otherwise) of, or any call, commitment or claims of any
character relating to, its equity interests.

 

(B)                                Exhibit 5(j)(iii)(B) sets
forth the Indebtedness of such party as of the date of this Agreement,
including, as to each item of Indebtedness (to the extent applicable) including
Credit Support, (i) the counterparty or counterparties or issuers, (ii) the
nature of the Indebtedness or credit support, (iii) the amount of the
obligations, remaining purchase price or face amount, (iv) the final
maturity date or expiration or termination date and a description of required
interim payments and (v) the rate, and the timing of payments, of
interest, fees and similar charges.

 

(C)                                Exhibit 5(j)(iii)(C) sets
forth a list of all Hedging Transactions to which such party is a party as of
the date of this Agreement, including, as to each Hedging Transaction (to the
extent applicable), (i) the counterparty or counterparties, (ii) the
nature of said Hedging Transaction, (iii) the term of such Hedging Transaction
and (iv) the amount payable by, or payable to, such party if such Hedging
Transaction were liquidated as of the date of this Agreement.

 

(iv)                              Subsidiaries and Beneficial Interest.  Except as set forth
on Exhibit 5(j)(iv), such party does not, directly or indirectly,
beneficially own the whole or any part of the issued share capital or other
ownership interest of any other Person.

 

(v)                                 Governmental Approvals.

 

(A)                              All
Governmental Approvals necessary or advisable 
for the due execution, delivery and performance of this Agreement and
the other Specified Agreements by such party have been obtained from or, as the
case may be, filed with the relevant Governmental Authorities having
jurisdiction over such party and remain in full force and effect, and are listed
in Exhibit 5(j)(v)(A), and all conditions thereof have been duly complied
with and no other action by, and no notice to or filing with, any Governmental
Authority having jurisdiction is required for such execution, delivery or
performance of this Agreement or the other Specified Agreements by such party.

 

(B)                                All
Governmental Approvals necessary or advisable for the conduct of each such
party’s businesses as of the date of this Agreement and as contemplated herein
have been duly obtained, are set forth in Exhibit 5(j)(v)(B), are in full
force and effect, not subject to appeal, are held in the name of such party, as
the case may be, and are free from conditions or requirements which if not
complied with could reasonably be expected to 

 

17

 

have a Material Adverse Effect, or conditions or
requirements which such party does not expect to be able to satisfy on or prior
to the date required.

 

(C)                                Such party has
no reason to believe that any Governmental Approvals which have not been
obtained by or on behalf of such party, as the case may be, but which will be
required to be obtained by it in the future, will not be obtained in due course
on or prior to the date required and will not contain any condition or requirements,
the compliance with which could reasonably be expected to result in a Material
Adverse Effect.

 

(D)                               Party B and the
Specified Entities of Party B are not in violation of any Governmental Approval
applicable to any such Person, the violation of which could reasonably be
expected to result in either a Material Adverse Effect, a cease and desist
order or an aggregate monetary fine applicable to Party B and the Specified
Entities of Party B in excess of $1,000,000.

 

(vi)                              Financial Condition and No Material Adverse Change.

 

(A)                              Party B has
heretofore furnished to Party A the consolidated balance sheet and statements
of income, and statements of equity and cash flows of MX Holdings (i) as
of and for the fiscal year ended June 30, 2008, reported by Ernst &
Young LLP, independent public accountants, and (ii) as of and for the
fiscal quarter ending March 31, 2009, certified by its chief financial
officer.  Such financial statements
present fairly, in all material respects, the financial position and results of
operations and cash flows of MX Holdings and its subsidiaries as of such dates
and for such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the statements referred
to in clause (ii) above.

 

(B)                                Since March 31,
2009, no event has occurred which has or could reasonably be expected to have,
and no series of events has occurred which in the aggregate has or could
reasonably be expected to have, a Material Adverse Effect.

 

(vii)                           Insurance.  Such party maintains, with financially sound
and reputable insurance companies, insurance in such amounts and against such
risks as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations; provided, that,
except for directors and officers insurance, such party may self-insure to the
same extent as other companies engaged in similar businesses and owning similar
properties in the same general areas in which such party operates.

 

(viii)                        Material Contracts and Licenses.

 

(A)                              Exhibit 5(j)(viii)(A) sets
forth a list of all Material Contracts as of the date of this Agreement.  To such party’s knowledge, after due inquiry,
and without prejudice to any dispute that they may have with any third party,
no breach, default or event of default (each as defined in the applicable
Material Contract) has occurred and is continuing with respect to any party to
any Material Contract.

 

(B)                                To such party’s knowledge,
after due inquiry, such party owns, has the right to use or has the benefit of,
all permits, licenses, trademarks, patents, franchises and similar rights with
respect to the usage of technology or other property (other than those
constituting Governmental Approvals) that are necessary or advisable for the
conduct of its business as contemplated herein, except where it could not
reasonably be expected to result in a Material Adverse Effect.

 

18

 

(ix)                                Use of Proceeds.  The proceeds of any Loan shall be used solely
to satisfy any SG Novation Payments, any Third Party Liquidation Payments and
any Third Party Novation Payments, each in accordance with Part 10.

 

(x)                                   Title and ISDA Security Documents.

 

(A)                              Such party owns
and has good, legal and marketable title to the Collateral purported to be
owned by it and covered by the ISDA Security Documents, free and clear of all
Liens other than Permitted Liens.

 

(B)                                Upon the filing
of the UCC-1 Financing Statements and the UCC-3 Financing Statement Amendments
delivered pursuant to this Agreement, upon the execution of the required
control agreements and upon any necessary filings with the United States Patent
and Trademark Office, the provisions of the ISDA Security Documents are
effective to create, in favor of Party A, a legal, valid and enforceable Lien
on all of the Collateral purported to be covered thereby, and all necessary and
appropriate recordings and filings have been made in all necessary and
appropriate public offices, and all other necessary and appropriate action
(including payment of all filing, recording or other fees required in
connection with the creation or perfection of such Lien) has been taken, so
that each such ISDA Security Document creates a perfected Lien on all right,
title, estate and interest of such party in the Collateral purported to be
covered thereby, prior and superior to all other Liens other than Permitted
Liens.

 

(xi)                                Actions, Suits and Proceedings.  There is no action,
suit or proceeding at law or in equity or by, or before, any Governmental
Authority or arbitral tribunal now pending or, to such party’s best knowledge,
after due inquiry, threatened against or affecting Party B or any Specified
Entity of Party B or any of their respective Property which could reasonably be
expected to result in a Material Adverse Effect.

 

(xii)                             Environmental Matters.

 

(A)                              Such party is
not in violation of any Environmental Law except where such violation could not
reasonably be expected to result in a Material Adverse Effect.

 

(B)                                No Hazardous
Material has been Used or Released by any Person, at, on, under, or from any
part of the properties owned or leased by such party other than in compliance
with all applicable Environmental Laws except where such noncompliance could
not reasonably be expected to result in a Material Adverse Effect.

 

(C)                                There are no
Environmental Claims pending or threatened in respect of such party, except
where such Environmental Claim could not reasonably be expected to result in a
Material Adverse Effect.

 

(D)                               All environmental investigations, studies, audits, tests, reviews or
other analysis conducted by or that are in the possession of such party in
relation to facts, circumstances or conditions at or affecting Party B or any
Specified Entity of Party B have been provided to Party A.

 

(E)                                 No Liens have
arisen under or pursuant to any Environmental Laws on any property of such
party, and, to such party’s best knowledge, after due inquiry, no government
action has been taken or is in process that could subject any such property to
such Liens, and such party will not be required to place any notice or
restriction relating to the presence of Hazardous Materials at such property in
any deed to the real property.

 

19

 

(xiii)                      Compliance with Applicable Laws.  Such party is in
compliance with all Applicable Laws except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

 

(xiv)                     Taxes.  Such party has timely filed or caused to be
filed all tax returns, information statements and reports required to have been
filed by it and has paid or caused to be paid all Taxes required to have been
paid by it, except Taxes that are being contested in good faith by appropriate
proceedings and for which such party has set aside or accrued for on its books
adequate reserves in accordance with GAAP.

 

(xv)                        Investment Company Status.  Such party is not an “investment company” as defined in, or
subject to regulation under, the Investment Company Act of 1940, as amended.

 

(xvi)                     Federal Reserve Regulations.  No part of the proceeds of any Transaction under this
Agreement have been used or will be used, whether directly or indirectly, for
any purpose that entails a violation of any of the Regulations of the Board of
Governors of the Federal Reserve System, including Regulations T, U and X.

 

(xvii)                  Nature of Business.  Party B and MX Canada are engaged solely in the purchase and
sale of Gas to Customers and other activities necessary in connection
therewith.  MX Electric is engaged solely
in the purchase and sale of electricity to residential or small commercial
end-users of electricity and other activities necessary in connection therewith.  Infometer.com Inc. is engaged in providing
consultations and audits with respect to energy supply procurement and
improving energy efficiency.  Online
Choice is engaged in the commissioned sale of consumer
products such as telecom services and satellite TV for
homeowners and small businesses (provided that
such products may not be sold door-to-door).  The Specified Entities of Party B (other than
MX Electric, MX Canada, Infometer.com and Online Choice) are engaged solely in
holding Equity Interests in the MX Holdcos, Party B, MX Electric and MX Canada
and the performance of their duties and obligations under this Agreement, the
other ISDA Documents, the Old Notes Indenture, the Indenture and each other
document related thereto.

 

(xviii)               Disclosure.  Such party has disclosed to Party A all agreements,
instruments and corporate or other restrictions to which it is subject, and all
other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.  Neither the Offering Memorandum nor any of
the other reports, financial statements, certificates, data or other written
information furnished by or on behalf of such party to Party A in connection
with the negotiation of this Agreement or delivered hereunder, taken as a
whole, contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided that,
with respect to projected financial information, such party represents only
that such information was prepared in good faith based on assumptions believed
to be reasonable at the time, it being recognized by Party A that projections
are not to be viewed as facts and that the actual results during the period or
periods covered by such projections may differ from the projected results and
such difference may be material.

 

(xix)                       Securities Accounts.  Such party does not hold any Investments in
any securities accounts.

 

(xx)                          ERISA.  No ERISA Event has occurred, and no ERISA Event with respect
to any Plan is reasonably expected to occur, that, when taken together with all
other such ERISA Events for which liability is reasonably expected to occur,
could reasonably be expected to result in a Material Adverse Effect.

 

(xxi)                       No Defaults.
No event of default or potential event of default or, to its knowledge,
termination event or potential termination event or any event of similar import
(in each case as defined in the applicable agreement) with respect to it has
occurred and is continuing and no such event or 

 

20

 

circumstance
would occur as a result of its entering into or performing its obligations
under this Agreement or any Specified Agreement to which it is a party.

 

(xxii)                    Solvency.
Such party is, and after giving effect to the incurrence of all Indebtedness
and obligations being incurred in connection herewith will be, Solvent.

 

(xxiii)                 Accuracy of Specified Information. All applicable information that is furnished in writing by
or on behalf of it to Party A and is identified for the purpose of this Part 5(j)(xxiii)
in the Schedule is, as of the date of the information, true, accurate and
complete in all material respects.

 

(xxiv)                Payer Tax Representation.
Each representation specified in this Schedule as being made by it for  the purpose of this Part 5(j)(xxiv) is
accurate and true.

 

(xxv)                   Payee Tax Representations.
Each representation specified in this Schedule as being made by it for the
purpose of this Part 5(j)(xxv) is accurate and true.

 

(xxvi)                Real Property.  Such party does not own any real property.

 

(k)                                  Further Representations of  the Parties.  Party A, Party B and each Specified Entity of
Party B represents to the other party (which representations will be deemed to
be represented by each party and each such Specified Entity on each date on
which a Transaction is entered into and at all times until this Agreement is
terminated) that:

 

(i)                                 Non-Reliance.   In connection with this Agreement, any
Specified Agreement to which it is a party, each Transaction, and any other
documentation relating to this Agreement to which it is a party or that it is
required by this Agreement to deliver:

 

(A)                              it is not
relying upon any representations (whether written or oral) of the other party
other than the representations expressly set forth in this Agreement, such
Specified Agreement and in any Confirmation;

 

(B)                                it has
consulted with its own legal, regulatory, tax, business, investment, financial
and accounting advisors to the extent it has deemed necessary, and it has made
its own investment, hedging and trading decisions (including decisions
regarding the suitability of any Transaction pursuant to this Agreement) based
upon its own judgment and upon any advice from such advisors as it has deemed
necessary and not upon any view expressed by the other party;

 

(C)                                it has a full
understanding of all the terms, conditions and risks (economic and otherwise)
of the Agreement and each Transaction 
and is capable of assuming and willing to assume (financially and
otherwise) those risks;

 

(D)                               it is entering
into this Agreement, such Specified Agreements, each Transaction and such other
documentation as principal, and not as agent or in any other capacity,
fiduciary or otherwise; and

 

(E)                                 the other party
is not acting as a fiduciary or financial, investment or commodity trading
advisor for it, it being understood that it is not relying on any unique or
special expertise of the other party and it is not in any special relationship
of trust or confidence with respect to the other party.

 

(ii)                              Eligible Commercial Entity and Eligible Contract Participant.  It is an “eligible
commercial entity” as defined in Section 1a (11) of the Commodity Exchange
Act, and it is an “eligible contract participant” within the meaning of Section 1a
(12) of the Commodity Exchange Act, as amended by the Commodity Futures
Modernization Act of 2000.

 

21

 

(iii)                           Bankruptcy Code.  Without limiting the applicability of any
other provision of the U.S. Bankruptcy Code, as amended (the “Bankruptcy
Code”), the parties acknowledge and agree that: (a) all Transactions,
with the exception of the Loans, entered into hereunder will constitute “forward
contracts” or “swap agreements” and this Agreement constitutes a “master
netting agreement” as defined in the Bankruptcy Code; (b) each party is a “master
netting agreement participant,” a “forward contract merchant” and a “swap
participant” as defined in the Bankruptcy Code; (c) the rights of the
parties under Sections 5 and 6 of this Agreement will constitute “contractual
rights” to liquidate Transactions; (d) any margin or collateral provided
under any margin, collateral, security, or similar agreement related hereto,
including but not limited to the ISDA Security Documents and any Credit Support
Annex, will constitute a “margin payment” or a “settlement payment” as defined
in the Bankruptcy Code.

 

(l)                                     Certain Understandings.  Each party to this
Agreement acknowledges that Party A and its Affiliates (collectively, “SET”)
will engage in transactions with Party B and certain of Party B’s Affiliates
pursuant to this Agreement and the other Specified Agreements. Neither this
Agreement nor the other Specified Agreements shall preclude SET from engaging
in transactions of a nature like the transactions contemplated by the Specified
Agreements with any other Person. 
Without limiting the foregoing, each party acknowledges that SET is
engaged in, among other things, dealing in fuel, and power and related
commodities for its own account in the U.S. wholesale fuel and power markets,
and manages positions in fuel and power and related commodities for
others.  SET may  (i) take actions under this Agreement
and the other Specified Agreements which may be different than the actions SET
takes for its own account or for the account of others, even though the
circumstances may be the same or similar and (ii) effect transactions with
counterparties that are also counterparties to other transactions in fuel
and/or power or related commodities with SET or for which SET is acting in an
agency capacity.  SET may from time to
time take proprietary positions and/or make a market in commodities and/or
instruments identical or economically related to the transactions contemplated
by the ISDA Documents, or may have an investment banking or other commercial
relationship with and access to information from the issuer(s) of
financial instruments or other interests underlying such transactions during
the term of the ISDA Documents.  SET may
also undertake lawful proprietary activities, including hedging transactions
related to the initiation or termination of a transaction, that may adversely
affect the market price, rate, index or other market factor(s) underlying
the transactions contemplated by the ISDA Documents and consequently the value
of the transactions contemplated by the ISDA Documents.  Neither this Agreement nor the other
Specified Agreements shall limit in any manner the ability of SET to enter into
any transaction of any nature with any other Person.  The parties acknowledge that the relationship
between SET and Party B and its Affiliates is a commercial and not a fiduciary
relationship and that SET is free to pursue its own business interests.

 

(m)                               Existing ISDA.
The parties hereby agree that, on and with effect from the date of this
Agreement, the ISDA Master Agreement, dated as of November 10, 2005 (as
amended, supplemented, or otherwise modified prior to the date hereof) between
Party A and Party B (the “Existing ISDA Master Agreement”) shall be
terminated in all respects, and all Transactions (as defined in the Existing
ISDA Master Agreement) which remain in effect as of the date hereof shall, from
and after the date hereof, be (and shall be deemed to be) Transactions under
this Agreement in all respects and for all purposes. In the event of any
conflict between the provisions of this Agreement and any Confirmation
evidencing an outstanding Transaction originally entered into under the
Existing ISDA Master Agreement, the Confirmation will prevail for purposes of
such Transaction.

 

(n)                                 Payments.  Except as otherwise expressly provided
herein:

 

(i)                                     all payments shall be made by Party B to Party A without
setoff, recoupment or counterclaim and in immediately available funds at the
office specified by Party A not later than 12:00 p.m. New York time on the
date due, and funds received after that hour shall be deemed to have been
received by Party A on the following Business Day.

 

(ii)                                  if any payment under this Agreement falls due on a day which
is not a Business Day, then such due date shall be extended to the immediately
following Business Day and additional interest, 

 

22

 

Financing
Fees and Credit Support Fees shall accrue and be payable for the period of any
such extension.

 

(o)                                 Termination of Specified Transactions. Party B shall demonstrate to Party A that all Specified
Transactions (and any related master agreements) between Party B or any
Specified Entity of Party B and any third party, as set forth on Exhibit 5(o),
shall be terminated or novated to Party A within 30 days after the Closing
Date.  Party B represents to Party A that
no other Specified Transactions will be outstanding as of the Closing Date except
those set forth on Exhibit 5(o).

 

(p)                                 Sub Accounts.  Party B acknowledges and agrees that all
funds held in the Party A Sub Account and the Swap Note Sub Account may be
commingled with Party A’s funds and Party A shall be entitled to sell, pledge,
invest or use the funds held in such accounts, free from claim or right of any
nature whatsoever of Party B.  Party A
agrees to credit (i) the Party A Sub Account with interest on funds held
in such account from time to time at the rate of Overnight LIBOR (calculated on
a daily basis) and (ii) the Swap Note Sub Account with interest on funds
held in such account from time to time at the Base Rate plus 3% (calculated on
a daily basis).  Any such interest
payable by Party A to Party B shall be paid monthly on the 10th day of the month
occurring after the month in which any such interest accrued and is subject to
setoff as otherwise provided herein.

 

(q)                                 Facility Agent; Holders of ISDA Obligations.  The parties
acknowledge that Party A is acting as the Facility Agent (as defined in the
Intercreditor Agreement) hereunder.  All
references herein to “Party A” shall also be a reference to the Facility
Agent.  On the date hereof, Party A is
the sole holder of ISDA Obligations (as defined in the Intercreditor
Agreement).  The parties acknowledge that
from time to time there may be more than one holder of ISDA Obligations.  All actions by Party A hereunder and unless
otherwise notified to Party B shall be an action by the Facility Agent and the
required holders of ISDA Obligations.

 

(r)                                    Indemnification.  Except as otherwise
expressly provided herein, Party B shall indemnify Party A, its Affiliates, and
their respective officers, directors, shareholders and employees (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses, or
disbursements (including all reasonably incurred fees, expenses and
disbursements of any law firm or other external counsel) of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against any
Indemnitee in any way relating to or arising out of or in connection with (a) the
execution, delivery, enforcement, performance or administration of this
Agreement, any other Specified Agreement, or any other agreement, letter or
instrument delivered in connection with the transactions contemplated hereby
and thereby or the consummation of the transactions contemplated hereby and
thereby, (b) any action taken or omitted by Party A under this Agreement
or any other Specified Agreement (including Party A’s own negligence), or (c) any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory
(including any investigation of, preparation for, or defense of any pending or
threatened claim, investigation, litigation or proceeding) and regardless of
whether any Indemnitee is a party thereto (all the foregoing, collectively, the
“Indemnified Liabilities”);  provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee.

 

(s)                                  Increased Costs.

 

(i)                                     If any Change in Law shall:

 

(A)                              impose, modify
or deem applicable any reserve, special deposit, compulsory transaction,
insurance charge or similar requirement against assets of, deposits with or for
the account of, or credit extended or participated in by, Party A with respect
to this Agreement; or

 

23

 

(B)                                impose on the
natural gas market or other relevant market any other condition, cost or
expense affecting this Agreement or any Transactions which Party A is obligated
to enter into hereunder;

 

and
the result of any of the foregoing shall be to materially increase the cost to
Party A of entering into or maintaining any Transaction with Party B or to
materially reduce the amount of any sum received or receivable by Party A hereunder
or under any other Specified Agreement then, upon request of Party A, Party B
will pay to Party A such additional amount or amounts as will compensate Party
A for such additional costs incurred or reduction suffered.

 

(ii)                                  Party A shall provide to Party B reasonable evidence of any
Change in Law forming the basis of a claim for payment under Part 5(s)(i) within
one year from the effectiveness of such Change in Law; provided, however,
that the calculation by Party A of the amount or amounts to compensate Party A
as contemplated by Part 5(s)(i), which shall be final and conclusive,
absent manifest error, may be provided by Party A to Party B thereafter, and
from time to time, based on the nature of such Change in Law; provided, further,
that Party B shall not be required to compensate Party A pursuant to this Part 5(s) for
any increased costs incurred or reductions suffered more than 12 months prior
to the date that Party A notifies Party B of the Change in Law giving rise to
such increased costs or reductions and of Party A’s intention to claim
compensation therefor.

 

(t)                                    Survival of Obligations.  Section 9(c) is
deleted in its entirety and replaced with the following new Section:

 

Without
prejudice to Sections 2(a)(iii) and 6(c)(ii), any obligations to make
payment hereunder, any obligation of either party to indemnify the other
pursuant hereto and any obligations under Sections 5 and 6 shall survive the
termination of this Agreement or any Transaction.

 

(u)                                 MX Canada.

 

(i)                                     Any covenants or representations and warranties undertaken
or made by or on behalf of MX Canada under this Agreement shall apply only to
MX Canada.

 

(ii)                                  Notwithstanding Part 12(a)(xi) and Part 13(b)(xiii),
Party A and Party B agree that Party B may sell Gas to, and enter into physically
and financially settled Gas Swaps and Gas Options with, MX Canada (each such
transaction, an “MX Canada Transaction”); provided, however,
that MX Canada (with the exception of any transactions outstanding on the
Closing Date) shall be subject to the same restrictions and covenants with
respect to such transactions and the operation of its business and the same
reporting requirements that, in each case, would be applicable to Party B if
Party B were entering into such transactions with Party A hereunder, including
the covenants set forth in Part 12(a)(viii), (xi), (xii), (xiii), (xiv),
and (xvi) and Part 13(b). In addition, any Event of Default or Termination
Event with respect to Party B under this Agreement shall be a default with
respect to MX Canada under each  MX
Canada Transaction.  Concurrently with,
and as a condition precedent to, entering into any MX Canada Transaction, Party
A and Party B shall enter into back-to-back offsetting Transactions having the
same contract quantities, contract price, notional quantities, fixed and
floating prices, and remain tenors (in each case as applicable) with respect to
such MX Canada Transaction and otherwise on terms satisfactory to Party A in
its sole discretion.  Notwithstanding
anything herein to the contrary, at no time shall Party B’s potential credit
exposure (including the exposure for the value of delivered commodities and the
potential mark-to-market exposure on physically and financially settled
transactions) to MX Canada, as calculated by Party A, exceed $900,000.

 

Part 6.           Physical Gas Transactions.

 

Sub-Annex
E to the 2005 ISDA Commodity Definitions (Physically Settled North American Gas
Transactions) (the “Gas Annex”) in effect as of the date hereof is
incorporated by reference into the Master Agreement and in the 

 

24

 

relevant
Confirmations with respect to Gas Transactions. 
All terms in this Part 6 that are not otherwise defined shall have
the meaning given to  them in the Gas
Annex.

 

Elective Provisions to the Gas Annex
(clause (l) of the Gas Annex):

 

1.  Section (a)(ii):
Outstanding Gas Transactions.  The Gas Annex shall apply to all Gas
Transactions outstanding between the parties as of the date the Gas Annex
becomes effective.

 

2.  Section (a)(iii):
Outstanding Gas Credit Support Documents.  Outstanding Gas Credit Support held by a
party in connection with Outstanding Gas Transactions shall be deemed to have
been delivered under and in connection with this Agreement pursuant to clause
(a)(iii) of the Gas Annex.

 

3.  Section (b)(ii): Performance
Obligation.  Option A, Cover Standard
shall apply.

 

4.  Section (e):
Taxes.  Option A, Buyer Pays At and
After Delivery Point shall apply.

 

5.  Section (f)(ii):
Payment Date.  The
applicable Payment Date shall be the dates specified in Part 9.

 

6.  Section (k)(xxii):
Alternative to Spot Price Index. The parties have selected
the following alternative index as the Spot Price Index:                           . If no index is
specified, the Spot Price Index specified in clause (k)(xxi) applies.

 

7.  Section (m) Notices
for Gas Transactions.  As set
forth in this Schedule.

 

8.  Section (n) Other
Provisions/Modifications to the Gas Annex.

 

(i)                                     The following
is added to the end of clause (a)(iii):

 

The
parties acknowledge that all representations made in the Schedule, including
those pertaining to non-reliance, shall be part of this Gas Annex.  In addition, the parties acknowledge that
this Gas Annex is subject to the confirmation process specified in the
Schedule, as well as amendments to the Events of Default, including the
additional Events of Default specified in Part 1(i)(xi), and the reduction
of any grace period for involuntary bankruptcies.

 

(ii)                                  In clause
(k)(vi), the parenthetical on the third line of the definition of Cover
Standard is deleted.

 

(iii)                               Clause (c)(iii) is
amended by adding the following sentence at the end thereof:

 

“For
the avoidance of doubt, this clause (c)(iii) shall apply even if the
relevant obligation to deliver or receive Gas was excused under the Force
Majeure provisions of Section (h) of this Part 6.”

 

(iv)                              Clause (f)(v) is
deleted in its entirety and replaced with the following:

 

[Reserved]

 

(v)           The following new clause (f)(vi) is
added:

 

If,
at the time the parties enter into a Gas purchase and sale transaction under
which one party is to sell Gas to the other, one or more other Gas purchase and
sale transactions are outstanding under which such other party is to sell Gas
to such first party for delivery during the same Delivery Period and at the
same Delivery Point for payment on the same Payment Date, then (subject to Part 5(d))
all such offsetting transactions shall be netted into a single transaction
under which (a) the party required to deliver the larger amount of Gas
shall deliver to the other party the difference between the amount of Gas it is
to deliver and the amount it is to receive under such offsetting 

 

25

 

transactions,
and (b) the party owing the greater purchase price under such offsetting
Gas purchase and sale transaction shall pay to the other party the difference
between the amount it owes and the amount owed to it under such offsetting
transactions.  The single resulting
transaction shall be deemed entered into automatically and, once entered into,
outstanding obligations under the offsetting transactions shall terminate.  Such netting shall not affect that
transaction’s status as a Forward Contract based on the date it was originally
entered into.

 

Part 7.            Gas Purchases and Sales

 

(a)                                    Gas Purchases.

 

(i)                                     Party B hereby agrees that Party A shall be its exclusive
supplier of (A) Gas with respect to Party B’s sale of Gas to Customers and
(B) Gas Swaps and Gas Options to hedge the risks associated with Party B’s
sales to Customers.  Party B shall not
(except to the extent permitted by Part 13(b)(iii) and Part 5(h))
purchase Gas from, or enter into any Gas Swap, Gas Option or any other Hedging
Transaction with, any other party during the term of this Agreement.  Party B will only purchase Gas for sale to
Customers and hedge locational basis risk and price risk relating to such
sales. Party A hereby also agrees, subject to the terms and conditions set
forth herein, that it will sell and deliver Gas to Party B for storage (“Storage
Gas”) consisting of (A) actual storage in which Gas is injected into
Party B’s storage account with any Transporter and (B) virtual storage as
required by any LDC at any LDC Citygate.

 

(ii)                                  During the term of this Agreement, Party B shall purchase
from Party A a minimum of 130,000,000 MMBtus of Gas for physical delivery in
accordance with the following schedule:

 

(A)                              during the
first Contract Year, Party B shall purchase a minimum of 39,000,000 MMBtus in
the aggregate, excluding any volumes of Gas delivered prior to October 1,
2009;

 

(B)                                during the
second Contract Year, Party B shall purchase a minimum of 44,000,000  MMBtus of Gas in the aggregate; and

 

(C)                                during the
third Contract Year, Party B shall purchase a minimum of 47,000,000 MMBtus of
Gas in the aggregate (with respect to each such Contract Year, the “Minimum
Gas Quantity”).

 

If
Party A has exercised its right to extend the term of this Agreement, Party B
shall purchase a Minimum Gas Quantity of 47,000,000 MMBtus in the aggregate
during the fourth Contract Year.

 

In
the event Party B fails to purchase the applicable Minimum Gas Quantity during
any Contract Year (including due to the occurrence of an Early Termination
Date), Party B shall pay to Party A, on the first Business Day immediately
following the last day of such period or (if such failure is due to the
occurrence of an Early Termination Date) on the date specified in Section 6
after the occurrence of such Early Termination Date (as the case may be), an
amount equal to the then-current Gas Adder multiplied by the positive
difference between the Minimum Gas Quantity for such period and the number of
MMBtus of Gas  actually purchased by
Party B during such period; provided, however, that, for the
avoidance of doubt, upon the occurrence of an Early Termination Date, Party B
shall pay to Party A such an amount in respect of each such period or partial
period that has not yet occurred, including the Extended Term to the extent
Party A has not declined its option to extend the term of this Agreement.  Notwithstanding the foregoing and not in
limitation of any other amounts that would be payable by Party B hereunder, the
parties agree that, if an Early Termination Date occurs as the result of the
occurrence of an Additional Termination Event with respect to Party A, Party B
shall not be liable for (A) the Gas Adder with respect to any portion of
the Minimum Gas Quantity that Party B had not purchased for the Contract Year
in which such Early Termination Date occurred and (B) the Gas Adder with
respect to the Minimum Gas Quantity in any subsequent Contract Years.  If, in any Contract Year, Party B purchases a

 

26

 

quantity
of Gas in excess of the Minimum Gas Quantity for such Contract Year, the
Minimum Gas Quantity for the next Contract Year shall be reduced by the  amount of any such excess.

 

(iii)                               Party A will enter into Gas Transactions with Party B to
supply Gas at fixed and floating prices to Party B, and Party A will enter into
Gas Swaps (including basis swaps) with Party B to enable Party B to (A) hedge
the market risk associated with its sales of Gas to its Customers, and (B) to
satisfy Party B’s obligations under Part 12(a)(xiv). The parties shall
enter into all such Transactions on the terms set forth herein or as otherwise
agreed.

 

(iv)                              Party A  will enter
into Gas Options with Party B on the terms set forth herein or as otherwise
mutually agreed by the parties to offset (A) the market risk associated
with fixed-price sales of Gas by Party B to its Customers, and (B) the
market risk associated with the fixed cost of Storage Gas purchased to meet
Party B’s delivery and storage obligations.

 

(b)                                 Contract Price for Gas, Gas Swaps and Gas Options.

 

(i)                                     Except with respect to Sleeve Transactions (which shall be
priced in accordance with Part 7(e)(iii)) and those certain Transactions
described in Part 7(b)(ii) and Part 7(b)(iii), the Contract
Price(s) for Gas purchased by Party B from Party A pursuant to any
Transaction shall be the sum of (A) the Quoted Price(s), plus (B) the
applicable Gas Adder.  The fixed and
floating prices for any Gas Swaps shall be the applicable Quoted Prices, plus a
Gas Adder, if applicable.  Party A hereby
agrees that it will provide Quoted Prices for Gas in respect of various Delivery
Points to Party B, upon Party B’s reasonable request.  Once Party A has provided Party B with a
Quoted Price with respect to a Transaction and Party B has not objected to such
Quoted Price when such quote is given, the Quoted Price for such Transaction
shall be final and binding.

 

(ii)                                  For the avoidance of doubt, the Contract Price for any
locational basis swap, shall be the Quoted Price and shall not include a Gas
Adder; provided, that
such purchases shall not be credited toward the Minimum Gas Quantity for any
Contract Year.

 

(iii)                               For day-ahead Gas Transactions (where Party A is selling to
Party B or Party B is selling to Party A), where Party B’s relevant Nomination
Schedule is delivered by Party B to Party A prior to 8:30 a.m. EPT, the
Contract Price for Gas volumes delivered in accordance with such Nomination
Schedule shall be shall be the sum of (A) the Gas Daily “midpoint” price
for the relevant Delivery Point (as reasonably determined by Party A) plus (B) with
respect to sales of Gas by Party A to Party B only, the applicable Gas Adder; provided, that, notwithstanding the foregoing, where the
Delivery Point for any such Transaction is Transco Zone 6 in New York, this Part 7(b)(iii) shall
not apply and the Contract Price for such Transaction shall be the Contract
Price specified in Part 7(b)(i), above.

 

(iv)                              For the avoidance of doubt, Party A and Party B acknowledge
and agree that a Gas Adder shall not be added to amounts payable by Party A
under any Transaction.

 

(c)                                  Price Credits.   For all sales of Gas by Party B to Party A, and for all Gas
Swaps that Party A agrees unwind existing positions, Party A will credit to
Party B an amount equal to $0.0525/MMBtu in addition to the Quoted Purchase
Price(s) for such Transactions; provided, however, that such
credit shall not apply to (i) Prompt Month and intra-month Transactions, (ii) locational
basis swaps and (iii) sales by Party B to Party A of Gas, the Contract
Price of which included the “IT Gas Adder” when originally purchased by Party
B.  Once Party A has provided Party B
with a Quoted Purchase Price with respect to a Transaction and Party B has not
objected to such Quoted Purchase Price when such quote is given, the Quoted
Purchase Price for such Transaction shall be final and binding.  The quantity of Gas purchased by Party A from
Party B shall be subtracted from the aggregate volume of Gas purchased
hereunder during the relevant Contract Year for purposes of determining whether
the applicable Minimum Gas Quantity has been purchased by Party B.

 

27

 

(d)                                 Applicability of Gas Adder.  If the fixed price for any Gas Swap includes
a Gas Adder, Party B shall not be obligated to pay a Gas Adder with respect to
that portion of any Gas Transaction which at the time of determination is  hedged by such Gas Swap.

 

(e)                                  Sleeve Transactions.

 

(i)                                     Party B shall have the right to obtain price quotes from
third parties for physically settled Gas purchase transactions where Party B
would be the buyer of Gas, Gas Swaps where Party B would be the fixed price
payer and basis swaps.  Party B may
request that Party A enter into any such purchase transaction or Gas Swap with
any such third party on the price and, with respect to physical purchase
transactions, delivery terms negotiated by Party B; provided, however,
that Party A shall be under no obligation to enter into any such transaction
with a third party unless Party A is satisfied with such transaction and such
third party, in each case as determined by Party A in its sole discretion; and,
provided,  further, that (A) Party A shall not be obligated
in any case to enter into any such third party transactions if the aggregate
actual and notional quantities of Gas to be delivered under all such
outstanding third party transactions exceed (x) 15bcf in the initial
Contract Year, and (y) for each subsequent Contract Year, 25% of the
aggregate quantity of Gas delivered to Party B in the prior Contract Year
pursuant to the terms of this Agreement, as determined by Party A, and (B) no
such third party transaction may have a delivery period, calculation period or
settlement date that occurs after the date that is 12 months prior to the
maturity date of the Notes. 
Notwithstanding the foregoing, Party B will not request that Party A enter
into any transaction with a third party in respect of any financially settled
Option Transaction.

 

(ii)                                  Upon Party A’s execution of a transaction with a third party
pursuant to Part 7(e)(i) above, Party A and Party B shall be deemed
automatically and immediately to have entered into a Sleeve Transaction (as
defined below) hereunder.

 

(iii)                               Contract Price for Sleeve Transactions.  With respect to
each Transaction entered into by Party A with Party B that serves as a
back-to-back offsetting hedge of a physically settled Gas transaction or a Gas
Swap entered into between Party A and a third party pursuant to Part 7(e)(i) (each
such transaction between Party A and Party B, a “Sleeve Transaction”),
the per MMBtu Contract Price payable to Party B in respect of such Transaction
shall be equal to the sum of the following amounts:

 

(A)                              The relevant
per MMBtu price to be paid by Party A to such third party pursuant to the
transaction that corresponds to such Sleeve Transaction (the “Base Price”)
plus the applicable Gas Adder; plus

 

(B)                                The total
amount of the following costs and expenses to the extent incurred by Party A in
respect of the third party transaction and/or in respect of the related Sleeve
Transaction divided by the contract quantity associated with each such
transaction: brokerage commissions, interest costs for required cash margin,
costs associated with other forms of posted collateral  and similar costs and expenses incurred by
Party A with respect to the third party transaction and/or the related Sleeve
Transaction mutually agreed by the parties.

 

(f)                                    Gas Transportation and Storage Costs; Taxes.   Party B  agrees to pay all Transportation and Storage
Costs relating to Gas delivered.  Party B
shall pay and shall be solely responsible for any and all personal property
taxes applicable to any Gas held in storage by Party A pursuant to the terms of
this Agreement.

 

(g)                                 Firm Basis.  Unless otherwise specified in a Transaction, all purchases
and sales of Gas made under this Agreement shall be made on a Firm basis.

 

28

 

(h)                                 Credit Support To LDCs and Transporters.   Party
A agrees to provide Credit Support on behalf of Party B to meet LDC and
Transporter credit requirements on terms reasonably acceptable to Party A and
relating to the Transactions entered into under this Agreement; provided,
however, that Party A shall not be obligated to provide or maintain any
such Credit Support on terms and in amounts that are unsatisfactory to Party A,
as determined by Party A in its reasonable discretion.  In the event that Party A determines that any
Transporter’s or LDC’s credit support requirements are, or have become,
unreasonable, Party A will cooperate with Party B in an attempt to amend the
credit requirements of the applicable LDC or Transporter.  To the extent that Party A provides Credit
Support to any LDC or Transporter, Party B shall (i) reimburse Party A for
any Credit Support Amounts actually paid by Party A in accordance with Part 12(a)(xviii),
and (ii) pay the applicable Credit Support Fees with respect to the Credit
Support Amount in accordance with Part 9(f).

 

(i)                                     Imbalance Charges.

 

(i)                                     Notwithstanding anything to the contrary (including clause
(c)(iii) of the Gas Annex) and without limitation to Part 5(r) hereof,
Party A shall reimburse Party B for, and shall indemnify Party B against and
hold Party B harmless from, all Imbalance Charges and other charges, costs and
penalties assessed by any LDC or Transporter arising from or in connection with
Gas scheduled or delivered by Party A using pipeline capacity that has been
released directly or indirectly by Party B to Party A; provided, however,
that Party A shall have no obligation to reimburse or indemnify Party B with
respect to any Imbalance Charges or any other charges, costs or penalties that
are assessed as the direct result of 
Party B’s error, negligence or willful misconduct, and Party B shall be
solely responsible for, and shall reimburse Party A with respect to, any such
Imbalance Charges and any other such charges, costs or penalties.  Both parties shall use commercially
reasonable efforts to provide each other with timely notice of any disruption
in Gas flow of which such party is aware.

 

(ii)                                  The parties acknowledge and agree that a party’s obligation
to pay, or reimburse the other party for, Imbalance Charges and other charges,
costs and penalties assessed by any LDC or Transporter arising from or in
connection with Gas scheduled or delivered by Party A using pipeline capacity
that has not been released directly or indirectly by Party B to Party A shall
be determined utilizing the methodology set forth in clause (c)(iii) of
the Gas Annex.

 

(j)                                     Designated Jurisdictions.

 

(i)                                     The parties acknowledge and agree that Party A shall have no
obligation to supply any Gas (A) to Party B in any jurisdiction not listed
on Exhibit 7(j), or (B) with respect to potential Customers served by
any LDC that is not listed as an approved LDC on Exhibit 7(j), in each
case unless and until Party A (x) has completed a market, regulatory and
utility rules review for the applicable jurisdiction and the applicable
LDC within such jurisdiction and (y) has provided written notice to Party
B that based upon the results of such review Party A is prepared to commence
supply of Gas in such jurisdiction and with respect to such LDC.  Party A shall use commercially reasonable
efforts to complete a review with respect to any jurisdiction and/or any such
LDC in a timely fashion following a written request.  Unless approved by Party A in accordance with
this Part 7(j), Party B agrees that it shall be prohibited from entering
into transactions with Customers for the supply of Gas in any jurisdiction not
listed on Exhibit 7(j), or with respect to any potential Customer served
by an LDC that is not listed on Exhibit 7(j) with respect to the
jurisdiction in which such potential Customer is located.  Exhibit 7(j) shall be amended from
time to time to include any jurisdictions or LDC’s approved by Party A pursuant
to this Part 7(j).

 

(ii)                                  If there is a change in Applicable Law in any Designated
Jurisdiction or if a proceeding is initiated against Party A, Party B and/or
any LDC, which, in either case, Party A reasonably determines could have an
adverse effect on the results of any market, regulatory or utility rules review
performed by Party A with respect to a Designated Jurisdiction or an approved
LDC, then Party A shall have the right to initiate an additional market,
regulations and/or utility rules review with respect to such Designated
Jurisdiction or approved LDC (such review, a “Bring Down Review”).

 

29

 

Based on the results of any such
Bring Down Review, Party A may amend Exhibit 7(j) to remove any
affected LDC or Designated Jurisdiction.

 

Part 8.            Forecasting, Scheduling, Nomination, Taxes

 

(a)                                  Forecasting.

 

(i)                                     Party B hereby agrees that it shall be solely responsible
for its own load forecasting.  Party B
also agrees that it will cooperate with Party A to modify or improve Party B’s
forecasting performance if requested by Party A.  For the avoidance of doubt, Party A will not
be responsible for any aspect of Party B’s load forecasting responsibility and
Party B shall be responsible for any costs or penalties incurred as a result of
any forecasting error.

 

(ii)                                  Party B shall provide Party A with Party B’s projected Gas
needs for daily, monthly, and seasonal periods. Party B shall provide such
projections at such times and in such format as may be reasonably requested by
Party A.

 

(b)                                 Gas Nomination; Transportation and Storage
Capacity; Release of Transportation and Storage Capacity.

 

(i)                                     For monthly base load Gas Transactions, Party B will use its
best commercial efforts to provide to Party A a Nomination Schedule setting
forth Party B’s Prompt Month requirements by the close of business of the 3rd
trading day prior to the NYMEX natural gas futures contract expiration day for
that month but no later than the close of business on the penultimate NYMEX
futures contract expiration day for that month. 
For day-ahead Gas Transactions, Party B will use its best commercial efforts
to provide Party A with a Nomination Schedule for all of Party B’s day-ahead
requirements by 9:00 AM EPT, but no later than 10:00 AM EPT, on the day prior
to the day of Gas flow.  For intra-day
Gas Transactions, Party B will notify Party A as soon as it is aware of any
intra-day Gas requirements and Party A shall satisfy such requirements through
the delivery of Storage Gas if reasonably practicable.  Party B may request that Party A satisfy an
intra-day Gas requirement without delivering Storage Gas, but Party A makes no
guaranty that it can fulfill any such request and Party A shall have no
liability if it fails to deliver such Gas under such circumstances.  However, Party B will have the right to
request that Party A sleeve an intra-day transaction for the purchase of Gas
should Party A be unable to satisfy such intra-day Gas requirement; provided,
however, that Party A shall be under no obligation to enter into any
such sleeve transaction unless Party A is satisfied with such transaction and
with the proposed counterparty, in its sole discretion.  Party A agrees that it will perform all
interstate pipeline nominations for Party B based on the Nomination Schedules
submitted by Party B in accordance with the terms of this Agreement; provided,
that Party B agrees that it will perform all nominations behind LDC
Citygates.  The submission by Party B to
Party A of a Nomination Schedule shall constitute the agreement by Party B to
purchase the quantity of Gas indicated on such Nomination Schedule, as balanced
by the relevant LDCs, to satisfy the requirements of  Party B’s Customer Load on the Days to which
such Nomination Schedule applies, at the Delivery Points reflected on such
schedule.

 

(ii)                                  Except as otherwise agreed between Party A and Party B, as
soon as practicable but in any event no later than 90 days after the Closing
Date, Party B will release, or will arrange for the release of, all of Party B’s
pipeline transportation and storage capacity on interstate and interprovincial
pipelines directly to Party A and will enter into such agreements as Party A
may reasonably require (including asset management agreements) to effectuate
such release in a manner that is compliant with the requirements of Applicable
Law or any relevant Governmental Entity, Transporter and/or LDC.  Party B will provide to Party A instructions
regarding such releases of capacity in a timely and efficient manner.  Party B hereby agrees to pay, or to reimburse
Party A for, all Transportation and Storage Costs incurred by Party A resulting
from Party A’s acceptance of releases of pipeline transportation and storage
capacity to serve Party B’s Customer Load. 
Upon Party A’s acceptance of the release of any such capacity, Party A
shall be responsible for 

 

30

 

nominating quantities of Gas
from the relevant receipt point on such capacity to the relevant Delivery Point
or storage location and all storage nominations, and Party A shall make all
such nominations in accordance with all applicable tariffs.  Until all pipeline capacity has been released
to Party A, Party B and Party A will cooperate to meet Party B’s delivery and
Gas storage requirements hereunder in accordance with Applicable Law.

 

(iii)                               Purchase of Initial Storage Gas.

 

(A)                              On the effective date of
each release of pipeline storage capacity specified in Part 8(b)(ii),
Party B shall sell to Party A and Party A shall purchase from Party B all of
the Gas then held in storage with respect to such released capacity (all such
Gas, the “Initial Storage Gas”). 
The purchase price for such Initial Storage Gas (the “Party A Storage
Gas Purchase Price”) shall be the weighted average cost per MMBtu of such
Gas (the “Initial Storage Gas Per MMbtu Price”) multiplied by the
quantity of such Initial Storage Gas each as demonstrated by Party B to Party A’s
satisfaction.

 

(B)                                Party A and Party B agree
that the payment by Party A of the Party A Storage Gas Purchase Price for any
Initial Storage Gas shall not be due on the Gas Settlement Date of the month
following the month such Gas was sold to Party A and shall instead be paid in
accordance with Part 8(b)(iii)(C); provided, however, that,
to the extent the Party A Storage Gas Purchase Price for any Initial Storage
Gas is not paid in full on or before the Gas Settlement Date following the date
such Initial Storage Gas was sold to Party A, the outstanding amount of such
Party A Storage Gas Purchase Price shall accrue interest at Overnight LIBOR
plus 5% from and including such Gas Settlement Date to, but excluding, the date
such amount is paid to Party B.

 

(C)                                On the Gas Settlement Date
of the month following the month of delivery of any such Initial Storage Gas to
Party B’s customers, Party A shall pay to Party B an amount equal to the sum of
(i) the product of the Initial Storage Gas Per MMBtu Price multiplied by
the amount of Initial Storage Gas delivered to Party B’s customers in the prior
month, and (ii) outstanding accrued interest on such amount, if any; provided,
however, that such amount shall be netted against the corresponding
payment to be made by Party B to Party A with respect to such deliveries to
Party B’s Customers pursuant to Part 9(b). Initial Storage Gas will be
deemed Storage Gas for all purposes of this Agreement.  In addition, for purposes of  Part 9(b), any Initial Storage Gas held
in storage shall be deemed to be delivered to Party B’s Customers on a first in
first out basis prior to any other Storage Gas held in storage and the Contract
Price payable by Party B with respect to such Storage Gas shall be the Initial
Storage Gas per MMBtu Price multiplied by the quantity of Initial Storage Gas
delivered to such Customers, and such Initial Storage Gas shall not be included
for purposes of determining compliance with Part 7(a)(ii).

 

(iv)                              Party A shall have the right to utilize pipeline capacity
not utilized by Party A to serve Party B’s Customer Load; provided, however,
that such unutilized capacity shall be available at all times to support Party
B’s purchases and deliveries of Gas, including on an intra-day basis.  If Party B determines that there is
interstate pipeline transportation capacity not required to serve its customer
load, and Party B has identified an opportunity to derive market value for such
capacity, then Party B may direct Party A to release any such excess capacity
to a third party that is not a Specified Entity of Party B; provided, however,
that (A) Party A shall only be obligated to release such excess capacity
in a manner that is in full compliance with all Applicable Laws including any
applicable FERC regulations, (B) Party A shall not be obligated to release
any such excess capacity for a term of less than a full month, and (C) Party
A shall not be obligated to release any capacity if it reasonably believes that
such capacity will be required to serve Party B’s Customer Load.  Party A shall enable Party B to realize,
through set-offs or otherwise, the value of any pipeline credits that accrue to
Party A’s account in respect of any such releases made in accordance with the
foregoing.  Prior to releasing any
capacity in accordance with the foregoing, Party A shall have the right to
match the market price offered by a third party for such capacity 

 

31

 

and to purchase such capacity
for its own account.  In the event of any
such purchase of capacity  by Party A,
Party B will not be entitled to any pipeline credits that accrue to Party A in
connection with such purchased capacity. 
Party A shall have the right to utilize any pipeline capacity that is
not used to serve Party B’s customer load and that has not been released to a
third party in accordance with this Part 8(b)(iv).  Prior to Party A’s exercise of its right to
utilize any such capacity, Party A and Party B will mutually agree to a price
to be paid to Party B for such capacity utilization.

 

(v)                                 At Party B’s direction, Party A shall use its commercially
reasonable efforts to acquire transportation capacity at demand charges that
are mutually agreed by Party A, Party B and the relevant Transporter.

 

Part 9.           Payment Terms; Financing Fees; Third Party Credit Support
Fees

 

(a)                                  Gas Payments.  Notwithstanding any provision herein to the
contrary, including clauses (f)(i) and f(ii) of the Gas Annex, Party
A shall deliver an invoice to Party B for Gas on or about the 10th calendar day
of each month beginning in the month immediately succeeding the month of
commencement of the term of this Agreement. 
Each such invoice shall itemize all amounts owed by Party B for Gas
delivered and received during the previous month and all other amounts due to
Party A under this Agreement that have accrued in the previous month; provided,
however, that any failure by Party A to deliver an invoice to Party B
shall not in any way affect Party B’s obligation to pay such amounts or the Due
Date for the payment of such amounts. If the actual quantity of Gas delivered
is not known by the invoice date, the invoice will be prepared based on the
quantity of Gas that was scheduled for delivery in such month.  The invoiced quantity will then be adjusted
to reflect the actual delivered quantity of Gas on the following month’s
invoice or as soon thereafter as actual delivery information is available.
Except as otherwise provided in Parts 9(b), (c), (e) and (f), Party B will
pay each invoice on or before the 25th day of the month such invoice is
received (the “Gas Settlement Date”); provided, however,
that such amounts shall not be considered past due if such amounts are paid to
Party A on or before the 10th day of the third month following the month of
delivery or accrual, as applicable (each such date, a “Gas Due Date”).

 

(b)                                 Payments for Storage Gas.  Party B shall pay Party A for Storage Gas and
all related charges on the Gas Settlement Date of the month following the month
of delivery of such Storage Gas to Party B’s customers; provided, however,
that such amounts (other than amounts for Initial Storage Gas, which shall be
netted pursuant to Part 8(b)(iii)) shall not be considered past due if
such amounts are paid to Party A on or before the 10th day of the third month
following the month of delivery to Party B’s customers (each such date, a “Storage
Gas Due Date”).  Financing Fees shall
accrue on the purchase price for Storage Gas and any related charges from (and
excluding) the Gas Settlement Date in the month following the date such Storage
Gas is delivered to the relevant LDC for credit to the relevant storage account
(the “Storage Financing Commencement Date”) to the date such purchase
price is paid.  All Financing Fees with
respect to Storage Gas and related charges shall be due and payable on the 10th
day of each month, commencing with the first month to occur after the Storage
Financing Commencement Date.  Any Storage
Gas that has not been delivered to an LDC for delivery to Party B’s customers
on or prior to the Termination Date shall be required to be purchased by Party
B (a “Required Purchase”) on the Termination Date (the “Required
Purchase Date”).  The contract price
for Gas to be sold to Party B under a Required Purchase shall be the product of
(i) the average Contract Price per MMBtu of the relevant Storage Gas
weighted by volume and determined on a “last in last out” basis multiplied by (ii) the
outstanding quantity (in MMBtus) of Storage Gas.  Payment for a Required Purchase shall not enjoy
extended payment terms.  Accordingly,
amounts due and unpaid on the Required Purchase Date shall be immediately
overdue if not paid on the Required Purchase Date and shall accrue interest at
the Default Rate.

 

(c)                                  Swap Payments.  Promptly after the end of each Calculation
Period for each outstanding Gas Swap, Party A shall deliver to Party B invoices
in respect of Gas Swap settlement payments that are due with respect to such
Transactions.  Gas Swap settlement payments
shall be due on the fifth Business Day after the end of each relevant
Calculation Period (the “Gas Swap Settlement Date”); provided, however,
that Gas Swap settlement payments due from Party B shall not be deemed past due
so long as such payments are made by the Gas Due Date that occurs in the third
month following the end of the applicable Calculation Period.

 

32

 

(d)                                 Option Payments.  Unless otherwise required by Party A, the
premium payment for Option Transactions will be due on the next Gas Settlement
Date after the Option Transaction is entered into; provided, however,
that any such premium payment shall not include the Gas Adder or other fees and
shall not be deemed past due so long as such payment is made by the Gas Due
Date that applies to such Gas Settlement Date. 
Settlement payments for exercised Option Transactions shall be subject
to the payment terms applicable to the underlying transaction.  For the avoidance of doubt, the Contract
Price for Gas delivered pursuant to the exercise of any physically settled
Option Transactions and Option Transactions on Gas Swaps will include the
relevant Gas Adder.

 

(e)                                  Financing Fees.  Party B shall pay Financing Fees with respect
to all Outstanding Amounts.  Financing
Fees shall accrue on each Outstanding Amount from and excluding the Settlement
Date or other date on which such Outstanding Amount was originally due for
payment and through and including the date such amount is paid; provided,
however, that, with respect to the amounts due for Storage Gas,
Financing Fees shall accrue in accordance with Part 9(b).  Financing Fees shall be payable monthly in
arrears on the 10th day of each month (the “Financing Fee Settlement Date”);
provided, however, that Financing Fees shall not be deemed past due so long as
such payments are made by the Gas Due Date that occurs in the third month
following the applicable Financing Fee Settlement Date.

 

(f)                                    Credit Support Fees.  With respect to any outstanding Credit
Support Amount, Party B shall pay to Party A a Credit Support Fee.  The Credit Support Fee shall be calculated
daily and shall be paid monthly in arrears on each Gas Settlement Date; provided,
however, that the Credit Support Fee shall not be deemed past due so
long as payment is made on or prior to the next occurring Gas Due Date.

 

Part 10.                    Third Party Close-Outs and Novations; Financing

 

(a)                                  SocGen Transactions.

 

(i)                                     On the Closing Date, Party B shall cause SocGen to novate
SocGen’s positions under the outstanding Hedging Transactions set forth on Exhibit 10(a)(i) to
Party A (the “SG Novated Transactions”). Concurrently with the novation
of the SG Novated Transactions, Party A and SocGen shall enter into
back-to-back offsetting Hedging Transactions having the same notional
quantities, fixed and floating prices and remaining tenors with respect to each
SG Novated Transaction and otherwise on terms satisfactory to Party A in its
sole discretion (each such back-to-back hedge, a “SG Sleeve Transaction”).  If SocGen requires a payment in exchange for,
or as a condition to, executing any novation, Party B shall make such payment
to SocGen (such payments, the “SG Novation Payments”).

 

(ii)                                  On the Closing Date, Party A shall inform Party B of the
aggregate mark-to-market exposure that Party A has assumed in connection with
the SG Novated Transactions (the “SG Notional Amount”).  In addition to any other payments required to
be made by Party B in connection therewith, Party B shall pay to Party A, from
and including the Closing Date to and excluding the latest settlement date
scheduled to occur with respect to the SG Novated Transactions, a monthly fee
(the “SG Exposure Fee”) on the SG Notional Amount.  The SG Exposure Fee for each month and the
formula used to calculate each such monthly amount shall be set forth on Exhibit 10(a)(ii).
The SG Exposure Fee shall be payable monthly in arrears, on the 10th day of
each month (each, an “Exposure Fee Due Date”); provided, however,
that each such payment shall not be considered past due if such payment is paid
to Party A on or before the 10th day of the third month following the
applicable Exposure Fee Due Date.

 

(iii)                               The parties acknowledge and agree that, in respect of the SG
Novated Transactions, (A) the fee paid to Party A pursuant to clause (v) of
this Part 10(a) shall be in lieu of any Gas Adder and Sleeve Adder
that otherwise would have applied to such Transactions, and (B) the
aggregate notional amount of the SG Novated Transactions will be counted toward
the Minimum Gas Quantity for the initial Contract Year.

 

33

 

(iv)                              Party B agrees that, to secure its obligations under the SG
Novated Transactions, it shall deliver to Party A on the Closing Date cash in
an amount equal to that portion of the SG Notional Amount that Party A
attributes to the mark-to-market exposure for calculation periods under the SG
Novated Transactions that commence more than one calendar year from the Closing
Date (each, a “SG Future Calculation Period”).  All such cash shall be held by Party A in the
Swap Note Sub Account; provided, however, that, on each Gas Swap
Settlement Date following October 31, 2009 and as long as no Default or
Potential Termination Event has occurred and is continuing with respect to
Party B, Party A shall transfer from the Swap Note Sub Account to the Party A
Sub Account an amount equal to the mark-to-market exposure that Party A, in
accordance with the preceding sentence, attributed to the SG Future Calculation
Period occurring 11 months following such Gas Swap Settlement.

 

(v)                                 On the Closing Date, and in consideration for Party A
entering into the SG Novated Transactions and the SG Sleeve Transactions, Party
B shall pay to Party A a fee in an amount equal to  $600,000.

 

(b)                                 Third Party Transactions.

 

(i)                                     Within 30 days of the Closing Date, Party B shall either (A) terminate
and liquidate or (B) novate to Party A, as the case may be, all of the
outstanding Hedging Transactions with third parties that are listed on Exhibit 10(b)(i).  With respect to such transactions on Exhibit 10(b)(i) that
Party B elects to terminate and liquidate (such transactions, the “Third
Party Transactions”), such terminations and liquidations may result in
termination payments to be made by Party B to one or more third-parties at the
relevant time of such terminations and liquidations in amounts to be negotiated
between each such third party and Party A (such payments, the “Third Party
Liquidation Payments”).

 

(ii)                                  Concurrently with the termination and liquidation of each
Third Party Transaction, Party A shall enter into a Hedging Transaction with
Party B that corresponds with such terminated Third Party Transaction (each
such corresponding transaction, a “Corresponding Third Party Transaction”)
having the same notional quantity, floating price and remaining tenor; provided,
however, that the fixed price applicable to each such Hedging
Transaction shall be the fixed price used to calculate the Third Party
Liquidation Payment for the corresponding terminated Third Party Transaction.

 

(iii)                               With respect to such transactions on Exhibit 10(b)(i) that
Party B elects to novate to Party A (the “Third Party Novation Transactions”),  concurrently with the novation of such
transactions, Party A and each relevant third party shall enter into
back-to-back offsetting Hedging Transactions having the same notional
quantities, floating prices and remaining tenors with respect to each Third
Party Novation Transaction and otherwise on terms satisfactory to Party A in
its sole discretion.  If a third party
requires a payment in exchange for, or as a condition to, executing any
novation, Party B shall make such payment to the relevant third party (such
payments, the “Third Party Novation Payments”).

 

(iv)                              On the Closing Date, Party A shall inform Party B of the
then-current aggregate mark-to-market exposure associated with each transaction
listed on Exhibit 10(b)(i) (each, a “Third Party Notional Amount”).  In addition to any other payments required to
be made by Party B in connection herewith, Party B shall pay to Party A, from and
including the Closing Date, to and excluding the latest settlement date
scheduled to occur with respect to each such transaction, a monthly fee (the “Third
Party Exposure Fees”) on the relevant Third Party Notional Amount
associated with each such transaction; provided, however, that, once a transaction listed on
Exhibit 10(b)(i) becomes a Third Party Transaction (i.e., is terminated and liquidated), Third Party Exposure
Fees shall cease to accrue on the Third Party Notional Amount attributable to
such transaction.  The formula used to
calculate all Third Party Exposure Fees shall be set forth on Exhibit 10(b)(iv).  All Third Party Exposure Fees shall be
payable monthly in arrears on each Exposure Fee Due Date; provided, however,
that each such payment shall not be considered past due if such payment is paid
to Party A on or before the 10th day of the third month following the
applicable Exposure Fee Due Date.

 

34

 

(v)                                 On and subject to the terms and conditions of this Agreement
and to enable Party B to pay any Third Party Liquidation Payments, any SG
Novation Payments and any Third Party Novation Payments, Party A shall make one
or more loans to Party B (each such loan, a “Loan”) on and after the
Closing Date and in amounts equal to any SG Novation Payments, Third Party
Novation Payments and/or Third Party Liquidation Payments; provided,
that, the commitment of Party A to make any such Loans shall expire
on the 30th day following the Closing Date.

 

(vi)                              Party B agrees that, to secure its obligations and potential
obligations under the Third Party Novated Transactions and under the Loans
relating to any Third Party Liquidation Payments, it shall deliver to Party A
on the Closing Date cash in an amount equal to that portion of the Third Party
Notional Amount that Party A attributes to the mark-to-market exposure for
calculation periods under the transactions listed on Exhibit 10(b)(i) that
commence more than one calendar year from the Closing Date (each, a “Third Party
Future Calculation Period”).  All
such cash shall be held by Party A in the Swap Note Sub Account; provided,
however, that, on each Gas Swap Settlement Date following October 31,
2009 and as long as no Default or Potential Termination Event has occurred and
is continuing with respect to Party B, Party A shall transfer from the Swap
Note Sub Account to the Party A Sub Account an amount equal to that portion of
the Third Party Notional Amount of each such transaction attributed to the
Third Party Future Calculation Period occurring eleven months following such
Gas Swap Settlement Date.

 

(vii)                           If Party A and Party B do not agree on a flat fee to be paid
by Party B to Party A for entering into the Corresponding Third Party
Transactions and the Third Party Novation Transactions, Party B shall pay to
Party A the applicable Gas Adder in respect of the notional amounts relating to
each such Corresponding Third Party Transaction and each such Third Party
Novation Transaction.  The parties
further agree that the aggregate notional amounts of the Corresponding Third
Party Transactions and the Third Party Novation Transactions shall be counted
toward the Minimum Gas Quantity for the initial Contract Year.

 

(c)                                  Loan Accounting.

 

(i)                                     Party A shall record in its records the date and amount of
each of the Loans and each repayment thereof. 
The aggregate unpaid principal amount so recorded shall be rebuttably
presumptive evidence of the principal amount of the Loans owing and unpaid.  The failure to so record any such amount or
any error in so recording any such amount shall not, however, limit or
otherwise affect the obligations of Party B hereunder or under any Promissory
Note to repay the principal amount of the Loans hereunder, together with all
interest accruing thereon.

 

(ii)                                  At the request of Party A, the Loans shall be evidenced by
Promissory Notes, substantially in the form of Exhibit 10(c)(ii), with
appropriate insertions, payable to the order of Party A in a face principal
amount equal to the principal amount of the applicable Loan.

 

(d)                                 Interest.

 

(i)                                     Party B promises to pay interest on the unpaid principal
amount of each Loan for the period commencing on the date of such Loan until
such Loan is paid in full at the applicable rate per annum set forth on Exhibit 10(d)(i) hereto
with respect to such Loan; provided, that (A) at any time an Event
of Default exists, the applicable rate of interest corresponding to the Loan
shall be the Default Rate and (B) any such increase may thereafter be
rescinded by Party A.  In no event shall
charges constituting interest payable by Party B to Party A exceed the maximum
amount or the rate permitted under any Applicable Law, and if any such part or
provision of this Agreement is in contravention of any such Applicable Law,
such part or provision shall be deemed amended to conform thereto.  Amounts payable as the SG Exposure Fee and
Third Party Exposure Fees shall, for the purposes of this clause (i), be
considered interest payable on the SG Notional Amount and the Third Party
Notional Amount, respectively. 
Accordingly, the proviso set forth above shall apply, and shall be
calculated on the SG Notional Amount and the Third Party Notional Amount.

 

35

 

(ii)                                  Accrued interest on each Loan shall be payable in arrears on
the 10th day of each month during the term of this Agreement; provided,
however, that each such payment shall not be considered past due if such
payment is paid to Party A on or before the Gas Due Date that relates to the Gas
Settlement Date that occurs during the month such payment was originally
due.  After maturity and at any time an
Event of Default exists, all accrued interest on all Loans shall be payable in
cash and on demand at the rates specified in Part 10(d)(i).

 

(e)                                  Loan Prepayments.  Party B may not make any prepayment on any
Loan hereunder.

 

(f)                                    Loan Repayments.  The Loans shall be paid at the times and in
the amounts set forth on Exhibit 10(d)(i) attached hereto.  Notwithstanding the foregoing, the
outstanding principal balance of the Loans shall be paid in full on their
respective Maturity Dates; provided, however, that each such payment shall not
be considered past due if such payment is paid to Party A on or before the Gas
Due Date that relates to the Gas Settlement Date that occurs during the month
such payment was originally due.

 

(g)                                 Manner of Funding; Alternate Funding Offices.  Notwithstanding any
provision of this Agreement to the contrary, Party A shall be entitled to fund
and maintain its funding of all or any part of the Loans at its sole
discretion.  Party A may, if it so
elects, fulfill its commitment to make any Loan by causing any Affiliate of
Party A to make such Loan; provided, that in such event for the purposes
of this Agreement such Loan shall be deemed to have been made by Party A and
the obligation of Party B to repay such Loan shall nevertheless be to Party A
and shall be deemed held by it, to the extent of such Loan, for the account of
such Affiliate.

 

(h)                                 Loans Generally.  The parties agree that all Loans by Party A
to Party B hereunder shall be deemed Transactions entered into under this
Agreement.

 

(i)                                     Security Interests and Collateral.  Simultaneously with
the novation or liquidation of transactions under Part 10(a) or Part 10(b),
Party B shall cause SocGen or the applicable third party to such transaction to
(A) assign to Party A any security interest held by SocGen or such third
party (in any capacity) in any assets owned by Party B or any Specified Entity
of Party B, including any transactions or agreements between Party B and any
Customer of Party B; and (B) transfer any existing collateral securing
such transactions held by SocGen or such third party (to the extent such
collateral was not liquidated in connection with the close-out and liquidation
of such transactions).

 

Part 11.                    Collateral Accounts; Payments

 

(a)                                  General.  Party B as to itself as set forth below, each
Specified Entity of Party B and Party B in respect of each of its Specified
Entities, agrees with Party A that, until the Discharge of ISDA Obligations,
Party B shall establish and maintain only the accounts described in this Part 11
and shall release funds or request release of funds from such accounts only as
permitted by this Part 11 (except for the Escrow Account, which shall not
be subject to the limitations set forth herein).

 

(b)                                 Lockbox Accounts.

 

(i)                                     Party B represents and warrants that the following bank
accounts are the sole bank accounts utilized by Party B to receive funds from
LDCs and other payers (each a “Lockbox Account”):

 

(A)                              Account Number:
2000008695512 in the name of : Party B; Institution: Wachovia

 

(B)                                Account Number:
2000001122095 in the name of : Party B; Institution: Wachovia

 

(C)                                Account Number:
20000018007530 in the name of : Party B; Institution: Wachovia

 

(D)                               Account Number:
20000030372793 in the name of : Party B; Institution: Wachovia

 

36

 

(E)                                 Account Number:
2000011662367 in the name of : Party B; Institution: Wachovia

 

(F)                                 Account Number:
200003894582 in the name of : Party B; Institution: Wachovia

 

(G)                                Account Number:
0189-2398262 in the name of : Party B; Institution: Huntington

 

Each
Lockbox Account shall be in the name of Party B and shall each, at all times,
be under the control of Party A.  In
order to give effect to the foregoing, Party A, Party B and each Institution
set forth above shall enter into an Account Control Agreement substantially in
the form of Exhibit 11(b)(i)(A) and Exhibit 11(b)(ii), as the
case may be, on the Closing Date.

 

(ii)                                  Party B and each Specified Entity of Party B shall cause all
payments due to it of any nature to be paid directly into one or more Lockbox
Accounts.  If Party B or any Specified
Entity of Party B receives any funds directly in contravention of the preceding
sentence, it shall immediately deposit such funds in a Lockbox Account.

 

(iii)                               As of the close of business on each Business Day, all funds
in each Lockbox Account shall be transferred in accordance with the applicable
Account Control Agreement to the Party A Sub Account.

 

(c)                                  Operating Account.

 

(i)                                     Party B shall identify to Party A or establish the Operating
Account on or before the Closing Date at Wachovia.  The Operating Account shall be in the name of
Party B and shall, at all times, be under the control of Party A.  In order to give effect to the foregoing,
Party A, Party B and Wachovia shall enter into the Wachovia Control Agreement
substantially in the form of Exhibit  11(b)(i)(B) on the Closing
Date.

 

(ii)                                  Only amounts transferred from the Party A Sub Account may be
deposited in the Operating Account.

 

(iii)                               Funds in the Operating Account shall be released solely for
the following purposes and in the following order of priority:

 

(A)                              first, for the payment of
Taxes, provided that, no less than two Business Days prior to the proposed
release of funds, Party A shall have received a certificate of a Responsible
Officer stating the amount of such Taxes and the jurisdiction to which such
Taxes are owed; and

 

(B)                                second, for working capital
expenses (other than amounts payable to Party A) required for the next week,
provided that, not less than two Business Days prior to the proposed release of
funds, Party A shall have received a certificate of a Responsible Officer,
acceptable to Party A in its sole discretion, stating the amount to be made
available to Party B and that such amount shall be used solely to pay working
capital expenses contemplated by the then current Budget (as amended from time
to time in accordance with Part 12(a)(xiii)) and that, after giving effect
to the expenditure of the funds released, Party B’s forecasted aggregate
expenditures for the then current month and any subsequent month shall not
exceed 110% of the forecasted aggregate expenditures for the then current month
and any subsequent month covered by the then current Budget determined on a
month to month basis.

 

(iv)                              Not later than the fifth Business Day of each month, a
Responsible Officer shall deliver a certificate to Party A (which certificate
shall be acceptable to Party A in its sole discretion) stating the balance of
the Operating Account as of the first Business Day and as of the last Business
Day 

 

37

 

of the immediately preceding
month and confirming that all payments from the Operating Account during such
month were in accordance with the then current Budget.

 

(d)                                 Party A Sub Account.  The Party A Sub Account shall be in the name
of Party A.  Funds in the Party A Sub
Account shall be released in the following order of priority:

 

(A)                              first, to the
payment of all amounts payable under this Agreement on account of Party A’s
fees and any legal fees, costs, and expenses (including Imbalance Charges) or
other liabilities of any kind incurred by Party A in connection with this Agreement
(including the Reimbursement Obligation);

 

(B)                                second, to any
amount payable to Party A that is at such time overdue and for which Party B is
incurring a default rate of interest (including all payments for which the Due
Date has occurred without payment in full);

 

(C)                                third, to the
payment of any amount due (whether for principal or interest) on the Loans and
any SG Exposure Fee and Third Party Exposure Fees, in each case, where the
related Gas Swap Settlement Date has occurred;

 

(D)                               fourth, to the
payment of any other amount due where the related Settlement Date has occurred;

 

(E)                                 fifth, to fund
the dividend or distribution of amounts necessary to make intercompany loans to
MX Electric or MX Canada permitted hereunder;

 

(F)                                 sixth, to the
Operating Account, in the amounts determined in accordance with clause (c)(iii) of
this Part 11;

 

(G)                                seventh, to pay
any amount due and payable pursuant to a Required Purchase and to pay any other
amount required for the Discharge of ISDA Obligations;

 

(H)                               eighth, if
funds are to be used for any other purpose, such funds shall be released only
upon the approval of Party A; and

 

(I)                                    ninth, after
the Discharge of ISDA Obligations, to Party B.

 

Party
A shall apply any and all amounts due to Party A from funds in the Party A Sub
Account from time to time and in the order of priorities set forth above.

 

(e)                                  Swap Note Sub Account.  The Swap Note Sub Account shall be in the
name of Party A.  Funds in the Swap Note
Sub Account (other than any funds deposited
pursuant to Part 13(a)(x)(F)) shall be transferred to the Party A
Sub Account as provided in Part 10(a)(iv) and Part 10(b)(vi).  Any
funds in the Swap Note Sub Account deposited pursuant to Part 13(a)(x)(F) shall
be released in the following order of priority:

 

first, to pay any
amount required for the Discharge of ISDA Obligations that has not been
satisfied in full from funds deposited in the Party A Sub Account and released
in accordance with clauses (d)(A) through (G), inclusive; and

 

second, after the
Discharge of ISDA Obligations, to Party B.

 

Party A shall apply any and
all amounts due Party A from funds in the Swap Note Sub Account from time to
time in the accordance with the above.

 

(f)                                    Replacement Custodial Account.  If at any time The Royal Bank of Scotland plc’s
Credit Rating falls below BBB- from S&P or Baa3  from Moody’s, then Party B may require that
Party A transfer the Party A 

 

38

 

Sub Account and the Swap Note
Sub Account to a Qualified Custodian pursuant to a custodial agreement in form
and substance acceptable to Party A.  For
the avoidance of doubt, following any such transfer of the Party A Sub Account
and the Swap Note Sub Account, the terms of such custodial agreement governing
the disbursement of funds from such transferred accounts shall be consistent
with Part 11(d) and Part 11(e), respectively.

 

(g)                                 Other Accounts.

 

(i)                                     Party B and each Specified Entity of Party B (other than MX
Electric (as permitted pursuant to the terms of the other Master ISDAs)) shall
have no accounts other than the Lockbox Accounts, the Operating Account, the
accounts described in this Part 11(g) and the Escrow Account, and
shall not release funds or request release of funds from such accounts other
than as permitted by this Part 11 (except for the Escrow Account, which
shall not be subject to the limitations set forth herein).

 

(ii)                                  Party B maintains a payroll account at Citibank, NY (Account
Number: 22416285).  Within 30 days of the
Closing Date, Party B, Party A and Citibank, NY shall have entered into a
control agreement, in form and substance satisfactory to Party A, permitting
Party A to direct the disposition of such account upon notice to Citibank, NY.

 

(iii)                               MX Canada maintains an account at Royal Bank of Canada,
Toronto (Account Number 1329788).  Within
30 days of the Closing Date, Party B, MX Canada and Royal Bank of Canada,
Toronto shall have entered into an agreement, in form and substance
satisfactory to Party A, permitting Party A to direct the disposition of such account
upon notice to Royal Bank of Canada, Toronto.

 

(iv)                              MX Holdings maintains brokerage accounts at Morgan Stanley,
New York (Account Number 796011175002) and Deutsche Bank Securities, Inc.,
New York (Account Number: 61619603).  The
only assets in such accounts are Old Notes held by MX Holdings that shall be
canceled on the Closing Date.  MX
Holdings shall not hold any other assets in such accounts.  Promptly following the Closing Date, such
accounts will be closed.

 

(v)                                 With respect to the account of Bill Matrix, Inc. (“Bill
Matrix”) at The Bancorp Bank, Delaware (Account Number 2421002170)
maintained for the benefit of Party B, Party B will (A) deliver to Bill
Matrix, on or before the Closing Date, a payment direction letter acceptable to
Party A instructing Bill Matrix to continue making all payments directly to a
Lockbox Account, (B) deliver to Bill Matrix, as soon as practicable after
the Closing Date, but in no event more than 30 days thereafter, a payment
direction letter acceptable to Party A giving Bill Matrix irrevocable
instructions to continue making payments directly to a Lockbox Account and
directing Bill Matrix to only accept changes to such payment instructions from
Party A (and will use commercially reasonable efforts to obtain Bill Matrix’s
signed agreement to obey such instructions) and (C) use commercially
reasonable efforts to enter into arrangements satisfactory to Party A with
respect to such account that will have the effect of protecting Party B’s
assets in such account from credit exposure to Bill Matrix, which arrangements
may include an agreement among Party B, Bill Matrix and The Bancorp Bank,
Delaware granting Party B control over such account and converting such account
to a segregated account.

 

(vi)                              Party B maintains an institutional money market account at
Evergreen Investments (Account Number 400007559).  Within 30 days of the Closing Date, Party B,
Party A and Evergreen Investments shall have entered into a control agreement, in form and substance satisfactory to
Party A, permitting Party A to direct the disposition of such account upon
notice to Evergreen Investments.

 

(h)                                 Documentation.  Party B shall provide such documents in
respect of the accounts described in this Part 11 (other than the Escrow
Account) and their establishment and maintenance as Party A shall from time to
time reasonably request.

 

39

 

(i)                                     Certificates.  Each certificate to be delivered by a
Responsible Officer pursuant to this Part 11 shall include a statement
that no Default or Potential Termination Event shall have occurred and is
continuing both before and after giving effect to the release of funds
contemplated by such certificate.  Funds
shall not be released unless such statement is included in the applicable
certificate.

 

(j)                                     Investments.  Amounts in the Operating Account may be
invested by Party B in Permitted Investments described in clauses (i) through
(iii) of the definition thereof. 
Any losses attributable to the investment of amounts in such accounts
shall not limit or modify the obligation of Party B to make any payments
required to be made to Party A under this Agreement.

 

Part 12.                    Affirmative Covenants

 

(a)                                  Each Specified Entity of Party B, Party B in respect of each
of its Specified Entities and Party B with respect to itself agrees with Party
A that, at all times prior to the Discharge of ISDA Obligations:

 

(i)                                  Existence; Conduct of Business.  Such party shall
preserve and maintain (A) its legal existence as a corporation, limited
liability company, partnership or other similar entity, as applicable, in good
standing under the laws of the jurisdiction of organization, (B) its
qualification to do business in each other jurisdiction where such
qualification is required, except to the extent that failure to be so qualified
could not reasonably be expected to result in a Material Adverse Effect and (C) all
of its licenses, rights, privileges and franchises necessary for the
maintenance of its existence and its qualification to do business, except to
the extent that could not reasonably be expected to result in a Material
Adverse Effect.

 

(ii)                               Payment of Obligations and Tax Filings.  Such party shall:

 

(A)                              file all Tax returns that
are required to be filed and pay all of its obligations, including liabilities
for Taxes, except where (i) (x) the validity or amount of such
payment is being contested in good faith by appropriate proceedings and (y) such
party has accrued for or set aside on its books adequate reserves with respect
to such payment in accordance with GAAP and (ii) the failure to make
payment pending such contest could not reasonably be expected to result in a
Material Adverse Effect.

 

(B)                                deliver to Party A all tax
forms and other documents necessary to permit Party A to both receive payment
made by such party, and confirm that all payments made by such party shall be
received free of withholding tax or deduction or stamp, registration or similar
tax.

 

(iii)                            Insurance.  Such party shall maintain the types of
insurance set forth on Exhibit 12(a)(iii) and, upon request by Party
A, such other insurance as is customary for entities in the same industry, and
with reputable and financially sound carriers. 
The policies for each type of insurance will be issued by insurers, and
have such terms and conditions, as are and remain satisfactory to Party A.  Such party shall cause all such insurance to
name Party A as an additional insured and/or loss payee, as appropriate, and to
provide that no cancellation, change in amount or change in coverage shall be
effective without 30 days’ prior written notice thereof to Party A.

 

(iv)                           Books and Records; Inspection Rights; Accounting and Accounting
Matters.

 

(A)                              Such party will keep proper
books and records in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities in
accordance with GAAP.  Such party will
permit Party A or any representative thereof, upon reasonable prior notice, to
visit and inspect its properties, to examine and make extracts from its books
and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as often
as reasonably requested, provided that in the case of any visit by Party
A other than when 

 

40

 

Default or Potential Termination Event has occurred and is continuing,
Party A shall be required to provide not less than three Business Days notice
of its intent to inspect and such inspections shall occur during normal
business hours.

 

(B)                                Such party shall authorize
the Auditor (whose fees and expenses shall be for the account such party) to
communicate with the officers and designated representatives of Party A from
time to time upon reasonable prior notice to such party, as applicable.

 

(v)                              Notices of Material Events; Environmental Matters.  Such party will
furnish written notice of each of the following events, occurrence and
conditions to Party A:

 

(A)                              the occurrence of any
Default or Potential Termination Event, promptly following the occurrence
thereof;

 

(B)                                (1) the filing or
commencement of any action, suit or proceeding or the assertion of any
Environmental Claim by or before any arbitrator or other Governmental Authority
against or affecting such party, and the occurrence of any material adverse
event in the course of any such action, suit or proceeding, or (2) any other
circumstance, act, or condition with respect to the adoption, material
amendment, interpretation, or repeal of any Applicable Law relevant in any
material respect to the transactions contemplated by this Agreement or the
Impairment of any Governmental Approval or notice (whether formal or informal,
written or oral) or the failure of such party to comply with the terms and
conditions of any Governmental Approval related to the transactions
contemplated by this Agreement, promptly following the occurrence thereof, in
each case, except to the extent that could not reasonably be expected to result
in a Material Adverse Effect; and

 

(C)                                as promptly as possible and
in any event within three Business Days after a Responsible Officer of such
party has knowledge of any development or circumstance that results in, or
could reasonably be expected to result in, a Material Adverse Effect, an event
of force majeure or action by a Governmental Authority adverse to such party.

 

Each notice delivered under
this Part 12(a)(v) shall be accompanied by a statement of a
Responsible Officer of such party setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.  In addition, such
party shall, promptly upon request therefor, furnish such other environmental
reports as Party A may reasonably request.

 

(vi)                           Financial Statements and Related Information.  Party B will
furnish to Party A (with one hard copy and, if reasonably available, a copy in
electronic format), in respect of itself, MX Holdings and MX Electric (each a “Reporting
Company”) (on a consolidated basis):

 

(A)                              (1) with respect to MX
Holdings, audited annual financial statements within 90 days after the end of
each fiscal year and setting forth, in comparative form, the corresponding
figures for the preceding fiscal year, accompanied by (x) an opinion
thereon of the Auditor (without a “going concern” or like qualification or
exception as to the scope of such audit) and (y) a certificate of a
Responsible Officer of such Reporting Company, in each case, to the effect that
said financial statements present fairly in all material respects the financial
position and results of operations as at the end of, and for, such fiscal year
in accordance with GAAP, and (2) with respect to itself and MX Electric,
unaudited annual financial statements in a form and format agreed to by the
parties, but in any event including gross revenues, gross profits, margin
contributions (including allocation of sales and marketing expense) and a
balance sheet presented in a manner consistent with prior practice, within 90
days after the end of each fiscal year and setting forth, in comparative form,
the corresponding figures for the preceding fiscal year, accompanied by a certificate
of a Responsible Officer of such Reporting Company to the effect that 

 

41

 

said financial statements present fairly in all material respects the
financial position and results of operations as at the end of, and for, such
fiscal year;

 

(B)                                (1) with respect to MX
Holdings, unaudited quarterly financial statements within 45 days after the end
of each of the first three fiscal quarters and within 60 days after the end of
the fourth fiscal quarter, for such period and for the period from the
beginning of the respective fiscal year to the end of such period, and the
related balance sheet as at the end of such period, setting forth in each case,
in comparative form, the corresponding figures for the corresponding period of
(or in the case of the balance sheet, as of the end of) the preceding fiscal
year, accompanied by a certificate of a Responsible Officer of such Reporting
Company, which certificate shall state that said financial statements present fairly
in all material respects the financial position and results of operations of
such Reporting Company in accordance with GAAP, as at the end of, and for, such
period (subject to normal year-end audit adjustments), said quarterly financial
statements for the fourth fiscal quarter to be accompanied by the unaudited
annual financial statements for the fiscal year without the notes thereto, and (2) with
respect to itself and MX Electric, unaudited quarterly financial statements in
a form and format agreed to by the parties, but in any event including gross
revenues, gross profits, margin contributions (including allocation of sales
and marketing expense), within 45 days after the end of each of the first three
fiscal quarters and within 60 days after the end of the fourth fiscal quarter,
for such period and for the period from the beginning of the respective fiscal
year to the end of such period, and the related balance sheet as at the end of
such period presented in a manner consistent with prior practice, setting forth
in each case, in comparative form, the corresponding figures for the
corresponding period of (or in the case of the balance sheet, as of the end of)
the preceding fiscal year, accompanied by a certificate of a Responsible
Officer of such Reporting Company, which certificate shall state that said
financial statements present fairly in all material respects the financial
position and results of operations of such Reporting Company, as at the end of,
and for, such period (subject to normal year-end audit adjustments);

 

(C)                                concurrently with any
delivery of financial statements under clause (A) or (B) of this Part 12(a)(vi),
a certificate of a Responsible Officer of each Reporting Company (1) certifying
as to whether a Default or Potential Termination Event has occurred and, if a
Default or Potential Termination Event has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto, (2) setting
forth in reasonable detail the calculation of Adjusted Consolidated Tangible
Net Worth as of the end of the immediately preceding fiscal quarter and (3) stating
whether any change in GAAP or in the application thereof has occurred since the
date of the audited financial statements of such Reporting Company for the immediately
prior fiscal year and, if any such change has occurred, specifying the effect
of such change on the financial statements accompanying such certificate;

 

(D)                               concurrently with the
delivery of the financial statements under clause (A) of this Part 12(a)(vi),
a discussion and analysis by the management of Party B of the business and
operations through the end of the fiscal year covered by such financial
statements, including a discussion and analysis with respect to (1) compliance
with Environmental Law, (2) a statement of all transactions in such period
between Party B and any of its Interested Persons or stockholders (other than
transactions between Party B or any of its Subsidiaries), including a
certification by a Responsible Officer of Party B that such transactions were
on ordinary commercial terms negotiated on an arm’s length basis and that each
such transaction was at least as favorable to such Party B as the terms
available from independent third parties, and (3) a comparison of the
results of operations of Party B for the relevant period to the operating
Budget for the same period, together with an explanation of any material
variation therefrom; and

 

42

 

(E)                                 as soon as available and in
any event within forty (40) days after the end of each month (including the
last month of Party B’s fiscal year), Party B will deliver the consolidated
balance sheet of Party B, as at the end of such month, and the related
consolidated statements of income, stockholders’ equity and cash flow for such
month and for the period from the beginning of the then current fiscal year of
Party B to the end of such month.

 

(vii)                        Miscellaneous Notices and Reports.  Party B will
furnish to Party A with respect to Party B and each Specified Entity of Party
B:

 

(A)                              promptly,
notice of any change in the Responsible Officers of Party B or any such
Specified Entity, including certified specimen signatures of any new officer so
appointed an, if requested by Party A, satisfactory evidence of the authority
of each such new officer;

 

(B)                                promptly after
Party B’s or any Specified Entity of Party B’s receipt thereof, a copy of any
management letter received by Party B or any such Specified Entity from the
Auditor in relation to its financial, accounting and other systems, management
or accounts;

 

(C)                                promptly after
Party B’s or any such Specified Entity’s receipt thereof, a summary including
all relevant information of any material notices and material documents or
information received by Party B or any such Specified Entity with respect to
any Material Contract (including any notice or other document relating to a
failure by Party B or any such Specified Entity to perform any of its covenants
or obligations under such Material Contract);

 

(D)                               not later than
the fifth Business Day following the end of each month, an updated monthly (i) accounts
receivable aging report for each month during the term of this Agreement (with
an estimate of associated taxes due), (ii) churn report, (iii) statement
of accrued unbilled accounts receivable, (iv) estimated amount of
imbalances with LDCs and Transporters, and (v) an information matrix for
each Designated Jurisdiction in which Party B or such Specified Entity is
marketing, which matrix will show the number of Customers, monthly throughput,
pricing structure, margin per unit per pricing structure and average sales;

 

(E)                                 upon Party A’s
request and in a manner and format determined by Party A in its sole
discretion, the individual Customer detail transaction history of charges and
payments to support the general ledger and aged receivables information
contained in any financial statements and reports furnished by Party B or any
such Specified Entity to Party A;

 

(F)                                 upon Party A’s
request, any information required to calculate the Collateral Coverage Ratio;

 

(G)                                upon Party A’s
request, any information required to calculate the weighted average tenor of
all of Party B’s and each such Specified Entity’s commodity obligations;

 

(H)                               not later than
the fifth Business Day following the end of each month, a monthly compliance
certificate in substantially the form of Exhibit 12(a)(vii)(H) hereto,
or as otherwise agreed by Party A and Party B;

 

(I)                                    not later than
the fifth Business Day following the end of each month, a monthly data file
download showing the name of each LDC that has delivered Gas to Party B or it’s
Customers and a list of Customers (if any) that are billed directly by or on
behalf of Party B; and

 

43

 

(J)                                   promptly
following any request therefor, such other information regarding the material
operations, business affairs and financial condition of Party B or any
Specified Entity of Party B as Party A may reasonably request.

 

(viii)                     Accounts Receivable.

 

(A)                              Party B shall
provide or cause to be provided written instructions to all ISOs and LDCs and
other payers of accounts receivable, which instructions may not be revoked
without the written consent of Party A, directing all such payers to cause any
and all amounts payable to Party B to be paid directly into a Lockbox Account.

 

(B)                                Party B shall
take any actions as may be reasonably requested by Party A in order to ensure
that Party A is satisfied with Party B’s accounts receivable and arrangements
with Customers and LDCs including payment directions.

 

(ix)                             Compliance with Laws.  Party B and each Specified Entity of Party B
shall comply with all Applicable Laws, including Environmental Laws, and shall
from time to time obtain and renew, and shall comply with, all Governmental
Approvals as shall now or hereafter be necessary for Party B and each Specified
Entity of Party B to comply with such Applicable Laws, except any such
Applicable Laws or Governmental Approvals, the failure to obtain, renew or
comply with, could not reasonably be expected to result in a Material Adverse
Effect.

 

(x)                                Maintenance of Lien.  Party B and each Specified Entity of Party B
shall take, or cause to be taken, all action required or desirable to maintain
and preserve the Liens created by the ISDA Security Documents and the priority
thereof.  Party B and each Specified
Entity of Party B shall from time to time execute or cause to be executed
further instruments (including financing statements, continuation statements
and similar statements with respect to any ISDA Security Document) reasonably
requested by Party A for such purposes. 
Party B and each Specified Entity of Party B shall promptly discharge,
at Party B’s and each such Specified Entity’s cost and expense, any Lien (other
than Permitted Liens) on the Collateral.

 

(xi)                             Hedging.  Party B and each Specified Entity of Party B
shall not enter into or maintain any Hedging Transactions, other than the
Hedging Transactions with Party A contemplated by the terms of the Master
ISDAs.

 

(xii)                          Exposures to LDCs, ISOs and Transporters.  If Party A has
notified Party B that Party B’s exposure to one or more LDC(s), ISO(s) or
Transporter(s) exceeds Party A’s then current individual or aggregate
exposure limit for such LDC(s), ISO(s) or Transporter(s) (as
determined by Party A from time to time in its sole discretion), Party B and
any such Specified Entity shall (A) within five (5) Business Days,
provide Party A with a written plan to reduce Party B’s credit exposure to such
entity to the extent required by Party A within nine months, (B) reduce or
mitigate Party B’s exposure to the relevant entity to the extent required by
Party A within nine months and (C) immediately cease any activity that
would have the effect of increasing (or potentially increasing) Party B’s
credit exposure to such entity.

 

(xiii)                       Budgets.

 

(A)                              On an annual
basis, but no later than 30 days prior to the end of each fiscal year, Party B
will deliver to Party A a reasonably detailed proposed budget for the following
fiscal year, which shall include projected consolidated statements of cash
flows and projected statements of income and expense on a monthly basis.  Within 30 days of receipt of the proposed
budget, Party A shall either approve the proposed budget, in which case the
proposed budget shall be the budget for the following fiscal year, or deliver
to Party B a statement setting forth objections to the proposed budget.  In the event that Party A objects to the
proposed budget, Party B shall, to the extent it accepts the objections, 

 

44

 

revise the proposed budget to the extent necessary
to satisfy the objections and, to the extent it does not accept the objections,
prepare a written statement of the reasons why it does not accept some or all
of the objections.  Party B shall deliver
to Party A, to the extent applicable, the revised proposed budget and the
written statement concerning the objections. 
Party B shall also make such further submissions relating to the
proposed budget to Party A as may be requested by Party A.  The revised budget shall become the budget
for the following fiscal year at such time as it is approved by Party A.  Pending such acceptance, the budget for the
following fiscal year shall be the budget that was applicable for the prior
fiscal year.

 

(B)                                On a monthly
basis, but not later than 10 days prior to the end of each month, Party B will
deliver to Party A an updated monthly budget for the next succeeding month,
accompanied by updated projected budgets for the immediately following two
months.  Each such budget shall (1) be
prepared in good faith and based on reasonable assumptions, (2) be
prepared on a basis consistent with the operating budget delivered for such
calendar year and the budget delivered in respect of the preceding month, and
shall reconcile any material differences from such budgets, (3) provide
for the timely payment of all obligations to Party A under this Agreement, (4) not
project any expenditures greater than projected cash flows, (5) provide
for the timely payment of all Taxes, including all federal, provincial and
local withholding taxes, all sales and use taxes and all gross receipts taxes
and (6) be satisfactory to Party A in its reasonable discretion as a
creditor of such Specified Entity.

 

(xiv)                      Matched Trading Book.  Except to
the extent set forth on Exhibit 12(a)(xiv) hereto, Party B shall maintain
a matched trading book such that at all times (1) each sale by Party B of
a quantity of Gas at a fixed forward price is hedged by a Gas Swap or Gas
Transaction maintained by Party B with Party A pursuant to this Agreement in
respect of an equal notional quantity of Gas (unless Party A determines that a
lower notional quantity is appropriate to take into account such factors as
Party A’s forecast of Party B’s Customer attrition/churn, storage supply, or
forecast modifications), with a lower fixed forward price and (with respect to
Gas Swaps) with a floating price index that reasonably hedges the market price
of Gas at the relevant Delivery Point of such sale, all as reasonably
satisfactory to Party A and (2) for any floating price purchase by Party B
of a quantity of Gas, there is a floating price sale of an equal quantity of
Gas by Party B at the same Delivery Point and with a higher floating sale price
based on the same pricing index used in the corresponding floating price
purchase.

 

(xv)                         Adjusted Consolidated Tangible Net Worth.  MX Holdings shall
at all times maintain an Adjusted Consolidated Tangible Net Worth of at least
$60,000,000 (calculated in accordance with GAAP).

 

(xvi)                      Access to Records
and Billing Systems.  Such party will
provide Party A with access (remote or otherwise) to such party’s records
and billing systems as part of ongoing review and audit procedures of Party
A.  Within six months of the Closing Date
(and from time to time, as requested by Party A), such party shall provide
Party A with copies of all of such party’s information technology
infrastructure systems (including, without limitation, billing systems)
required to realize the value of all customer contracts and required associated
licenses (at no cost to Party A and updated as necessary from time to
time) so that Party A can operate such party’s business in the event of a
foreclosure by Party A pursuant to the terms of this Agreement and the other
ISDA Documents.  As an alternative to the
foregoing, Party A may agree in writing to an arrangement where such party
provides Party A and its personnel with control of such party’s operations
through access to, and control of, such party’s disaster recovery facilities in
the event of a Default or Potential Termination Event hereunder or under the
other Master ISDAs.  Party A acknowledges
the confidential nature of such information technology infrastructure and in no
event shall Party A disclose to or share with any third parties any of such
information technology infrastructure without the express written consent of
Party B.

 

45

 

(xvii)                   Novation or Termination of Certain Transactions.  Party B and MX
Electric shall use commercially reasonable efforts to novate or terminate all
transactions underlying the Indebtedness permitted by clause (iii) of the
definition of “Permitted Indebtedness” set forth in Part 14 as promptly as
practicable, but in any event within 30 days of the Closing Date.

 

(xviii)                Reimbursement
Obligation.

 

(A)                              In the event (a) that
Party A or any other Person on behalf of Party A performs any obligation of
Party B to a LDC, Transporter or any other third party (it being understood
that nothing in this clause (a) shall be construed to require any such
performance by Party A) or (b) that any payment, disbursement or
performance under any Credit Support has been made to any LDC, Transporter or
any other third party, in either case (whether or not the obligations secured
thereby are now or hereafter existing), Party B shall, within one Business Day
of a written demand therefor made by Party A, (i) in the case of clause
(a), pay to Party A an amount, as reasonably calculated by Party A, equal to
the total amount it will cost Party A or such other Person on behalf of Party A
to perform such obligation; (ii) in the case of clause (b), pay to Party A
all amounts paid or disbursed under any Credit Support and (iii) pay to
Party A any other cost or expense of any nature reasonably incurred by Party A
(including any taxes and reasonable attorneys’ fees and expenses) in connection
with the foregoing (including any such taxes, costs and expenses incurred by
Party A to third parties that issue Credit Support) (collectively, the “Reimbursement
Obligation”).  Interest shall be
payable on the Reimbursement Obligation from the date of payment by Party A or
such other issuer of Credit Support to the beneficiary until payment by Party B
in full at the applicable rate which would be payable on any Outstanding
Amounts which were then overdue.  The
Reimbursement Obligation hereunder is unqualified, unconditional and absolute
and is irrespective of whether Party A is the issuer of Credit Support and, in
the case of clause (a), upon any such performance by Party A.

 

(B)                                In addition to,
and without in any way limiting the foregoing:

 

(1)                                  Party B’s
obligations under this clause (xviii) shall be absolute and unconditional under
any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which Party B
or any Specified Entity of Party B may have or have had against Party A, any
issuer of Credit Support, any beneficiary of a Credit Support or any other
Person.

 

(2)                                  Party B agrees
that Party A and any other issuer of Credit Support shall not be responsible
for, and the Reimbursement Obligation under this clause shall not be affected
by, among other things: (a) the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, (b) any dispute between or among Party B or
any Specified Entity of Party B and any beneficiary of any Credit Support or
any other party to which such Credit Support may be transferred, (c) any
claims whatsoever of Party B or any Specified Entity of Party B against any
beneficiary of such Credit Support or any transferee thereof, (d) any
change in the time, manner or place of payment of, or in any other term of, all
or any of the obligations of Party B or any Specified Entity of Party B in
respect of any Credit Support or any other amendment or waiver of or any
consent to departure from the terms of any Credit Support or any document
executed or delivered in connection with the issuance or payment thereof, (e) any
adverse change in the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Party B or any of the Specified
Entities of Party B (individually or taken as a whole), (f) any breach
hereof or of any other ISDA Document by any party thereto, (g) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing, (h) the fact that a potential event of default, 

 

46

 

event of default, potential termination event or termination event
(each, however defined) shall have occurred and be continuing, or (i) any
payment by Party A or any other issuer of Credit Support against presentation
of any document or certificate that does not strictly comply with the terms of
such Credit Support, or any payment made by Party A or any other issuer of
Credit Support under any Credit Support to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of any Credit 
Support, including arising in connection with any proceeding of the type
described in Section 5(a)(vii).

 

(3)                                  No issuer of
Credit Support shall be liable for any error, omission, interruption or delay
in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any such Credit Support, except that Party A
shall be liable for errors and omissions directly caused primarily by its own
(and not any other Person’s) gross negligence or willful misconduct.

 

(C)                                In addition to,
and without in any way limiting the foregoing:

 

(1)                                  The role of any
issuer of Credit Support in connection with any draft presented for payment
under any Credit Support which is a letter of credit issued to secure Party B’s
obligations to third parties shall, in addition to any payment obligation
thereunder, be limited to determining that the documents (including each draft)
delivered under such letter of credit in connection with such presentment are
in conformity with such letter of credit. 
In addition, Party B agrees that, in paying any drawing or demand for
payment under any Credit Support, neither Party A nor any other issuer of any
Credit Support shall not have any responsibility to inquire as to the validity
or accuracy of any document presented in connection with such drawing or demand
for payment or the authority of the Person executing or delivering the same.

 

(2)                                  No issuer of
Credit Support nor any of the respective correspondents, participants or
assignees of such issuer shall be liable for the due execution, effectiveness,
validity or enforceability of any document delivered in connection with the issuance or payment of such Credit
Support.

 

(3)                                  Party B hereby
assumes all risks of the acts or omissions of any beneficiary or transferee
with respect to its use of any Credit Support; provided, however, that this assumption is not intended
to, and shall not, preclude Party B from pursuing such rights and remedies as
it may have against such beneficiary or transferee at law or under any other
agreement.  No issuer of Credit Support,
nor any of the respective correspondents, participants or assignees of such
issuer shall be liable or responsible for any of the matters described in the
preceding clause (xviii)(B).  In
furtherance and not in limitation of the foregoing: (a) any issuer of
Credit Support may accept documents that appear on their face to be in order
and substantially comply with the terms of the Credit Support, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (b) no issuer of Credit Support shall be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Credit Support instrument or
the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason.  Without duplication of any obligation of
Party B hereunder, in addition to amounts payable as provided herein, Party B
hereby agrees to protect, indemnify, pay and hold harmless Party A from and
against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including all reasonably incurred fees, expenses and
disbursements of 

 

47

 

any law firm or other external counsel) which Party A may incur or
be subject to as a consequence, direct or indirect, of (i) the issuance of
any Credit Support by it or any other Person, or (ii) the failure to honor
a drawing or demand for payment under any Credit Support as a result of any act
of any Governmental Authority.

 

(xix)                        Interest Rate Swaps.

 

(A)                              Within 30 days following the
Closing Date, Party B shall cause MX Holdings to cause its counterparties under
those certain interest rate swaps set forth on Exhibit 12(a)(xix) (the “RBS
Novated Transactions”) to novate their positions under such transactions to
The Royal Bank of Scotland plc. 
Concurrently with each such novation, The Royal Bank of Scotland plc and
each such third party shall enter into back-to-back offsetting interest rate
swaps having the same notional quantities, fixed and floating prices, and
remain tenors with respect to each RBS Novated Transaction and otherwise on
terms satisfactory to The Royal Bank of Scotland plc in its sole discretion
(each such back-to-back hedge, an “RBS Sleeve Transaction”).  The parties agree that, prior to the novation
of the RBS Novated Transactions pursuant to this Part 12(a)(xix) and
notwithstanding any provision herein to the contrary, MX Holdings shall have
the right to reduce the aggregate notional amount of the RBS Novated
Transactions by liquidating a portion of such RBS Novated Transactions or by
entering into off-setting interest rate swaps with the counterparties to such
transactions; provided, however, that in no event shall MX
Holdings reduce the aggregate notional amount of such RBS Novated Transactions
to an amount less than $60,000,000 without Party A’s prior written
approval.  To the extent that Party B
enters into off-setting interest rate swaps with third parties pursuant to this
Part 12(a)(xix), Exhibit 12(a)(xix) shall be amended to include such
off-setting swaps.

 

(B)                                Concurrently with the
novations of the RBS Novated Transactions and only to the extent the aggregate
notional amount of the RBS Novated Transactions exceeds $60,000,000, Party B
shall reduce the notional amount of the RBS Novated Transactions to $60,000,000
by liquidating a portion of such RBS Novated Transactions or by entering into
off-setting interest rate swaps with The Royal Bank of Scotland plc.

 

(C)                                If, at any time following
the novation of the RBS Novated Transactions, the outstanding amount of
the  obligations hedged by the RBS
Novated Transactions (the “Hedged Obligations”) is reduced, Party B
shall promptly reduce the notional amount of the RBS Novated Transactions to an
amount equal to the then outstanding amount of Hedged Obligations, through a
transaction with The Royal Bank of Scotland plc, and shall provide Party A with
prompt notice of such reduction.

 

(xx)                           Further Assurances.

 

(A)                              Subject to the terms and
conditions of this Agreement, Party B and each such Specified Entity agrees to
use all commercially reasonable efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary, proper or
advisable under Applicable Laws to consummate and make effective the transactions
contemplated by this Agreement and the other Specified Agreements.  In case at any time any further action or the
performance of any function is necessary or desirable to carry out the purposes
of the Specified Agreements or to allow Party A or its Affiliates to enter into
any Transaction or take any other action specified therein, the proper officers
and directors of Party B and each such Specified Entity shall take all such
necessary action and shall cause any such functions to be performed.

 

(B)                                Without limiting the
generality of Part 12(a)(xx)(A), upon the approval by Party A of any LDC
not listed on Exhibit 7(j) with respect to any Designated
Jurisdiction, and prior to any delivery of Gas to such LDC for storage or the
execution of any Gas purchase and 

 

48

 

sale agreement with a Customer served by such LDC, Party B shall cause
such LDC to irrevocably agree to make all payments owing to Party B or to any
Specified Entity of Party B directly to a Lockbox Account covered by the
Wachovia Control Agreement.

 

Part 13.                   Negative Covenants

 

(a)                                  General Covenants.  Each Specified
Entity of Party B, Party B in respect of each Specified Entity of Party B and
Party B as to itself as set forth below, agrees with Party A that, at all times
prior to the Discharge of ISDA Obligations:

 

(i)                                  Indebtedness.  Party B and each such Specified Entity will
not, at any time directly or indirectly create, incur, assume, guarantee or
otherwise be or become liable for any Indebtedness, except Permitted
Indebtedness.

 

(ii)                               Liens.  Party B and each such Specified Entity will
not create, assume, incur or suffer to exist any Lien upon or with respect to
any Property now owned or hereafter acquired by it (including the Collateral),
or assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof, except for Permitted Liens.

 

(iii)                            Merger and Consolidation; Disposition of Assets; New
Subsidiaries.

 

(A)                              Except as otherwise
permitted by this Agreement, Party B and each such Specified Entity shall not
be a party to any merger or consolidation or, except in the ordinary course of
business, transfer, sell, assign (except as contemplated by the ISDA Security
Documents), convey, lease, sublease or otherwise dispose of any of its Property
or business (whether now owned or hereafter acquired) or otherwise effect an
Asset Sale, except that Party B and each such Specified Entity may (i) dispose
of any obsolete or worn-out Property no longer required in connection with the
operation of its business and (ii) dispose of Property that is replaced by
other Property of like utility in its business.

 

(B)                                Party B and each such
Specified Entity shall not create or cause to be created any Subsidiary other
than those listed on Exhibit 5(j)(iv) without (i) the consent of
Party A and (ii) any such Subsidiary executing and delivering to Party A a
Guarantee and Collateral Agreement Joinder (as such term is defined in the
Guarantee and Collateral Agreement).

 

(iv)                           Organizational Documents; Capitalization; Fiscal Year; Legal
Form.  Party B and each such Specified Entity will
not amend or modify its constitutional documents (including the Certificate of
Incorporation and the Bylaws), alter its authorized capitalization, change its
legal form or change its fiscal year without the consent of Party A.

 

(v)                              No Other Business.  Party B and each such Specified Entity will
not engage in, or permit any of its Affiliates to engage in, (A) with
respect to Party B and MX Canada, any business other than the purchase and sale
of Gas to Customers and other activities necessary in connection therewith, (B) with
respect to MX Electric, any business other than the purchase and sale of
electricity to residential or small commercial end-users of electricity and
other activities necessary in connection therewith, (C) with respect to
Infometer.com, any business other than providing consultations and audits with
respect to energy supply procurement and 
improving energy efficiency and other activities in connection
therewith, (D) with respect to Online Choice, any business other than the
commissioned sale of consumer products such as telecom
services and satellite TV for
homeowners and small businesses (provided that
such products may not be sold door-to-door)
and other activities in connection therewith and (E) with respect to MX
Holdings and the MX Holdcos (other than Infometer.com), any other business
other than owning equity interests in Party B, MX Canada, MX Electric or
another MX Holdco.

 

49

 

(vi)                              Permitted Investments.  Party B and each such Specified Entity will
not make, or permit to remain outstanding, any Investments except Permitted
Investments.

 

(vii)                           Leases and Sale-Leasebacks.  Party B  and each such
Specified Entity will not become or remain liable as lessee, as guarantor or as
other surety with respect to any lease, whether an operating lease or a capital
lease, of any Property (whether real, personal or mixed), whether now owned or
hereafter acquired (A) that Party B or such Specified Entity has sold or
transferred, or is to sell or transfer, to any other Person or (B) that
Party B or such Specified Entity intends to use for substantially the same
purpose as any other property that has been or is to be sold or transferred by
it to any Person in connection with such lease.

 

(viii)                        Capital Expenditures.  Party B and each such Specified Entity shall
not make or incur any Capital Expenditures (including obligations under Capital
Lease Obligations) other than in a Budget approved by Party A in accordance
with Part 12(a)(xiii).

 

(ix)                                Acquisitions.  Without the prior consent of Party A, Party B
and each such Specified Entity will not make any Acquisition.

 

(x)                                   Restricted Payments.  Party B and each such Specified Entity may
not, directly or indirectly, declare or make Restricted Payments; provided,
however, that the following Restricted Payments may be made:

 

(A)                              scheduled payments of
principal and interest on the Old Notes when due and payable;

 

(B)                                purchase of Old Notes,
provided that no Default or Potential Termination Event exists prior to or
immediately following any such purchase, and provided further that the
following conditions are met:

 

(1)                                  the Collateral Coverage
Ratio is at least 1.50:1.00, immediately prior to and after giving effect to
such purchase;

 

(2)                                  the purchase price
represents at least a 10% discount from the face amount of the Old Notes
purchased; and

 

(3)                                  the aggregate cash amount of
purchases of Old Notes pursuant to this Part 13(a)(x)(B) shall not
exceed $2,000,000;

 

(C)                                scheduled payments of
interest and any related Tax Gross-Up Amounts on the Notes when due and
payable;

 

(D)                               prepayment of the Old Notes
and/or the Notes pursuant to a Qualified Initial Public Offering;

 

(E)                                 prepayment of the Notes in
accordance with Section 3.10 of the Intercreditor Agreement (including
Replacement Debt incurred by MX Holdings that complies with such Section 3.10);

 

(F)                                 prepayment of
the Notes in accordance with Section 3.11 of the Intercreditor Agreement,
provided that:

 

(1)                                  Party A is satisfied that,
immediately prior to and after giving effect to the transaction contemplated by
such Section 3.11, no Default or Potential Termination Event has occurred
or is continuing under any ISDA Document; and

 

50

 

(2)                                  Party B ensures that Party A
receives (at the time of the closing thereof) from the proceeds of such
transaction original
margin in the form of cash, to be deposited to the Swap Note Sub
Account in the amount equal to: (x) if the Collateral Coverage Ratio at
such time is less than 2.00 to 1.00, the greater of (i) 10% of the
proceeds of such transaction and (ii) such amount as is necessary to cause
the Collateral Coverage Ratio to be 1.80 to 1.00, except that (y) if the
Collateral Coverage Ratio at such time is greater than 1.80 to 1.00 but less
than or equal to 2.00 to 1.00, 10% of the proceeds of such transaction.  Where the Collateral Coverage Ratio at such
time exceeds 2.00 to 1.00, there shall be no requirement to provide original margin in the form of cash pursuant to
this clause;

 

provided, that any proceeds
of such transaction that exceed the payment contemplated by Section 3.11
of the Intercreditor Agreement plus what is required to be deposited in the
Swap Note Sub Account pursuant to clause (2) above shall be immediately
deposited in the Party A Sub Account hereunder.

 

The foregoing does not
constitute a waiver or limitation of any right of Party A or obligation of
Party B or the Specified Entities of Party B hereunder or under any other
Specified Agreement.

 

(G)                                payments necessary to make
Restricted Payments permitted by this Part 13(a)(x);

 

(H)                               payments necessary to fund
the Escrow Account in accordance with the Indenture;

 

(I)                                    payments to fund loans
permitted by clause (iv) of the definition of “Permitted Indebtedness”;

 

(J)                                   dividend
payments or other distributions made by MX Holdings to the holders of its
Equity Interests solely in the Common Stock or other common equity interests of
such Person on a pro rata basis; and

 

(K)                               payments
by MX Holdings to (i) purchase, redeem or otherwise acquire shares of its
common stock or other common equity interests or warrants or options to acquire
any such shares held by any current or former officer, director or employee of
MX Holdings (or their assigns, heirs or estates); provided that the aggregate
price paid for all such purchases, redemptions or acquisitions by MX Holdings
shall not exceed $1,000,000 in any twelve month period and (ii) repurchase
Equity Interests deemed to occur upon the exercise of stock options or warrants
to the extent such Equity Interests represent a portion of the exercise price
of those options or warrants or corresponding statutory withholding taxes due
in connection with such exercise.

 

(xi)                                Material Contracts; Etc.

 

(A)                              Except as permitted by this
Agreement, Party B and each such Specified Entity shall not without the prior
written consent of Party A (i) cancel or terminate any Material Contracts
to which it is a party or consent to or accept any cancellation or termination
thereof prior to the scheduled expiration thereof, (ii) sell, assign
(other than pursuant to the ISDA Security Documents) or otherwise dispose of
(by operation of law or otherwise) any part of its interest in any Material
Contract, (iii) waive any default under or breach of any material
provision of any Material Contract or waive, fail to enforce, forgive,
compromise, settle, adjust or release any material right, interest or
entitlement, howsoever arising, under, or in respect of any Material Contract,
or (iv) amend, supplement, modify or in any way vary or agree to any
variation of any material provisions of any Material Contract or of the
performance of any material covenant or 

 

51

 

obligation by any other Person under any Material Contract (in each
case as in effect on the date of this Agreement and as thereafter amended,
supplemented or modified in accordance with this clause (A)).

 

(B)                                Except as permitted by this
Agreement, Party B and each such Specified Entity shall not enter into any
Material Contract not in effect on the date of this Agreement without the prior
written consent of Party A other than (i) renewal of existing agreements
on substantially consistent terms, (ii) as may be required by Applicable
Law, or (iii) to refinance the Notes to the extent permitted by the
Intercreditor Agreement.

 

(C)                                Party B and each such
Specified Entity shall not enter into any contract or agreement, other than the
Specified Agreements, which restricts the ability of Party B or such Specified
Entity to:  (i) enter into
amendments, modifications, supplements or waivers of the Material Contracts, (ii) sell,
transfer or otherwise dispose of its property, (iii) create, incur, assume
or suffer to exist any Lien upon any of its Property other than Permitted
Liens, or (iv) create, incur, assume, suffer to exist or otherwise become
liable with respect to any Indebtedness other than Permitted Indebtedness; provided,
however, that the preceding restrictions shall not apply to: (A) agreements
or instruments governing Permitted Indebtedness and any amendments or other
modifications thereto (including any refinancing thereof); provided that such
amendments or modifications are no more restrictive, when taken as a whole, when
compared to those contained in those agreements as in effect on the Closing
Date, or (B) customary non-assignment provisions in contracts, leases,
intellectual property licenses entered into in the ordinary course of business.

 

(D)                               Party B and each such Specified
Entity shall not enter into any contract or agreement interfering in any way
with Party A’s ability to have a first-priority perfected Lien on the
Collateral, subject to Permitted Liens.

 

(xii)                             Transactions with Interested Persons and Non Arms’-Length
Dealing.  All transactions that Party B or any
Specified Entity of Party B enters into will be on an arm’s length basis and,
if the transaction is with an Interested Person or a Person holding, directly
or indirectly, more than 1% of the equity or voting shares of Party B or any
Specified Entity of Party B, then the transaction will be on terms that are at
least as favorable to Party B or such Specified Entity as those available from
an independent third party; provided, however, that the foregoing
limitation shall not apply to (a) transactions between Party B or any
Specified Entity of Party B and Party A, (b) employment
agreements entered into in the ordinary course of business that are consistent
with current practices and at compensation levels that are consistent with
compensation levels for similar positions in comparable companies (1) in
similar industries, (2) of the same size and (3) in the same
geographic area, (c) the
issuance of equity securities permitted hereby, (d) Director’s fees as
permitted by the Certificate of Incorporation, (e) payments or
transactions with respect to the Notes as permitted under the Intercreditor
Agreement and (f) Restricted Payments permitted hereby.

 

(b)                                 Transactional Negative Covenants.  Party B as to
itself as set forth below, agrees with Party A that, at all times prior to the
Discharge of ISDA Obligations:

 

(i)                                     Long Term Transactions.  Party B shall not enter into any (A) physically
settled transactions in respect of Gas for a fixed forward price with a supply term
(measured from the first day of Gas delivery) of greater than 24 months, (B) any
Swap Transaction with a term greater than 24 months (measured from the
commencement of the first calculation period thereof), or (C) any
transaction that has a term that expires on a date that is 27 or more months
from the date such transaction was entered into, in each case without the prior
written consent of Party A.

 

(ii)                                  Volumetric Tenor.  Party B shall not directly or indirectly sell
any commodity at a fixed price, or enter into a Swap Transaction or an Option
Transaction, which when combined with all 

 

52

 

transactions entered into
between Party B and its Customers, would cause the average tenor weighted by
notional and actual volume of all physically and financially settled Gas
transactions entered into by Party B to exceed 14 months in duration.

 

(iii)                               Counterparty Limitations.
Party B shall not directly or indirectly purchase any commodity from, or enter
into any financially settled Swap Transaction, Option Transaction or other
derivative transaction with, any Person other than Party A; provided, however,
that Party B may purchase Gas (a) from LDCs or other “behind-the-gate”
third parties approved by Party A, in its sole discretion, solely for balancing
purposes or in connection with the purchase of bundled services and (b) upon
the failure of Party A to satisfy an obligation to schedule a delivery of Gas
to Party B on any Day, in accordance with clause (b)(ii) of the Gas Annex.

 

(iv)                              Required Hedges.

 

(A)                              Except to the extent
expressly permitted by Part 12(a)(xiv), Party B shall not directly or
indirectly enter into any transaction for the sale of Gas with any Customer
involving a fixed forward price unless prior to, or contemporaneously with,
entering into any such sale transaction, Party B shall have entered into a Swap
Transaction, Option Transaction or physical forward transaction with Party A in
respect of an equal notional or actual quantity of Gas  (unless Party A determines that a lower
quantity is appropriate to take into account such factors as Party A determines
reasonable, including Party A’s forecast of Party B’s Customer attrition/churn,
storage supply, or forecast modifications), with a lower fixed forward price
with respect to physically settled transactions or with a floating price index
with respect to a Swap Transaction that hedges the market price of Gas at the
relevant Delivery Point of such sale transaction, all in form and substance
reasonably satisfactory to Party A;

 

(B)                                Notwithstanding anything
herein to the contrary, Party B shall not (1) incur any obligation to sell
Gas to a Customer with a term of greater than 365 days, or (2) take a long
fixed forward price position in Gas pursuant to the exception to Part 12(a)(xiv)
unless prior to, or contemporaneously with, the incurrence of any such
obligation, Party B shall have offset the exposure associated with the portion
of the term of such obligation in excess of 365 days (the “Excess Term”)
with Party A (x) by having Party A purchase one or more Put Options for
Gas with respect to the Excess Term with a notional amount to be determined by
Party A, or (y) provided that such obligation has not already been hedged
pursuant to Part 12(a)(xiv) by purchasing Call Options from Party A for
the Excess Term with a notional amount to be determined by Party A, or (z) in
some other manner acceptable to Party A. 
Party B acknowledges and agrees that in the event that Party A purchases
Put Options pursuant to this Part 13(b)(iv)(B), Party B shall pay to Party
A a fee equal to the amount of the premium paid by Party A for such Put Options
which fee shall be paid on the next Gas Settlement Date following the date such
Put Option was entered into by Party A. 
Party B further acknowledges and agrees that Party A shall have no
obligation to purchase any Put Options or enter into any Call Option with Party
B pursuant to this Part 13(b)(iv)(B) and that any such transactions
shall be entered into by Party A in its sole discretion.

 

(v)                                 Fixed Price Contract Mix.  Party B shall not, during any twelve month
period, enter into any new fixed price contracts where the Residential
Customer-Equivalents of such contracts are greater than 75% of all the
Residential Customer-Equivalents of all new contracts entered into in a
Contract Year.

 

(vi)                              Limit on Transaction Size.   Without the prior written consent of Party A, Party B shall
not directly or indirectly sell Gas to any Person if the reasonably forecasted
purchases of such Person indicate purchases from Party B of more than (A) 1500
MMBtus on average per day, (B) $440,000 in actual billed amounts for any
30-day period at the time of such sale, or (C) if MX Electric is
concurrently selling Energy to such Person, 675 MMBtu on average per day.

 

53

 

(vii)                           Limit on Customer Demand.  Party B shall not enter into any fixed priced
forward transaction for the sale of Gas with a Customer if the forecasted
annual quantity of Gas consumed by such Customer for Gas, as determined by
Party B and approved by Party A, is greater than 3% of the Party B Customer
Load for Gas.

 

(viii)                        Limit on Notional Exposure.  Party B shall not enter into any transaction
for the sale of Gas with a Customer involving a fixed forward price if, after
giving effect to the Transaction that would be required under Part 12(a)(xiv)
hereof in order to hedge the price risk associated with such sale transaction,
the amount determined in accordance with the following formula would equal or
exceed $260,000,000:

 

(A)                              First, for each Swap
Transaction entered into (i) by Party B with Party A with respect to Gas
and (ii) by MX Electric with Party A with respect to Energy, determine the
product of:

 

(1)                                  the remaining notional
quantity in respect of such Transaction as at the time of the determination
thereof (in MMBtu or Mwh, as the case may be); multiplied by

 

(2)                                  the fixed forward price
payable by Party B or MX Electric, as applicable, with respect to that
Transaction;

 

(B)                                Second, determine the
sum of the amounts calculated in accordance with Part 13(b)(viii)(A) above
for all Swap Transactions with respect to Gas and Energy between (i) Party
B and Party A and (ii) MX Electric and Party A (the “Swap Exposure”);

 

(C)                                Third, for each
physically settled Transaction for the purchase of Gas  entered into by Party B with Party A and for
each physically settled Transaction for the purchase of Energy entered into by
MX Electric with Party A, in each case where the relevant commodity is being
purchased by Party B for a forward fixed price (each, a “Fixed-Price
Physical Transaction”), determine the product of:

 

(1)                                  the remaining quantity of
Gas or Energy to be delivered in respect of such Fixed Price Physical
Transaction as at the time of the determination thereof (in MMBtu or Mwh, as
the case may be); multiplied by

 

(2)                                  the fixed forward price
payable by Party B or MX Electric, as applicable, with respect to that
Fixed-Price Physical Transaction;

 

(D)                               Fourth, determine the
sum of the amounts calculated in accordance with Part 13(b)(viii)(C) above
for all Fixed-Price Physical Transactions with respect to Gas and Energy
between (i) Party B and Party A and (ii) MX Electric and Party A (the
“Fixed Physical Exposure”); and

 

(E)                                 Fifth, determine the
sum of the Swap Exposures and the Fixed Physical Exposures.

 

(ix)                                Designated Jurisdictions.
Party B shall not market or enter into financially or physically settled
transactions in respect of Gas in any jurisdiction, other than a Designated
Jurisdiction for such commodity, without the prior written consent of Party A.

 

(x)                                   Fixed Price Limit.   Party B shall not enter into financially or
physically settled transactions in respect of Gas as purchaser for a fixed
forward price of greater than $9/MMBtu (based on either the relevant strip
prices or average price per trade), without the prior written consent of Party
A; provided, however, that Party A, in its sole discretion and
with two Business Days notice to Party B, may increase or decrease such fixed
price limit and, provided further, that Party B may request 

 

54

 

a waiver of the fixed price
limit on a per trade basis and Party A shall use commercially reasonable
efforts to respond to such request within trading hours on the date of such
request.

 

(xi)                                RCE Limits.  Party B shall not enter into new contracts
with Customers in any Contract Year if the sum of (A) the number of
Residential Customer-Equivalents associated with all new contracts for Gas
entered into with Customers by Party B or MX Canada, as applicable, during such
Contract Year and (B) the number of Residential Customer-Equivalents
associated with all new contracts for Energy entered into with Customers (as
defined in the MX Electric Agreement) by MX Electric during such Contract Year,
would exceed 235,000 Residential Customer-Equivalents during such Contract
Year; provided, however, that, notwithstanding the foregoing,
Party B, without the prior written consent of Party A, shall not enter into any
contract for the sale of Gas with any Customer if, as the result of entering
into such contract, the aggregate number of Fixed Price Customer-Equivalents
served by Party B and MX Electric would exceed 325,000 in the aggregate.

 

(xii)                             Customer Load.  Party B shall not purchase Gas hereunder or
otherwise for any reason other than to serve Party B’s actual or forecasted
aggregate Gas Customer Load.

 

(xiii)                          Limitation on Sales.  Party B shall not directly or indirectly sell
Gas to any Person except for, and limited to the extent of, (A) Gas sold
to an LDC or other approved third-party for balancing purposes or for storage
behind an LDC Citygate, and (B) Gas sold to a Customer of Party B in the
ordinary course of its business.

 

Part 14.     Additional Definitions

 

(a)                                  Section 14 is hereby amended to add the following
additional definitions:

 

“AAA” has the meaning
specified in Part 5(c)(vii).

 

“Account Control Agreement”
means, as applicable, the Huntington Control Agreement or the Wachovia Control
Agreement.

 

“Acquisition” means any transaction,
or any series of related transactions, consummated on or after the date of this
Agreement, by which Party B, any Specified Entity of Party B (a) acquires
any going business or all or substantially all of the assets of any firm,
corporation or limited liability company, or division thereof, whether through
purchase of assets, merger or otherwise or (b) directly or indirectly
acquires (in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the outstanding
ownership interests of a partnership or limited liability company.

 

“Adjusted
Consolidated Tangible Net Worth” means, as of any date of determination with
respect to MX Holdings, all items which in accordance with GAAP would be
included under shareholders’, partners’ or members’ equity on a consolidated
balance sheet of MX Holdings less intangible assets (which shall not include
any and all amounts associated with the capitalized acquisition cost
of Customers of Party B, MX Electric and MX Canada) adjusted for (i) non-cash
impact on earnings on Storage Gas due to lower of cost or market valuation, (ii) non-cash
impact on earnings on Storage Gas due to variance from weighted average cost
method of inventory calculation, (iii) non-cash assets from FAS133 Gains
(derivatives), (iv) non cash liabilities from FAS133 Losses (derivatives),
(v) non-cash impact on earnings of compensation expense from FAS 123R
application, and (vi) settled financial hedges since the beginning of the
latest storage injection season (i.e. April 1st), but in no case longer than 365 days, for
inventory before the inventory is sold to customers.

 

“Aggregate
Credit Support Amount” means, on any date of determination, the aggregate face
amount of all Credit Support provided under all Master ISDAs.

 

55

 

“Aggregate Unpaid Value”
means the aggregate value of (i) all amounts owed for commodities
delivered under all Master ISDAs for which the applicable Settlement Date has
not occurred, (ii) all amounts owed under Swap Transactions with respect
to calculation periods that have expired but for which the applicable
Settlement Date has not occurred, (iii) all Outstanding Amounts under all
Master ISDAs (as defined in each such Master ISDA), (iv) all accrued and
unpaid Financing Fees and Credit Support Fees under all Master ISDAs, and (v) the
amount of any Credit Support posted by Party A that was applied to satisfy in
whole or in part any obligation of Party B or any Specified Entity of Party B
to a third party and which amount has not been repaid to Party A.

 

“Aggregated Collateral
Accounts” means all Collateral Accounts established under all Master ISDAs.

 

“Ancillary Services” means
any of the services identified by a Transmission Provider in its transmission
tariff as “ancillary services” including regulation and frequency response,
energy imbalance, operating reserve-spinning and operating
reserve-supplemental, as specified in the relevant transaction.

 

“Applicable Law” means any
constitution, statute, law, rule, regulation, ordinance, judgment, order,
decree, permit, or any published directive, guideline, Governmental Approval,
requirement or other governmental restriction which has the force of law, or
any published determination by, or interpretation of any of the foregoing by,
any judicial authority or Governmental Authority binding on a given Person
whether in effect as of the date of this Agreement or thereafter and in each
case as amended (including all Environmental Laws and any of the foregoing
pertaining to land use or zoning restrictions).

 

“Asset Sale” means any
direct or indirect sale, issuance, conveyance, transfer, lease (other than
operating leases entered into in the ordinary course of business), assignment
or other transfer for value by Party B or any of the Specified Entities of
Party B (including any Sale and Leaseback Transaction) to any Person other than
Party B or a Specified Entity of Party B of: (1) any Capital Stock of
Party B or a Specified Entity of Party B; or (2) any other property or
assets of Party B or any Specified Entity of Party B other than in the ordinary
course of business other than (a) any sale or issuance of Equity Interests
of MX Holdings, (b) dispositions of assets that are not critical to the
operation of the business of Party B or any Specified Entity of Party B having
a fair market value (as to Party B and all Specified Entities of Party B,
collectively) of $500,000 or less for any one such disposition or $1,000,000 or
less for all such dispositions in any fiscal year of MX Holdings and (c) dispositions
of accounts to LDCs or EDCs under guaranteed receivables agreements entered
into in the ordinary course of business in accordance with the terms hereof.

 

“Auditor” means such firm or
firms of independent public accountants of recognized international standing as
any party or any Specified Entity may, from time to time, appoint as auditors
of such party or Specified Entity with the prior written consent of Party A.

 

“Bankruptcy Code” has the
meaning specified in Part 5(k)(iii).

 

“Base Price” has the meaning
specified in Part 7(e).

 

“Base Rate” means the rate
of interest per annum (rounded upwards if necessary to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page or http://www.bba.org.uk/bba/ (or
any successor page) as the British Bankers Association London Interbank offered
rate for two-month deposits in U.S. Dollars at approximately 11 a.m.
London time two Business Days prior to the date of determination.

 

“Bill Matrix” has the
meaning specified in Part 11(g).

 

“Board of Directors” means,
as to any Person, the board of directors (or similar governing body) of such
Person or any duly authorized committee thereof.

 

“Bring Down Review” has the
meaning specified in Part 7(j).

 

“Budget” means any budget prepared
in accordance with Part 12(a)(xiii).

 

56

 

“Business Day” means any day
that is not a Saturday or Sunday in the United States or a day on which banking
institutions chartered by the State of New York or the United States are
required or authorized to be closed.

 

“Bylaws” means the Third
Amended and Restated Bylaws of MX Holdings.

 

“Call Option” means an
Option Transaction, which may be physically or financially settled, that gives
the holder the right to buy a certain quantity of an underlying commodity from
the seller of such Option Transaction, at a specified price on or up to a
specified expiration date or during a specified exercise period.

 

“Capital Expenditures”
means, for any period, the aggregate of amounts that would be reflected as
additions to property, plant or equipment on a balance sheet prepared in
accordance with GAAP.

 

“Capital Lease Obligations”
of any Person means the obligations of such Person to pay rent or other amounts
under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to
be classified and accounted for as capital leases on a balance sheet of such
Person under GAAP, and the amount of such obligations shall be the capitalized
amount thereof determined in accordance with GAAP.

 

“Capital Stock” means:

 

(i)            with respect to any Person that is a corporation,
any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, including each class
of Common Stock and Preferred Stock of such Person, and all options, warrants
or other rights to purchase or acquire any of the foregoing; and

 

(ii)           with respect to any Person that is not a
corporation, any and all partnership, membership or other equity interests of
such Person, and all options, warrants or other rights to purchase or acquire
any of the foregoing.

 

“Certificate of
Incorporation” means the Second Amended and Restated Certificate of
Incorporation of MX Holdings.

 

“Change of Control” means
the occurrence of one or more of the following events with respect to Party B
or any Specified Entity of Party B (each, a “Subject Person”):

 

(i)            any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all
or substantially all of the assets of a Subject Person to any Person or group
of related Persons for purposes of Section 13(d) of the Securities
Exchange Act of 1934, as amended (a “Group”), together with any
Affiliates thereof (whether or not otherwise in compliance with the provisions
of the Indenture) other than, with respect to MX Holdings, to the Permitted
Holders;

 

(ii)           the approval by the holders
of Capital Stock of any Subject Person of any plan or proposal for the
liquidation or dissolution of such Subject Person (whether or not otherwise in
compliance with the provisions of the Indenture);

 

(iii)          any Person or Group (other
than the Permitted Holders and any entity formed by the Permitted Holders for
the purpose of owning Capital Stock of MX Holdings) shall become the owner,
directly or indirectly, beneficially or of record, of shares representing more
than 50% of the aggregate ordinary voting power represented by the issued and
outstanding Capital Stock of any Subject Person; or

 

(iv)          any Person (or related group
of Persons) that is not a holder of Equity Interests in any Subject Person on
the date hereof should hereafter acquire, directly or indirectly, the
beneficial ownership of (a) Equity Interests having the power to elect a
majority of the Board of Directors of such Subject Person or (b) any other
ownership interest enabling it to exercise control of any Subject Person;

 

57

 

provided, however, that no
holders of shares of Class A Exchange Common Stock, Class C Common
Stock or Common Stock shall be deemed to constitute a Group for the purpose of
determining whether a Change of Control has occurred solely by virtue of being
a party to the Class A Voting Agreement, the Class C Voting Agreement
and/or the Stockholders Agreement, respectively.

 

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

 

“Class A Exchange
Common Stock” means the shares of newly created Class A Common Stock of MX
Holdings, par value $0.01 per share.

 

“Class A Voting
Agreement” means that certain agreement, dated as of September 22, 2009,
among the holders of the Class A Exchange Common Stock.

 

“Class B Common Stock”
means the shares of newly created Class B Common Stock of MX Holdings, par
value $0.01 per share.

 

“Class C Common Stock”
means the shares of newly created Class C Common Stock of MX Holdings, par
value $0.01 per share.

 

“Class C Voting Agreement”
means that certain agreement, dated as of September 22, 2009, among the
holders of the Class C Common Stock.

 

“Closing Date” means the
date of execution of this Agreement.

 

“Code” means the Internal
Revenue Code of 1986, as amended from time to time.

 

“Collateral” means all
collateral of whatsoever nature purported to be subject to the Lien of any ISDA
Security Document.

 

“Collateral Accounts” means
the Lockbox Accounts, the Party A Sub Account and the Swap Note Sub Account.

 

“Collateral Coverage Ratio”
means the ratio, on any date of determination, as determined by Party A in a
commercially reasonable manner of (A) (i) the aggregate amount of
Party B’s and MX Electric’s accounts receivable due from any LDC or EDC or from
a customer (whether billed or unbilled) when the accounts receivable due from
such customer are not purchased by a LDC or EDC, in each case, less than 90
days past due at such time net of any estimated net Taxes due in respect
thereof and net of any LDC/EDC Delivery Charges (except to the extent Party B
has provided cash margin to such LDC or EDC for such charges) plus (ii) the
aggregate amount of cash held in the Collateral Accounts minus (iii) $2,000,000
plus (iv) the value of any positive Gas or Energy imbalances for the
account of Party B at any LDCs or EDCs minus (v) the value of any negative
Gas or Energy imbalances for the account of Party B at any LDCs or EDCs, plus (vi) the
aggregate amount of any mark-to-market gain for Party B’s and each Specified
Entity of Party B’s account on any forward position held by Party B or any such
Specified Entity with Party A or any customers of Party B or any such Specified
Entity (excluding Prompt Month mark-to-market Gas position gains up to
$10,000,000 in the aggregate)  minus (vii) the
aggregate amount of any mark-to-market loss for Party B’s and each Specified
Entity of Party B’s account on any forward position held by Party B or any such
Specified Entity with Party A or any customers of Party B or any such Specified
Entity (excluding Prompt Month mark-to-market Gas position losses up to
$10,000,000 in the aggregate), plus (viii) the value of Initial Storage
Gas and the value of any Storage Gas to which Party B has title and with
respect to which Party A has a perfected Lien (determined by Party A based on
the lower of Party B’s cost of such Storage Gas or the market value of such
Storage Gas with such market value determined by Party A on a quarterly (or, if
Party A deems it appropriate in its sole discretion, on a more frequent) basis
based on the relevant LDC cash out/liquidation 

 

58

 

value of such Storage Gas in
the event of Party B’s default under such LDC’s retail program), to (B) (i) the
aggregate value of Energy, Gas (including Storage Gas), Capacity (including
UCAP) and Ancillary Services delivered to, but not yet paid for by, Party B and
each Specified Entity of Party B plus (ii) any accrued but unpaid
Financing Fees due hereunder or under the MX Electric Agreement minus (iii) with
respect to any Storage Gas to which Party A has title other than Initial
Storage Gas, the difference between (1) the value of such Storage Gas
based on the lower of Party A’s weighted average cost of such Storage Gas or
the market value of such Storage Gas with such market value determined by Party
A on a quarterly (or, if Party A deems it appropriate in its sole discretion,
on a more frequent) basis based on the relevant LDC cash out/liquidation value
of such Storage Gas in the event of Party B’s default under such LDC’s retail
program and (2) Party A’s weighted average cost of such Storage Gas, as
determined by Party A plus (iv) all other amounts owed by Party B and each
Specified Entity of Party B  to Party A
under or in connection with this Agreement not covered by any other sub-clause
of this definition.

 

“Common Stock” of any Person
means any and all shares, interests or other participations in, and other
equivalents (however designated and whether voting or non-voting) of such
Person’s common stock, whether outstanding on the Closing Date or issued after
the Closing Date, and includes, without limitation, all series and classes of
such common stock.

 

“Consolidated Net Worth”
means, as of any date of determination with respect to MX Holdings, all items
which in accordance with GAAP, would be included under shareholders’, partners’
or members’ equity on a consolidated balance sheet of MX Holdings.

 

“Contract Price” has the
meaning specified in Part 7(b).

 

“Contract Quantity” has the
meaning specified in the Gas Annex.

 

“Contract Year” means (i) for the first Contract
Year, the period from the Closing Date through September 30, 2010, and (ii) for
each subsequent Contract Year, each successive twelve month period; provided,
that the final Contract Year shall end on August 31, 2012.

 

“control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “controlling” and “controlled” have the
meanings correlative thereto.

 

“Corresponding Third Party
Transaction” has the meaning specified in Part 10(b)(ii).

 

“Credit Support” means all
letters of credit, letters of indemnity, guarantees and any other credit
support issued, provided or arranged for by Party A in accordance with the
terms hereof to any LDC, Transporter, or any other third party to cover such
third party’s exposure to Party B.

 

“Credit Support Amount”
means, on any date of determination, the aggregate face amount of all Credit
Support that Party B would be required to post to LDCs and Transporters if such
Credit Support were not being provided by Party A pursuant to this Agreement,
as reasonably determined by Party A.

 

“Credit Support Fee” means,
for any day, an amount calculated as follows:

 

(i)            If on such day, the
Aggregated Collateral Accounts are not in Surplus, then the Credit Support Fee
for such day shall be the product of the Aggregate Credit Support Amount
multiplied by the Primary Rate.

 

(ii)           If on such day, the
Aggregated Collateral Accounts are in Surplus and the Aggregate Credit Support
Amount is less than $27,000,000, then the Credit Support Fee for such day shall
be the product of the Aggregate Credit Support Amount multiplied the Primary Rate.

 

(iii)          If on such day, the
Aggregated Collateral Accounts are in Surplus and the Aggregate Credit Support
Amount exceeds $27,000,000, then for such day, the Credit Support Fee for such
day shall be the

 

59

 

sum of  (A) $27,000,000 multiplied  by the Primary Rate, and (B) the
Aggregate Credit Support Amount (less $27,000,000) multiplied by the Secondary
Rate; provided, however, that if, on such day, a Termination
Event or Event of Default has occurred and is continuing, with immediate effect
(and without regard to whether there is a Surplus), the Credit Support Fee for
such day shall be the product of  the
Aggregate Credit Support Amount multiplied by the Primary Rate.

 

“Customer” means any
residential or small commercial end-user of Gas and any IT Accounts that are
served by Party B and by an approved LDC in any Designated Jurisdiction.

 

“Default” means any event or
condition which constitutes an Event of Default or which upon notice, lapse of
time or both would, unless cured or waived, become an Event of Default.

 

“Definitions” has the
meaning specified in Part 5(a).

 

“Delivery Period” has the
meaning specified in the Gas Annex.

 

“Delivery Point” has the
meaning specified in the Gas Annex.

 

“Designated Jurisdictions”
means the jurisdictions listed on Exhibit 7(j).

 

“Discharge of ISDA
Obligations” means the occurrence of all of the following:

 

(i)            indefeasible payment in full
in cash of settlement amounts, termination payments, the principal of and
interest (including interest accruing on or after the commencement of any
Insolvency or Liquidation Proceeding, whether or not such interest would be
allowed in such Insolvency or Liquidation Proceeding) and premium (if any) on
all amounts outstanding under or that would be due upon the termination of the
Master ISDAs and constituting ISDA Obligations, including reimbursement
obligations;

 

(ii)           indefeasible payment in full
in cash of all other ISDA Obligations that are outstanding and unpaid at the
time such settlement amounts, termination payments, principal, interest and
premium (if any) on all amounts outstanding under the Master ISDAs are paid in
full in cash (other than any obligations for taxes, indemnifications, damages
and other contingent liabilities in respect of which no claim or demand for
payment has been made at such time);

 

(iii)          irrevocable termination or
expiration of all commitments, if any, of Party A to extend credit or undertake
transactions that would constitute, or give rise to, ISDA Obligations; and

 

(iv)          irrevocable termination or
cash collateralization (in an amount and manner reasonably satisfactory to
Party A, but in no event greater than 105% of the aggregate undrawn face
amount) of all Credit Support issued under or pursuant to the terms of the
Master ISDAs and constituting ISDA Obligations.

 

“Disqualified
Capital Stock” means that portion of any Capital Stock which, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of any
event (other than an event which would constitute a Change of Control or an
Asset Sale), matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof (except, in each case, upon the occurrence of a Change of Control or an
Asset Sale) on or prior to the final maturity date of the Notes.

 

“Dollar” or “$” means the
lawful currency of the United States of America.

 

“Due Date” shall mean the
Exposure Fee Due Date, the Gas Due Date or the Storage Gas Due Date, as the
context requires.

 

“EDC” has the meaning
specified in the MX Electric Agreement.

 

60

 

“Energy” means three-phase,
60-cycle alternating current electric energy, expressed in megawatt hours.

 

“Environmental Claim” means,
with respect to any Person, any written notice, claim, administrative,
regulatory or judicial action, suit, judgment or demand by any other Person
alleging or asserting such first Person’s liability for investigator costs,
cleanup costs, government response costs, damages to natural resources or other
Property of such first Person, personal injuries, fines or penalties arising
out of, based on or resulting from (i) the presence, Use, threatened
Release or Release into the environment of any Hazardous Material at any
location, whether or not owned by such first Person or (ii) any fact,
circumstance, condition or occurrence forming the basis of any violation, or
alleged violation, of any Environmental Law. 
The term Environmental Claim shall include any claim by any Governmental
Authority for enforcement, delineation, investigation, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and any claim by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
resulting from the presence of Hazardous Materials or arising from alleged
injury or threat of injury to the environment.

 

“Environmental Laws” means
all laws, rules, regulations, treaties, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment (including its effect on human health and safety), preservation or
reclamation of natural resources, the management, Release or threatened Release
of any Hazardous Material, waste disposal arrangements or to health and safety
matters.

 

“EPT” means Eastern
Prevailing Time.

 

“Equity Interests” means
shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person, and any warrants, options or other rights
entitling the holder thereof to purchase or acquire any such equity interest; provided,
however, that any instruments evidencing Indebtedness convertible into
or exchangeable for common stock of Party B or a Specified Entity of Party B
will be deemed Indebtedness and not Equity Interests, unless any such
instruments would be accounted for in accordance with GAAP as shareholders’
equity.

 

“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended from time to time, and the
regulations promulgated thereunder.

 

“ERISA Affiliate” means any
trade or business (whether or not incorporated) that, together with Party B, is
treated as a single employer under Section 414(b) or (c) of the
Code or, solely for purposes of Section 302 of ERISA and Section 412
of the Code, is treated as a single employer under Section 414 of the
Code.

 

“ERISA Event” means (a) any
“reportable event”, as defined in Section 4043 of ERISA or the regulations
issued thereunder with respect to a Plan (other than an event for which the
30-day notice period is waived); (b) the existence with respect to any
Plan of an “accumulated funding deficiency” (as defined in Section 412 of
the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of
ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by Party B or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by Party B or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the
incurrence by Party B or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal of Party B or any of its ERISA
Affiliates from any Plan or Multiemployer Plan; or (g) the receipt by
Party B or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from Party B or any ERISA Affiliate of any notice,
concerning the imposition upon Party B or any of its ERISA Affiliates of
Withdrawal Liability or a determination that a Multiemployer Plan is insolvent
or in reorganization, within the meaning of Title IV of ERISA.

 

“Escrow Account” means the
segregated escrow account established pursuant to the Escrow Agreement.

 

“Escrow Agreement” means
that certain Escrow and Security Agreement dated as of September 22, 2009,
among the Trustee, MX Holdings and Law Debenture Trust Company of New York, as
escrow agent.

 

61

 

“Excess Term” has the
meaning specified in Part 13(b)(iv)(B).

 

“Existing ISDA Master
Agreement” has the meaning specified in Part 5(m).

 

“Exposure Fee Due Date” has
the meaning specified in Part 10(a)(ii).

 

“Extended Term” has the
meaning specified in Part 5(h).

 

“FERC” means the United
States Federal Energy Regulatory Commission.

 

“Financing Fee” means
interest on the Outstanding Amounts, calculated on a daily basis, at (a) the
Base Rate plus 5% per annum, or (b) Party A’s relevant business unit’s
actual cost of funds plus 5% per annum, whichever is greater; provided,
however, that with respect to any past due Outstanding Amount the Financing Fee
shall be calculated at the Default Rate.

 

“Financing Fee Settlement
Date” has the meaning specified in Part 9(e).

 

“Fixed-Price Physical
Transaction” has the meaning specified in Part 13(b).

 

“Fixed Physical Exposure”
has the meaning specified in Part 13(b).

 

“fuel” means natural gas,
coal, oil and the products and by-products thereof.

 

“GAAP” means generally
accepted accounting principles in the United States consistently applied.

 

“Gas” has the meaning
specified in the Gas Annex.

 

“Gas Adder” has the meaning
specified in Exhibit 14(a)(i).

 

“Gas Annex” has the meaning
specified in Part 6.

 

“Gas Customer Load” means
the aggregate annual Gas load requirements of all Customers of Party B, as
reasonably determined by Party A.

 

“Gas Due Date” has the
meaning specified in Part 9.

 

“Gas Option” means a
physically or financially settled option transaction that provides the buyer
the right, but not the obligation, to enter into a transaction where the underlying
price is based upon the price of Gas.

 

“Gas Settlement Date” has
the meaning specified in Part 9.

 

“Gas Swap” means any swap
transaction where the floating or fixed price is based upon the price of Gas or
any related index for the price of Gas.

 

“Gas Swap Settlement Date”
has the meaning specified in Part 9.

 

“Gas Transactions” has the
meaning specified in the Gas Annex.

 

“Governmental Approval”
means (i) any authorization, consent, approval, license, lease, ruling,
permit, tariff, certification, exemption, filing, variance, claim, order,
judgment, decree, by or with, (ii) any declaration of or with or (iii) any
registration by or with, any Governmental Authority, in each case relating to (a) the
due execution and delivery of, or the performance by each intended party of,
any Material Contract of its obligations or the exercise of its rights under,
each Material Contract to which it is (or is intended to be) a party or (b) with
respect to Party B, any Specified Entity of Party B or any Affiliate of such
Specified Entity, the grant by Party B, such Specified Entity or such Affiliate
of the Liens created pursuant to the ISDA Security Documents to which Party B,
such Specified 

 

62

 

Entity or such Affiliate of
such Specified Entity is a party, the validity, enforceability and perfection
of such Liens and the exercise by Party A of its rights and remedies under such
ISDA Security Documents.

 

“Governmental Authority”
means the government of any jurisdiction, or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, board, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.

 

“Group” has the meaning set
forth in clause (i) of the definition of “Change of Control”.

 

“Guarantee” of or by any
Person (the “guarantor”) means any obligation, contingent or otherwise,
of the guarantor guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person (the “primary obligor”) in
any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation or to purchase (or to advance or supply funds for the purchase of)
any security for the payment thereof, (ii) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (iii) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay
such Indebtedness or other obligation or (iv) as an account party in
respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not
include endorsements for collection or deposit in the ordinary course of
business.

 

“Guarantee and Collateral
Agreement” means the Guarantee and Collateral Agreement to be entered into
among Party A, Party B and the Specified Entities, as may be amended, modified,
restated or supplemented.

 

“Hazardous Materials” means
all explosive or radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.

 

“Hedged Obligations” has the
meaning specified in Part 12(a)(xix)(C).

 

“Hedging Transaction” means
any Specified Transaction or any other transaction that would be a Specified
Transaction if it were entered into by Party A and Party B.

 

“Holder” means a beneficial
owner of the Notes.

 

“Huntington” means The
Huntington National Bank, a national banking association.

 

“Huntington Control
Agreement” means the Deposit Account Control Agreement among Party B,
Huntington and Party A, in the form of Exhibit 11(b)(ii).

 

“Imaged Agreement” has the
meaning specified in Part 5(e).

 

“Impairment” means, with
respect to any Governmental Approval, the rescission, termination,
cancellation, repeal, invalidity, suspension (other than by reason of an event
of force majeure to the extent suspension by reason of an event of force
majeure is expressly permitted by such Governmental Approval or results from
Applicable Law), injunction, inability to satisfy stated conditions to
effectiveness or amendment, modification or supplementation.  The verb “Impair” shall have a correlative
meaning.

 

“including” and “include”
are not limiting and are deemed followed by the words “without limitation”.

 

“Indebtedness” means with
respect to any Person, without duplication:

 

(i)            all obligations of such Person for borrowed money;

 

63

 

(ii)           all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;

 

(iii)          all Capitalized Lease Obligations of such Person;

 

(iv)          all obligations of such Person issued or assumed as
the deferred purchase price of property, all conditional sale obligations and
all obligations under any title retention agreement (but excluding trade
accounts payable and other accrued liabilities arising in the ordinary course
of business that are not overdue by 120 days or more or are being contested in
good faith by appropriate proceedings promptly instituted and diligently
conducted);

 

(v)           all obligations for the reimbursement of any obligor
on any letter of credit, banker’s acceptance or similar credit transaction;

 

(vi)          guarantees and other contingent obligations in
respect of Indebtedness referred to in clauses (i) through (v) above
and clause (viii) below;

 

(vii)         all obligations of any other Person of the type
referred to in clauses (i) through (vi) above and clause (viii) below
which are secured by any Lien on any property or asset of such Person; and

 

(viii)        all obligations under currency agreements and
interest swap agreements of such Person.

 

“Indemnified Liabilities”
has the meaning set forth in Part 5(r).

 

“Indemnitee” has the meaning
specified in Part 5(r).

 

“Indenture” means the
indenture, dated as of September 22, 2009, among MX Holdings, the
Guarantors and the Trustee, under which the Notes were issued.

 

“Infometer.com” means
Infometer.com Inc., a Delaware corporation.

 

“Initial Storage Gas” has
the meaning specified in Part 8(b)(iii).

 

“Initial Storage Gas Per
MMbtu Price” has the meaning specified in Part 8(b)(iii).

 

“Insolvency or Liquidation
Proceeding”  means:

 

(i)            any case
commenced by or against Party B or any Specified Entity of Party B under Title
11, U.S. Code or any similar federal or state law for the relief of debtors,
any other proceeding for the reorganization, recapitalization or adjustment or
marshalling of the assets or liabilities of Party B or any Specified Entity of
Party B, any receivership or assignment for the benefit of creditors relating
to Party B or any Specified Entity of Party B or any similar case or proceeding
relative to Party B or any Specified Entity of Party B or its creditors, as
such, in each case whether or not voluntary;

 

(ii)           any
liquidation, dissolution, marshalling of assets or liabilities or other winding
up of Party B or any Specified Entity of Party B, in each case whether or not
voluntary and whether or not involving bankruptcy or insolvency, other than a
liquidation or dissolution of Party B or a Specified Entity of Party B in
connection with (a) a merger or consolidation of such Person with or into
a Specified Entity of Party B or Party B, as the case may be, or (b) a
transfer of substantially all assets of Party B or a Specified Entity of Party
B to a Specified Entity of Party B or Party B, as the case may be, in the case
of each of the preceding clauses (a) and (b), in a transaction that is
permitted under the Master ISDAs; or

 

(iii)          any other
proceeding of any type or nature in which substantially all claims of creditors
of Party B or any Specified Entity of Party B are determined and any payment or
distribution is or may be made on account of such claims.

 

64

 

“Intercreditor Agreement”
means the Intercreditor and Subordination Agreement, dated as of September 22,
2009, by and among MX Holdings, the pledgors from time to time party thereto,
Sempra Energy Trading LLC, in its capacity as facility agent, and Law Debenture
Trust Company of New York, in its capacity as indenture trustee, as it may be
amended from time to time.

 

“Interested Person” means,
in respect of Party B or any Specified Entity of Party B, (a) any Person
which has a Ten Percent Interest in Party B or any such Specified Entity, (b) any
Person in which Party B or any such Specified Entity has a Ten Percent
Interest, or (c) if a Person has a Ten Percent Interest in Party B or any
such Specified Entity and in other Persons, such other Persons.

 

“Investment” means, for any
Person: (i) the acquisition (whether for cash, property, services or
securities or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities of any other
Person or any agreement to make any such acquisition (including any “short sale”
or any sale of any securities at a time when such securities are not owned by
the Person entering into such sale), (ii) the making of any deposit with,
or advance, loan or other extension of credit to, any other Person (including
the purchase of property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such property to such Person),
but excluding any such advance, loan or extension of credit having a term not
exceeding ninety (90) days arising in connection with the sale of inventory or
supplies by such Person in the ordinary course of business, (iii) the
entering into of any Guarantee of, or other contingent obligation with respect
to, Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person or (iv) any capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for
the account or use of others) any other Person.

 

“investment company” has the
meaning specified in Part 5(j).

 

“ISDA Documents” means the
Master ISDAs, trade confirmations under the Master ISDAs or otherwise, Credit
Support issued in connection with Master ISDAs, the ISDA Security Documents and
each of the other agreements, schedules, annexes, confirmations, documents and
instruments providing for, relating to or evidencing any other ISDA
Obligations, and any other document or instrument executed or delivered at any
time in connection with, or giving rise to, any ISDA Obligations, to the extent
such are effective at the relevant time, as each may be amended, amended and
restated, supplemented, modified, renewed, replaced, refinanced or extended,
restructured or otherwise modified, in whole or in part, from time to time in
accordance with its terms and with the provisions of this Agreement.

 

“ISDA Obligations” means any
settlement amount, termination payment, principal (including reimbursement
obligations with respect to Credit Support whether or not drawn), interest
(including, to the extent legally permitted, all interest accrued thereon after
the commencement of any Insolvency or Liquidation Proceeding at the rate,
including any applicable post-default rate, specified in the ISDA Documents,
even if such interest is not enforceable, allowable or allowed as a claim in
such proceeding), premium (if any), fees, indemnifications, reimbursements,
expenses and other liabilities to be paid or performed under the ISDA
Documents.

 

“ISDA Security Documents”
means, collectively, the Guarantee and Collateral Agreement and any and all
guarantees, security agreements, pledge agreements, collateral assignments,
mortgages, collateral agency agreements, control agreements, deeds of trust or
other grants or transfers for security executed and delivered by Party B or any
Specified Entity of Party B creating (or purporting to create) a Lien securing
ISDA Obligations in favor of Party A, in each case, as amended, amended and
restated, supplemented, modified, renewed, restated, replaced, refinanced or
extended, restructured or otherwise modified, in whole or in part, from time to
time, in accordance with its terms and with the provisions of this Agreement.

 

“ISO” means any independent
electric system operator, regional transmission operator or similar entity
including the NYISO, ERCOT, PJM, NEPOOL and any other independent electric
system operator, regional transmission operator or similar entity added to the
list set forth on Exhibit 7(j) from time to time.

 

“IT Account” means a
customer of Party B that is classified as a commercial customer by Party B and
which the applicable LDC has classified as a customer that receives
interruptible transport services or any customer that Party 

 

65

 

B can demonstrate, to Party
A’s reasonable satisfaction, historically purchases an annual quantity of at
least 0.5 BCF of Gas.

 

“IT Gas Adder” means
$0.03/MMBtu.

 

“LDC” means the local
distribution company responsible for delivering Gas to Party B’s Customers in a
particular geographic area.

 

“LDC Citygate” means the
delivery point for the distribution system of the applicable LDC.

 

“LDC/EDC Delivery Charges”
means, with respect to any billed and unbilled accounts receivable outstanding
as at any time of the determination thereof, the portion of such accounts
receivable that constitutes amounts owed by Party B’s Customers for services
provided by an LDC or EDC with respect to which Party B has an equal account
payable obligation to such LDC or EDC.

 

“Lien” means (i) any
mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or
security interest of any kind in, on or of such Property, (ii) the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having substantially
the same economic effect as any of the foregoing) relating to such Property, (iii) in
the case of securities, any purchase option, call or similar right of a third
party with respect to such securities, (iv) any right of set off,
recoupment, combination of accounts or similar rights; and in each case whether
by contract, operation of law or otherwise and (v) any agreement to give
any interest described in clauses (i) through (iv).

 

“Loan” has the meaning
specified in Part 10(b)(v).

 

“Lockbox Account” has the
meaning specified in Part 11(b)(i).

 

“Management Incentive Plan”
has the meaning specified in the Stockholders Agreement.

 

“Margin” means all cash held
in the Party A Sub Account under all Master ISDAs.

 

“Master ISDAs” shall mean
this Agreement, the MX Electric Agreement and any additional ISDA Master
Agreement entered into between Party A and any Specified Entity of Party B
(other than MX Electric).

 

“Material Adverse Effect”
means (a) a material adverse effect on (i) Party B or Party B and
Party B’s Specified Entities taken as a whole, (ii) the ability of Party B
or any Specified Entity of Party B to perform any of its material obligations
under any Material Contracts to which it is a party or (iii) the aggregate
value of the Collateral or the validity or priority of the security interests
in such Collateral, or (b) a material adverse change (as reasonably
determined by Party A in its sole discretion) in (i) the financial
condition, the results of operations, business, prospects or results of
operations of Party B or Party B and Party B’s Specified Entities taken as a
whole, or (ii) the collection rate or accounts receivable for Party B or
any Specified Entity of Party B;

 

“Material Contracts” means
the Notes, the Indenture, the Old Notes, the Old Notes Indenture, any
Replacement Debt (and, if applicable, any indenture related thereto), any
contract or agreement to which Party B or any Specified Entity of Party B is a
party under which Party B or such Specified Entity, as applicable, shall have
obligations (or a right to receive revenues) over the term of such contract or
agreement in excess of $3,500,000, or the then equivalent of such amount in
another currency or currencies (or such other amount as approved by the Party
A) or which is otherwise material to the business or operation of Party B or
such Specified Entity, as applicable and any other contract or agreement that
is necessary or advisable for the conduct of the business of Party B or any
Specified Entity of Party B as contemplated by this Agreement.

 

“Maturity Date” means, with
respect to a Loan, the maturity date for such Loan specified on Exhibit 10(d)(i).

 

“Minimum Gas Quantity” has
the meaning specified in Part 7(a).

 

66

 

“Missing Day” has the
meaning specified in Part 5(f)(2).

 

“Moody’s” means Moody’s
Investors Service, Inc., or any successor thereof.

 

“Multiemployer Plan” means a
multiemployer plan as defined in Section 4001(a)(3) of ERISA with
respect to which Party B or any of its ERISA Affiliates may have any liability,
contingent or otherwise.

 

“MX Canada” means MxEnergy
(Canada) Ltd., a Nova Scotia corporation.

 

“MX Canada Transaction” has
the meaning specified in Part 5(u).

 

“MX Electric” means MxEnergy
Electric Inc., a Delaware corporation.

 

“MX Electric Agreement”
means that certain ISDA Master Agreement, of even date herewith, entered into
between Party A and MX Electric.

 

“MX Holdco” means any
Specified Entity of Party B other than MX Holdings, Party B, MX Canada and MX
Electric.

 

“MX Holdings” means MxEnergy
Holdings, Inc., a Delaware corporation.

 

“NEPOOL” means ISO New
England.

 

“Notes Escrow Account” means
the segregated escrow account established pursuant to the Escrow Agreement.

 

“Nomination Schedule” means
the act of Party A, Party B or any relevant Transporter notifying, requesting,
and confirming to each other relevant party the quantity of Gas to be delivered
on any Day, as the case may be, or the quantity of UCAP to be delivered in
respect of any month.

 

“Notes” means the 13.25%
Senior Subordinated Secured Notes due 2014 of MX Holdings.

 

“NYMEX” means The New York
Mercantile Exchange, or any successor thereof.

 

“Offering Memorandum” means
that certain Second Amended and Restated Confidential Offering Memorandum and
Consent Solicitation Statement of MX Holdings, dated as of August 27,
2009, as amended through the Closing Date.

 

“Officers’ Certificate”
means a certificate signed by two officers of MX Holdings, at least one of whom
shall be the principal executive officer or principal financial officer of MX
Holdings, and delivered to the Trustee.

 

“Old Notes” means the
Floating Rate Senior Notes Due 2011 of MX Holdings.

 

“Old Notes Indenture” means
the indenture, dated as of August 4, 2006, among MX Holdings, Law
Debenture Trust Company of New York, as trustee, and Deutsche Bank Trust
Company Americas, as registrar and paying agent, as amended through the Closing
Date.

 

“Online Choice” means
OnlineChoice Inc., a Delaware corporation.

 

“Operating Account” means
account number 2079961065281 at Wachovia.

 

“Option Transaction” means a
transaction that provides the buyer the right, but not the obligation, to
purchase or sell a commodity specified in such transaction.

 

“Outstanding Gas Credit
Support” has the meaning specified in the Gas Annex.

 

67

 

“Outstanding Amount” means
at any time, all amounts (including Credit Support Fees and Financing Fees and
amounts payable on the Gas Settlement Dates set out in Parts 10(a) and
10(b)) not paid on the applicable Settlement Date and any other amount owed to
Party A and, with respect to Storage Gas (in addition to the foregoing), the
aggregate amount owed by Party B to Party A for all Storage Gas that at such
time has not been delivered to Party B’s customers or has not been delivered to
Party B pursuant to a Required Purchase (determined in any case based on the
amount that Party B would be required to pay Party A for such Gas in the event
of a Required Purchase).

 

“Overnight LIBOR” means for
any Business Day the rate of interest per annum (rounded upwards if necessary
to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page or
http://bba.org.uk/bba/ (or any successor page) as the British Bankers
Association London Interbank offered rate for overnight deposits in U.S.
Dollars at approximately 11 a.m. London time two Business Days prior to
the date of determination.

 

“Part” means, unless
otherwise specified, a Part of the Schedule to the Master Agreement.

 

“Party A Storage Gas
Purchase Price” has the meaning specified in Part 8(b)(iii).

 

“Party A Sub Account” means
a sub account of Party A’s general working capital account which shall be
identified as relating to this Agreement, or any replacement custodial account
established in accordance with Part 11(f).

 

“Party B Customer Load”
means the full Gas load requirements of Party B’s Customers.

 

“PBGC” means the Pension
Benefit Guaranty Corporation referred to and defined in ERISA and any successor
entity performing similar functions.

 

“Permitted Holders” means
Jeffrey A. Mayer, Denham Commodity Partners LP, Charter Mx LLC and Camulos
Capital LP, and their respective Affiliates.

 

“Permitted Indebtedness”
means the following Indebtedness:

 

(i)            Indebtedness incurred under
the ISDA Documents;

 

(ii)           Indebtedness incurred with
respect to any LDC, EDC or ISO in connection with Party B’s balancing
obligations;

 

(iii)          for a period of 90 days
following the Closing Date, letters of credit issued by SocGen for the account
of Party B that are outstanding on the Closing Date and that are secured by
Credit Support arranged for by Party A;

 

(iv)          loans from MX Holdings or a
MX Holdco, subordinated to the ISDA Obligations on terms satisfactory to Party
A in its sole discretion, to MX Electric or MX Canada necessary to pay ISDA
Obligations of MX Electric or MX Canada then due and payable;

 

(v)           the Notes in a principal
amount not to exceed $75,000,000 (and Replacement Debt that is incurred
pursuant to, and compliant with, Section 3.10 of the Intercreditor
Agreement);

 

(vi)          the Old Notes in a principal
amount not to exceed $10,000,000;

 

(vii)         Guarantees of MX Holdings or
any Wholly-Owned Subsidiary of MX Holdings in respect of Permitted
Indebtedness;

 

(viii)        (a) Indebtedness
incurred to finance the acquisition, construction or improvement of any fixed
or capital assets and (b) Indebtedness in respect of Capital Leases and
synthetic lease obligations and extensions, renewals and replacements of any
such Indebtedness that do not increase the outstanding principal amount
thereof; provided that (x) in the case of Indebtedness to finance the
acquisition, construction or improvements of fixed or capital assets, such
Indebtedness is incurred prior to or within 120 

 

68

 

days
after such acquisition or the completion of such construction or improvement
and (y) the aggregate principal amount of Indebtedness permitted by this
paragraph shall not exceed $250,000 at any time outstanding;

 

(ix)           unsecured Indebtedness in an
aggregate principal amount not to exceed $500,000 at any time outstanding;

 

(x)            Indebtedness required to
satisfy regulatorily-required credit requirements not satisfied by Party A on
behalf of Party B;

 

(xi)           Indebtedness consisting of
obligations relating to surety bonds outstanding as of the Closing Date, as set
forth on Exhibit 14(a)(ii);

 

(xii)          for a period of 30 days
following the Closing Date, Indebtedness consisting of the RBS Novated
Transactions (to the extent such transactions have not been novated to The
Royal Bank of Scotland plc) set forth on Exhibit 12(a)(xix); and

 

(xiii)         following the novation of
such transactions to The Royal Bank of Scotland plc, Indebtedness consisting of
RBS Novated Transactions.

 

“Permitted Investments”
means, as of the date of this Agreement, any of the following owned by Party B
or any Specified Entity of Party B: (i) securities issued or directly and
fully guaranteed or insured by the United Sates or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having maturities of not more than
six months from the date of acquisition; (ii) time deposits and
certificates of deposit, with maturities of not more than six months from the
date of acquisition, of any domestic or international commercial bank of
recognized standing having capital and surplus in excess of $500,000,000 (or
whose holding company meets such standard) and having a rating on its
commercial paper of at least “A-l” or the equivalent thereof by S&P or at
least “P-l” or the equivalent by Moody’s; (iii) investments in money
market funds substantially all the assets of which are comprised of securities
of the types described in clauses (i) and (ii) above; (iv) investments
in the Subsidiaries listed on Exhibit 5(j)(iv) which subsist as of
the date of this Agreement; (v) Indebtedness between Party B and any of
the Specified Entities of Party B or between any of the Specified Entities of
Party B incurred solely for the purposes of facilitating the payment of any
amounts due to Party A under any Master ISDA, so long as such Indebtedness is subordinated
to all ISDA Obligations on terms satisfactory to Party A in its sole
discretion; (vi) Equity Interests in a Wholly-Owned Subsidiary of Party B
or a Wholly-Owned Subsidiary of a Specified Entity of Party B; (vii) any
other investment which Party A agrees in writing shall constitute a “Permitted
Investment”; (viii) investments consisting of extensions of credit in the
nature of accounts receivable or notes receivable arising from the grant of
trade credit in the ordinary course of business, and investments received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit loss
and (ix) Guarantees constituting Permitted Indebtedness.

 

“Permitted Liens” means:

 

(i)            Liens in favor of Party A
created under the ISDA Security Documents;

 

(ii)           Liens to secure the Notes (and Replacement Debt that is incurred pursuant to, and
compliant with, Section 3.10 of the Intercreditor Agreement); provided
that such Liens (other than with respect to the Notes Escrow Account) shall be
subordinate to the Liens securing the ISDA Obligations of Party B and the
Specified Entities of Party B under the ISDA Documents in accordance with the
Intercreditor Agreement.

 

(iii)          Liens in connection with
workmen’s compensation; unemployment insurance or other social security or
pension obligations;

 

(iv)          mechanics’, workmen’s,
materialmen’s, suppliers’, construction or like liens, in each case (A) for
amounts not yet due and payable or (B) for amounts due and payable with
respect to ordinary course claims

 

69

 

being
contested in good faith and for which adequate reserves (in accordance with
GAAP) have been established or bond is posted;

 

(v)          Liens for taxes,
assessments or governmental charges or levies on Party B’s or any Specified
Entity of Party B’s Property not yet delinquent or, if delinquent, which are
being contested in good faith and for which adequate reserves (in accordance
with GAAP) have been established;

 

(vi)          Liens (including first-priority Liens
if required) in connection with any account receivables purchase program
entered into between Party B or any Specified Entity of Party B and any LDC
listed on Exhibit 7(j);

 

(vii)         attachment or judgment liens to the
extent not constituting an Event of Default; provided that (A) the
existence of such liens could not reasonably be expected to result in a
Material Adverse Effect and (B) such liens are discharged within 60 days
of the creation thereof;

 

(viii)        Liens in favor of third parties in any
Collateral having in the aggregate a fair market value not to exceed $500,000
for Party B and all Specified Entities of Party B taken as a whole;

 

(ix)           Liens arising out of judgments or
awards in respect of which MX Holdings or any its Subsidiaries shall in good
faith be prosecuting an appeal or proceedings for review in respect of which
there shall be secured a subsisting stay of execution pending such appeal or
proceedings; provided that the aggregate amount of all such judgments or awards
(and any cash and the fair market value of any property subject to such Liens)
does not exceed $500,000 for Party B and all Specified Entities of Party B
taken as a whole, at any time outstanding;

 

(x)            rights of set-off of banks, LDCs and
Transporters in the ordinary course of banking and trading arrangements;

 

(xi)           Liens securing Permitted
Indebtedness under Subparagraph (viii) of the definition of “Permitted
Indebtedness”  in any fixed or capital
assets and improvements thereto or equipment hereafter acquired (or, in the
case of improvements, constructed) by MX Holdings or any of its Subsidiaries;
provided that (a) such Liens do not at any time encumber any property
other than the property financed by such Indebtedness and the proceeds thereof,
(b) the Indebtedness secured thereby does not exceed the lesser of the
cost or fair market value of the property being acquired or financed on the
date of acquisition or financing, and (c) in the case of purchase money
security interests, such security interests are created within 120 days after
such acquisition (or completion of such improvements); and

 

(xii)          Liens
on cash margin delivered to The Royal Bank of Scotland plc or a third party
securing Indebtedness permitted by Subparagraphs (xii) and (xiii) of the
definition of “Permitted Indebtedness”.

 

“Person” means
an individual, partnership, corporation, limited liability company,
unincorporated organization, trust or joint venture, or a Governmental
Authority or political subdivision thereof.

 

“Plan” means
any employee pension benefit plan (other than a Multiemployer Plan) subject to
the provisions of Title IV of ERISA or Section 412 of the Code or Section 302
of ERISA, and in respect of which Party B or any ERISA Affiliate is (or, if
such plan were terminated, would under Section 4069 of ERISA be deemed to
be) an “employer” as defined in Section 3(5) of ERISA.

 

“Potential
Termination Event” means an event or condition which constitutes a Termination
Event or which, upon notice, lapse of time or both, would, unless cured or
waived, become a Termination Event.

 

“Preferred
Stock” of any Person means any Capital Stock of such Person that has
preferential rights to any other Capital Stock of such Person with respect to
dividends or redemptions or upon liquidation.

 

70

 

“Primary Rate”
means (i) the greater of 4% per annum and (ii) the Base Rate
(matching the term of the applicable Credit Support document or instrument)
plus 3.00% per annum; provided that a Credit Support instrument with no
termination, expiration or maturity date shall be presumed to have a duration
of two years.

 

“Private
Equity” has the meaning set forth in the Intercreditor Agreement.

 

“Promissory
Note” means a promissory note substantially in the form of Exhibit 10(c)(ii).

 

“Prompt Month”
means the nearest month of delivery for which NYMEX futures prices are
published during the applicable trading month.

 

“Property”
means any right or interest in or property of any kind whatsoever, whether
real, personal or mixed and whether tangible or intangible, including, cash,
securities, accounts and contract rights.

 

“Put Option”
means an Option Transaction, which may be physically or financially settled,
that gives the holder the right to sell a certain quantity of an underlying
commodity to the seller of such Option Transaction, at a specified price on or
up to a specified expiration date or during a specified exercise period.

 

“Qualified
Capital Stock” means any Capital Stock that is not Disqualified Capital Stock.

 

“Qualified Custodian” means
a domestic office of a commercial bank, trust company or financial institution
organized under the laws of the United States (or any state or a political
subdivision thereof) having assets of at least $10 billion and a long term debt
or deposit rating of at least (i) A3 by Moody’s or (ii) A- by
S&P.

 

“Qualified
Initial Public Offering” has the meaning set forth in the Intercreditor
Agreement.

 

“Quoted Price”
means any price, discount or premium to a Commodity Reference Price (for
purposes of determining a floating price) or Option Transaction premium quoted
by Party A (before adding any relevant Gas Adder) for (i) any Gas
Transaction where Party B is the buyer, (ii) any fixed-for-floating Gas
Swap where Party B is the fixed price payer, (iii) any Gas Swap that is a
locational basis swap or (iv) any Gas Option; such prices, discounts or
premiums, as the case may be, shall be reflective of market offers or
offer-side discounts and premiums, as the case may be, adjusted for market
conditions for similar quantities of Gas, similar periods and tenors, at like
Delivery Points, and with counterparties whose credit quality is satisfactory
to Party A.

 

“Quoted
Purchase Price” means any price, discount or premium to a Commodity Reference
Price (for purposes of determining a floating price) or Option Transaction premium
quoted by Party A (before adding any applicable credit) for (i) any Gas
Transaction where Party B is the seller, (ii) any fixed-for-floating Gas
Swap where Party B is the floating price payer, (iii) any Gas Swap that is
a locational basis swap or (iv) any Gas Option; such prices, discounts or
premiums, as the case may be, shall be reflective of market bids or bid-side
index prices, discounts and premiums, as the case may be, adjusted for market
conditions for similar quantities of Gas, similar periods and tenors, at like
Delivery Points, and with counterparties whose credit quality is satisfactory
to Party A.

 

“Rating”
means, with respect to any entity, the ratings assigned to such entity by each
of the Rating Agencies.

 

“Rating
Agencies” means Moody’s and/or S&P, as applicable, and any successor
thereto.

 

“RBS Novated
Transaction” has the meaning specified in Part 12(a)(xix)(A).

 

“RBS Sleeve
Transaction” has the meaning specified in Part 12(a)(xix)(A).

 

“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of September 22,
2009, among MX Holdings and certain of the Stockholders party thereto, as the
same may be amended from time to time.

 

“Reimbursement
Obligation” has the meaning specified in Part 12(a)(xviii).

 

71

 

“Related
Agreements” means, collectively, the ISDA Documents, the Intercreditor
Agreement, the Stockholders Agreement and the Registration Rights Agreement.

 

“Release”
means any release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration into the indoor or
outdoor environment, including the movement of Hazardous Materials through
ambient air, soil, surface water, ground water, wetlands, land or subsurface
strata.

 

“Replacement
Debt” has the meaning specified in the Intercreditor Agreement.

 

“Reporting
Company” has the meaning specified in Part 12(a)(vi).

 

“Required
Purchase” has the meaning specified in Part 9(b)

 

“Required
Purchase Date” has the meaning specified in Part 9(b).

 

“Residential
Customer-Equivalent”  means each 100
MMBtus, with respect to Gas, and each 10Mws, with respect to Energy, of Party B
Customer Load.

 

“Responsible
Officer” means, with respect to Party B and any Specified Entity of Party B, a
director, the president, chief executive officer, general counsel, chief
operating officer, chief financial officer, principal accounting officer,
treasurer or any vice president of Party B or such Specified Entity as the case
may be.

 

“Restricted
Payment” means any instance where Party B and the Specified Entities of Party B
will, directly or indirectly:

 

(i)            declare
or pay any dividend or make any distribution, whether in cash, securities or
other property (other than dividends or distributions payable in Qualified
Capital Stock), on or in respect of any Equity Interests to the holders
thereof;

 

(ii)           make
any payment (whether in cash, securities or other property), including any
sinking fund or similar fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such
Equity Interests in Party B or any Specified Entity of Party B or any option,
warrant or other right to acquire any such Equity Interests in Party B or any
Specified Entity of Party B;

 

(iii)           make any interest or principal payment on,
purchase, defease, redeem, repay, prepay, decrease or otherwise acquire or
retire for value, prior to any scheduled final maturity, scheduled repayment or
scheduled sinking fund payment, the Old Notes or any Indebtedness of Party B or
any Specified Entity of Party B that is subordinated or junior in right of
payment to the ISDA Obligations, other than payments to the Notes Escrow
Account in accordance with the terms of the Intercreditor Agreement; and

 

(iv)          make
any Investment (other than Permitted Investments).

 

“Sale and
Leaseback Transaction” means any direct or indirect arrangement with any Person
or to which any such Person is a party, providing for the leasing to Party B or
a Specified Entity of Party B of any property, whether owned by Party B or any
Specified Entity of Party B at the Closing Date or later acquired, which has
been or is to be sold or transferred by Party B or such Specified Entity to
such Person or to any other Person from whom funds have been or are to be
advanced by such Person on the security of such Property.

 

“Secondary
Rate” means 1.00% per annum.

 

“SET” has the
meaning specified in Part 5(l).

 

“Settlement
Date” shall mean the Gas Settlement Date, the Financing Fee Settlement Date or
the Gas Swap Settlement Date, as the context requires.

 

72

 

“SG Exposure
Fee” has the meaning specified in Part 10(a)(ii).

 

“SG Future
Calculation Period” has the meaning specified in Part 10(a)(iv).

 

“SG Notional
Amount” has the meaning specified in Part 10(a)(ii).

 

“SG Novated
Transactions” has the meaning specified in Part 10(a)(i).

 

“SG Novation
Payments” has the meaning specified in Part 10(a)(i).

 

“SG Sleeve
Transaction” has the meaning specified in Part 10(a)(i).

 

“Sleeve Adder”
has the meaning specified in Exhibit 14(a)(i).

 

“Sleeve
Transaction” has the meaning specified in Part 7(e).

 

“S&P”
means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor thereof.

 

“SocGen” means
Société Générale, a French bank.

 

“Solvent” when
used with respect to any Person, means that, as of any date of determination, (a) the
amount of the “present fair saleable value” of the assets of such Person will,
as of such date, exceed the amount of all “liabilities of such Person,
contingent or otherwise”, as of such date, as such quoted terms are determined
in accordance with applicable federal and state laws (or, with respect to MX
Canada, applicable Canadian federal or provincial laws) governing
determinations of the insolvency of debtors, (b) the present fair saleable
value of the assets of such person will, as of such date, be greater than the
amount that will be required to pay the liability of such Person on its debts
as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they
mature.  For purposes of this definition,
(i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right
to payment, whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (y) right to an equitable remedy
for breach of performance if such breach gives rise to a right to payment,
whether or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

 

“Specified
Agreements” means, collectively, the ISDA Documents, the Intercreditor
Agreement, the Stockholders Agreement and the Registration Rights Agreement.

 

“Stockholders”
means the holders of Capital Stock in MX Holdings.

 

“Stockholders
Agreement” means the Stockholders Agreement dated the date hereof among MX
Holdings and the Stockholders party thereto.

 

“Storage
Financing Commencement Date” has the meaning specified in Part 9(b).

 

“Storage Gas”
has the meaning specified in Part 7(a).

 

“Storage Gas
Due Date” has the meaning specified in Part 9(b).

 

“Subject
Person” has the meaning set forth in the definition of “Change of Control”.

 

“Subsidiary”
means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent’s consolidated financial statements if such financial statements
were prepared in accordance 

 

73

 

with GAAP as
of such date, as well as any other corporation, limited liability company,
partnership, association or other entity (i) of which securities or other
ownership interests representing more than 50% of the equity or more than 50%
of the ordinary voting power or, in the case of a partnership, more than 50% of
the general partnership interests are, as of such date, owned, controlled or
held, or (ii) that is, as of such date, otherwise controlled, by the
parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.

 

“Surplus”
means that the amount held in the Aggregated Collateral Accounts at the time of
determination exceeds the aggregate amount of all outstanding settlement
payments under all Transactions (as such term is defined in the applicable
Master ISDA) under all Master ISDAs (whether or not the applicable Settlement
Dates have occurred).

 

“Swap Exposure”
has the meaning specified in Part 13(b).

 

“Swap Note
Collateral” means the funds deposited in the Swap Note Sub Account pursuant to Part 10(a)(iv) or
10(b)(vi), as applicable.

 

“Swap Note Sub
Account” means a sub account of Party A’s general working capital account which
shall be identified as relating to this Agreement and holding Swap Note
Collateral, or any replacement custodial account established in accordance with
Part 11(f).

 

“Swap
Transaction” means any swap, contract for differences, or other financially
settled derivative transaction (other than an Option Transaction), including
any such transaction entered into under this Agreement.

 

“Tax” has the
meaning specified in the Master Agreement except that, for purposes of the
provisions of this Agreement (whether or not incorporated by reference into the
Master Agreement), that definition shall be amended by deleting the phrase “in
respect of any payment under this Agreement other than a” and inserting in its
place “including any income, value added, sales”.

 

“Tax Gross-Up
Amounts” has the meaning specified in the Intercreditor Agreement.

 

“Ten Percent
Interest” means, in respect of any Person, 10% of any class of securities in
the aggregate, whether held directly or indirectly.

 

“Terminate”
means terminate and/or liquidate, and any right granted in this Agreement to
terminate Transactions is a right to terminate and/or liquidate.  “Termination” shall be similarly construed.

 

“Termination
Currency” has the meaning specified in Part 1(g).

 

“Termination
Date” has the meaning specified in Part 5(h).

 

“Third Party
Exposure Fees” has the meaning specified in Part 10(b)(iv).

 

“Third Party
Future Calculation Period” has the meaning specified in Part 10(b)(vi).

 

“Third Party
Liquidation Payments” has the meaning specified in Part 10(b)(i).

 

“Third Party
Notional Amount” has the meaning specified in Part 10(b)(iv)

 

“Third Party
Novation Payments” has the meaning specified in Part 10(b)(iii).

 

“Third Party
Novation Transactions” has the meaning specified in Part 10(b)(iii).

 

“Third Party
Transactions” has the meaning specified in Part 10(b)(i).

 

“Threshold
Amount” has the meaning specified in Part 1(c).

 

74

 

“Transportation
and Storage Costs” means Transporter demand and capacity charges and all the
variable costs incurred by Party A as principal or agent for delivering or
storing Gas pursuant to this Agreement including fuel shrinkage or losses,
commodity costs and any other charges made in accordance with any relevant
tariffs.

 

“Transporter”
has the meaning specified in the Gas Annex.

 

“Trustee”
means Law Debenture Trust Company of New York, as trustee under the Indenture,
and it successors and assigns.

 

“UCAP” means
the electricity product that is required to be purchased by load-serving
entities in the NYISO control area.

 

“Use” means,
with respect to any Hazardous Material and with respect to any Person, the
generation, manufacture, processing, distribution, handling, use, treatment,
recycling or storage of such Hazardous Material or transportation to or from
the property of such Person of such Hazardous Material.

 

“Wachovia”
means Wachovia Bank National Association, a national banking association.

 

“Wachovia
Control Agreements” means the Account Control Agreements among Party A, Party
B, the other parties thereto and Wachovia, in the forms of Exhibit 11(b)(i)(A) and
Exhibit 11(b)(i)(B).

 

“Wholesale
Transfer” has the meaning specified in the Certificate of Incorporation.

 

“Wholly-Owned
Subsidiary” of any Person means any Subsidiary of such Person of which all the
outstanding Equity Interests (other than in the case of a foreign Subsidiary,
directors’ qualifying shares or an immaterial amount of shares required to be
owned by other Persons pursuant to Applicable Law) is owned by such Person or
any Wholly-Owned Subsidiary of such Person.

 

75

 

IN WITNESS
WHEREOF, the parties have executed this Schedule as of the date specified on
the first page hereof.

 

 

	
   

  	
  SEMPRA ENERGY TRADING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Mitchell

  
	
   

  	
   

  	
  Name:  Michael D. Mitchell

  
	
   

  	
   

  	
  Title:    Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MXENERGY INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey Mayer

  
	
   

  	
   

  	
  Name:  Jeffrey Mayer

  
	
   

  	
   

  	
  Title:    President and Chief Executive Officer

  

 

 

Acknowledged and Agreed:

 

MXENERGY HOLDINGS INC.

 

	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Jeffrey Mayer

  	
   

  
	
   

  	
  Name:  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:    President and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MXENERGY ELECTRIC INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jeffrey Mayer

  	
   

  
	
   

  	
  Name:  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:    President and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MXENERGY (CANADA) LTD.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jeffrey Mayer

  	
   

  
	
   

  	
  Name:  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:    President and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ONLINECHOICE, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jeffrey Mayer

  	
   

  
	
   

  	
  Name:  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:    President and Chief Executive Officer

  	
   

  

 

[Signature Page to Gas ISDA Schedule]

 

 

	
  MXENERGY GAS CAPITAL HOLDINGS CORP.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jeffrey Mayer

  	
   

  
	
   

  	
  Name:  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:    President and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MXENERGY ELECTRIC CAPITAL HOLDINGS CORP.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jeffrey Mayer

  	
   

  
	
   

  	
  Name:  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:    President and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MXENERGY GAS CAPITAL CORP.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jeffrey Mayer

  	
   

  
	
   

  	
  Name:  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:    President and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MXENERGY ELECTRIC CAPITAL CORP.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jeffrey Mayer

  	
   

  
	
   

  	
  Name:  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:    President and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MXENERGY CAPITAL HOLDINGS CORP.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jeffrey Mayer

  	
   

  
	
   

  	
  Name:  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:    President and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  INFOMETER.COM INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jeffrey Mayer

  	
   

  
	
   

  	
  Name:  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:    President and Chief Executive Officer

  	
   

  

 

[Signature Page to Gas ISDA Schedule]Exhibit 10.1(b)

 

(Multicurrency — Cross Border)

ISDA®

International
Swap Dealers Association, Inc.

MASTER AGREEMENT

 

dated as of September 22,
2009

 

	
  SEMPRA
  ENERGY TRADING LLC

  	
   

  	
  MXENERGY
  ELECTRIC INC.

  
	
  (“Party
  A”)

  	
   

  	
  (“Party
  B”)

  

 

have
entered and/or anticipate entering into one or more transactions (each a “Transaction”)
that are or will be governed by this Master Agreement, which includes the
schedule (the “Schedule”), and the documents and other confirming evidence
(each a “Confirmation”) exchanged between the parties confirming those
Transactions.

 

Accordingly,
the parties agree as follows:—

 

1.             Interpretation

 

(a)           Definitions.  The terms defined in Section 14 and in
the Schedule will have the meanings therein specified for the purpose of this
Master Agreement.

 

(b)           Inconsistency.  In the event of any inconsistency between the
provisions of the Schedule and the other provisions of this Master Agreement,
the Schedule will prevail. In the event of any inconsistency between the
provisions of any Confirmation and this Master Agreement (including the
Schedule), such Confirmation will prevail for the purpose of the relevant
Transaction.

 

(c)           Single Agreement.  All Transactions are
entered into in reliance on the fact that this Master Agreement and all
Confirmations form a single agreement between the parties (collectively
referred to as this “Agreement”), and the parties would not otherwise enter
into any Transactions.

 

2.             Obligations

 

(a)           General Conditions.

 

(i)            Each party will make each payment or delivery specified in
each Confirmation to be made by it, subject to the other provisions of this
Agreement.

 

(ii)           Payments under this Agreement will be made on the due date
for value on that date in the place of the account specified in the relevant
Confirmation or otherwise 

 

 

pursuant
to this Agreement, in freely transferable funds and in the manner customary for
payments in the required currency. Where settlement is by delivery (that is,
other than by payment), such delivery will be made for receipt on the due date
in the manner customary for the relevant obligation unless otherwise specified
in the relevant Confirmation or elsewhere in this Agreement.

 

(iii)          Each obligation of each party under Section 2(a)(i) is
subject to (1) the condition precedent that no Event of Default or
Potential Event of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date in
respect of the relevant Transaction has occurred or been effectively designated
and (3) each other applicable condition precedent specified in this
Agreement.

 

(b)           Change of Account. Either party may change its account for
receiving a payment or delivery by giving notice to the other party at least
five Local Business Days prior to the scheduled date for the payment or
delivery to which such change applies unless such other party gives timely
notice of a reasonable objection to such change.

 

(c)           Netting. If on any date amounts would otherwise be payable:—

 

(i)            in the same currency; and

 

(ii)           in respect of the same Transaction,

 

by
each party to the other, then, on such date, each party’s obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the
other party, replaced by an obligation upon the party by whom the larger
aggregate amount would have been payable to pay to the other party the excess
of the larger aggregate amount over the smaller aggregate amount.

 

The
parties may elect in respect of two or more Transactions that a net amount will
be determined in respect of all amounts payable on the same date in the same
currency in respect of such Transactions, regardless of whether such amounts
are payable in respect of the same Transaction. The election may be made in the
Schedule or a Confirmation by specifying that subparagraph (ii) above will
not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above
will not, or will cease to, apply to such Transactions from such date). This
election may be made separately for different groups of Transactions and will
apply separately to each pairing of Offices through which the parties make and
receive payments or deliveries.

 

(d)           Deduction or Withholding for Tax.

 

(i)            Gross-Up.  All payments under
this Agreement will be made without any deduction or withholding for or on
account of any Tax unless such deduction or withholding is required by any
applicable law, as modified by the practice of any relevant governmental
revenue authority, then in effect. If a party is so required to deduct or
withhold, then that party (“X”) will:—

 

2

 

(1)           promptly notify the other
party (“Y”) of such requirement;

 

(2)           pay to the relevant
authorities the full amount required to be deducted or withheld (including the
full amount required to be deducted or withheld from any additional amount paid
by X to Y under this Section 2(d)) promptly upon the earlier of
determining that such deduction or withholding is required or receiving notice
that such amount has been assessed against Y;

 

(3)           promptly forward to Y an
official receipt (or a certified copy), or other documentation reasonably
acceptable to Y, evidencing such payment to such authorities; and

 

(4)           if such Tax is an
Indemnifiable Tax, pay to Y, in addition to the payment to which Y is otherwise
entitled under this Agreement, such additional amount as is necessary to ensure
that the net amount actually received by Y (free and clear of Indemnifiable
Taxes, whether assessed against X or Y) will equal the full amount Y would have
received had no such deduction or withholding been required. However, X will
not be required to pay any additional amount to Y to the extent that it would
not be required to be paid but for:—

 

(A)          the failure by Y to comply
with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d); or

 

(B)           the failure of a
representation made by Y pursuant to Section 3(f) to be accurate and
true unless such failure would not have occurred but for (I) any action
taken by a taxing authority, or brought in a court of competent jurisdiction,
on or after the date on which a Transaction is entered into (regardless of
whether such action is taken or brought with respect to a party to this
Agreement) or (II) a Change in Tax Law.

 

(ii)           Liability.  If: —

 

(1)           X is required by any
applicable law, as modified by the practice of any relevant governmental
revenue authority, to make any deduction or withholding in respect of which X
would not be required to pay an additional amount to Y under Section 2(d)(i)(4);

 

(2)           X does not so deduct or
withhold; and (3) a liability resulting from such Tax is assessed directly
against X, then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or perform
any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

 

(e)           Default Interest; Other Amounts.  Prior to the
occurrence or effective designation of an Early Termination Date in respect of
the relevant Transaction, a party that defaults in the performance of any
payment obligation will, to the extent permitted by law and subject to Section 6(c),
be required to pay interest (before as well as after judgment) on the overdue
amount 

 

3

 

to
the other party on demand in the same currency as such overdue amount, for the
period from (and including) the original due date for payment to (but
excluding) the date of actual payment, at the Default Rate. Such interest will
be calculated on the basis of daily compounding and the actual number of days
elapsed. If, prior to the occurrence or effective designation of an Early
Termination Date in respect of the relevant Transaction, a party defaults in
the performance of any obligation required to be settled by delivery, it will
compensate the other party on demand if and to the extent provided for in the
relevant Confirmation or elsewhere in this Agreement.

 

3.             Representations

 

Each
party represents to the other party (which representations will be deemed to be
repeated by each party on each date on which a Transaction is entered into and,
in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:—

 

(a)           Basic Representations.

 

(i)            Status.  It is duly organised
and validly existing under the laws of the jurisdiction of its organisation or
incorporation and, if relevant under such laws, in good standing;

 

(ii)           Powers.  It has the power to
execute this Agreement and any other documentation relating to this Agreement
to which it is a party, to deliver this Agreement and any other documentation
relating to this Agreement that it is required by this Agreement to deliver and
to perform its obligations under this Agreement and any obligations it has
under any Credit Support Document to which it is a party and has taken all
necessary action to authorise such execution, delivery and performance;

 

(iii)          No Violation or
Conflict.  Such execution, delivery and performance do
not violate or conflict with any law applicable to it, any provision of its
constitutional documents, any order or judgment of any court or other agency of
government applicable to it or any of its assets or any contractual restriction
binding on or affecting it or any of its assets;

 

(iv)          Consents.  All governmental and
other consents that are required to have been obtained by it with respect to
this Agreement or any Credit Support Document to which it is a party have been
obtained and are in full force and effect and all conditions of any such
consents have been complied with; and

 

(v)           Obligations
Binding.  Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid and
binding obligations, enforceable in accordance with their respective terms
(subject to applicable bankruptcy, reorganisation, insolvency, moratorium or
similar laws affecting creditors’ rights generally and subject, as to
enforceability, to equitable principles of general application (regardless of
whether enforcement is sought in a proceeding in equity or at law)).

 

(b)           Absence of Certain Events.  No Event of Default
or Potential Event of Default or, to its knowledge, Termination Event with
respect to it has occurred and is continuing and no such event or circumstance
would occur as a result of its entering into or performing its obligations
under this Agreement or any Credit Support Document to which it is a party.

 

4

 

(c)           Absence of Litigation.  There is not pending
or, to its knowledge, threatened against it or any of its Affiliates any
action, suit or proceeding at law or in equity or before any court, tribunal,
governmental body, agency or official or any arbitrator that is likely to
affect the legality, validity or enforceability against it of this Agreement or
any Credit Support Document to which it is a party or its ability to perform
its obligations under this Agreement or such Credit Support Document.

 

(d)           Accuracy of Specified Information.  All
applicable information that is furnished in writing by or on behalf of it to
the other party and is identified for the purpose of this Section 3(d) in
the Schedule is, as of the date of the information, true, accurate and complete
in every material respect.

 

(e)           Payer Tax Representation.  Each
representation specified in the Schedule as being made by it for the purpose of
this Section 3(e) is accurate and true.

 

(f)            Payee Tax Representations.  Each representation
specified in the Schedule as being made by it for the purpose of this Section 3(f) is
accurate and true.

 

4.             Agreements

 

Each
party agrees with the other that, so long as either party has or may have any
obligation under this Agreement or under any Credit Support Document to which
it is a party:—

 

(a)           Furnish Specified Information. It will deliver to the other
party or, in certain cases under subparagraph (iii) below, to such
government or taxing authority as the other party reasonably directs:—

 

(i)            any forms, documents or certificates relating to taxation
specified in the Schedule or any Confirmation;

 

(ii)           any other documents specified in the Schedule or any
Confirmation; and

 

(iii)          upon reasonable demand by such other party, any form or
document that may be required or reasonably requested in writing in order to
allow such other party or its Credit Support Provider to make a payment under
this Agreement or any applicable Credit Support Document without any deduction
or withholding for or on account of any Tax or with such deduction or
withholding at a reduced rate (so long as the completion, execution or
submission of such form or document would not materially prejudice the legal or
commercial position of the party in receipt of such demand), with any such form
or document to be accurate and completed in a manner reasonably satisfactory to
such other party and to be executed and to be delivered with any reasonably
required certification,

 

in
each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.

 

(b)           Maintain Authorisations.  It will use all
reasonable efforts to maintain in full force and effect all consents of any
governmental or other authority that are required to be obtained by it 

 

5

 

with
respect to this Agreement or any Credit Support Document to which it is a party
and will use all reasonable efforts to obtain any that may become necessary in
the future.

 

(c)           Comply with Laws.  It will comply in all
material respects with all applicable laws and orders to which it may be
subject if failure so to comply would materially impair its ability to perform
its obligations under this Agreement or any Credit Support Document to which it
is a party.

 

(d)           Tax Agreement.  It will give notice of any failure of a
representation made by it under Section 3(f) to be accurate and true
promptly upon learning of such failure.

 

(e)           Payment of Stamp Tax.  Subject to Section 11,
it will pay any Stamp Tax levied or imposed upon it or in respect of its
execution or performance of this Agreement by a jurisdiction in which it is
incorporated, organised, managed and controlled, or considered to have its
seat, or in which a branch or office through which it is acting for the purpose
of this Agreement is located (“Stamp Tax Jurisdiction”) and will indemnify the
other party against any Stamp Tax levied or imposed upon the other party or in
respect of the other party’s execution or performance of this Agreement by any
such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with
respect to the other party.

 

5.             Events
of Default and Termination Events

 

(a)           Events of Default.  The occurrence at any
time with respect to a party or, if applicable, any Credit Support Provider of
such party or any Specified Entity of such party of any of the following events
constitutes an event of default (an “Event of Default”) with respect to such
party:—

 

(i)            Failure to Pay
or Deliver.  Failure by the party to make, when due, any payment under
this Agreement or delivery under Section 2(a)(i) or 2(e) required
to be made by it if such failure is not remedied on or before the third Local
Business Day after notice of such failure is given to the party;

 

(ii)           Breach of
Agreement.  Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment under
this Agreement or delivery under Section 2(a)(i) or 2(e) or to
give notice of a Termination Event or any agreement or obligation under Section 4(a)(i),
4(a)(iii) or 4(d)) to be complied with or performed by the party in
accordance with this Agreement if such failure is not remedied on or before the
thirtieth day after notice of such failure is given to the party;

 

(iii)          Credit Support Default.

 

(1)           Failure by the party or any
Credit Support Provider of such party to comply with or perform any agreement
or obligation to be complied with or performed by it in accordance with any
Credit Support Document if such failure is continuing after any applicable
grace period has elapsed;

 

6

 

(2)           the expiration or
termination of such Credit Support Document or the failing or ceasing of such
Credit Support Document to be in full force and effect for the purpose of this
Agreement (in either case other than in accordance with its terms) prior to the
satisfaction of all obligations of such party under each Transaction to which
such Credit Support Document relates without the written consent of the other
party; or

 

(3)           the party or such Credit
Support Provider disaffirms, disclaims, repudiates or rejects, in whole or in
part, or challenges the validity of, such Credit Support Document;

 

(iv)          Misrepresentation.
 A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been
made or repeated by the party or any Credit Support Provider of such party in
this Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have been
made or repeated;

 

(v)           Default under
Specified Transaction.  The party, any Credit Support Provider of such
party or any applicable Specified Entity of such party (1) defaults under
a Specified Transaction and, after giving effect to any applicable notice
requirement or grace period, there occurs a liquidation of, an acceleration of
obligations under, or an early termination of, that Specified Transaction, (2) defaults,
after giving effect to any applicable notice requirement or grace period, in
making any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified Transaction (or
such default continues for at least three Local Business Days if there is no
applicable notice requirement or grace period) or (3) disaffirms,
disclaims, repudiates or rejects, in whole or in part, a Specified Transaction
(or such action is taken by any person or entity appointed or empowered to operate
it or act on its behalf);

 

(vi)          Cross Default.  If “Cross Default” is
specified in the Schedule as applying to the party, the occurrence or existence
of (1) a default, event of default or other similar condition or event
(however described) in respect of such party, any Credit Support Provider of
such party or any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of them
(individually or collectively) in an aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which has resulted
in such Specified Indebtedness becoming, or becoming capable at such time of
being declared, due and payable under such agreements or instruments, before it
would otherwise have been due and payable or (2) a default by such party,
such Credit Support Provider or such Specified Entity (individually or
collectively) in making one or more payments on the due date thereof in an
aggregate amount of not less than the applicable Threshold Amount under such
agreements or instruments (after giving effect to any applicable notice
requirement or grace period);

 

(vii)         Bankruptcy.  The party, any Credit
Support Provider of such party or any applicable Specified Entity of such
party: —

 

7

 

(1)           is dissolved (other than
pursuant to a consolidation, amalgamation or merger); (2) becomes
insolvent or is unable to pay its debts or fails or admits in writing its
inability generally to pay its debts as they become due; (3) makes a
general assignment, arrangement or composition with or for the benefit of its
creditors; (4) institutes or has instituted against it a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting creditors’ rights,
or a petition is presented for its winding-up or liquidation, and, in the case
of any such proceeding or petition instituted or presented against it, such
proceeding or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making of an order for
its winding-up or liquidation or (B) is not dismissed, discharged, stayed
or restrained in each case within 30 days of the institution or presentation
thereof; (5) has a resolution passed for its winding-up, official
management or liquidation (other than pursuant to a consolidation, amalgamation
or merger); (6) seeks or becomes subject to the appointment of an
administrator, provisional liquidator, conservator, receiver, trustee,
custodian or other similar official for it or for all or substantially all its
assets; (7) has a secured party take possession of all or substantially
all its assets or has a distress, execution, attachment, sequestration or other
legal process levied, enforced or sued on or against all or substantially all
its assets and such secured party maintains possession, or any such process is
not dismissed, discharged, stayed or restrained, in each case within 30 days
thereafter; (8) causes or is subject to any event with respect to it
which, under the applicable laws of any jurisdiction, has an analogous effect
to any of the events specified in clauses (1) to (7) (inclusive); or (9) takes
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the foregoing acts; or

 

(viii)        Merger Without
Assumption.  The party or any Credit Support Provider of
such party consolidates or amalgamates with, or merges with or into, or transfers
all or substantially all its assets to, another entity and, at the time of such
consolidation, amalgamation, merger or transfer: —

 

(1)           the resulting, surviving or
transferee entity fails to assume all the obligations of such party or such
Credit Support Provider under this Agreement or any Credit Support Document to
which it or its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this Agreement; or

 

(2)           the benefits of any Credit Support
Document fail to extend (without the consent of the other party) to the
performance by such resulting, surviving or transferee entity of its
obligations under this Agreement.

 

(b)           Termination Events.  The occurrence at any
time with respect to a party or, if applicable, any Credit Support Provider of
such party or any Specified Entity of such party of any event specified below
constitutes an Illegality if the event is specified in (i) below, a Tax
Event if the event is specified in (ii) below or a Tax Event Upon Merger
if the event is specified in (iii) below, and, if specified to be
applicable, a Credit Event (i) Illegality. Due to the adoption of, or 

 

8

 

any
change in, any applicable law after the date on which a Transaction is entered
into, or due to the promulgation of, or any change in, the interpretation by
any court, tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a result of
a breach by the party of Section 4(b)) for such party (which will be the
Affected Party): —

 

(1)           to perform any absolute or
contingent obligation to make a payment or delivery or to receive a payment or
delivery in respect of such Transaction or to comply with any other material
provision of this Agreement relating to such Transaction; or

 

(2)           to perform, or for any
Credit Support Provider of such party to perform, any contingent or other
obligation which the party (or such Credit Support Provider) has under any
Credit Support Document relating to such Transaction;

 

(ii)           Tax Event.  Due to (x) any
action taken by a taxing authority, or brought in a court of competent
jurisdiction, on or after the date on which a Transaction is entered into (regardless
of whether such action is taken or brought with respect to a party to this
Agreement) or (y) a Change in Tax Law, the party (which will be the
Affected Party) will, or there is a substantial likelihood that it will, on the
next succeeding Scheduled Payment Date (1) be required to pay to the other
party an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except
in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive
a payment from which an amount is required to be deducted or withheld for or on
account of a Tax (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) and no additional amount is required to be paid in respect of such Tax
under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or
(B));

 

(iii)          Tax Event Upon
Merger.  The party (the “Burdened Party”) on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except
in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive
a payment from which an amount has been deducted or withheld for or on account
of any Indemnifiable Tax in respect of which the other party is not required to
pay an additional amount (other than by reason of Section 2(d)(i)(4)(A) or
(B)), in either case as a result of a party consolidating or amalgamating with,
or merging with or into, or transferring all or substantially all its assets
to, another entity (which will be the Affected Party) where such action does
not constitute an event described in Section 5(a)(viii);

 

(iv)          Credit Event
Upon Merger.  If “Credit Event Upon Merger” is specified in
the Schedule as applying to the party, such party (“X”), any Credit Support
Provider of X or any applicable Specified Entity of X consolidates or
amalgamates with, or merges with or into, or transfers all or substantially all
its assets to, another entity and such action does not constitute an event
described in Section 5(a)(viii) but the creditworthiness of the
resulting, surviving or transferee entity is materially weaker than that of X,
such Credit Support Provider or such Specified Entity, as the case may be,
immediately prior to such action (and, in such event, X or its successor or
transferee, as appropriate, will be the Affected Party); or

 

9

 

(v)           Additional
Termination Event.  If any “Additional Termination Event” is
specified in the Schedule or any Confirmation as applying, the occurrence of
such event (and, in such event, the Affected Party or Affected Parties shall be
as specified for such Additional Termination Event in the Schedule or such
Confirmation).

 

(c)           Event of Default and Illegality.  If an event or
circumstance which would otherwise constitute or give rise to an Event of
Default also constitutes an Illegality, it will be treated as an Illegality and
will not constitute an Event of Default.

 

6.             Early
Termination

 

(a)           Right to Terminate Following Event of Default.  If at any time an
Event of Default with respect to a party (the “Defaulting Party”) has occurred
and is then continuing, the other party (the “Non-defaulting Party”) may, by
not more than 20 days notice to the Defaulting Party specifying the relevant
Event of Default, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all outstanding
Transactions. If, however, “Automatic Early Termination” is specified in the
Schedule as applying to a party, then an Early Termination Date in respect of
all outstanding Transactions will occur immediately upon the occurrence with
respect to such party of an Event of Default specified in Section 5(a)(vii)(1),
(3), (5), (6) or, to the extent analogous thereto, (8), and as of the time
immediately preceding the institution of the relevant proceeding or the
presentation of the relevant petition upon the occurrence with respect to such
party of an Event of Default specified in Section 5(a)(vii)(4) or, to
the extent analogous thereto, (8).

 

(b)           Right to Terminate Following Termination Event.

 

(i)            Notice.  If a Termination
Event occurs, an Affected Party will, promptly upon becoming aware of it,
notify the other party, specifying the nature of that Termination Event and
each Affected Transaction and will also give such other information about that
Termination Event as the other party may reasonably require.

 

(ii)           Transfer to
Avoid Termination Event.  If either an Illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon
Merger occurs and the Burdened Party is the Affected Party, the Affected Party
will, as a condition to its right to designate an Early Termination Date under Section 6(b)(iv),
use all reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days after it
gives notice under Section 6(b)(i) all its rights and obligations
under this Agreement in respect of the Affected Transactions to another of its
Offices or Affiliates so that such Termination Event ceases to exist.

 

If
the Affected Party is not able to make such a transfer it will give notice to
the other party to that effect within such 20 day period, whereupon the other
party may effect such a transfer within 30 days after the notice is given under
Section 6(b)(i).

 

Any
such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party, which
consent will not be withheld if 

 

10

 

such
other party’s policies in effect at such time would permit it to enter into
transactions with the transferee on the terms proposed.

 

(iii)          Two Affected
Parties.  If an Illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there are two Affected Parties, each party will use all
reasonable efforts to reach agreement within 30 days after notice thereof is
given under Section 6(b)(i) on action to avoid that Termination
Event.

 

(iv)          Right to
Terminate.  If: —

 

(1)           a transfer under Section 6(b)(ii) or
an agreement under Section 6(b)(iii), as the case may be, has not been
effected with respect to all Affected Transactions within 30 days after an
Affected Party gives notice under Section 6(b)(i); or

 

(2)           an Illegality under Section 5(b)(i)(2),
a Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax
Event Upon Merger occurs and the Burdened Party is not the Affected Party,

 

either
party in the case of an Illegality, the Burdened Party in the case of a Tax
Event Upon Merger, any Affected Party in the case of a Tax Event or an
Additional Termination Event if there is more than one Affected Party, or the
party which is not the Affected Party in the case of a Credit Event Upon Merger
or an Additional Termination Event if there is only one Affected Party may, by
not more than 20 days notice to the other party and provided that the relevant
Termination Event is then continuing, designate a day not earlier than the day
such notice is effective as an Early Termination Date in respect of all
Affected Transactions.

 

(c)           Effect of Designation.

 

(i)            If notice designating an Early Termination Date is given
under Section 6(a) or (b), the Early Termination Date will occur on
the date so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.

 

(ii)           Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section 2(a)(i) or
2(e) in respect of the Terminated Transactions will be required to be
made, but without prejudice to the other provisions of this Agreement. The
amount, if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).

 

(d)           Calculations.

 

(i)            Statement.  On or as soon as
reasonably practicable following the occurrence of an Early Termination Date,
each party will make the calculations on its part, if any, contemplated by Section 6(e) and
will provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the
relevant account to which any amount payable to it is to be paid. In the
absence of written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the 

 

11

 

party
obtaining such quotation will be conclusive evidence of the existence and
accuracy of such quotation.

 

(ii)           Payment Date.  An amount calculated
as being due in respect of any Early Termination Date under Section 6(e) will
be payable on the day that notice of the amount payable is effective (in the
case of an Early Termination Date which is designated or occurs as a result of
an Event of Default) and on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event). Such
amount will be paid together with (to the extent permitted under applicable
law) interest thereon (before as well as after judgment) in the Termination
Currency, from (and including) the relevant Early Termination Date to (but
excluding) the date such amount is paid, at the Applicable Rate. Such interest
will be calculated on the basis of daily compounding and the actual number of
days elapsed.

 

(e)           Payments on Early Termination.  If an Early
Termination Date occurs, the following provisions shall apply based on the
parties’ election in the Schedule of a payment measure, either “Market
Quotation” or “Loss”, and a payment method, either the “First Method” or the “Second
Method”. If the parties fail to designate a payment measure or payment method
in the Schedule, it will be deemed that “Market Quotation” or the “Second
Method”, as the case may be, shall apply. The amount, if any, payable in
respect of an Early Termination Date and determined pursuant to this Section will
be subject to any Set-off.

 

(i)            Events of
Default.  If the Early Termination Date results from an
Event of Default:—

 

(1)           First
Method and Market Quotation.  If the First Method and Market Quotation
apply, the Defaulting Party will pay to the Non-defaulting Party the excess, if
a positive number, of (A) the sum of the Settlement Amount (determined by
the Non-defaulting Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent of the
Unpaid Amounts owing to the Defaulting Party.

 

(2)           First
Method and Loss.  If the First
Method and Loss apply, the Defaulting Party will pay to the Non-defaulting
Party, if a positive number, the Non-defaulting Party’s Loss in respect of this
Agreement.

 

(3)           Second
Method and Market Quotation.  If the Second Method and Market Quotation
apply, an amount will be payable equal to (A) the sum of the Settlement
Amount (determined by the Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party less (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party. If that amount
is a positive number, the Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.

 

12

 

(4)           Second Method and Loss.  If the Second Method and Loss apply, an amount
will be payable equal to the Non-defaulting Party’s Loss in respect of this
Agreement. If that amount is a positive number, the Defaulting Party will pay
it to the Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting Party.

 

(ii)           Termination
Events.  If the Early Termination Date results from a
Termination Event:—

 

(1)           One Affected Party.  If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies, except
that, in either case, references to the Defaulting Party and to the
Non-defaulting Party will be deemed to be references to the Affected Party and
the party which is not the Affected Party, respectively, and, if Loss applies
and fewer than all the Transactions are being terminated, Loss shall be
calculated in respect of all Terminated Transactions.

 

(2)           Two Affected Parties.  If there are two Affected Parties:—

 

(A)          if Market Quotation applies, each party will
determine a Settlement Amount in respect of the Terminated Transactions, and an
amount will be payable equal to (I) the sum of (a) one-half of the
difference between the Settlement Amount of the party with the higher
Settlement Amount (“X”) and the Settlement Amount of the party with the lower
Settlement Amount (“Y”) and (b) the Termination Currency Equivalent of the
Unpaid Amounts owing to X less (II) the Termination Currency Equivalent of
the Unpaid Amounts owing to Y; and

 

(B)           if Loss applies, each party will determine its Loss
in respect of this Agreement (or, if fewer than all the Transactions are being
terminated, in respect of all Terminated Transactions) and an amount will be
payable equal to one-half of the difference between the Loss of the party with
the higher Loss (“X”) and the Loss of the party with the lower Loss (“Y”).

 

If the amount payable is a
positive number, Y will pay it to X; if it is a negative number, X will pay the
absolute value of that amount to Y.

 

(iii)          Adjustment for
Bankruptcy.  In circumstances where an Early Termination
Date occurs because “Automatic Early Termination” applies in respect of a
party, the amount determined under this Section 6(e) will be subject
to such adjustments as are appropriate and permitted by law to reflect any
payments or deliveries made by one party to the other under this Agreement (and
retained by such other party) during the period from the relevant Early
Termination Date to the date for payment determined under Section 6(d)(ii).

 

(iv)          Pre-Estimate.  The parties agree
that if Market Quotation applies an amount recoverable under this Section 6(e) is
a reasonable pre-estimate of loss and not a penalty. Such amount is payable for
the loss of bargain and the loss of protection against future 

 

13

 

risks and
except as otherwise provided in this Agreement neither party will be entitled
to recover any additional damages as a consequence of such losses.

 

7.             Transfer

 

Subject to Section 6(b)(ii),
neither this Agreement nor any interest or obligation in or under this
Agreement may be transferred (whether by way of security or otherwise) by
either party without the prior written consent of the other party, except that:
—

 

(a)           a party may make such a transfer of this Agreement pursuant
to a consolidation or amalgamation with, or merger with or into, or transfer of
all or substantially all its assets to, another entity (but without prejudice
to any other right or remedy under this Agreement); and

 

(b)           a party may make such a transfer of all or any part of its
interest in any amount payable to it from a Defaulting Party under Section 6(e).

 

Any purported transfer that
is not in compliance with this Section will be void.

 

8.             Contractual Currency

 

(a)           Payment in the Contractual Currency.  Each payment under
this Agreement will be made in the relevant currency specified in this
Agreement for that payment (the “Contractual Currency”). To the extent
permitted by applicable law, any obligation to make payments under this
Agreement in the Contractual Currency will not be discharged or satisfied by
any tender in any currency other than the Contractual Currency, except to the
extent such tender results in the actual receipt by the party to which payment
is owed, acting in a reasonable manner and in good faith in converting the
currency so tendered into the Contractual Currency, of the full amount in the Contractual
Currency of all amounts payable in respect of this Agreement. If for any reason
the amount in the Contractual Currency so received falls short of the amount in
the Contractual Currency payable in respect of this Agreement, the party
required to make the payment will, to the extent permitted by applicable law,
immediately pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. If for any reason the amount in the
Contractual Currency so received exceeds the amount in the Contractual Currency
payable in respect of this Agreement, the party receiving the payment will
refund promptly the amount of such excess.

 

(b)           Judgments.  To the extent permitted by applicable law, if any judgment
or order expressed in a currency other than the Contractual Currency is
rendered (i) for the payment of any amount owing in respect of this
Agreement, (ii) for the payment of any amount relating to any early
termination in respect of this Agreement or (iii) in respect of a judgment
or order of another court for the payment of any amount described in (i) or
(ii) above, the party seeking recovery, after recovery in full of the
aggregate amount to which such party is entitled pursuant to the judgment or
order, will be entitled to receive immediately from the other party the amount
of any shortfall of the Contractual Currency received by such party as a
consequence of sums paid in such other currency and will refund promptly to the
other party any excess of the Contractual Currency received by such party as a
consequence of sums paid in such other currency if such shortfall or such
excess arises or results from any variation between the rate of exchange at
which the Contractual Currency is converted into the currency of the judgment
or 

 

14

 

order
for the purposes of such judgment or order and the rate of exchange at which
such party is able, acting in a reasonable manner and in good faith in
converting the currency received into the Contractual Currency, to purchase the
Contractual Currency with the amount of the currency of the judgment or order
actually received by such party. The term “rate of exchange” includes, without
limitation, any premiums and costs of exchange payable in connection with the
purchase of or conversion into the Contractual Currency.

 

(c)           Separate Indemnities. To the extent permitted by applicable law, these indemnities
constitute separate and independent obligations from the other obligations in
this Agreement, will be enforceable as separate and independent causes of
action, will apply notwithstanding any indulgence granted by the party to which
any payment is owed and will not be affected by judgment being obtained or
claim or proof being made for any other sums payable in respect of this
Agreement.

 

(d)           Evidence of Loss.  For tbe purpose of
this Section 8, it will be sufficient for a party to demonstrate that it
would have suffered a loss had an actual exchange or purchase been made.

 

9.             Miscellaneous

 

(a)           Entire Agreement.  This Agreement
constitutes the entire agreement and understanding of the parties with respect
to its subject matter and supersedes all oral communication and prior writings
with respect thereto.

 

(b)           Amendments.  No amendment, modification or waiver in
respect of this Agreement will be effective unless in writing (including a
writing evidenced by a facsimile transmission) and executed by each of the
parties or confirmed by an exchange of telexes or electronic messages on an
electronic messaging system.

 

(c)           Survival of Obligations.  Without prejudice to
Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties under this
Agreement will survive the termination of any Transaction.

 

(d)           Remedies Cumulative.  Except as provided in
this Agreement, the rights, powers, remedies and privileges provided in this
Agreement are cumulative and not exclusive of any rights, powers, remedies and
privileges provided by law.

 

(e)           Counterparts and Confirmations.

 

(i)            This Agreement (and each amendment, modification and waiver
in respect of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.

 

(ii)           The parties intend that they are legally bound by the terms
of each Transaction from the moment they agree to those terms (whether orally
or otherwise). A Confirmation shall he entered into as soon as practicable and
may he executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in each case will
be sufficient for all purposes to evidence a binding supplement to 

 

15

 

this
Agreement. The parties will specify therein or through another effective means
that any such counterpart, telex or electronic message constitutes a
Confirmation.

 

(f)            No Waiver of Rights.  A failure or delay in
exercising any right, power or privilege in respect of this Agreement will not
be presumed to operate as a waiver, and a single or partial exercise of any
right, power or privilege will not be presumed to preclude any subsequent or
further exercise, of that right, power or privilege or the exercise of any
other right, power or privilege.

 

(g)           Headings.  The headings used in this Agreement are for
convenience of reference only and are not to affect the construction of or to
be taken into consideration in interpreting this Agreement.

 

10.          Offices; Multibranch Parties

 

(a)           If Section 10(a) is specified in the Schedule as
applying, each party that enters into a Transaction through an Office other
than its head or home office represents to the other party that,
notwithstanding the place of booking office or jurisdiction of incorporation or
organisation of such party, the obligations of such party are the same as if it
had entered into the Transaction through its head or home office. This
representation will be deemed to be repeated by such party on each date on
which a Transaction is entered into.

 

(b)           Neither party may change the Office through which it makes
and receives payments or deliveries for the purpose of a Transaction without
the prior written consent of the other party.

 

(c)           If a party is specified as a Multibranch Party in the
Schedule, such Multibranch Party may make and receive payments or deliveries
under any Transaction through any Office listed in the Schedule, and the Office
through which it makes and receives payments or deliveries with respect to a
Transaction will be specified in the relevant Confirmation.

 

11.          Expenses

 

A Defaulting Party will, on
demand, indemnify and hold harmless the other party for and against all
reasonable out-of-pocket expenses, including legal fees and Stamp Tax, incurred
by such other party by reason of the enforcement and protection of its rights
under this Agreement or any Credit Support Document to which the Defaulting
Party is a party or by reason of the early termination of any Transaction,
including, but not limited to, costs of collection.

 

12.          Notices

 

(a)           Effectiveness. 
Any notice or
other communication in respect of this Agreement may be given in any manner set
forth below (except that a notice or other communication under Section 5
or 6 may not be given by facsimile transmission or electronic messaging system)
to the address or number or in accordance with the electronic messaging system
details provided (see the Schedule) and will be deemed effective as indicated:—

 

(i)            if in writing and delivered in person or by courier, on the
date it is delivered;

 

16

 

(ii)           if sent by telex, on the date the recipient’s answerback is
received;

 

(iii)          if sent by facsimile transmission, on the date that
transmission is received by a responsible employee of the recipient in legible
form (it being agreed that the burden of proving receipt will be on the sender
and will not be met by a transmission report generated by the sender’s
facsimile machine);

 

(iv)          if sent by certified or registered mail (airmail, if
overseas) or the equivalent (return receipt requested), on the date that mail
is delivered or its delivery is attempted; or

 

(v)           if sent by electronic messaging system, on the date that
electronic message is received, unless the date of that delivery (or attempted
delivery) or that receipt, as applicable, is not a Local Business Day or that
communication is delivered (or attempted) or received, as applicable, after the
close of business on a Local Business Day, in which case that communication
shall be deemed given and effective on the first following day that is a Local
Business Day.

 

(b)           Change of Addresses.  Either party may by
notice to the other change the address, telex or facsimile number or electronic
messaging system details at which notices or other communications are to be
given to it.

 

13.          Governing Law and Jurisdiction

 

(a)           Governing Law.  This Agreement will be governed by and
construed in accordance with the law specified in the Schedule.

 

(b)           Jurisdiction.  With respect to any suit, action or
proceedings relating to this Agreement (“Proceedings”), each party
irrevocably:—

 

(i)            submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if this
Agreement is expressed to be governed by the laws of the State of New York; and

 

(ii)           waives any objection which it may have at any time to the
laying of venue of any Proceedings brought in any such court, waives any claim
that such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such court
does not have any jurisdiction over such party.

 

Nothing in this Agreement
precludes either party from bringing Proceedings in any other jurisdiction
(outside, if this Agreement is expressed to be governed by English law, the
Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.

 

17

 

(c)           Service of Process.  Each party
irrevocably appoints the Process Agent (if any) specified opposite its name in
the Schedule to receive, for it and on its behalf, service of process in any
Proceedings. If for any reason any party’s Process Agent is unable to act as
such, such party will promptly notify the other party and within 30 days
appoint a substitute process agent acceptable to the other party. The parties
irrevocably consent to service of process given in the manner provided for
notices in Section 12. Nothing in this Agreement will affect the right of
either party to serve process in any other manner permitted by law.

 

(d)           Waiver of Immunities.  Each party
irrevocably waives, to the fullest extent permitted by applicable law, with
respect to itself and its revenues and assets (irrespective of their use or
intended use), all immunity on the grounds of sovereignty or other similar
grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief
by way of injunction, order for specific performance or for recovery of
property, (iv) attachment of its assets (whether before or after judgment)
and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.

 

14.          Definitions

 

As used in this Agreement:—

 

“Additional Termination Event” has the meaning specified
in Section 5(b).

 

“Affected Party” has the meaning specified
in Section 5(b).

 

“Affected Transactions” means (a) with respect
to any Termination Event consisting of an Illegality, Tax Event or Tax Event Upon
Merger, all Transactions affected by the occurrence of such Termination Event
and (b) with respect to any other Termination Event, all Transactions.

 

“Affiliate” means, subject to the Schedule, in relation
to any person, any entity controlled, directly or indirectly, by the person,
any entity that controls, directly or indirectly, the person or any entity
directly or indirectly under common control with the person. For this purpose, “control”
of any entity or person means ownership of a majority of the voting power of
the entity or person.

 

“Applicable Rate” means:—

 

(a)           in respect of obligations payable or deliverable (or which
would have been but for Section 2(a)(iii)) by a Defaulting Party, the
Default Rate;

 

(b)           in respect of an obligation to pay an amount under Section 6(e) of
either party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;

 

(c)           in respect of all other obligations payable or deliverable
(or which would have been but for Section 2(a)(iii)) by a Non-defaulting
Party, the Non-default Rate; and

 

(d)           in all other cases, the Termination Rate.

 

18

 

“Burdened Party” has the meaning specified in
Section 5(b).

 

“Change in Tax Law” means the enactment,
promulgation, execution or ratification of, or any change in or amendment to,
any law (or in the application or official interpretation of any law) that
occurs on or after the date on which the relevant Transaction is entered into.

 

“consent” includes a consent, approval, action,
authorisation, exemption, notice, filing, registration or exchange control
consent.

 

“Credit Event Upon Merger” has the meaning specified in
Section 5(b).

 

“Credit Support Document” means any agreement or instrument
that is specified as such in this Agreement.

 

“Credit Support Provider” has the meaning specified in
the Schedule.

 

“Default Rate” means a rate per annum equal
to the cost (without proof or evidence of any actual cost) to the relevant
payee (as certified by it) if it were to fund or of funding the relevant amount
plus 1% per annum.

 

“Defaulting Party” has the meaning specified in
Section 6(a).

 

“Early Termination Date” means the date determined in
accordance with Section 6(a) or 6(b)(iv).

 

“Event of Default” has the meaning specified in
Section 5(a) and, if applicable, in the Schedule.

 

“Illegality” has the meaning specified in Section 5(b).

 

“Indemnifiable Tax” means any Tax other than a
Tax that would not be imposed in respect of a payment under this Agreement but
for a present or former connection between the jurisdiction of the government
or taxation authority imposing such Tax and the recipient of such payment or a
person related to such recipient (including, without limitation, a connection arising
from such recipient or related person being or having been a citizen or
resident of such jurisdiction, or being or having been organised, present or
engaged in a trade or business in such jurisdiction, or having or having had a
permanent establishment or fixed place of business in such jurisdiction, but
excluding a connection arising solely from such recipient or related person
having executed, delivered, performed its obligations or received a payment
under, or enforced, this Agreement or a Credit Support Document).

 

“law” includes any treaty, law, rule or regulation
(as modified, in the case of tax matters, by the practice of any relevant
governmental revenue authority) and “lawful” and “unlawful” will be construed
accordingly.

 

“Local Business Day” means, subject to the
Schedule, a day on which commercial banks are open for business (including
dealings in foreign exchange and foreign currency deposits) (a) in
relation to any obligation under Section 2(a)(i), in the place(s) specified
in the relevant Confirmation or, if not so specified, as otherwise agreed by
the parties in writing or determined 

 

19

 

pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in
relation to any other payment, in the place where the relevant account is
located and, if different, in the principal financial centre, if any, of the
currency of such payment, (c) in relation to any notice or other
communication, including notice contemplated under Section 5(a)(i), in the
city specified in the address for notice provided by the recipient and, in the
case of a notice contemplated by Section 2(b), in the place where the
relevant new account is to be located and (d) in relation to Section 5(a)(v)(2),
in the relevant locations for performance with respect to such Specified
Transaction.

 

“Loss” means, with respect to this Agreement or one or more
Terminated Transactions, as the case may be, and a party, the Termination
Currency Equivalent of an amount that party reasonably determines in good faith
to be its total losses and costs (or gain, in which case expressed as a
negative number) in connection with this Agreement or that Terminated
Transaction or group of Terminated Transactions, as the case may be, including
any loss of bargain, cost of funding or, at the election of such party but
without duplication, loss or cost incurred as a result of its terminating,
liquidating, obtaining or reestablishing any hedge or related trading position
(or any gain resulting from any of them). Loss includes losses and costs (or
gains) in respect of any payment or delivery required to have been made
(assuming satisfaction of each applicable condition precedent) on or before the
relevant Early Termination Date and not made, except, so as to avoid
duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies.
Loss does not include a party’s legal fees and out-of-pocket expenses referred
to under Section 11. A party will determine its Loss as of the relevant
Early Termination Date, or, if that is not reasonably practicable, as of the
earliest date thereafter as is reasonably practicable. A party may (but need
not) determine its Loss by reference to quotations of relevant rates or prices
from one or more leading dealers in the relevant markets.

 

“Market Quotation” means, with respect to one
or more Terminated Transactions and a party making the determination, an amount
determined on the basis of quotations from Reference Market-makers. Each
quotation will be for an amount, if any, that would be paid to such party
(expressed as a negative number) or by such party (expressed as a positive
number) in consideration of an agreement between such party (taking into
account any existing Credit Support Document with respect to the obligations of
such party) and the quoting Reference Market-maker to enter into a transaction
(the “Replacement Transaction”) that would have the effect of preserving for
such party the economic equivalent of any payment or delivery (whether the
underlying obligation was absolute or contingent and assuming the satisfaction
of each applicable condition precedent) by the parties under Section 2(a)(i) in
respect of such Terminated Transaction or group of Terminated Transactions that
would, but for the occurrence of the relevant Early Termination Date, have been
required after that date. For this purpose, Unpaid Amounts in respect of the
Terminated Transaction or group of Terminated Transactions are to be excluded
but, without limitation, any payment or delivery that would, but for the
relevant Early Termination Date, have been required (assuming satisfaction of
each applicable condition precedent) after that Early Termination Date is to be
included. The Replacement Transaction would be subject to such documentation as
such party and the Reference Market-maker may, in good faith, agree. The party
making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as
of the same day and time (without regard to different time zones) on or as soon
as reasonably practicable after the relevant Early Termination Date. The day
and time as of which those quotations are to be 

 

20

 

obtained will be selected in
good faith by the party obliged to make a determination under Section 6(e),
and, if each party is so obliged, after consultation with the other. If more
than three quotations are provided, the Market Quotation will be the arithmetic
mean of the quotations, without regard to the quotations having the highest and
lowest values. If exactly three such quotations are provided, the Market
Quotation will be the quotation remaining after disregarding the highest and
lowest quotations. For this purpose, if more than one quotation has the same
highest value or lowest value, then one of such quotations shall be
disregarded. If fewer than three quotations are provided, it will be deemed
that the Market Quotation in respect of such Terminated Transaction or group of
Terminated Transactions cannot be determined.

 

“Non-default Rate” means a rate per annum equal
to the cost (without proof or evidence of any actual cost) to the
Non-defaulting Party (as certified by it) if it were to fund the relevant
amount.

 

“Non-defaulting Party” has the meaning specified in
Section 6(a).

 

“Office” means a branch or office of a party, which
may be such party’s head or home office.

 

“Potential Event of Default” means any event which, with
the giving of notice or the lapse of time or both, would constitute an Event of
Default.

 

“Reference Market-makers” means four leading dealers
in the relevant market selected by the party determining a Market Quotation in
good faith (a) from among dealers of the highest credit standing which
satisfy all the criteria that such party applies generally at the time in
deciding whether to offer or to make an extension of credit and (b) to the
extent practicable, from among such dealers having an office in the same city.

 

“Relevant Jurisdiction” means, with respect to a
party, the jurisdictions (a) in which the party is incorporated,
organised, managed and controlled or considered to have its seat, (b) where
an Office through which the party is acting for purposes of this Agreement is
located, (c) in which the party executes this Agreement and (d) in
relation to any payment, from or through which such payment is made.

 

“Scheduled Payment Date” means a date on which a
payment or delivery is to be made under Section 2(a)(i) with respect
to a Transaction.

 

“Set-off” means set-off, offset, combination of
accounts, right of retention or withholding or similar right or requirement to
which the payer of an amount under Section 6 is entitled or subject
(whether arising under this Agreement, another contract, applicable law or
otherwise) that is exercised by, or imposed on, such payer.

 

“Settlement Amount” means, with respect to a
party and any Early Termination Date, the sum of: —

 

(a)           the Termination Currency Equivalent of the Market Quotations
(whether positive or negative) for each Terminated Transaction or group of
Terminated Transactions for which a Market Quotation is determined; and

 

21

 

(b)           such party’s Loss (whether positive or negative and without
reference to any Unpaid Amounts) for each Terminated Transaction or group of
Terminated Transactions for which a Market Quotation cannot be determined or
would not (in the reasonable belief of the party making the determination)
produce a commercially reasonable result.

 

“Specified Entity” has the meanings specified
in the Schedule.

 

“Specified Indebtedness” means, subject to the
Schedule, any obligation (whether present or future, contingent or otherwise,
as principal or surety or otherwise) in respect of borrowed money.

 

“Specified Transaction” means, subject to the
Schedule, (a) any transaction (including an agreement with respect
thereto) now existing or hereafter entered into between one party to this
Agreement (or any Credit Support Provider of such party or any applicable Specified
Entity of such party) and the other party to this Agreement (or any Credit
Support Provider of such other party or any applicable Specified Entity of such
other party) which is a rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect to
any of these transactions), (b) any combination of these transactions and (c) any
other transaction identified as a Specified Transaction in this Agreement or
the relevant confirmation.

 

“Stamp Tax” means any stamp, registration, documentation
or similar tax.

 

“Tax” means any present or future tax, levy, impost, duty,
charge, assessment or fee of any nature (including interest, penalties and
additions thereto) that is imposed by any government or other taxing authority
in respect of any payment under this Agreement other than a stamp,
registration, documentation or similar tax.

 

“Tax Event” has the meaning specified in Section 5(b).

 

“Tax Event Upon Merger” has the meaning specified in
Section 5(b).

 

“Terminated Transactions” means with respect to any
Early Termination Date (a) if resulting from a Termination Event, all
Affected Transactions and (b) if resulting from an Event of Default, all
Transactions (in either case) in effect immediately before the effectiveness of
the notice designating that Early Termination Date (or, if “Automatic Early
Termination” applies, immediately before that Early Termination Date).

 

“Termination Currency” has the meaning specified in
the Schedule.

 

“Termination Currency Equivalent” means, in respect of any
amount denominated in the Termination Currency, such Termination Currency
amount and, in respect of any amount denominated in a currency other than the
Termination Currency (the “Other Currency”), the amount in the Termination
Currency determined by the party making the relevant determination as being
required to purchase such amount of such Other

 

22

 

Currency as at the relevant
Early Termination Date, or, if the relevant Market Quotation or Loss (as the
case may be), is determined as of a later date, that later date, with the
Termination Currency at the rate equal to the spot exchange rate of the foreign
exchange agent (selected as provided below) for the purchase of such Other
Currency with the Termination Currency at or about 11:00 a.m. (in the city
in which such foreign exchange agent is located) on such date as would be
customary for the determination of such a rate for the purchase of such Other
Currency for value on the relevant Early Termination Date or that later date.
The foreign exchange agent will, if only one party is obliged to make a
determination under Section 6(e), be selected in good faith by that party
and otherwise will be agreed by the parties.

 

“Termination Event” means an Illegality, a Tax
Event or a Tax Event Upon Merger or, if specified to be applicable, a Credit
Event Upon Merger or an Additional Termination Event.

 

“Termination Rate” means a rate per annum equal
to the arithmetic mean of the cost (without proof or evidence of any actual
cost) to each party (as certified by such party) if it were to fund or of
funding such amounts.

 

“Unpaid Amounts” owing to any party means,
with respect to an Early Termination Date, the aggregate of (a) in respect
of all Terminated Transactions, the amounts that became payable (or that would
have become payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on
or prior to such Early Termination Date and which remain unpaid as at such
Early Termination Date and (b) in respect of each Terminated Transaction,
for each obligation under Section 2(a)(i) which was (or would have
been but for Section 2(a)(iii)) required to be settled by delivery to such
party on or prior to such Early Termination Date and which has not been so
settled as at such Early Termination Date, an amount equal to the fair market
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or
would have been required to have been paid or performed to (but excluding) such
Early Termination Date, at the Applicable Rate. Such amounts of interest will
be calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the
average of the Termination Currency Equivalents of the fair market values
reasonably determined by both parties.

 

23

 

IN WITNESS WHEREOF the
parties have executed this document on the respective dates specified below
with effect from the date specified on the first page of this document.

 

 

	
   

  	
   

  	
  SEMPRA
  ENERGY TRADING LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Michael D. Mitchell

  
	
   

  	
   

  	
   

  	
  Name: Michael
  D. Mitchell

  
	
   

  	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MXENERGY
  ELECTRIC INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Jeffrey Mayer

  
	
   

  	
   

  	
   

  	
  Name: Jeffrey Mayer

  
	
   

  	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  

 

 

Acknowledged
and Agreed:

 

	
  MXENERGY
  HOLDINGS INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name: Jeffrey Mayer

  	
   

  
	
   

  	
  Title: President
  and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
  MXENERGY
  INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name: Jeffrey Mayer

  	
   

  
	
   

  	
  Title: President
  and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MXENERGY
  (CANADA) LTD.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name: Jeffrey Mayer

  	
   

  
	
   

  	
  Title: President
  and Chief Executive Officer

  	
   

  

 

[Signature Page to Power ISDA Master Agreement]

 

 

	
  ONLINECHOICE,
  INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name: Jeffrey Mayer

  	
   

  
	
   

  	
  Title: President
  and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MXENERGY
  GAS CAPITAL HOLDINGS CORP.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name: Jeffrey Mayer

  	
   

  
	
   

  	
  Title: President
  and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MXENERGY ELECTRIC CAPITAL HOLDINGS CORP.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name: Jeffrey Mayer

  	
   

  
	
   

  	
  Title: President
  and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MXENERGY
  GAS CAPITAL CORP.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name: Jeffrey Mayer

  	
   

  
	
   

  	
  Title: President
  and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MXENERGY
  ELECTRIC CAPITAL CORP.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name: Jeffrey Mayer

  	
   

  
	
   

  	
  Title: President
  and Chief Executive Officer

  	
   

  

 

[Signature Page to Power ISDA Master Agreement]

 

 

	
  MXENERGY CAPITAL HOLDINGS CORP.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name: Jeffrey Mayer

  	
   

  
	
   

  	
  Title: President
  and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  INFOMETER.COM
  INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name: Jeffrey Mayer

  	
   

  
	
   

  	
  Title: President
  and Chief Executive Officer

  	
   

  

 

[Signature Page to Power ISDA Master Agreement]

 

 

EXECUTION VERSION

 

(Multicurrency - Cross
Border)

Schedule to
the

 

ISDA Master
Agreement

 

dated as of

 

September 22,
2009

 

between
SEMPRA ENERGY TRADING LLC, a Delaware

limited liability company (“Party A”), and MXENERGY ELECTRIC INC.,

a Delaware corporation  (“Party B”).

Part 1.           Termination Provisions.

 

(a)                                  “Specified
Entity” means in relation to Party A
for the purpose of:

 

Section 5(a)(v), none 

Section 5(a)(vi), none 

Section 5(a)(vii), none

Section 5(b)(iv), none

 

and means in relation to Party B for all
purposes under this Agreement:  each
Affiliate of Party B (other than shareholders of MX Holdings that are not
Subsidiaries of MX Holdings).

 

(b)                                 “Specified
Transaction” will have
the meaning specified in Section 14 of this Agreement, except that such term
is amended on line 8 after the words “currency option” by adding a comma and
the words “agreement for the purchase, sale or transfer of any commodity or any
other commodity trading transaction”. 
For this purpose, “commodity” means any tangible or intangible commodity
of any type or description including electric energy and/or capacity, petroleum
and natural gas, the products or by-products thereof, coal, emissions, and base
or precious metals.

 

(c)                                  The “Cross Default” provisions of Section 5(a)(vi) will not apply to
Party A and will apply to Party B.

 

“Specified
Indebtedness” shall not apply to Party A, and with respect to Party
B and each Specified Entity of Party B, Specified Indebtedness shall have the
meaning specified in Section 14 and shall also include all Indebtedness,
including the Notes, the Old Notes, the Promissory Notes (if any) and the
Loans.

 

“Threshold
Amount” means, in the aggregate, with respect to Party B and all
Specified Entities of Party B, $1,000,000.

 

(d)                                 The “Credit Event
Upon Merger” provisions
of Section 5(b)(iv) will not apply to Party A and will apply to Party
B.

 

If such provisions
apply:  Section 5(b)(iv) is
hereby amended by inserting after the words “another entity” the phrase “or
another entity consolidates or amalgamates with, or merges into, or transfers
all or substantially all its assets to, X or any Credit Support Provider of X
or any applicable Specified Entity of X”.

 

(e)                                  The “Automatic Early Termination” provisions of Section 6(a) will
not apply to Party A or Party B.

 

(f)                                    Payments on Early Termination.  For the purpose of Section 6(e) of
this Agreement:

 

(i)                                     Loss will apply.

 

 

(ii)                                  The Second Method will apply.

 

(g)                                 “Termination
Currency” means
United States Dollars.

 

(h)                                 “Additional
Termination Event” will apply.

 

(i) The following event
shall constitute an Additional Termination Event with respect to Party B
pursuant to Section 5(b)(v) (for the purposes of which, Party B shall
be the sole Affected Party and all Transactions shall be Affected
Transactions):

 

The occurrence of February 28,
2014.

 

(ii)  The following
events shall also constitute Additional Termination Events with respect to
Party A pursuant to Section 5(b)(v) for the purposes of which Party A
shall be the sole Affected Party; provided, however, that,
notwithstanding anything to the contrary in Section 6 of the Agreement,
the calculations required by Section 6(e) and any other calculations
to be made as the result of the occurrence of such Additional Termination Event
shall be made by Party A:

 

(A)                              If at any time The Royal
Bank of Scotland plc’s Credit Rating falls below BBB- from S&P or Baa3 from
Moody’s, and Party A fails to provide adequate assurances in an amount
determined by Party B in a commercially reasonable manner within two Business
Days of a written request therefor from Party B.

 

(B)                                Any permit or license
necessary for Party A to perform its material obligations hereunder is revoked
and such revocation is not cured within ten Business Days of written notice
from Party B.

 

(i)                                     Amendments.  The parties agree to the following changes to
this Agreement:

 

(i)                                     Section 2(a)(i) is amended by inserting “, the
Schedule or any Promissory Note” immediately after the term “Confirmation”.

 

(ii)                                  Section 2(a)(ii) is amended by inserting “,
Promissory Note, any other ISDA Document” immediately after the term
Confirmation in lines 2 and 6 of such Section.

 

(iii)          Section 2(e) is
hereby amended by inserting the phrase “and unless otherwise specified in this
Agreement with respect to any Loan” immediately after “Transaction” in the
second line of such Section.

 

(iv)                              Section 5(a)(i) is amended by deleting “third” and
substituting “second”.

 

(v)                                 Section 5(a)(ii) is amended by inserting “or under
Part 12 or Part 13” immediately after “or 4(d)” in the parenthetical.

 

(vi)                              Section 5(a)(iv) is deleted in its entirety and
replaced with the following new Section:

 

“Misrepresentation. A
representation (other than a representation under Section 3(e) or (f) or
under Part 5(j)(xxiv) or (xxv)) made or repeated or deemed to have been
made or repeated by the party or any Credit Support Provider or Specified
Entity of such party in this Agreement or any Specified Agreement, or in any
report, certificate, financial statement or other document furnished pursuant
to or in connection with this Agreement or any Specified Agreement, proves to
have been incorrect or misleading in any material respect when made or repeated
or deemed to have been made or repeated.”

 

2

 

(vii)         Section 5(a)(v)(2) is
amended by deleting the parenthetical and substituting with “(unless with
respect to a performance default, the exclusive remedy for such failure to
perform under the terms of the Specified Transaction is the payment of damages
as defined in such Specified Transaction)”.

 

(viii)        Section 5(a)(vi) is
amended by deleting the words “becoming capable at such time of being declared,”
in the seventh line and substituting with the words “becoming capable at such
time or with the passage of time or the giving of notice (regardless of whether
such time has elapsed or such notice has been given) of being declared,”.

 

(ix)                                Section 5(a)(vii)(4) is amended by deleting it in
its entirety and replacing with the following:

 

“Institutes or has instituted
against it proceedings seeking a judgment of insolvency or bankruptcy or any
other relief under any bankruptcy or insolvency law or other similar law
affecting creditors’ rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition instituted or
presented against it, that proceeding or petition:

 

(A)                              results in a judgment of
insolvency or bankruptcy or the entry of an order for relief or the making of
an order for its winding-up or liquidation, or

 

(B)                                is not withdrawn, dismissed,
discharged, stayed or restrained, in each case within:

 

(1)                                  thirty (30) days of its
institution or presentation if as of and during the pendency of such proceeding
or petition, the party or its Credit Support Provider (such reference to Credit
Support Provider shall be applicable if all such party’s financial obligations
under the Agreement are fully guaranteed or assured under a Credit Support
Document provided by such Credit Support Provider) has a Credit Rating of at
least BBB+ by S&P or Baa1 by Moody’s; or

 

(2)                                  fifteen (15) days of its
institution or presentation in all cases other than those set out under Section 5
(a)(vii) (4) (B) (1) above;”

 

(x)                                   Section 14 is amended by deleting the existing
definition of “Default Rate” contained therein and replacing it in its entirety
as follows:

 

“Default Rate” means
the Base Rate plus 9%, or, if a rate is specified in this Agreement to be
applicable prior to a Default, such rate plus 2%.

 

(xi)                                Additional Events of Default.  The occurrence at any
time with respect to Party B or, if applicable, any Specified Entity of Party B
of any of the following events will constitute an additional Event of Default
under Section 5(a) with respect to Party B and such Events of Default
shall be in addition to, and not in limitation of, any other Events of Default
or Termination Events in this Agreement:

 

(A)                              Failure by Party B or any
Specified Entity of Party B to comply with or perform any agreement or
obligation to be complied with or performed by such party in accordance with Part 12
(“Affirmative Covenants”), if such failure is not remedied within 3
Business Days (or, in the case of Part 12(a)(vi) and Part 12(a)(vii),
5 Business Days) after notice of such failure is given to Party B;

 

(B)                                Failure by Party B or any
Specified Entity of Party B to comply with or perform any agreement or
obligation to be complied with or performed by Party B or such Specified Entity
in accordance with Part 13 (“Negative Covenants”);

 

3

 

(C)                                At any time the outstanding
Aggregate Unpaid Value exceeds the amount of Margin then held or (if Party A is
required to establish replacement custodial accounts pursuant to Part 11(f))
controlled by Party A pursuant to any Master ISDA by $45,000,000 or more;

 

(D)                               A Change of Control shall
have occurred;

 

(E)                                 Any money judgment, writ or
warrant of attachment or similar process involving in any individual case or in
the aggregate at any time an amount in excess of the lower of (1) 5% of
Party B’s or any Specified Entity of Party B’s total assets as reflected on its
most recent balance sheet (not adequately covered by insurance as to which a
solvent and unaffiliated insurance company has acknowledged coverage) or (2) $1,000,000
shall be entered or filed against Party B or any Specified Entity of Party B or
any of their respective assets;

 

(F)                                 (1) At any time after
the execution and delivery thereof, any Specified Agreement, or any provision
thereof, shall cease to be in full force and effect, shall be terminated or
shall be declared to be null and void, (2) Party A shall not have or shall
cease to have a valid and perfected first-priority lien in any Collateral with
a fair market value in excess of $500,000, except as permitted hereunder or
under the ISDA Security Documents (or as to which Party A may grant consent
from time to time), purported to be covered by the ISDA Security Documents
hereunder, or (3) Party B or any Specified Entity of Party B shall
repudiate or contest the validity or enforceability of any Specified Agreement
or any provision thereof in writing or deny in writing that it has any further
liability under any Specified Agreement or any provision thereof to which it is
a party;

 

(G)                                Any time there occurs an “Event
of Default” or “Termination Event” with respect to MX Energy under, and as
defined in the MX Energy Agreement;

 

(H)                               Any time the Collateral
Coverage Ratio is less than 1.25:1.00 when determined in respect of the months
of October through March (inclusive), or is less than 1.4:1.00, when
determined for any other month;

 

(I)                                    [Intentionally Omitted];

 

(J)                                   There is, at any time, a
material adverse change (as reasonably determined by Party A) in (A) the
financial condition, the results of operations, business, prospects or results
of Party B and Party B’s Specified Entities taken as a whole, or (B) the
collection rate or aging of accounts receivable for Party B or any Specified
Entity of Party B;

 

(K)                               At any time, (1) the
rights of the holders of Class B Common Stock (included in MX Holdings’
Second Amended and Restated Certificate of Incorporation, Bylaws and otherwise
set forth in a Specified Agreement) shall have been modified in any manner
(regardless of whether such modification is written or whether it occurs due to
an action or a failure to act) adverse to the holders of Class B Common
Stock without the prior written consent of Party A or (2) MX Holdings or
any of its Affiliates shall take any action or omit to take any action
inconsistent with the continued existence of, or the ability of the holders of Class B
Common Stock to exercise, the rights afforded to such holders and referred to
in clause (1) of this Part 1(i)(xi)(K);

 

(L)                                 Jeff Mayer shall cease to be
the Chief Executive Officer and President of MX Holdings or Chaitu Parikh shall
cease to be the Chief Financial Officer of MX Holdings, or either of them shall
cease to be involved in the day-to-day management of Party B, MX Energy or MX
Canada in substantially the same roles as of the date hereof and, 60 days
following any such person leaving such position, such person is not replaced in
such position by a person or persons that is/are approved by Party A in
writing;

 

4

 

(M)                            [Intentionally Omitted];

 

(N)                               Any default, event of default
or termination event (or terms of like import) by Party B or any Specified
Entity of Party B shall occur under any Specified Agreement or any other
agreement between any such party and Party A and such default, event of
default, termination event or similar event shall not have been fully and
completely cured within the grace period provided for in such agreement, or if
no grace period is so provided, within three Business Days;

 

(O)                               An ERISA Event shall have
occurred that, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect;

 

(P)                                 The terms of the Notes, the
Indenture, the Old Notes or the Old Notes Indenture shall be amended, restated
or otherwise modified in a manner that is adverse to Party A;

 

(Q)                               Principal or interest on the
Notes or the Old Notes shall have been paid or any of such notes have been
purchased by Party B or its Specified Entities in whole or in part, prior to
the respective due dates, except (with respect to the Notes) as permitted by
the Intercreditor Agreement or (with respect to the Old Notes) as permitted by
this Agreement.

 

(xii)          Section 6(c) is
amended by adding the following new paragraph (iii):

 

“(iii)                         Notwithstanding
the foregoing, the Non-defaulting Party shall not be obligated to terminate and
liquidate Transactions to the extent that, in the good faith opinion of the
Non-defaulting Party, (A) such termination and liquidation is not
permitted under applicable law or (B) the Non-defaulting Party cannot
enter into or liquidate offsetting transactions (including Specified
Transactions) in a commercially reasonable manner or at commercially reasonable
prices.  In addition, the Non-defaulting
Party may, at its election, take a reasonable amount of time to complete any
aspect of the termination and liquidation.”

 

Part 2.           Tax Representations.

 

(a)                                  Payer Representations.  For the purpose of Section 3(e),
Party A will make the following representation and, for the purpose of Part 5(j)(xxiv)
Party B will make the following representation:

 

It is not required by any
applicable law, as modified by the practice of any relevant governmental
revenue authority, of any Designated Jurisdiction to make any deduction or
withholding for or on account of any Tax from any payment (other than interest
under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be
made by it to the other party under this Agreement.  In making this representation, it may rely
on: (i) the accuracy of any representations made by the other party
pursuant to Section 3(f) of this Agreement, (ii) the
satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of
this Agreement and the accuracy and effectiveness of any document provided by
the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
Agreement, and (iii) the satisfaction of the agreement of the other party
contained in Section 4(d) of this Agreement, provided that it
shall not be a breach of this representation where reliance is placed on clause
(ii) and the other party does not deliver a form or document under Section 4(a)(iii) by
reason of material prejudice to its legal or commercial position.

 

(b)                                 Payee Representations.  For the purpose of Section 3(f) of
this Agreement with respect to Party A and for the purpose of Part 5(j)(xxv)
with respect to Party B, Party A and Party B make the representations specified
below, if any:

 

(i)                                     The following representation will apply to Party A and will
apply to Party B:

 

5

 

It is entering into this
Agreement, including each Transaction, as principal and not as agent of any
Person.

 

Part 3.           Agreement to Deliver Documents.

 

For the purpose of Sections
4(a)(i) and (ii) of this Agreement, each party agrees to deliver the
following documents, as applicable:

 

(1)           Tax forms,
documents or certificates to be delivered are:

 

	
  Party required to

  deliver document

  	
   

  	
  Form/Document/Certificate

  	
   

  	
  Date by which to be delivered

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  A

  	
   

  	
  An
  executed United States Internal Revenue Service Form W-8ECI (or any
  successor thereto).

  	
   

  	
  (i) Upon
  the execution of this Agreement; (ii) promptly upon reasonable demand by
  the other Party; and (iii) promptly upon learning that any such form
  previously provided has becomes obsolete, incorrect or expired.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  B

  	
   

  	
  An
  executed United States Internal Revenue Service Form W-9 (or any
  successor thereto).

  	
   

  	
  (i) Upon
  the execution of this Agreement; (ii) promptly upon reasonable demand by
  the other Party; and (iii) promptly upon learning that any such form
  previously provided has becomes obsolete, incorrect or expired.

  

 

(2)           Other documents
to be delivered are:

 

	
  Party Required to

  Deliver Document

  	
   

  	
  Form/Document/

  Certificate

  	
   

  	
  Date by
  which

  to be delivered

  	
   

  	
  Covered by
  Section

  3(d) or Part

  5(j)(xxiii) (as

  applicable)

  Representation

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MX
  Holdings and Party A

  	
   

  	
  An
  executed subscription agreement for the Class B Common Stock

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  B

  	
   

  	
  Guarantee
  and Collateral Agreement

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Wachovia
  Control Agreements

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Huntington
  Control Agreement

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Trademark
  Security Agreements for filing with the United States Patent and Trademark
  Office

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UCC-1
  Financing Statements as required by Party A; and assignments by SocGen of
  UCC-1 

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  

 

6

 

	
   

  	
   

  	
  Financing
  Statements as required by Party A.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Novation
  Agreement(s) with respect to the novation of the interest rate swaps set
  forth on Exhibit 12(a)(xix)

  	
   

  	
  As
  soon as practicable, but in any event not later than 30 days after the
  Closing Date

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Intercreditor
  Agreement

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Certificate
  of Incorporation

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Registration
  Rights Agreement

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Stockholders
  Agreement

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The
  Financial Statements specified in Part 12(a)(vi)

  	
   

  	
  As
  provided in Part 12(a)(vi)

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The
  Budgets specified in Part 12(a)(xiii)

  	
   

  	
  As
  provided in Part 12(a)(xiii)

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Notices and Reports specified in Part 12(a)(v) and
  Part 12(a)(vii)

  	
   

  	
  As provided in Part 12(a)(v) and Part 12(a)(vii)

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Copies of information technology infrastructure systems (including,
  without limitation, billing systems)

  	
   

  	
  As provided in Part 12(a)(xvi)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  An
  opinion of New York legal counsel, in form and substance satisfactory to
  Party A, covering such matters as Party A shall reasonably require.

  	
   

  	
  Upon
  Execution

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  An
  Officers’ Certificate from MX Holdings certifying that the aggregate
  principal amount of the Old Notes outstanding following the consummation of
  the Exchange Offer does not exceed $10,000,000 and that aggregate principal
  amount of the Notes outstanding following the Exchange Offer does not exceed
  $75,000,000.

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  

 

7

 

	
   

  	
   

  	
  An
  Officers’ Certificate from Party B and each Specified Entity of Party B
  certifying that each of the representations and warranties of Party B and
  each of the Specified Entities of Party B contained in this Agreement is true
  and correct in all material respects as of the date of this Agreement (except
  for any such representations and warranties made as of a specific date, which
  shall remain true and correct in all material respects as of such date)

  	
   

  	
  Upon
  Execution

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A proposed consolidated operating Budget for Party B, its
  Subsidiaries and MX Energy, for fiscal year 2010 which shall be in form and
  substance satisfactory to Party A.

  	
   

  	
  Upon Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A
  proposed consolidated business plan for Party B, its Subsidiaries and MX
  Energy, for the first two years of the term of this Agreement which shall be
  in form and substance satisfactory to Party A.

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Evidence,
  satisfactory to Party A, that each EDC and all other payers have been
  instructed to make all payments owing to Party B or to any Specified Entity
  of Party B directly to the Lockbox Accounts.

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Evidence,
  satisfactory to Party A, that each EDC and all other payers have been
  instructed to make all payments owing to Party B or to any Specified Entity
  of Party B directly to the Lockbox Accounts and not to any other accounts 

  	
   

  	
  As
  soon as practicable, but in any event not later than 10 Business Days after
  the Closing Date

  	
   

  	
   

  

 

8

 

	
   

  	
   

  	
  without
  the prior written consent of Party A.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Evidence
  satisfactory to Party A that all master agreements between Party B or any
  Specified Entity of Party B and any third party have been terminated.

  	
   

  	
  As
  soon as practicable, but in any event not later than 30 days after the
  Closing Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Evidence,
  satisfactory to Party A, that (i) Party B and each Specified Entity of
  Party B has in place the types of insurance set forth on
  Exhibit 12(a)(iii), and (ii) all such insurance names Party A as an
  additional insured and/or loss payee, as appropriate.

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  A&B:

  	
   

  	
  Certified
  copies of board resolutions approving this Agreement and the Transactions
  contemplated by this Agreement and any exhibits or supplements attached
  hereto and the Confirmations hereunder.

  	
   

  	
  Upon
  Execution

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party A&B:

  	
   

  	
  Evidence of authority of signatories

  	
   

  	
  Upon Execution

  	
   

  	
  Yes

  

 

Part 4.           Miscellaneous

 

(a)                                  Addresses for Notices.  For the purpose of Section 12(a) of
this Agreement:

 

Address for notices or communications with
respect to Confirmations only to Party A:

 

Address: 
600 Washington Blvd, Mail Code CS0930, Stamford, Connecticut 06901

 

Attention: 
Energy Operations

 

	
  For
  electric energy and/or capacity invoices and Confirmations:

  	
   

  	
   

  
	
  Facsimile
  No.: 203-355-6614

  	
   

  	
  Telephone
  No.: 203-897-5926

  
	
   

  	
   

  	
  E-mail:
  PowerTeam@RBSSempra.com

  
	
   

  	
   

  	
   

  
	
  For
  petroleum:

  	
   

  	
   

  
	
  Facsimile
  No.:

  	
  Invoices:
  203-355-6615

  	
   

  	
  Telephone
  No.: 203-897-5632

  
	
   

  	
  Confirmations:
  203-355-6617

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  For natural gas:

  	
   

  	
   

  
	
  Facsimile
  No.:

  	
  Invoices:
  203-355-6612

  	
   

  	
  Telephone
  No.: 203-897-5647

  
	
   

  	
  Confirmations:
  203-355-6630

  	
   

  	
   

  

 

9

 

	
  Attention:
   FX or Metals Operations

  	
   

  	
   

  
	
  Facsimile
  No.: 

  	
  203-355-6605

  	
   

  	
  Telephone
  No.: 203-355-5607

  
				

 

Electronic Messaging System details:  None until mutually agreed otherwise.

 

And for notices or communications other than
Confirmations:

 

	
  Address:
  600 Washington Blvd, Stamford, CT 06901

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention
  of the Legal Department.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile
  No.: 203-355-5410

  	
   

  	
  Telephone
  No.: 203-897-5510

  
	
   

  	
   

  	
   

  
	
  Address
  for notices to, or Energy Confirmations for, Party B:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:
  510 Thornall Street, Suite 270 Edison, NJ 08837-2207

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:
  Eve Hoffman, Manager Supply Administration

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile
  No.: 732-805-4044

  	
   

  	
  Telephone
  No.: 732-805-0300 ext. 6812

  
	
   

  	
   

  	
   

  
	
  Address
  for any other notices for Party B:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:
  595 Summer Street, Suite 300 Stamford, CT 06901-1407

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:
  

  	
  Chief
  Financial Officer 

  	
   

  	
   

  
	
   

  	
  Chief
  Legal Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile
  No.: 203-975-9659

  	
   

  	
  Telephone
  No.: 203-356-1318

  

 

Electronic Messaging System Details:  None until mutually agreed otherwise.

 

(b)                                 Process Agent.  For the purpose of Section 13(c) of
this Agreement:  Party B appoints as its
Process Agent Not Applicable.

 

(c)                                  Offices.  The provisions of Section 10(a) will
apply to this Agreement.

 

(d)                                 Multibranch Party.  For the purpose of Section 10(c) of
this Agreement:

 

Party A is not a Multibranch Party.

 

Party B is not a Multibranch Party.

 

(e)                                  Calculation Agent.  The Calculation
Agent is Party A.

 

(f)            Credit Support Document.  With
respect to Party A means, none.  With
respect to Party B means the ISDA Security Documents and the Intercreditor
Agreement.

 

10

 

(g)           Credit Support Provider.  Credit Support
Provider means, in relation to Party A, none. 
Credit Support Provider means, in relation to Party B, each Specified
Entity of Party B.

 

(h)           Governing Law.  THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO CHOICE OF LAW DOCTRINE, OTHER THAN SECTION 5-1401 AND SECTION 5-1402
OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.  THE UNITED NATIONS CONVENTION ON CONTRACTS
FOR THE INTERNATIONAL SALE OF GOODS SHALL NOT IN ANY WAY APPLY TO, OR GOVERN,
THIS AGREEMENT.

 

(i)            Waiver of Certain Damages.  FOR BREACH OF ANY
PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH
EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE
REMEDY.  A PARTY’S LIABILITY HEREUNDER
SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR
DAMAGES AT LAW OR IN EQUITY ARE WAIVED. 
IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN OR IN
ANY TRANSACTION, A PARTY’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES
ONLY.  SUCH DIRECT ACTUAL DAMAGES SHALL
BE THE SOLE AND EXCLUSIVE REMEDY, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR
IN EQUITY ARE WAIVED.  UNLESS EXPRESSLY
HEREIN PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL,
PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS
INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY
PROVISION OR OTHERWISE.  IT IS THE INTENT
OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE
OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING
THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR
CONCURRENT, OR ACTIVE OR PASSIVE.  TO THE
EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES
ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR
OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES
CALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS.

 

(j)            Waiver of Jury Trial.  Each Party waives
its respective right to any jury trial with respect to any litigation arising
under or in connection with this Agreement, any Specified Agreement or any
Transaction.

 

(k)           Netting of Payments.  Subparagraph (ii) of
Section 2(c) of this Agreement will not apply to all Transactions
starting from the date of this Agreement.

 

(l)            “Affiliate” will have the meaning set forth below:

 

“Affiliate” means, with
respect to any specified Person, any other Person who directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, such specified Person. The term “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by agreement or otherwise; and the terms “controlling”
and “controlled” have meanings correlative of the foregoing; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be a controlling interest; provided further that (i) Party A
shall be deemed not to be an Affiliate of Party B and its Specified Entities;
and (ii) no Holder of Notes shall be deemed to be an Affiliate of Party B
or any Specified Entity of Party B solely by reason of holding the shares of Class A
Exchange Common Stock such Holder has received in the Exchange Offer and being
party to the equity agreements entered into in connection with the Exchange
Offer.

 

Part 5.           Other
Provisions.

 

(a)                                  Definitions.  Any capitalized terms used herein and not
otherwise defined herein shall have the respective meanings ascribed to them in
the 2006 ISDA Definitions and the 2005 Commodity Definitions (as 

 

11

 

published by
the International Swaps and Derivatives Association, Inc.) (collectively,
the “Definitions”), which are incorporated into this Agreement.  In the event of any inconsistency between the
Definitions and the provisions of this Agreement, this Agreement will
prevail.  Capitalized terms used herein
and not defined in this Agreement or in the Definitions shall have the meanings
set forth in the Intercreditor Agreement.

 

(b)           Events of Default; Termination Events.  The parties
acknowledge and agree that, with the exception of the Event of Default
specified in Section 5(a)(vii) and the Additional Termination Events
specified in Part 1(h)(ii), no other Events of Default or Termination
Events will apply to Party A.

 

(c)           Agreed Changes.  The parties agree to the following changes in
this Agreement:

 

(i)            Section 1(b) is amended by deleting the period at
the end and substituting “except for Sections 5 and 6, which may only be
amended by a written amendment executed by the parties.”

 

(ii)           Section 1(c) is deleted in its entirety and
replaced with the following new Section:

 

“ (c) All Transactions
(including any Loans) are entered into in reliance on the fact that the Master
ISDAs, all Confirmations thereunder, all Promissory Notes thereunder, the ISDA
Security Documents and each other ISDA Document form a single agreement between
the parties (collectively referred to as this “Agreement”), and the
parties would not otherwise enter into any Transactions (including any Loans)
contemplated by the Master ISDAs, the other ISDA Documents and the Specified
Agreements.”

 

(iii)          Section 3 is amended by deleting the first paragraph
thereof and replacing it with the following new paragraph:

 

“Party A represents to Party
B (which representations will be deemed to be repeated by Party A on each date
on which a Transaction is entered into and, in the case of the representations
in Section 3(f), at all times until the termination of this Agreement)
that:—”

 

(iv)          Add the following paragraphs at the end of Section 9:

 

(h)           Consent to
Recording.  The parties
agree that each may electronically record all telephone conversations between
them and that any such recordings may be submitted in evidence to any court or
in any proceeding for the purpose of establishing any matters pertinent to any
Transaction.

 

(i)            Severability.  In the event that any provision of this
Agreement is declared to be illegal, invalid or otherwise unenforceable by a
court of competent jurisdiction, the remainder of this Agreement shall not be
affected except to the extent necessary to delete such illegal, invalid or
unenforceable provision, unless the deletion of such provision shall
substantially impair the benefits of the remaining portions of this Agreement.

 

(j)            Dealer
Market Practices.  To the
extent applicable, the obligations of the parties are to be construed in
accordance with practices in the international financial or commodity, as
applicable, dealer market.

 

(k)           Trader
Authority.  The parties
hereby expressly waive all rights to, and expressly agree not to contest, any
Transaction, or assert or otherwise raise any defenses or arguments related to
any Transaction to the effect that such is not binding, valid or enforceable in
accordance with its terms because either the employee(s) or representative(s) who
entered into the Transaction on behalf of a party, and who appeared to have the
requisite authority to do so, did not, in fact, have such authority or because
the provisions of certain applicable laws require the Transaction to be in
writing and/or executed by one or both parties.

 

12

 

(v)           Section 7 is amended by (1) deleting “and” at the
end of clause (a) of such section, (2) deleting the period at the end
of clause (b) and replacing it with “; and”, and (3) inserting the
following new clause (c) immediately after clause (b):

 

“Party A may at any time assign
and transfer this Agreement (i) by novation to any Affiliate of Party A,
to The Royal Bank of Scotland plc or any Affiliate thereof, and, upon such
novation, such Affiliate of Party A, The Royal Bank of Scotland plc or any such
Affiliate of The Royal Bank of Scotland plc will assume all of Party A’s rights
and obligations under this Agreement and Party A shall be released and
discharged from all liabilities under this Agreement; provided, however,
that any such Affiliate shall have a Credit Rating of at least BBB- by S&P
or Baa3 by Moody’s or the obligations of such Affiliate shall be guaranteed by
The Royal Bank of Scotland plc or (ii) pursuant to a Wholesale Transfer.”

 

(vi)          Section 9(e)(ii) is amended by adding the
following new sentence at the end thereof: “Notwithstanding the foregoing,
Party A shall promptly confirm each Transaction and unless objected to in
writing within two Local Business Days, the Confirmation shall be final and
binding on the parties, absent manifest error. 
Failure to send or agree upon a Confirmation shall not affect a
Transaction entered into by the parties.”

 

(vii)         Section 13(b) shall be deleted in its entirety and
replaced with the following new Section:

 

“(b)         Consent to Arbitration.

 

(i)            Any dispute, controversy, or
claim arising out of, relating to, or in connection with this Agreement, or the
breach, termination, or validity thereof, shall be finally settled by
arbitration.  The arbitration shall be
conducted in accordance with the Commercial Arbitration Rules of the
American Arbitration Association (the “AAA”) in effect at the time of
the arbitration, except as they may be modified herein or by mutual agreement
of the parties.  Notwithstanding the
provisions of Part 4(h), the arbitration and this clause shall be governed
by Title 9 (Arbitration) of the United States Code.  The seat of the arbitration shall be New
York, New York, United States of America, and it shall be conducted in the
English language.  The parties submit to
jurisdiction in the state and federal courts in the State, County and City of
New York for the limited purpose of enforcing this agreement to arbitrate.

 

(ii)           The arbitration shall be
conducted by three neutral arbitrators, who shall be appointed by the AAA.  The arbitrators shall be impartial and
independent.

 

(iii)          In order to facilitate the
comprehensive resolution of related disputes, and upon request of any party to
the arbitration proceeding, the arbitration tribunal may consolidate the
arbitration proceeding with any other arbitration proceeding involving any of
the parties hereto relating to this Agreement or to the Related Agreements
(whether or not such other proceeding involves all of the parties hereto).  The arbitration tribunal shall not
consolidate such arbitrations unless it determines that (x) there are
issues of fact or law common to the various arbitrations so that a consolidated
proceeding would be more efficient than separate proceedings and (y) no
party would be prejudiced as a result of such consolidation through undue delay
or otherwise.  In the event of different
rulings on this question by the arbitration tribunal constituted hereunder and
the tribunal constituted under any other Related Agreement, the ruling of the
arbitration tribunal governing the first proceeding to have been filed shall
control.  In the event of the consolidation
of one or more proceedings pursuant to this subsection, the arbitration
tribunal governing the first such proceeding to have been filed shall govern
the consolidated proceeding unless otherwise agreed by all parties to the
proceedings being consolidated.  Solely
for purposes of this subsection (iii), (x) a proceeding shall be deemed to
have been filed when the related demand for arbitration is served by the
complaining party and (y) in the event that two proceedings shall have
been filed on the same day, the proceeding involving the largest dollar amount
in dispute shall be deemed to have been the first filed.

 

13

 

(iv)          The arbitration award shall
be final and binding on the parties. 
Judgment upon the award may be entered by any court having jurisdiction
thereof or having jurisdiction over the relevant party or its assets.”

 

(viii)        In Section 14: “Terminated Transactions” is amended on
line 2 by deleting “all Transactions” and substituting “any or all Transactions
terminated in accordance with Section 6(c)(ii)”.

 

(ix)           The definition of “Loss” in Section 14 is deleted in
its entirety and replaced with the following new definition:

 

“‘Loss’ means, with respect
to this Agreement or one or more Terminated Transactions, as the case may be,
and a party, the Termination Currency Equivalent of an amount that party
reasonably determines in good faith to be its total losses and costs (or gain,
in which case expressed as a negative number) in connection with this Agreement
or that Terminated Transaction or group of Terminated Transactions, as the case
may be, including an amount equal to 100% of the Credit Support Amount
outstanding on the Early Termination Date, any losses and costs relating to the
provision of Credit Support to any third party, any losses and costs relating
to any Loan, any losses or costs relating to any financing or similar fees,
loss of bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating, liquidating,
obtaining or reestablishing any hedge or related trading position (or any gain
resulting from any of them).  Loss
includes losses and costs (or gains) in respect of any payment or delivery
required to have been made (assuming satisfaction of each applicable condition
precedent) on or before the relevant Early Termination Date and not made,
except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or
6(e)(ii)(2)(A) applies.  Loss does
not include a party’s legal fees and out-of-pocket expenses referred to under Section 11.  A party will determine its Loss as of the
relevant Early Termination Date, or, if that is not reasonably practicable, as
of the earliest date thereafter as is reasonably practicable.  A party may (but need not) determine its Loss
by reference to quotations of relevant rates or prices from one or more leading
dealers in the relevant markets.”

 

(x)            Section 11 is deleted in its entirety and replaced with
the following new Section 11:

 

“A Defaulting Party will, on
demand, indemnify and hold harmless the other party for and against all
reasonable out-of-pocket expenses, including legal fees and Stamp Tax, incurred
by such other party by reason of (i) the enforcement and protection of its
rights under this Agreement or any Credit Support Document to which the
Defaulting Party is a party, (ii) the enforcement or protection of its
rights with respect to any outstanding Credit Support Amount, including any
costs incurred in recovering any such amounts, or (iii) the early
termination of any Transaction, including, but not limited to, costs of
collection.”

 

(d)           Set-Off.  Section 6 of this Agreement shall be
amended by the insertion of the following additional provision:

 

“(f)          Set-Off.  At any time or from time to time after an
Event of Default or Termination Event occurs, the party (“X”) that is the
Non-defaulting Party or the party other than the Affected Party (and without
prior notice to the Defaulting Party or the Affected Party (“Y”)) may, at X’s
election, set off any or all amounts which Y or any Affiliate of Y owes to X or
any Affiliate of X against any or all amounts which X or any Affiliate of X
owes to Y or any Affiliate of Y (in each case, whether under this Agreement,
any other agreement or otherwise, and whether or not then due, and irrespective
of the currency, place of payment or booking office of the obligation);
provided that any amount not then due which is included in such setoff shall be
discounted to present value as at the time of setoff (to take account of the
period between the time of setoff and the date on which such amount would have
otherwise been due) at the applicable rate for that period determined by X in
any commercially reasonable manner.  X
may give notice to the other party of any set-off effected under this Section 6(f).

 

14

 

For this purpose, any amount
(or the relevant portion of such amounts) may be converted by X into the
currency in which the other is denominated at the rate of exchange at which
such party would be able, acting in a reasonable manner and in good faith, to
purchase the relevant amount of such currency.

 

If an obligation is
unascertained, X may in good faith estimate that obligation and set-off in
respect of the estimate, subject to the relevant party accounting to the other
when the obligation is ascertained.

 

Nothing in this Section 6(f) shall
be effective to create a charge or other security interest.  This Section 6(f) shall be without
prejudice and in addition to any Lien to which any party is at any time
otherwise entitled (whether by operation of law, contract or otherwise).”

 

(e)           Imaged Agreement.  Any fully executed
Agreement, Confirmation, Specified Agreement or other related document, or
recording may be scanned and stored electronically, or stored on computer tapes
and disks, as may be practicable (the “Imaged Agreement”).  The Imaged Agreement, if introduced as
evidence on paper, the Confirmation if introduced as evidence in automated
facsimile form, any recording, if introduced as evidence in its original form
and as transcribed onto paper, and all computer records of the foregoing, if
introduced as evidence in printed format, in any judicial, arbitration,
mediation or administrative proceedings, will be admissible as between the Parties
to the same extent and under the same conditions as other business records
originated and maintained in documentary form. 
Neither Party shall object to the admissibility of any Imaged Agreement
(or photocopies of the transcription of such Imaged Agreement) on the basis
that such were not originated or maintained in documentary form under either
the hearsay rule, the best evidence rule or other rule of
evidence.  However, nothing herein shall
be construed as a waiver of any other objection to the admissibility of such
evidence.

 

(f)            (1) Market
Disruption Events.  Each of the following events shall constitute
a Market Disruption Event hereunder:

 

(i)            Price Source Disruption

 

(ii)           Trading Disruption

 

(iii)          Disappearance of Commodity Reference Price

 

(iv)          Material Change in Formula

 

(v)           Material Change in Content

 

(2) Disruption Fallbacks.  If a Market Disruption Event occurs on a
Pricing Date, then the Commodity Reference Price for such day (a “Missing
Day”) shall be determined in accordance with the provisions of the 2005
Commodity Definitions as if no elections had been made.

 

(g)           Illegality.  For purposes of Section 5(b)(i), the
obligation of either Party to comply with any official directive issued or
given by any government agency or authority with competent jurisdiction which
has the result referred to in Section 5(b)(i) will be deemed to be an
“Illegality”.

 

(h)           Term.  Subject to the earlier occurrence of an Early Termination
Date, Party A shall not be obliged to enter into further Transactions under this
Agreement commencing on August 31, 2012 (the “Termination Date”);
provided, however, that Party A, on or before the date that is 180 days prior
to the then current Termination Date but no sooner than April 1, 2011,
shall have the right to extend the Termination Date on the then current terms
and conditions to August 31, 2013 (the “Extended Term”) (in which
case Party A shall not be obliged to enter into further Transactions beyond the
Termination Date so extended). For the avoidance of doubt, this Agreement and
the Specified Agreements shall otherwise remain in full force and effect until
the Discharge of ISDA Obligations. 
Neither Party B, nor any Specified Entity of Party B, shall enter into
any agreement or series of agreements which provide for transactions similar to
those contemplated by any 

 

15

 

one or more
of the Specified Agreements unless such agreement or agreements do not become
effective until after the Termination Date and after the Discharge of ISDA
Obligations has occurred.

 

(i)            No Obligation.  Notwithstanding
any other provision in this Agreement to the contrary, Party A (A) shall
have no obligation to enter into any Transaction with Party B or to provide
Credit Support that has a term, calculation period, delivery period, maturity
or expiration which extends beyond the date that is 12 months prior to the
maturity date of the Notes, and (B) shall not be obligated to enter into
any transaction (including any Transaction hereunder) with Party B or any
Specified Entity of Party B following the occurrence of a Default or Potential
Termination Event (however defined) by Party B or any Specified Entity of Party
B under any of the Specified Agreements, which Default or Potential Termination
Event has not been cured or waived by Party A in accordance with the terms of
the applicable Specified Agreement.

 

(j)            Further Representations of Party B and its
Specified Entities.  Each Specified Entity of Party B, Party B in respect of each
of its Specified Entities and Party B as to itself as set forth below,
represents and warrants to Party A (which representations will be deemed to be
represented by Party B and each such Specified Entity on each date on which a
Transaction is entered into and on each date that Party A issues or arranges
for the issuance of Credit Support and, other than in respect of Part 5(j)(iii) and
Part 5(j)(iv), at all times until this Agreement is terminated):

 

(i)            Existence and Authorization.

 

(A)          Such party is duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization and is
qualified as a foreign corporation in each jurisdiction where it conducts
business where such qualification is required, except where the failure to be
so qualified could not reasonably be expected to result in a Material Adverse
Effect;

 

(B)           Such party has delivered to Party A true and
complete copies of its organizational documents as amended or amended and
restated through the date hereof and as in effect on the date hereof;

 

(C)           Such party has the full corporate power and
corporate authority to execute and deliver this Agreement and the other
Specified Agreements and to perform its obligations hereunder and thereunder;
and

 

(D)          The execution, delivery and performance of this
Agreement and any other Specified Agreement by such party have been and remain
duly authorized by all necessary corporate, limited liability company or
partnership action, as applicable, and do not contravene (i) any provision
of its organizational documents, (ii) Applicable Law, or (iii) the
terms of any Material Contract.

 

(ii)           Enforceability.  This Agreement and each Specified Agreement
to which it is a party constitute the legal, valid and binding obligations of
such party, enforceable against such party in accordance with their respective
terms, except as enforcement hereof or thereof may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors’ rights generally or by general equity principles.

 

(iii)          Capitalization, Indebtedness and Hedging Transactions.

 

(A)          Exhibit 5(j)(iii)(A) sets forth the
capitalization of such party as of the date hereof, including (i) the
authorized capital, (ii) the equity interests outstanding and (iii) each
Person owning, of record or beneficially, 10% or more of any class of such
party’s equity interests, together with the number of equity interests of each
such class and the percentage so held by each such Person.  All outstanding equity interests are duly and
validly issued, fully paid and non-assessable. Except for options and warrants
of MX Holdings outstanding on the date hereof or which may be issued pursuant
to the 

 

16

 

Management Incentive Plan, such party does not have outstanding any
securities convertible into or exchangeable for its equity interests or any
rights to subscribe for or to purchase, or any option for the purchase of, or
any agreement, arrangement or understanding providing for the issuance
(contingent or otherwise) of, or any call, commitment or claims of any
character relating to, its equity interests.

 

(B)           Exhibit 5(j)(iii)(B) sets forth the
Indebtedness of such party as of the date of this Agreement, including, as to
each item of Indebtedness (to the extent applicable) including Credit Support, (i) the
counterparty or counterparties or issuers, (ii) the nature of the
Indebtedness or credit support, (iii) the amount of the obligations,
remaining purchase price or face amount, (iv) the final maturity date or
expiration or termination date and a description of required interim payments
and (v) the rate, and the timing of payments, of interest, fees and
similar charges.

 

(C)           Exhibit 5(j)(iii)(C) sets forth a list of
all Hedging Transactions to which such party is a party as of the date of this
Agreement, including, as to each Hedging Transaction (to the extent
applicable), (i) the counterparty or counterparties, (ii) the nature
of said Hedging Transaction, (iii) the term of such Hedging Transaction
and (iv) the amount payable by, or payable to, such party if such Hedging
Transaction were liquidated as of the date of this Agreement.

 

(iv)          Subsidiaries and Beneficial Interest.  Except as set forth
on Exhibit 5(j)(iv), such party does not, directly or indirectly,
beneficially own the whole or any part of the issued share capital or other
ownership interest of any other Person.

 

(v)           Governmental Approvals.

 

(A)          All Governmental Approvals
necessary or advisable for the due execution, delivery and performance of this
Agreement and the other Specified Agreements by such party have been obtained
from or, as the case may be, filed with the relevant Governmental Authorities
having jurisdiction over such party and remain in full force and effect, and are
listed in Exhibit 5(j)(v)(A), and all conditions thereof have been duly
complied with and no other action by, and no notice to or filing with, any
Governmental Authority having jurisdiction is required for such execution,
delivery or performance of this Agreement or the other Specified Agreements by
such party.

 

(B)           All Governmental Approvals
necessary or advisable for the conduct of each such party’s businesses as of
the date of this Agreement and as contemplated herein have been duly obtained,
are set forth in Exhibit 5(j)(v)(B), are in full force and effect, not
subject to appeal, are held in the name of such party, as the case may be, and
are free from conditions or requirements which if not complied with could
reasonably be expected to have a Material Adverse Effect, or conditions or
requirements which such party does not expect to be able to satisfy on or prior
to the date required.

 

(C)           Such party has no reason to
believe that any Governmental Approvals which have not been obtained by or on
behalf of such party, as the case may be, but which will be required to be
obtained by it in the future, will not be obtained in due course on or prior to
the date required and will not contain any condition or requirements, the
compliance with which could reasonably be expected to result in a Material
Adverse Effect.

 

(D)          Party B and the Specified
Entities of Party B are not in violation of any Governmental Approval
applicable to any such Person, the violation of which could reasonably be
expected to result in either a Material Adverse Effect, a cease and desist
order or an aggregate monetary fine applicable to Party B and the Specified
Entities of Party B in excess of $1,000,000.

 

17

 

(vi)          Financial Condition and No Material Adverse Change.

 

(A)          Party B has heretofore
furnished to Party A the consolidated balance sheet and statements of income,
and statements of equity and cash flows of MX Holdings (i) as of and for
the fiscal year ended June 30, 2008, reported by Ernst & Young
LLP, independent public accountants, and (ii) as of and for the fiscal
quarter ending March 31, 2009, certified by its chief financial
officer.  Such financial statements
present fairly, in all material respects, the financial position and results of
operations and cash flows of MX Holdings and its subsidiaries as of such dates
and for such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the statements referred
to in clause (ii) above.

 

(B)           Since March 31, 2009,
no event has occurred which has or could reasonably be expected to have, and no
series of events has occurred which in the aggregate has or could reasonably be
expected to have, a Material Adverse Effect.

 

(vii)         Insurance.
 Such party maintains, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations; provided,
that, except for directors and officers insurance, such party may self-insure
to the same extent as other companies engaged in similar businesses and owning
similar properties in the same general areas in which such party operates.

 

(viii)        Material Contracts and Licenses.

 

(A)          Exhibit 5(j)(viii)(A) sets forth a list of
all Material Contracts as of the date of this Agreement.  To such party’s knowledge, after due inquiry,
and without prejudice to any dispute that they may have with any third party,
no breach, default or event of default (each as defined in the applicable
Material Contract) has occurred and is continuing with respect to any party to
any Material Contract.

 

(B)           To such party’s knowledge, after due inquiry, such
party owns, has the right to use or has the benefit of, all permits, licenses,
trademarks, patents, franchises and similar rights with respect to the usage of
technology or other property (other than those constituting Governmental
Approvals) that are necessary or advisable for the conduct of its business as
contemplated herein, except where it could not reasonably be expected to result
in a Material Adverse Effect.

 

(ix)           Use of Proceeds.  The proceeds of any Loan shall be used solely
to satisfy any Third Party Liquidation Payments and any Third Party Novation
Payments, each in accordance with Part 10.

 

(x)            Title and ISDA Security Documents.

 

(A)          Such party owns and has
good, legal and marketable title to the Collateral purported to be owned by it
and covered by the ISDA Security Documents, free and clear of all Liens other
than Permitted Liens.

 

(B)           Upon the filing of the UCC-1
Financing Statements and the UCC-3 Financing Statement Amendments delivered
pursuant to this Agreement, upon the execution of the required control agreements
and upon any necessary filings with the United States Patent and Trademark
Office, the provisions of the ISDA Security Documents are effective to create,
in favor of Party A, a legal, valid and enforceable Lien on all of the
Collateral purported to be covered thereby, and all necessary and appropriate
recordings and filings have been made in all necessary and appropriate public
offices, and all other necessary and appropriate action (including payment of
all filing, recording or other fees required in 

 

18

 

connection with the creation or perfection of such
Lien) has been taken, so that each such ISDA Security Document creates a
perfected Lien on all right, title, estate and interest of such party in the Collateral
purported to be covered thereby, prior and superior to all other Liens other
than Permitted Liens.

 

(xi)           Actions,
Suits and Proceedings.  There is no action, suit or proceeding at law
or in equity or by, or before, any Governmental Authority or arbitral tribunal
now pending or, to such party’s best knowledge, after due inquiry, threatened
against or affecting Party B or any Specified Entity of Party B or any of their
respective Property which could reasonably be expected to result in a Material
Adverse Effect.

 

(xii)          Environmental
Matters.

 

(A)          Such party is not in
violation of any Environmental Law except where such violation could not
reasonably be expected to result in a Material Adverse Effect.

 

(B)           No Hazardous Material has
been Used or Released by any Person, at, on, under, or from any part of the
properties owned or leased by such party other than in compliance with all
applicable Environmental Laws except where such noncompliance could not
reasonably be expected to result in a Material Adverse Effect.

 

(C)           There are no
Environmental Claims pending or threatened in respect of such party, except
where such Environmental Claim could not reasonably be expected to result in a
Material Adverse Effect.

 

(D)          All environmental investigations, studies, audits, tests, reviews or
other analysis conducted by or that are in the possession of such party in
relation to facts, circumstances or conditions at or affecting Party B or any
Specified Entity of Party B have been provided to Party A.

 

(E)           No Liens have arisen under
or pursuant to any Environmental Laws on any property of such party, and, to
such party’s best knowledge, after due inquiry, no government action has been
taken or is in process that could subject any such property to such Liens, and
such party will not be required to place any notice or restriction relating to
the presence of Hazardous Materials at such property in any deed to the real
property.

 

(xiii)         Compliance
with Applicable Laws.  Such party is in compliance with all
Applicable Laws except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

 

(xiv)        Taxes.  Such party has timely filed or caused to be
filed all tax returns, information statements and reports required to have been
filed by it and has paid or caused to be paid all Taxes required to have been
paid by it, except Taxes that are being contested in good faith by appropriate
proceedings and for which such party has set aside or accrued for on its books
adequate reserves in accordance with GAAP.

 

(xv)         Investment Company Status.  Such party is not an “investment company” as defined in, or
subject to regulation under, the Investment Company Act of 1940, as amended.

 

(xvi)        Federal Reserve Regulations.  No part of the proceeds of any Transaction under this
Agreement have been used or will be used, whether directly or indirectly, for
any purpose that entails a violation of any of the Regulations of the Board of
Governors of the Federal Reserve System, including Regulations T, U and X.

 

19

 

(xvii)       Nature of Business.  Party B is engaged solely in the purchase and sale of Energy
to Customers and other activities necessary in connection therewith.  MX Energy and MX Canada are engaged solely in
the purchase and sale of Gas to residential or small commercial end-users of
Gas and other activities necessary in connection therewith.  Infometer.com Inc. is engaged in providing
consultations and audits with respect to energy supply procurement and
improving energy efficiency.  Online
Choice is engaged in the commissioned sale of consumer
products such as telecom services and satellite TV for
homeowners and small businesses (provided that
such products may not be sold door-to-door).  The Specified Entities of Party B (other than
MX Energy, MX Canada, Infometer.com and Online Choice) are engaged solely in
holding Equity Interests in the MX Holdcos, Party B, MX Energy and MX Canada
and the performance of their duties and obligations under this Agreement, the
other ISDA Documents, the Old Notes Indenture, the Indenture and each other
document related thereto.

 

(xviii)      Disclosure.  Such
party has disclosed to Party A all agreements, instruments and corporate or
other restrictions to which it is subject, and all other matters known to it,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect.  Neither
the Offering Memorandum nor any of the other reports, financial statements, certificates,
data or other written information furnished by or on behalf of such party to
Party A in connection with the negotiation of this Agreement or delivered
hereunder, taken as a whole, contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading; provided
that, with respect to projected financial information, such party represents
only that such information was prepared in good faith based on assumptions
believed to be reasonable at the time, it being recognized by Party A that
projections are not to be viewed as facts and that the actual results during
the period or periods covered by such projections may differ from the projected
results and such difference may be material.

 

(xix)         Securities
Accounts.  Such party does not hold any Investments in
any securities accounts.

 

(xx)          ERISA.  No
ERISA Event has occurred, and no ERISA Event with respect to any Plan is
reasonably expected to occur, that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur, could
reasonably be expected to result in a Material Adverse Effect.

 

(xxi)         No
Defaults. No event of
default or potential event of default or, to its knowledge, termination event
or potential termination event or any event of similar import (in each case as
defined in the applicable agreement) with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any
Specified Agreement to which it is a party.

 

(xxii)        Solvency. Such party is, and after giving effect to the incurrence
of all Indebtedness and obligations being incurred in connection herewith will
be, Solvent.

 

(xxiii)       Accuracy
of Specified Information. All
applicable information that is furnished in writing by or on behalf of it to
Party A and is identified for the purpose of this Part 5(j)(xxiii) in the
Schedule is, as of the date of the information, true, accurate and complete in
all material respects.

 

(xxiv)       Payer
Tax Representation. Each
representation specified in this Schedule as being made by it for the purpose
of this Part 5(j)(xxiv) is accurate and true.

 

(xxv)        Payee
Tax Representations. Each
representation specified in this Schedule as being made by it for the purpose
of this Part 5(j)(xxv) is accurate and true.

 

(xxvi)       Real
Property.  Such party does not own any real property.

 

20

 

(k)           Further Representations of the Parties.  Party A, Party B and
each Specified Entity of Party B represents to the other party (which
representations will be deemed to be represented by each party and each such
Specified Entity on each date on which a Transaction is entered into and at all
times until this Agreement is terminated) that:

 

(i)            Non-Reliance.  In connection with this Agreement, any
Specified Agreement to which it is a party, each Transaction, and any other
documentation relating to this Agreement to which it is a party or that it is
required by this Agreement to deliver:

 

(A)          it is not
relying upon any representations (whether written or oral) of the other party
other than the representations expressly set forth in this Agreement, such
Specified Agreement and in any Confirmation;

 

(B)           it has
consulted with its own legal, regulatory, tax, business, investment, financial
and accounting advisors to the extent it has deemed necessary, and it has made
its own investment, hedging and trading decisions (including decisions
regarding the suitability of any Transaction pursuant to this Agreement) based
upon its own judgment and upon any advice from such advisors as it has deemed
necessary and not upon any view expressed by the other party;

 

(C)           it has a full
understanding of all the terms, conditions and risks (economic and otherwise)
of the Agreement and each Transaction and is capable of assuming and willing to
assume (financially and otherwise) those risks;

 

(D)          it is entering
into this Agreement, such Specified Agreements, each Transaction and such other
documentation as principal, and not as agent or in any other capacity,
fiduciary or otherwise; and

 

(E)           the other party
is not acting as a fiduciary or financial, investment or commodity trading
advisor for it, it being understood that it is not relying on any unique or
special expertise of the other party and it is not in any special relationship
of trust or confidence with respect to the other party.

 

(ii)           Eligible Commercial Entity and Eligible Contract Participant.  It is an “eligible
commercial entity” as defined in Section 1a(11) of the Commodity Exchange
Act, and it is an “eligible contract participant” within the meaning of Section 1a
(12) of the Commodity Exchange Act, as amended by the Commodity Futures
Modernization Act of 2000.

 

(iii)          Bankruptcy Code.  Without limiting the applicability of any
other provision of the U.S. Bankruptcy Code, as amended (the “Bankruptcy
Code”), the parties acknowledge and agree that: (a) all Transactions,
with the exception of the Loans, entered into hereunder will constitute “forward
contracts” or “swap agreements” and this Agreement constitutes a “master
netting agreement” as defined in the Bankruptcy Code; (b) each party is a “master
netting agreement participant,” a “forward contract merchant” and a “swap
participant” as defined in the Bankruptcy Code; (c) the rights of the
parties under Sections 5 and 6 of this Agreement will constitute “contractual
rights” to liquidate Transactions; (d) any margin or collateral provided
under any margin, collateral, security, or similar agreement related hereto,
including but not limited to the ISDA Security Documents and any Credit Support
Annex, will constitute a “margin payment” or a “settlement payment” as defined
in the Bankruptcy Code.

 

(l)            Certain Understandings.  Each party to this
Agreement acknowledges that Party A and its Affiliates (collectively, “SET”)
will engage in transactions with Party B and certain of Party B’s Affiliates
pursuant to this Agreement and the other Specified Agreements. Neither this
Agreement nor the other Specified Agreements shall preclude SET from engaging
in transactions of a nature like the transactions contemplated by the Specified
Agreements with any other Person. 
Without limiting the foregoing, each

 

21

 

party
acknowledges that SET is engaged in, among other things, dealing in fuel, and
power and related commodities for its own account in the U.S. wholesale fuel
and power markets, and manages positions in fuel and power and related
commodities for others.  SET may (i) take
actions under this Agreement and the other Specified Agreements which may be
different than the actions SET takes for its own account or for the account of
others, even though the circumstances may be the same or similar and (ii) effect
transactions with counterparties that are also counterparties to other
transactions in fuel and/or power or related commodities with SET or for which
SET is acting in an agency capacity.  SET
may from time to time take proprietary positions and/or make a market in
commodities and/or instruments identical or economically related to the
transactions contemplated by the ISDA Documents, or may have an investment
banking or other commercial relationship with and access to information from
the issuer(s) of financial instruments or other interests underlying such
transactions during the term of the ISDA Documents.  SET may also undertake lawful proprietary
activities, including hedging transactions related to the initiation or
termination of a transaction, that may adversely affect the market price, rate,
index or other market factor(s) underlying the transactions contemplated
by the ISDA Documents and consequently the value of the transactions
contemplated by the ISDA Documents. 
Neither this Agreement nor the other Specified Agreements shall limit in
any manner the ability of SET to enter into any transaction of any nature with
any other Person.  The parties
acknowledge that the relationship between SET and Party B and its Affiliates is
a commercial and not a fiduciary relationship and that SET is free to pursue
its own business interests.

 

(m)                              Existing ISDA.
The parties hereby agree that, on and with effect from the date of this
Agreement, the ISDA Master Agreement, dated as of July 28, 2006 (as
amended, supplemented, or otherwise modified prior to the date hereof) between
Party A and Party B (the “Existing ISDA Master Agreement”) shall be
terminated in all respects, and all Transactions (as defined in the Existing
ISDA Master Agreement) which remain in effect as of the date hereof shall, from
and after the date hereof, be (and shall be deemed to be) Transactions under
this Agreement in all respects and for all purposes. In the event of any
conflict between the provisions of this Agreement and any Confirmation evidencing
an outstanding Transaction originally entered into under the Existing ISDA
Master Agreement, the Confirmation will prevail for purposes of such
Transaction.

 

(n)                                Payments.  Except as otherwise expressly provided
herein:

 

(i)                                   all payments shall be made by Party B to Party A without
setoff, recoupment or counterclaim and in immediately available funds at the
office specified by Party A not later than 12:00 p.m. New York time on the
date due, and funds received after that hour shall be deemed to have been
received by Party A on the following Business Day.

 

(ii)                                if any payment under this Agreement falls due on a day which
is not a Business Day, then such due date shall be extended to the immediately
following Business Day and additional interest, Financing Fees and Credit
Support Fees shall accrue and be payable for the period of any such extension.

 

(o)                                Termination of Specified Transactions. Party B shall demonstrate to Party A that all Specified
Transactions (and any related master agreements) between Party B or any
Specified Entity of Party B and any third party, as set forth on Exhibit 5(o),
shall be terminated or novated to Party A within 30 days after the Closing
Date.  Party B represents to Party A that
no other Specified Transactions will be outstanding as of the Closing Date
except those set forth on Exhibit 5(o).

 

(p)                                Sub Accounts.  Party B acknowledges and agrees that all
funds held in the Party A Sub Account and the Swap Note Sub Account may be
commingled with Party A’s funds and Party A shall be entitled to sell, pledge,
invest or use the funds held in such accounts, free from claim or right of any
nature whatsoever of Party B.  Party A
agrees to credit (i) the Party A Sub Account with interest on funds held
in such account from time to time at the rate of Overnight LIBOR (calculated on
a daily basis) and (ii) the Swap Note Sub Account with interest on funds
held in such account from time to time at the Base Rate plus 3% (calculated on
a daily basis).  Any such interest
payable by Party A to Party B shall be paid monthly on the 10th day of the month
occurring after the month in which any such interest accrued and is subject to
setoff as otherwise provided herein.

 

22

 

(q)                                Facility Agent; Holders of ISDA Obligations.  The parties
acknowledge that Party A is acting as the Facility Agent (as defined in the
Intercreditor Agreement) hereunder.  All
references herein to “Party A” shall also be a reference to the Facility
Agent.  On the date hereof, Party A is
the sole holder of ISDA Obligations (as defined in the Intercreditor
Agreement).  The parties acknowledge that
from time to time there may be more than one holder of ISDA Obligations.  All actions by Party A hereunder and unless
otherwise notified to Party B shall be an action by the Facility Agent and the
required holders of ISDA Obligations.

 

(r)                                   Indemnification.  Except as otherwise
expressly provided herein, Party B shall indemnify Party A, its Affiliates, and
their respective officers, directors, shareholders and employees (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses, or disbursements
(including all reasonably incurred fees, expenses and disbursements of any law
firm or other external counsel) of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against any Indemnitee in any way relating
to or arising out of or in connection with (a) the execution, delivery,
enforcement, performance or administration of this Agreement, any other
Specified Agreement, or any other agreement, letter or instrument delivered in
connection with the transactions contemplated hereby and thereby or the
consummation of the transactions contemplated hereby and thereby, (b) any
action taken or omitted by Party A under this Agreement or any other Specified
Agreement (including Party A’s own negligence), or (c) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory (including any
investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified
Liabilities”);  provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such liabilities, obligations, losses, damages, penalties, claims,
demands, actions, judgments, suits, costs, expenses or disbursements are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.

 

(s)                                 Increased Costs.

 

(i)                                     If any Change in Law shall:

 

(A)                              impose, modify
or deem applicable any reserve, special deposit, compulsory transaction,
insurance charge or similar requirement against assets of, deposits with or for
the account of, or credit extended or participated in by, Party A with respect
to this Agreement; or

 

(B)                                impose on the
power market or other relevant market any other condition, cost or expense
affecting this Agreement or any Transactions which Party A is obligated to
enter into hereunder;

 

and the result of any of the
foregoing shall be to materially increase the cost to Party A of entering into
or maintaining any Transaction with Party B or to materially reduce the amount
of any sum received or receivable by Party A hereunder or under any other
Specified Agreement then, upon request of Party A, Party B will pay to Party A
such additional amount or amounts as will compensate Party A for such
additional costs incurred or reduction suffered.

 

(ii)                                 Party A shall provide to Party B reasonable evidence of any
Change in Law forming the basis of a claim for payment under Part 5(s)(i) within
one year from the effectiveness of such Change in Law; provided, however,
that the calculation by Party A of the amount or amounts to compensate Party A
as contemplated by Part 5(s)(i), which shall be final and conclusive,
absent manifest error, may be provided by Party A to Party B thereafter, and
from time to time, based on the nature of such Change in Law; provided, further,
that Party B shall not be required to compensate Party A pursuant to this Part 5(s) for
any increased costs incurred or reductions suffered more than 12 months prior
to the date that Party A notifies Party B of the Change in Law giving rise to
such increased costs or reductions and of Party A’s intention to claim
compensation therefor.

 

23

 

(t)                                   Survival of Obligations.  Section 9(c) is
deleted in its entirety and replaced with the following new Section:

 

Without prejudice to
Sections 2(a)(iii) and 6(c)(ii), any obligations to make payment
hereunder, any obligation of either party to indemnify the other pursuant
hereto and any obligations under Sections 5 and 6 shall survive the termination
of this Agreement or any Transaction.

 

(u)                                MX Canada.  Any covenants or representations and
warranties undertaken or made by or on behalf of MX Canada under this Agreement
shall apply only to MX Canada.

 

Part 6.          Physical
Power Transactions.

 

Sub-Annex
F to the 2005 ISDA Commodity Definitions (Physically-settled North American
Power Transactions) (the “Power Annex”) in effect as of the date hereof
is incorporated by reference into the Master Agreement and in the relevant
Confirmations with respect to Power Transactions.  All terms in this Part 6 that are not
otherwise defined shall have the meaning given to them in the Power Annex.

 

Elective Provisions for the Power
Annex (Clause (j) of the Power Annex):

 

1.  Section (a)(i):
Applicability to Outstanding Power Transactions.  The Power Annex shall apply
to all Outstanding Power Transactions as of the date the Power Annex becomes
effective.

 

2.  Section (a)(ii):
Credit Support Documents.  Outstanding
Credit Support held by a party in connection with Outstanding Power Transactions
shall be deemed to have been delivered under and in connection with this
Agreement pursuant to clause (a)(iii) of the Power Annex.

 

3.  Section (c):
Remedies for Failure to deliver or Receive; Limitation on Condition Precedent.  Accelerated Payment of Damages shall apply.

 

4. Section (d)(ii): Timeliness of Payment.  Option B shall apply.

 

5. Section (h)(i): 
Wholesale Power Tariffs:

 

(a)                                  Party A Electric Tariff: Fifth Revised
Rate Schedule FERC No. 1 (Superseding Fourth Revised Rate Schedule FERC No. 1),
dated July 30, 2008, effective July 31, 2008 (Docket No. ER08-100-004).

 

Party
B Electric Tariff: FERC Market-Based Rate (Schedule No. 1), dated March 1, 2002
(Docket No. ER01-04-0170-000).

 

6. Section (h)(ii): Severability.  Section (h)(ii) shall
apply.

 

7. Section (h)(iii): FERC Standard of Review and Certain
Covenants and Waivers.  Section (h)(iii) shall
apply.

 

8.  Section (k):  Other Provisions/Modifications to the Power
Annex.

 

	
  (i)

  	
   

  	
  Events
  of Default. Clause (i)(ii)(B) of the Power Annex is amended to delete
  the words “Section [5(a)(ii)][5(a)(ii)(1)]” and replace them with the
  words “Section 5(a)(ii)”.

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  The
  definition of “Replacement Price” shall be amended by deleting the phrase “at
  Buyer’s Option” in the 5th line and replacing it with
  “absent a purchase”.

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  The
  definition of “Sales Price” shall be amended by deleting the phrase “at
  Seller’s Option “ in the 5th line and replacing it with
  “absent a sale”.

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  Section (i)(iv) shall
  be amended by adding the following definition in appropriate alphabetical
  order:

  

 

24

 

“Claims”
means all third party claims or actions, threatened or filed and, whether
groundless, false, fraudulent or otherwise, that directly or indirectly relate
to the subject matter of an indemnity, and the resulting losses, damages,
expenses, attorneys’ fees and court costs, whether incurred by settlement or
otherwise, and whether such claims or actions are threatened or filed prior to
or after the termination of this Agreement.

 

(v)                                The following
is added to the end of clause (a)(iii):

 

(C) 
The parties acknowledge that all representations made in the Schedule,
including those pertaining to non-reliance, shall be part of this Power
Annex.  In addition, the parties
acknowledge that this Power Annex is subject to the confirmation process
specified in the Schedule, as well as amendments to the Events of Default,
including, but not limited to, the additional Events of Default specified in Part 1(i)(xi),
and the reduction of any grace period for involuntary bankruptcies.

 

(vi)                             For purposes of
this Agreement, the definition of “Power Transaction” as used in this Agreement
(except as used in this Part 6) shall not include Energy Options to
purchase, sell or transfer Energy or any Product; provided, however,
for purposes of this Part 6 and the Power Annex, Power Transactions shall
include Energy Options to purchase, sell or transfer Energy or any Product.

 

(vii)                          Clause (d)(iii) is
deleted in its entirety.

 

(viii)                       The definition
of “Capacity” is deleted and replaced with the following:

 

“Capacity”
means, for purposes of this Agreement, UCAP and other capacity and reliability
products that Party B is required to purchase in connection with the service of
its load pursuant to Applicable Law, applicable ISO, EDC and Transmission
Provider rules, and the terms hereof.

 

9. Section (l) Notices for Power Transactions.  As set forth in the schedule
to the ISDA Master Agreement.

 

Part 7.          
Energy Purchases and Sales

 

(a)                                    Energy Purchases and Purchases of Other Products.

 

(i)                                    Party B hereby agrees that Party A shall be its exclusive
supplier of (A) Energy with respect to Party B’s sale of Energy to
Customers (other than balancing purchases and sales with ISOs under Part 13(b)(iii)),
(B) physically or financially settled Hedging Transactions in respect of
Energy to hedge the risks associated with Party B’s sales to Customers and (C) such
other Products (including Capacity, Ancillary Services and financially settled
Products) as required to enable Party B to manage its requirements associated
with the Party B Customer Load in accordance with Applicable Law, applicable
ISO, EDC and other Transmission Provider rules, and the terms hereof.  Party B shall not (except to the extent
permitted by Part 13(b)(iii) and Part 5(h)) purchase Energy or
other Products from, or enter into any Energy Swap, Energy Option or any other
Hedging Transaction with, any other party during the term of this
Agreement.  Party B will only purchase
Energy for sale to Customers, hedge locational basis risk and price risk
relating to such sales and purchase other Products to the extent required to
enable Party B to manage its requirements associated with the Party B Customer
Load with Applicable Law, applicable ISO, EDC and Transmission Provider rules,
and the terms hereof.

 

(ii)                                 Party B shall purchase Capacity (including UCAP) from or
through Party A in an amount equal to the minimum amount necessary to satisfy
all requirements imposed by Applicable Law, applicable ISO, EDC and
Transmission Provider rules, and the terms hereof, associated with the Party B
Customer Load during the term of this Agreement.  Party B shall provide Party A with such
forecast and other information as Party A may require in a timely manner to
ensure that Party A 

 

25

 

will be able
to supply such Products to Party B.  The
cost of all such Capacity (including UCAP) shall be for the account of Party B.

 

(iii)                              Party B hereby agrees that it will purchase sufficient UCAP
from or through Party A to satisfy the obligations associated with the Party B
Customer Load in NYISO for each month during the term of this Agreement.  Party B agrees that it will provide Party A
with its UCAP requirements in writing by 3:00 pm EPT at least one Business Day
prior to the day of the applicable bidding deadline for each NYISO Prompt
Month, multi-month and deficiency UCAP auction during the term of this
Agreement.  Party A agrees that it will
then bid Party B’s UCAP obligations into the NYISO Prompt Month, multi-month
and deficiency UCAP auctions, as required to satisfy Party B’s Prompt Month
UCAP requirement and to purchase UCAP in such other months as Party B shall
direct; provided, that Party A does not guaranty that it will be able to
purchase all or any portion of Party B’s UCAP obligations at any time and Party
A shall have no liability if it fails to purchase all or any portion of Party B’s
UCAP obligations.  Party B also agrees
that Party A is hereby authorized on Party B’s behalf to (A) bid any
forecasted short UCAP position for any month at the maximum rate (unless an
alternative rate is agreed to by the parties) for the Prompt Month into the
Prompt Month UCAP auction and (B) sell any forecasted long UCAP position
for any month bilaterally or through offer into the monthly UCAP auction at the
minimum allowable rate as set by the NYISO.

 

(iv)                             All costs and charges for Ancillary Services incurred by
Party A in connection with the performance of its obligations hereunder shall
be for the account of Party B on a “pass through” basis.

 

(v)                                During the term of this Agreement, Party B shall purchase
from Party A a minimum of 1,850,000 Mwhs of Energy for physical delivery in
accordance with the following schedule:

 

(A)                             during the first
Contract Year, Party B shall purchase a minimum of 500,000 Mwhs in the
aggregate, excluding any volumes of Energy delivered prior to October 1,
2009;

 

(B)                               during the
second Contract Year, Party B shall purchase a minimum of 650,000 Mwhs in the
aggregate; and

 

(C)                               during the
third Contract Year, Party B shall purchase a minimum of 700,000 Mwhs in the
aggregate (with respect to each such Contract Year, the “Minimum Energy
Quantity”).

 

If Party A has exercised its
right to extend the term of this Agreement, Party B shall purchase a Minimum
Energy Quantity of 700,000 Mwhs in the aggregate during the fourth Contract
Year.  Party A and Party B hereby
acknowledge and agree that, for purposes of determining whether Party B has
satisfied the Minimum Energy Quantity requirement for any Contract Year, (i) the
aggregate notional amount of Energy Swaps between Party A and Party B for which
Party B has paid the applicable Energy Adder in such Contract Year, net of the
aggregate notional amount of any Energy Swaps with respect to which Party B has
received a price credit pursuant to Part 7(c) in such Contract Year,
shall be counted towards such Minimum Energy Quantity as if such net notional
quantity had been physically delivered, and (ii) any quantity of Energy
delivered pursuant to a Power Transaction for which no Energy Adder was paid
shall not be counted towards such Minimum Energy Quantity.

 

In the event Party B fails to
purchase the applicable Minimum Energy Quantity during any Contract Year
(including due to the occurrence of an Early Termination Date), Party B shall
pay to Party A, on the first Business Day immediately following the last day of
such period or (if such failure is due to the occurrence of an Early
Termination Date) on the date specified in Section 6 after the occurrence
of such Early Termination Date (as the case may be), an amount equal to the
then-current Energy Adder multiplied by the positive difference between the
Minimum Energy Quantity for such period and the number of Mwhs of Energy
actually purchased by Party B during 

 

26

 

such period; provided,
however, that, for the avoidance of doubt, upon the occurrence of an
Early Termination Date, Party B shall pay to Party A such an amount in respect
of each such period or partial period that has not yet occurred, including the
Extended Term to the extent Party A has not declined its option to extend the
term of this Agreement.   Notwithstanding
the foregoing and not in limitation of any other amounts that would be payable
by Party B hereunder, the parties agree that, if an Early Termination Date
occurs as the result of the occurrence of an Additional Termination Event with
respect to Party A, Party B shall not be liable for (A) the Energy Adder
with respect to any portion of the Minimum Energy Quantity that Party B had not
purchased for the Contract Year in which such Early Termination Date occurred
and (B) the Energy Adder with respect to the Minimum Energy Quantity in
any subsequent Contract Years.  If, in
any Contract Year, Party B exceeds the Minimum Energy Quantity for such
Contract Year, the Minimum Energy Quantity for the next Contract Year shall be
reduced by the amount of any such excess.

 

(vi)                             Party A will enter into Power Transactions with Party B to
supply Energy at fixed and floating prices to Party B, and Party A will enter
into Energy Swaps (including basis swaps) with Party B to enable Party B to (A) hedge
the market risk associated with its sales of Energy to its Customers, and (B) to
satisfy Party B’s obligations under Part 12(a)(xiv). The parties shall
enter into all such Transactions on the terms set forth herein or as otherwise
agreed.

 

(vii)                          Party A will enter into Energy Options with Party B on the
terms set forth herein or as otherwise mutually agreed by the parties to offset
the market risk associated with fixed-price sales of Energy by Party B to its
Customers.

 

(viii)                       Party B shall purchase the Product known in the energy
industry as “renewable energy credits” (“RECs”) solely to satisfy the
requirements of Applicable Law; provided, that, notwithstanding the
foregoing, Party B shall be permitted to purchase RECs in an amount greater
then required by Applicable Law (“Additional RECs”) and the Product
known in the energy industry as “carbon offsets” where, and to the extent that,
Party B has committed in an agreement with a Customer to purchase Additional
RECs and carbon offsets to offset such Customer’s energy usage; provided, that,
Party B shall not commit to purchase, or purchase, an aggregate amount of
Additional RECs and carbon offsets in any Contract Year for an aggregate amount
in excess of $500,000.

 

(b)                                Contract Price for Energy, Energy Swaps and Energy Options.

 

(i)                                    Except with respect to Sleeve Transactions (which shall be
priced in accordance with Part 7(e)(iii)) and except as specified in Part 7(b)(ii) with
respect to locational basis swaps, the Contract Price for Energy purchased by
Party B from Party A pursuant to any Transaction shall be the sum of (A) the
Quoted Price, plus (B) the applicable Energy Adder.  The fixed and floating prices for any Energy
Swaps shall be the applicable Quoted Prices, plus an Energy Adder, if
applicable.  Party A hereby agrees that
it will provide Quoted Prices for Energy at various Delivery Points to Party B,
upon Party B’s reasonable request.  Once
Party A has provided Party B with a Quoted Price with respect to a Transaction
and Party B has not objected to such Quoted Price when such quote is given, the
Quoted Price for such Transaction shall be final and binding.

 

(ii)                                 For the avoidance of doubt, the Contract Price for any
locational basis swap, as determined by Party A, shall be the price quoted by
Party A and shall not include an Energy Adder. 
Purchases of Energy to hedge locational basis risk shall not be credited
toward the Minimum Energy Quantity for any Contract Year.

 

(iii)                              For the avoidance of doubt, Party A and Party B acknowledge
and agree that an Energy Adder shall not be added to amounts payable by Party A
under any Transaction.

 

(c)                                 Price Credits.  For all sales of Energy by Party B to Party A and for all
Energy Swaps that Party A agrees unwind existing positions, Party A will credit
to Party B an amount equal to $0.625/Mwh in addition to the Quoted Purchase
Price(s) for such Transactions; provided, however, that such
credit shall not apply to (i) Prompt Month and intra-month Transactions
and (ii) locational basis swaps. 
Once Party A has provided 

 

27

 

Party B with
a Quoted Purchase Price with respect to a Transaction and Party B has not
objected to such Quoted Purchase Price when such quote is given, the Quoted
Purchase Price for such Transaction shall be final and binding.  The quantity of Energy purchased by Party A
from Party B shall be subtracted from the aggregate volume of Energy purchased
hereunder during the relevant Contract Year for purposes of determining whether
the applicable Minimum Energy Quantity has been purchased by Party B.

 

(d)                                Applicability of Energy Adder.  If the fixed price for any Energy Swap
includes an Energy Adder, Party B shall not be obligated to pay an Energy Adder
with respect to that portion of any Power Transaction which at the time of
determination is hedged by such Energy Swap.

 

(e)                                 Sleeve Transactions.

 

(i)                                    Party B shall have the right to obtain price quotes from
third parties for physically settled Energy purchase transactions where Party B
would be the buyer of Energy, Energy Swaps where Party B would be the fixed
price payer and basis swaps.  Party B may
request that Party A enter into any such purchase transaction or Energy Swap
with any such third party on the price and, with respect to physical purchase
transactions, delivery terms negotiated by Party B; provided, however,
that Party A shall be under no obligation to enter into any such transaction
with a third party unless Party A is satisfied with such transaction and such
third party, in each case as determined by Party A in its sole discretion; and,
provided,  further, that (A) Party A shall not be obligated
in any case to enter into any such third party transactions if the aggregate
actual and notional quantities of Energy to be delivered under all such
outstanding third party transactions exceed (x) 200,000 Mwhs in the
initial Contract Year, and (y) for each subsequent Contract Year, 40% of
the aggregate quantity of Energy delivered to Party B in the prior Contract
Year pursuant to the terms of this Agreement, as determined by Party A, and (B) no
such third party transaction may have a delivery period, calculation period or
settlement date that occurs after the date that is 12 months prior to the
maturity date of the Notes. 
Notwithstanding the foregoing, Party B will not request that Party A
enter into any transaction with a third party in respect of any financially
settled Option Transaction.

 

(ii)                                 Upon Party A’s execution of a transaction with a third party
pursuant to Part 7(e)(i) above, Party A and Party B shall be deemed
automatically and immediately to have entered into a Sleeve Transaction (as
defined below) hereunder.

 

(iii)                              Contract Price for Sleeve Transactions.  With respect to
each Transaction entered into by Party A with Party B that serves as a
back-to-back offsetting hedge of a physically settled Energy transaction or an
Energy Swap entered into between Party A and a third party pursuant to Part 7(e)(i) (each
such transaction between Party A and Party B, a “Sleeve Transaction”),
the per Mwh Contract Price payable to Party B in respect of such Transaction
shall be equal to the sum of the following amounts:

 

(A)                             The relevant
per Mwh contract price or fixed price to be paid by Party A to such third party
pursuant to the transaction that corresponds to such Sleeve Transaction (the “Base
Price”) plus the applicable Energy Adder; plus

 

(B)                               The total
amount of the following costs and expenses to the extent incurred by Party A in
respect of the third party transaction and/or in respect of the related Sleeve
Transaction divided by the contract quantity associated with each such
transaction: brokerage commissions, interest costs for required cash margin,
costs associated with other forms of posted collateral and similar costs and
expenses incurred by Party A with respect to the third party transaction and/or
the related Sleeve Transaction mutually agreed by the parties.

 

(f)                                   [Intentionally Omitted.]

 

28

 

(g)                                Firm Basis.  Unless otherwise specified in a Transaction, all purchases
and sales of Energy made under this Agreement shall be made on a Firm (LD)
basis.

 

(h)                                Credit Support To EDCs and ISO.  Party
A will act as the load-serving entity, financially-responsible party or
qualified scheduling entity, as the case may be, in respect of the Party B
Customer Load in each relevant ISO through which Party B serves Customers and
Party B shall take all actions reasonably requested by Party A, including to
execute and deliver any required agreements, to enable Party A to so act.  In connection therewith, Party A agrees to provide
Credit Support on behalf of Party B to meet EDC and ISO credit requirements on
terms reasonably acceptable to Party A and relating to the Transactions entered
into under this Agreement; provided, however, that Party A shall
not be obligated to provide or maintain any such Credit Support on terms and in
amounts that are unsatisfactory to Party A, as determined by Party A in its
reasonable discretion.  In the event that
Party A determines that any ISO’s or EDC’s credit support requirements are, or
have become, unreasonable, Party A will cooperate with Party B in an attempt to
amend the credit requirements of the applicable EDC or ISO.  To the extent that Party A provides Credit
Support to any EDC or ISO, Party B shall (i) reimburse Party A for any
Credit Support Amounts actually paid by Party A in accordance with Part 12(a)(xviii),
and (ii) pay the applicable Credit Support Fees with respect to the Credit
Support Amount in accordance with Part 9(f).

 

(i)                                    ISO and Related Charges.
Notwithstanding anything to the contrary and without limitation to Part 5(r) hereof,
Party B shall reimburse Party A for, and shall indemnify Party A against and
hold Party A harmless from, charges, costs and penalties assessed by any EDC or
ISO relating to the performance by Party A of its obligations under this Agreement;
provided, however, that Party B shall have no obligation to
reimburse or indemnify Party A with respect to any other charges, costs or
penalties that are assessed as the direct result of Party A’s error, negligence
or willful misconduct, and Party A shall be solely responsible for any such
charges, costs or penalties.

 

(j)                                    Designated Jurisdictions.

 

(i)                                    The parties acknowledge and agree that Party A shall have no
obligation to supply any Energy or any other Product (A) to Party B in any
jurisdiction not listed on Exhibit 7(j), or (B) with respect to
potential Customers served by any EDC and/or ISO that is not listed as an
approved EDC and/or ISO on Exhibit 7(j), in each case unless and until
Party A (x) has completed a market, regulatory and utility rules review
for the applicable jurisdiction and the applicable EDC and/or ISO within such
jurisdiction and (y) has provided written notice to Party B that based
upon the results of such review Party A is prepared to commence supply of
Energy and any other Product in such jurisdiction and with respect to such EDC
and/or ISO.  Party A shall use
commercially reasonable efforts to complete a review with respect to any
jurisdiction and/or any such EDC and/or ISO in a timely fashion following a
written request.  Unless approved by
Party A in accordance with this Part 7(j), Party B agrees that it shall be
prohibited from entering into transactions with Customers for the supply of
Energy or any other Product in any jurisdiction not listed on Exhibit 7(j),
or with respect to any potential Customer served by an EDC and/or ISO that is
not listed on Exhibit 7(j) with respect to the jurisdiction in which
such potential Customer is located.  Exhibit
7(j) shall be amended from time to time to include any jurisdictions or
EDCs and/or ISOs approved by Party A pursuant to this Part 7(j).

 

(ii)                                 If there is a change in Applicable Law in any Designated
Jurisdiction or if a proceeding is initiated against Party A, Party B and/or
any EDC or ISO, which Party A reasonably determines could have an adverse
effect on the results of any market, regulatory or utility rules review
performed by Party A with respect to a Designated Jurisdiction or an approved
EDC or ISO, then Party A shall have the right to initiate an additional market,
regulations and/or utility rules review with respect to such Designated
Jurisdiction, approved EDC or ISO (such review, a “Bring Down Review”).  Based on the results of any such Bring Down
Review, Party A may amend Exhibit 7(j) to remove any affected EDC or
ISO or Designated Jurisdiction.

 

29

 

Part 8.           Forecasting
and Scheduling

 

(a)                                 Forecasting.

 

(i)                                    Party B hereby agrees that it shall be solely responsible
for its own load forecasting with respect to purchases of Energy, Capacity,
Ancillary Services and related Products. 
Party B also agrees that it will cooperate with Party A to modify or
improve Party B’s forecasting performance if requested by Party A.  For the avoidance of doubt, Party A will not
be responsible for any aspect of Party B’s load forecasting responsibility and
Party B shall be responsible for any costs or penalties incurred as a result of
any forecasting error.  Party B shall
provide Party A with load forecasts in a timely manner and, from time to time,
upon the request of Party A.  With
respect to Party B’s obligations to provide forecasts, UCAP requirements and
other information to Party A with respect to purchases of UCAP set forth in Part 7(a)(ii) and
7(a)(iii), Party A will either (i) provide Party B with direct access to
the relevant NYISO data to allow Party B to prepare and provide such forecasts,
UCAP requirements and other information, or (ii) provide Party B with the
UCAP requirements specified for Party B by the NYISO in a timely manner such
that Party B can provide such forecasts, UCAP requirements and other
information at the time specified in Parts 7(a)(ii) and 7(a)(iii).  In the event that Party B fails to deliver a
load forecast in respect of any Day during the term, Party A shall use the
forecast provided by Party B for the previous Day.  Party B hereby further agrees that it will,
unless it has received prior written approval to do otherwise from Party B, at
all relevant times, (i) purchase between 85% and 115% of its daily
forecasted load, in New York, in the NYISO Day-Ahead Market (“DAM”), and
in the geographic area served by NEPOOL, in the NEPOOL DAM, and (ii) purchase
physical Energy to cover between 85% and 115% of its average daily forecast
non-MPCE indexed Party B Customer Load in ERCOT, with respect to both clause (i) and
(ii), for the on-peak (HE 0800 to HE 2300 EPT) portions of daily schedules.

 

(ii)                                 Party B shall provide Party A with Party B’s projected
Energy needs for daily, monthly, and seasonal periods. Subject to Part 8(b),
Party B shall provide such projections at such times and in such format as may
be reasonably requested by Party A.

 

(b)                                Energy Scheduling.

 

(i)                                    Party B hereby further agrees that it shall take all actions
reasonably requested by Party A, including to execute and deliver any required
agreements, to enable Party A to act as Party B’s agent to schedule with all
approved ISOs, on Party B’s behalf, receipt of all Energy purchased by Party B
from Party A to serve the Party B Customer Load in the Designated Jurisdictions.  Party A hereby agrees that it will act as
Party B’s agent to schedule with such ISOs, on Party B’s behalf, delivery of
all Energy purchased by Party B from Party A to serve the Party B Customer Load
in such jurisdictions.

 

(ii)                                With respect to the NYISO and NEPOOL Party B hereby agrees
that it will, based on its own load forecast, deliver to Party A (i) with
respect to the NYISO, by 4:00 p.m. EPT on the second Business Day prior to
the relevant date of delivery, and (ii) with respect to NEPOOL, by 9:30 a.m.
EPT on the first Business Day prior to the relevant date of delivery, its
requested Schedules in writing for delivery of Energy in the DAM of such ISO,
by transmission zone, in respect of each day of the term of this Agreement.  Such Schedules shall be in an electronic
format satisfactory to Party A, and shall be compliant, in form and substance,
with the requirements of the relevant ISO. 
Party A agrees that it will then bid the corresponding Schedules
provided by Party B into the DAM for all transmission zones, as required and
that it will make commercially reasonable efforts to accommodate any changes to
such schedules that are submitted to it by Party B in writing more than one
hour before the applicable ISO scheduling deadline for such day.

 

(iii)                             With respect to ERCOT, Party A will schedule the delivery
and receipt of all Energy purchased by Party B from Party A as required by
ERCOT.   Party A will make commercially
reasonable efforts to accommodate Party B’s changes to any such schedules if
such changes are submitted to Party A 

 

30

 

in writing
more than one hour before the applicable ERCOT scheduling deadline. Party A
will schedule all Ancillary Services specified and required by ERCOT with
respect to Energy purchased by Party B pursuant to this Agreement.

 

(iv)                             The submission by Party B to Party A of a Schedule shall
constitute an agreement by Party B to purchase the quantity of Energy indicated
on such Schedule, as balanced by the relevant ISO to satisfy the requirements
of the Party B Customer Load served by such ISO on such day, at the Delivery
Points reflected on such Schedule.  In
the event that Party B fails to deliver to Party A a Schedule for the delivery
of Energy in respect of any day by the applicable scheduling deadline, the last
Schedule submitted by Party B to Party A for the delivery of Electric Energy
shall be deemed to be the applicable Schedule for such day.

 

Part 9.          Payment
Terms; Financing Fees; Third Party Credit Support Fees

 

(a)                                 Energy Payments.  Notwithstanding any provision herein to the
contrary, including clause (d) of the Power Annex, Party A shall deliver
an invoice to Party B for Energy on or about the 10th calendar day of each
month beginning in the month immediately succeeding the month of commencement
of the term of this Agreement.  Each such
invoice shall itemize all amounts owed by Party B for Energy delivered and
received during the previous month and all other amounts due to Party A under
this Agreement that have accrued in the previous month, including, but not
limited to, for Capacity and Ancillary Services and all other amounts due Party
A under the Agreement; provided, however, that any failure by
Party A to deliver an invoice to Party B shall not in any way affect Party B’s
obligation to pay such amounts or the Due Date for the payment of such amounts.
If the actual quantity of a Product delivered is not known by the invoice date,
the invoice will be prepared based on the quantity of such Product that was
scheduled for delivery in such month. 
The invoiced quantity will then be adjusted to reflect the actual
delivered quantity of such Product on the following month’s invoice or as soon
thereafter as actual delivery information is available. Except as otherwise
provided in Parts 9(c), (e) and (f), Party B will pay each invoice on or
before the 20th day of the month such invoice is received (the “Energy
Settlement Date”); provided, however, that such amounts shall
not be considered past due if such amounts are paid to Party A on or before the
10th day of the third month following the month of delivery or accrual, as
applicable (each such date, an “Energy Due Date”).

 

(b)                                [Intentionally Omitted.]

 

(c)                                 Swap Payments.  Promptly after the end of each Calculation Period
for each outstanding Energy Swap, Party A shall deliver to Party B invoices in
respect of Energy Swap settlement payments that are due with respect to such
Transactions.  Energy Swap settlement
payments shall be due on the fifth Business Day after the end of each relevant
Calculation Period (the “Energy Swap Settlement Date”); provided,
however, that Energy Swap settlement payments due from Party B shall not
be deemed past due so long as such payments are made by the Energy Due Date
that occurs in the third month following the end of the applicable Calculation
Period.

 

(d)                                Option Payments.  Unless otherwise required by Party A, the
premium payment for Option Transactions will be due on the next Energy
Settlement Date after the Option Transaction is entered into; provided, however,
that any such premium payment shall not include the Energy Adder or other fees
and shall not be deemed past due so long as such payment is made by the Energy
Due Date that applies to such Energy Settlement Date.  Settlement payments for exercised Option
Transactions shall be subject to the payment terms applicable to the underlying
transaction.  For the avoidance of doubt,
the Contract Price for Energy delivered pursuant to the exercise of any
physically settled Option Transactions and Option Transactions on Energy Swaps
will include the relevant Energy Adder.

 

(e)                                 Financing Fees.  Party B shall pay Financing Fees with respect
to all Outstanding Amounts.  Financing
Fees shall accrue on each Outstanding Amount from and excluding the Settlement
Date or other date on which such Outstanding Amount was originally due for
payment and through and including the date such amount is paid.  Financing Fees shall be payable monthly in
arrears on the 10th day of each month (the “Financing Fee Settlement Date”);
provided, however, that Financing Fees shall not be deemed past due so

 

31

 

long as such
payments are made by the Energy Due Date that occurs in the third month
following the applicable Financing Fee Settlement Date.

 

(f)                                   Credit Support Fees.  With respect to any outstanding Credit
Support Amount, Party B shall pay to Party A a Credit Support Fee.  The Credit Support Fee shall be calculated
daily and shall be paid monthly in arrears on each Energy Settlement Date; provided,
however, that the Credit Support Fee shall not be deemed past due so
long as payment is made on or prior to the next occurring Energy Due Date.

 

Part 10.                                                    Third Party Close-Outs and Novations; Financing

 

(a)                                 [Intentionally Omitted]

 

(b)                                Third Party Transactions.

 

(i)                                   Within 30 days of the Closing Date, Party B shall either (A) terminate
and liquidate or (B) novate to Party A, as the case may be, all of the
outstanding Hedging Transactions with third parties that are listed on Exhibit 10(b)(i).  With respect to such transactions on Exhibit 10(b)(i) that
Party B elects to terminate and liquidate (such transactions, the “Third
Party Transactions”), such terminations and liquidations may result in
termination payments to be made by Party B to one or more third-parties at the
relevant time of such terminations and liquidations in amounts to be negotiated
between each such third party and Party A (such payments, the “Third Party
Liquidation Payments”).

 

(ii)                                 Concurrently with the termination and liquidation of each
Third Party Transaction, Party A shall enter into a Hedging Transaction with
Party B that corresponds with such terminated Third Party Transaction (each
such corresponding transaction, a “Corresponding Third Party Transaction”)
having the same notional quantity, floating price and remaining tenor; provided,
however, that the fixed price applicable to each such Hedging
Transaction shall be the fixed price used to calculate the Third Party
Liquidation Payment for the corresponding terminated Third Party Transaction.

 

(iii)                             With respect to such transactions on Exhibit 10(b)(i) that
Party B elects to novate to Party A (the “Third Party Novation Transactions”),  concurrently with the novation of such
transactions, Party A and each relevant third party shall enter into
back-to-back offsetting Hedging Transactions having the same notional
quantities, floating prices and remaining tenors with respect to each Third
Party Novation Transaction and otherwise on terms satisfactory to Party A in
its sole discretion.  If a third party
requires a payment in exchange for, or as a condition to, executing any
novation, Party B shall make such payment to the relevant third party (such
payments, the “Third Party Novation Payments”).

 

(iv)                             On the Closing Date, Party A shall inform Party B of the
then-current aggregate mark-to-market exposure associated with each transaction
listed on Exhibit 10(b)(i) (each, a “Third Party Notional Amount”).  In addition to any other payments required to
be made by Party B in connection herewith, Party B shall pay to Party A, from
and including the Closing Date, to and excluding the latest settlement date scheduled
to occur with respect to each such transaction, a monthly fee (the “Third
Party Exposure Fees”) on the relevant Third Party Notional Amount
associated with each such transaction; provided, however, that,
once a transaction listed on Exhibit 10(b)(i) becomes a Third Party
Transaction (i.e., is terminated and liquidated), Third Party Exposure Fees
shall cease to accrue on the Third Party Notional Amount attributable to such
transaction.  The formula used to calculate
all Third Party Exposure Fees shall be set forth on Exhibit 10(b)(iv).  All Third Party Exposure Fees shall be
payable monthly in arrears on the 10th day of each month (each, an “Exposure
Fee Due Date”); provided, however, that each such payment
shall not be considered past due if such payment is paid to Party A on or
before the 10th day of the third month following the applicable Exposure Fee
Due Date.

 

32

 

(v)                                On and subject to the terms and conditions of this Agreement
and to enable Party B to pay any Third Party Liquidation Payments and any Third
Party Novation Payments, Party A shall make one or more loans to Party B (each
such loan, a “Loan”) on and after the Closing Date and in amounts equal
to any Third Party Novation Payments and/or Third Party Liquidation Payments; provided,
that, the commitment of Party A to make any such Loans shall expire on the 30th
day following the Closing Date.

 

(vi)                             Party B agrees that, to secure its obligations and potential
obligations under the Third Party Novated Transactions and under the Loans
relating to any Third Party Liquidation Payments, it shall deliver to Party A
on the Closing Date cash in an amount equal to that portion of the Third Party
Notional Amount that Party A attributes to the mark-to-market exposure for
calculation periods under the transactions listed on Exhibit 10(b)(i) that
commence more than one calendar year from the Closing Date (each, a “Third
Party Future Calculation Period”). 
All such cash shall be held by Party A in the Swap Note Sub Account; provided,
however, that, on each Energy Swap Settlement Date following October 31,
2009 and as long as no Default or Potential Termination Event has occurred and
is continuing with respect to Party B, Party A shall transfer from the Swap
Note Sub Account to the Party A Sub Account an amount equal to that portion of
the Third Party Notional Amount of each such transaction attributed to the
Third Party Future Calculation Period occurring eleven months following such
Energy Swap Settlement Date.

 

(vii)                          If Party A and Party B do not agree on a flat fee to be paid
by Party B to Party A for entering into the Corresponding Third Party
Transactions and the Third Party Novation Transactions, Party B shall pay to
Party A the applicable Energy Adder in respect of the notional amounts relating
to each such Corresponding Third Party Transaction and each such Third Party
Novation Transaction.  The parties
further agree that the aggregate notional amounts of the Corresponding Third
Party Transactions and the Third Party Novation Transactions shall be counted
toward the Minimum Energy Quantity for the initial Contract Year.

 

(c)                                 Loan Accounting.

 

(i)                                    Party A shall record in its records the date and amount of
each of the Loans and each repayment thereof. 
The aggregate unpaid principal amount so recorded shall be rebuttably
presumptive evidence of the principal amount of the Loans owing and
unpaid.  The failure to so record any
such amount or any error in so recording any such amount shall not, however,
limit or otherwise affect the obligations of Party B hereunder or under any
Promissory Note to repay the principal amount of the Loans hereunder, together
with all interest accruing thereon.

 

(ii)                                 At the request of Party A, the Loans shall be evidenced by
Promissory Notes, substantially in the form of Exhibit 10(c)(ii), with
appropriate insertions, payable to the order of Party A in a face principal
amount equal to the principal amount of the applicable Loan.

 

(d)                                Interest.

 

(i)                                    Party B promises to pay interest on the unpaid principal
amount of each Loan for the period commencing on the date of such Loan until
such Loan is paid in full at the applicable rate per annum set forth on Exhibit 10(d)(i) hereto
with respect to such Loan; provided, that (A) at any time an Event
of Default exists, the applicable rate of interest corresponding to the Loan
shall be the Default Rate and (B) any such increase may thereafter be
rescinded by Party A.  In no event shall
charges constituting interest payable by Party B to Party A exceed the maximum
amount or the rate permitted under any Applicable Law, and if any such part or
provision of this Agreement is in contravention of any such Applicable Law,
such part or provision shall be deemed amended to conform thereto.  Amounts payable as the Third Party Exposure
Fees shall, for the purposes of this clause (i), be considered interest payable
on the Third Party Notional Amount. 
Accordingly, the proviso set forth above shall apply, and shall be calculated
on the Third Party Notional Amount.

 

33

 

(ii)                                 Accrued interest on each Loan shall be payable in arrears on
the 10th day of each month during the term of this Agreement; provided,
however, that each such payment shall not be considered past due if such
payment is paid to Party A on or before the Energy Due Date that relates to the
Energy Settlement Date that occurs during the month such payment was originally
due.  After maturity and at any time an Event
of Default exists, all accrued interest on all Loans shall be payable in cash
and on demand at the rates specified in Part 10(d)(i).

 

(e)                                 Loan Prepayments.  Party B may not make any prepayment on any
Loan hereunder.

 

(f)                                   Loan Repayments.  The Loans shall be paid at the times and in
the amounts set forth on Exhibit 10(d)(i) attached hereto.  Notwithstanding the foregoing, the
outstanding principal balance of the Loans shall be paid in full on their
respective Maturity Dates; provided, however, that each such payment shall not
be considered past due if such payment is paid to Party A on or before the
Energy Due Date that relates to the Energy Settlement Date that occurs during
the month such payment was originally due.

 

(g)                                Manner of Funding; Alternate Funding Offices.  Notwithstanding any
provision of this Agreement to the contrary, Party A shall be entitled to fund
and maintain its funding of all or any part of the Loans at its sole
discretion.  Party A may, if it so
elects, fulfill its commitment to make any Loan by causing any Affiliate of Party
A to make such Loan; provided, that in such event for the purposes of
this Agreement such Loan shall be deemed to have been made by Party A and the
obligation of Party B to repay such Loan shall nevertheless be to Party A and
shall be deemed held by it, to the extent of such Loan, for the account of such
Affiliate.

 

(h)                                Loans Generally.  The parties agree that all Loans by Party A
to Party B hereunder shall be deemed Transactions entered into under this
Agreement.

 

(i)                                    Security Interests and Collateral.  Simultaneously with
the novation or liquidation of transactions under Part 10(b), Party B
shall cause the applicable third party to such transaction to (A) assign
to Party A any security interest held by such third party (in any capacity) in
any assets owned by Party B or any Specified Entity of Party B, including any
transactions or agreements between Party B and any Customer of Party B; and (B) transfer
any existing collateral securing such transactions held by such third party (to
the extent such collateral was not liquidated in connection with the close-out
and liquidation of such transactions).

 

Part 11.                                                    Collateral Accounts; Payments

 

(a)                                 General.  Party B as to itself as set forth below, each
Specified Entity of Party B and Party B in respect of each of its Specified
Entities, agrees with Party A that, until the Discharge of ISDA Obligations,
Party B shall establish and maintain only the accounts described in this Part 11
and shall release funds or request release of funds from such accounts only as
permitted by this Part 11 (except for the Escrow Account, which shall not
be subject to the limitations set forth herein).

 

(b)                                Lockbox Accounts.

 

(i)                                    Party B represents and warrants that the following bank
accounts are the sole bank accounts utilized by Party B to receive funds from
EDCs and other payers (each a “Lockbox Account”):

 

(A)                              Account Number:
2000008695525 in the name of: Party B; Institution: Wachovia

 

(B)                                Account Number:
20000030372683 in the name of: Party B; Institution: Wachovia

 

(C)                                Account Number:
01892476728 in the name of: Party B; Institution: Huntington

 

Each
Lockbox Account shall be in the name of Party B and shall each, at all times,
be under the control of Party A.  In
order to give effect to the foregoing, Party A, Party B and each Institution 

 

34

 

set
forth above shall enter into an Account Control Agreement substantially in the
form of Exhibit 11(b)(i)(A) and Exhibit 11(b)(ii), as the case
may be, on the Closing Date.

 

(ii)                                 Party B and each Specified Entity of Party B shall cause all
payments due to it of any nature to be paid directly into one or more Lockbox
Accounts.  If Party B or any Specified
Entity of Party B receives any funds directly in contravention of the preceding
sentence, it shall immediately deposit such funds in a Lockbox Account.

 

(iii)                              As of the close of business on each Business Day, all funds
in each Lockbox Account shall be transferred in accordance with the applicable
Account Control Agreement to the Party A Sub Account.

 

(iv)                             Account number 51044923 at Amegy shall be closed within five
Business Days of the Closing Date and shall have no funds in such account on,
or after, the Closing Date.

 

(c)                                 Operating Account.

 

(i)                                    Party B shall identify to Party A or establish the Operating
Account on or before the Closing Date at Wachovia.  The Operating Account shall be in the name of
Party B and shall, at all times, be under the control of Party A.  In order to give effect to the foregoing,
Party A, Party B and Wachovia shall enter into the Wachovia Control Agreement
substantially in the form of Exhibit 11(b)(i)(B) on the Closing Date.

 

(ii)                                 Only amounts transferred from the Party A Sub Account may be
deposited in the Operating Account.

 

(iii)                              Funds in the Operating Account shall be released solely for
the following purposes and in the following order of priority:

 

(A)                             first, for the
payment of Taxes, provided that, no less than two Business Days prior to the
proposed release of funds, Party A shall have received a certificate of a
Responsible Officer stating the amount of such Taxes and the jurisdiction to
which such Taxes are owed; and

 

(B)                               second, for
working capital expenses (other than amounts payable to Party A) required for
the next week, provided that, not less than two Business Days prior to the
proposed release of funds, Party A shall have received a certificate of a
Responsible Officer, acceptable to Party A in its sole discretion, stating the
amount to be made available to Party B and that such amount shall be used
solely to pay working capital expenses contemplated by the then current Budget
(as amended from time to time in accordance with Part 12(a)(xiii)) and
that, after giving effect to the expenditure of the funds released, Party B’s
forecasted aggregate expenditures for the then current month and any subsequent
month shall not exceed 110% of the forecasted aggregate expenditures for the
then current month and any subsequent month covered by the then current Budget
determined on a month to month basis.

 

(iv)                             Not later than the fifth Business Day of each month, a
Responsible Officer shall deliver a certificate to Party A (which certificate
shall be acceptable to Party A in its sole discretion) stating the balance of
the Operating Account as of the first Business Day and as of the last Business
Day of the immediately preceding month and confirming that all payments from
the Operating Account during such month were in accordance with the then
current Budget.

 

(d)                                Party A Sub Account.  The Party A Sub Account shall be in the name
of Party A.  Funds in the Party A Sub
Account shall be released in the following order of priority:

 

35

 

(A)                             first, to the
payment of all amounts payable under this Agreement on account of Party A’s
fees and any legal fees, costs, and expenses or other liabilities of any kind
incurred by Party A in connection with this Agreement (including the
Reimbursement Obligation);

 

(B)                               second, to any
amount payable to Party A that is at such time overdue and for which Party B is
incurring a default rate of interest (including all payments for which the Due
Date has occurred without payment in full);

 

(C)                               third, to the
payment of any amount due (whether for principal or interest) on the Loans and
any Third Party Exposure Fees, in each case, where the related Energy Swap
Settlement Date has occurred;

 

(D)                              fourth, to the
payment of any other amount due where the related Settlement Date has occurred;

 

(E)                                fifth, to fund
the dividend or distribution of amounts necessary to make intercompany loans to
MX Energy or MX Canada permitted hereunder;

 

(F)                                sixth, to the
Operating Account, in the amounts determined in accordance with clause (c)(iii) of
this Part 11;

 

(G)                               seventh, to pay
any other amount required for the Discharge of ISDA Obligations;

 

(H)                              eighth, if
funds are to be used for any other purpose, such funds shall be released only
upon the approval of Party A; and

 

(I)                                   ninth, after
the Discharge of ISDA Obligations, to Party B.

 

Party
A shall apply any and all amounts due to Party A from funds in the Party A Sub
Account from time to time and in the order of priorities set forth above.

 

(e)                                 Swap Note Sub Account.  The Swap Note Sub Account shall be in the
name of Party A.  Funds in the Swap Note
Sub Account shall be transferred to the Party A Sub Account as provided in Part 10(b)(vi).

 

(f)                                   Replacement Custodial Account.  If at any time The Royal Bank of Scotland plc’s
Credit Rating falls below BBB- from S&P or Baa3  from Moody’s, then Party B may require that
Party A transfer the Party A Sub Account and the Swap Note Sub Account to a
Qualified Custodian pursuant to a custodial agreement in form and substance
acceptable to Party A.  For the avoidance
of doubt, following any such transfer of the Party A Sub Account and the Swap
Note Sub Account, the terms of such custodial agreement governing the
disbursement of funds from such transferred accounts shall be consistent with Part 11(d) and
Part 11(e), respectively.

 

(g)                                Other Accounts.

 

(i)                                    Party B and each Specified Entity of Party B (other than MX
Energy (as permitted pursuant to the terms of the other Master ISDAs)) shall
have no accounts other than the Lockbox Accounts, the Operating Account, the
accounts described in this Part 11(g) and the Escrow Account, and
shall not release funds or request release of funds from such accounts other
than as permitted by this Part 11 (except for the Escrow Account, which
shall not be subject to the limitations set forth herein).

 

(ii)                                 MX Canada maintains an account at Royal Bank of Canada,
Toronto (Account Number: 1329788). 
Within 30 days of the Closing Date, Party B, MX Canada and Royal Bank of
Canada, Toronto shall have entered into an agreement, in form and substance
satisfactory to Party A, 

 

36

 

permitting Party A to direct the
disposition of such account upon notice to Royal Bank of Canada, Toronto.

 

(iii)                              MX Holdings maintains brokerage accounts at Morgan Stanley,
New York (Account Number 796011175002) and Deutsche Bank Securities, Inc.,
New York (Account Number: 61619603).  The
only assets in such accounts are Old Notes held by MX Holdings that shall be
canceled on the Closing Date.  MX
Holdings shall not hold any other assets in such accounts.  Promptly following the Closing Date, such
accounts will be closed.

 

(iv)                             With respect to the account of Bill Matrix, Inc. (“Bill
Matrix”) at The Bancorp Bank, Delaware (Account Number 2421002170)
maintained for the benefit of Party B, Party B will (A) deliver to Bill
Matrix, on or before the Closing Date, a payment direction letter acceptable to
Party A instructing Bill Matrix to continue making all payments directly to a
Lockbox Account, (B) deliver to Bill Matrix, as soon as practicable after
the Closing Date, but in no event more than 30 days thereafter, a payment
direction letter acceptable to Party A giving Bill Matrix irrevocable
instructions to continue making payments directly to a Lockbox Account and
directing Bill Matrix to only accept changes to such payment instructions from
Party A (and will use commercially reasonable efforts to obtain Bill Matrix’s
signed agreement to obey such instructions) and (C) use commercially
reasonable efforts to enter into arrangements satisfactory to Party A with
respect to such account that will have the effect of protecting Party B’s
assets in such account from credit exposure to Bill Matrix, which arrangements
may include an agreement among Party B, Bill Matrix and The Bancorp Bank,
Delaware granting Party B control over such account and converting such account
to a segregated account.

 

(h)                                Documentation.  Party B shall provide such documents in
respect of the accounts described in this Part 11 (other than the Escrow
Account) and their establishment and maintenance as Party A shall from time to
time reasonably request.

 

(i)                                    Certificates.  Each certificate to be delivered by a
Responsible Officer pursuant to this Part 11 shall include a statement
that no Default or Potential Termination Event shall have occurred and is
continuing both before and after giving effect to the release of funds
contemplated by such certificate.  Funds
shall not be released unless such statement is included in the applicable
certificate.

 

(j)                                    Investments.  Amounts in the Operating Account may be
invested by Party B in Permitted Investments described in clauses (i) through
(iii) of the definition thereof. 
Any losses attributable to the investment of amounts in such accounts
shall not limit or modify the obligation of Party B to make any payments
required to be made to Party A under this Agreement.

 

Part 12.                                                    Affirmative Covenants

 

(a)                                 Each Specified Entity of Party B, Party B in respect of each
of its Specified Entities and Party B with respect to itself agrees with Party
A that, at all times prior to the Discharge of ISDA Obligations:

 

(i)                                    Existence; Conduct of Business.  Such party shall
preserve and maintain (A) its legal existence as a corporation, limited
liability company, partnership or other similar entity, as applicable, in good
standing under the laws of the jurisdiction of organization, (B) its
qualification to do business in each other jurisdiction where such
qualification is required, except to the extent that failure to be so qualified
could not reasonably be expected to result in a Material Adverse Effect and (C) all
of its licenses, rights, privileges and franchises necessary for the
maintenance of its existence and its qualification to do business, except to
the extent that could not reasonably be expected to result in a Material
Adverse Effect.

 

(ii)                                 Payment of Obligations and Tax Filings.  Such party shall:

 

37

 

(A)                             file all Tax
returns that are required to be filed and pay all of its obligations, including
liabilities for Taxes, except where (i) (x) the validity or amount of
such payment is being contested in good faith by appropriate proceedings and (y) such
party has accrued for or set aside on its books adequate reserves with respect
to such payment in accordance with GAAP and (ii) the failure to make
payment pending such contest could not reasonably be expected to result in a
Material Adverse Effect.

 

(B)                               deliver to
Party A all tax forms and other documents necessary to permit Party A to both
receive payment made by such party, and confirm that all payments made by such
party shall be received free of withholding tax or deduction or stamp,
registration or similar tax.

 

(iii)                              Insurance.  Such party shall maintain the types of
insurance set forth on Exhibit 12(a)(iii) and, upon request by Party
A, such other insurance as is customary for entities in the same industry, and
with reputable and financially sound carriers. 
The policies for each type of insurance will be issued by insurers, and
have such terms and conditions, as are and remain satisfactory to Party A.  Such party shall cause all such insurance to
name Party A as an additional insured and/or loss payee, as appropriate, and to
provide that no cancellation, change in amount or change in coverage shall be
effective without 30 days’ prior written notice thereof to Party A.

 

(iv)                             Books and Records; Inspection Rights; Accounting and
Accounting Matters.

 

(A)                             Such party will
keep proper books and records in which full, true and correct entries are made
of all dealings and transactions in relation to its business and activities in
accordance with GAAP.  Such party will
permit Party A or any representative thereof, upon reasonable prior notice, to
visit and inspect its properties, to examine and make extracts from its books
and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as often
as reasonably requested, provided that in the case of any visit by Party
A other than when Default or Potential Termination Event has occurred and is
continuing, Party A shall be required to provide not less than three Business
Days notice of its intent to inspect and such inspections shall occur during
normal business hours.

 

(B)                               Such party
shall authorize the Auditor (whose fees and expenses shall be for the account
such party) to communicate with the officers and designated representatives of
Party A from time to time upon reasonable prior notice to such party, as
applicable.

 

(v)                                Notices of Material Events; Environmental Matters.  Such party will
furnish written notice of each of the following events, occurrence and
conditions to Party A:

 

(A)                             the occurrence
of any Default or Potential Termination Event, promptly following the
occurrence thereof;

 

(B)                               (1) the
filing or commencement of any action, suit or proceeding or the assertion of
any Environmental Claim by or before any arbitrator or other Governmental
Authority against or affecting such party, and the occurrence of any material
adverse event in the course of any such action, suit or proceeding, or (2) any
other circumstance, act, or condition with respect to the adoption, material
amendment, interpretation, or repeal of any Applicable Law relevant in any
material respect to the transactions contemplated by this Agreement or the
Impairment of any Governmental Approval or notice (whether formal or informal,
written or oral) or the failure of such party to comply with the terms and
conditions of any Governmental Approval related to the transactions
contemplated by this Agreement, promptly following the occurrence thereof, in
each case, except to the extent that could not reasonably be expected to result
in a Material Adverse Effect; and

 

38

 

(C)                               as promptly as
possible and in any event within three Business Days after a Responsible
Officer of such party has knowledge of any development or circumstance that
results in, or could reasonably be expected to result in, a Material Adverse
Effect, an event of force majeure or action by a Governmental Authority adverse
to such party.

 

Each notice delivered under
this Part 12(a)(v) shall be accompanied by a statement of a
Responsible Officer of such party setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.  In addition, such
party shall, promptly upon request therefor, furnish such other environmental
reports as Party A may reasonably request.

 

(vi)                             Financial Statements and Related Information.  Party B will
furnish to Party A (with one hard copy and, if reasonably available, a copy in
electronic format), in respect of itself, MX Holdings and MX Energy (each a “Reporting
Company”) (on a consolidated basis):

 

(A)                             (1) with
respect to MX Holdings, audited annual financial statements within 90 days
after the end of each fiscal year and setting forth, in comparative form, the
corresponding figures for the preceding fiscal year, accompanied by (x) an
opinion thereon of the Auditor (without a “going concern” or like qualification
or exception as to the scope of such audit) and (y) a certificate of a
Responsible Officer of such Reporting Company, in each case, to the effect that
said financial statements present fairly in all material respects the financial
position and results of operations as at the end of, and for, such fiscal year
in accordance with GAAP, and (2) with respect to itself and MX Energy,
unaudited annual financial statements in a form and format agreed to by the
parties, but in any event including gross revenues, gross profits, margin
contributions (including allocation of sales and marketing expense) and a
balance sheet presented in a manner consistent with prior practice, within 90
days after the end of each fiscal year and setting forth, in comparative form,
the corresponding figures for the preceding fiscal year, accompanied by a
certificate of a Responsible Officer of such Reporting Company to the effect
that said financial statements present fairly in all material respects the
financial position and results of operations as at the end of, and for, such
fiscal year;

 

(B)                               (1) with
respect to MX Holdings, unaudited quarterly financial statements within 45 days
after the end of each of the first three fiscal quarters and within 60 days
after the end of the fourth fiscal quarter, for such period and for the period
from the beginning of the respective fiscal year to the end of such period, and
the related balance sheet as at the end of such period, setting forth in each
case, in comparative form, the corresponding figures for the corresponding
period of (or in the case of the balance sheet, as of the end of) the preceding
fiscal year, accompanied by a certificate of a Responsible Officer of such
Reporting Company, which certificate shall state that said financial statements
present fairly in all material respects the financial position and results of
operations of such Reporting Company in accordance with GAAP, as at the end of,
and for, such period (subject to normal year-end audit adjustments), said
quarterly financial statements for the fourth fiscal quarter to be accompanied
by the unaudited annual financial statements for the fiscal year without the
notes thereto, and (2) with respect to itself and MX Energy, unaudited
quarterly financial statements in a form and format agreed to by the parties,
but in any event including gross revenues, gross profits, margin contributions
(including allocation of sales and marketing expense), within 45 days after the
end of each of the first three fiscal quarters and within 60 days after the end
of the fourth fiscal quarter, for such period and for the period from the
beginning of the respective fiscal year to the end of such period, and the
related balance sheet as at the end of such period presented in a manner
consistent with prior practice, setting forth in each case, in comparative
form, the corresponding figures for the corresponding period of (or in the case
of the balance sheet, as of the end of) the preceding fiscal year, accompanied
by a certificate of a Responsible Officer of such Reporting Company, which
certificate shall state that said financial statements present fairly in all
material respects the financial position and results of 

 

39

 

operations of such Reporting Company, as at the end of, and for, such
period (subject to normal year-end audit adjustments);

 

(C)                               concurrently
with any delivery of financial statements under clause (A) or (B) of
this Part 12(a)(vi), a certificate of a Responsible Officer of each
Reporting Company (1) certifying as to whether a Default or Potential
Termination Event has occurred and, if a Default or Potential Termination Event
has occurred, specifying the details thereof and any action taken or proposed
to be taken with respect thereto, (2) setting forth in reasonable detail
the calculation of Adjusted Consolidated Tangible Net Worth as of the end of
the immediately preceding fiscal quarter and (3) stating whether any
change in GAAP or in the application thereof has occurred since the date of the
audited financial statements of such Reporting Company for the immediately
prior fiscal year and, if any such change has occurred, specifying the effect
of such change on the financial statements accompanying such certificate;

 

(D)                              concurrently
with the delivery of the financial statements under clause (A) of this Part 12(a)(vi),
a discussion and analysis by the management of Party B of the business and
operations through the end of the fiscal year covered by such financial
statements, including a discussion and analysis with respect to (1) compliance
with Environmental Law, (2) a statement of all transactions in such period
between Party B and any of its Interested Persons or stockholders (other than
transactions between Party B or any of its Subsidiaries), including a
certification by a Responsible Officer of Party B that such transactions were
on ordinary commercial terms negotiated on an arm’s length basis and that each
such transaction was at least as favorable to such Party B as the terms
available from independent third parties, and (3) a comparison of the
results of operations of Party B for the relevant period to the operating
Budget for the same period, together with an explanation of any material
variation therefrom; and

 

(E)                                as soon as
available and in any event within forty (40) days after the end of each month
(including the last month of Party B’s fiscal year), Party B will deliver the
consolidated balance sheet of Party B, as at the end of such month, and the
related consolidated statements of income, stockholders’ equity and cash flow
for such month and for the period from the beginning of the then current fiscal
year of Party B to the end of such month.

 

(vii)                          Miscellaneous Notices and Reports.  Party B will
furnish to Party A with respect to Party B and each Specified Entity of Party
B:

 

(A)                             promptly,
notice of any change in the Responsible Officers of Party B or any such
Specified Entity, including certified specimen signatures of any new officer so
appointed an, if requested by Party A, satisfactory evidence of the authority
of each such new officer;

 

(B)                               promptly after
Party B’s or any Specified Entity of Party B’s receipt thereof, a copy of any
management letter received by Party B or any such Specified Entity from the
Auditor in relation to its financial, accounting and other systems, management
or accounts;

 

(C)                               promptly after
Party B’s or any such Specified Entity’s receipt thereof, a summary including
all relevant information of any material notices and material documents or
information received by Party B or any such Specified Entity with respect to
any Material Contract (including any notice or other document relating to a
failure by Party B or any such Specified Entity to perform any of its covenants
or obligations under such Material Contract);

 

(D)                              not later than
the fifth Business Day following the end of each month, an updated monthly (i) accounts
receivable aging report for each month during the term of this 

 

40

 

Agreement (with an estimate of associated taxes
due), (ii) churn report, (iii) statement of accrued unbilled accounts
receivable, (iv) estimated amount of imbalances with EDCs and ISOs, and (v) an
information matrix for each Designated Jurisdiction in which Party B or such
Specified Entity is marketing, which matrix will show the number of Customers,
monthly throughput, pricing structure, margin per unit per pricing structure
and average sales;

 

(E)                                upon Party A’s
request and in a manner and format determined by Party A in its sole discretion,
the individual Customer detail transaction history of charges and payments to
support the general ledger and aged receivables information contained in any
financial statements and reports furnished by Party B or any such Specified
Entity to Party A;

 

(F)                                upon Party A’s
request, any information required to calculate the Collateral Coverage Ratio;

 

(G)                               upon Party A’s
request, any information required to calculate the weighted average tenor of
all of Party B’s and each such Specified Entity’s commodity obligations;

 

(H)                              not later than
the fifth Business Day following the end of each month, a monthly compliance
certificate in substantially the form of Exhibit 12(a)(vii)(H) hereto,
or as otherwise agreed by Party A and Party B;

 

(I)                                   not later than
the fifth Business Day following the end of each month, a monthly data file
download showing the name of each EDC that has delivered Energy to Party B or
it’s Customers and a list of Customers (if any) that are billed directly by or
on behalf of Party B; and

 

(J)                                  promptly
following any request therefor, such other information regarding the material
operations, business affairs and financial condition of Party B or any
Specified Entity of Party B as Party A may reasonably request.

 

(viii)                       Accounts Receivable.

 

(A)                             Party B shall
provide or cause to be provided written instructions to all ISOs and EDCs and
other payers of accounts receivable, which instructions may not be revoked
without the written consent of Party A, directing all such payers to cause any
and all amounts payable to Party B to be paid directly into a Lockbox Account.

 

(B)                               Party B shall
take any actions as may be reasonably requested by Party A in order to ensure
that Party A is satisfied with Party B’s accounts receivable and arrangements
with Customers and EDCs including payment directions.

 

(ix)                               Compliance with Laws.  Party B and each Specified Entity of Party B
shall comply with all Applicable Laws, including Environmental Laws, and shall
from time to time obtain and renew, and shall comply with, all Governmental
Approvals as shall now or hereafter be necessary for Party B and each Specified
Entity of Party B to comply with such Applicable Laws, except any such
Applicable Laws or Governmental Approvals, the failure to obtain, renew or
comply with, could not reasonably be expected to result in a Material Adverse
Effect.

 

(x)                                  Maintenance of Lien.  Party B and each Specified Entity of Party B
shall take, or cause to be taken, all action required or desirable to maintain
and preserve the Liens created by the ISDA Security Documents and the priority
thereof.  Party B and each Specified
Entity of Party B shall from time to time execute or cause to be executed
further instruments (including financing statements, continuation statements
and similar statements with respect to any ISDA Security Document) reasonably
requested by Party A for such purposes. 
Party B and each Specified Entity

 

41

 

of Party B shall promptly
discharge, at Party B’s and each such Specified Entity’s cost and expense, any
Lien (other than Permitted Liens) on the Collateral.

 

(xi)                                Hedging.  Party B and each Specified Entity of Party B
shall not enter into or maintain any Hedging Transactions, other than the
Hedging Transactions with Party A contemplated by the terms of the Master
ISDAs.

 

(xii)                            Exposures to EDCs and ISOs.  If Party A has notified Party B that Party B’s
exposure to one or more EDCs or ISO(s) exceeds Party A’s then current
individual or aggregate exposure limit for such EDCs or ISO(s) (as determined
by Party A from time to time in its sole discretion), Party B and any such
Specified Entity shall (A) within five (5) Business Days, provide
Party A with a written plan to reduce Party B’s credit exposure to such entity
to the extent required by Party A within nine months, (B) reduce or
mitigate Party B’s exposure to the relevant entity to the extent required by
Party A within nine months and (C) immediately cease any activity that
would have the effect of increasing (or potentially increasing) Party B’s
credit exposure to such entity.

 

(xiii)                         Budgets.

 

(A)                              On an annual
basis, but no later than 30 days prior to the end of each fiscal year, Party B
will deliver to Party A a reasonably detailed proposed budget for the following
fiscal year, which shall include projected consolidated statements of cash
flows and projected statements of income and expense on a monthly basis.  Within 30 days of receipt of the proposed budget,
Party A shall either approve the proposed budget, in which case the proposed
budget shall be the budget for the following fiscal year, or deliver to Party B
a statement setting forth objections to the proposed budget.  In the event that Party A objects to the
proposed budget, Party B shall, to the extent it accepts the objections, revise
the proposed budget to the extent necessary to satisfy the objections and, to
the extent it does not accept the objections, prepare a written statement of
the reasons why it does not accept some or all of the objections.  Party B shall deliver to Party A, to the
extent applicable, the revised proposed budget and the written statement
concerning the objections.  Party B shall
also make such further submissions relating to the proposed budget to Party A
as may be requested by Party A.  The
revised budget shall become the budget for the following fiscal year at such
time as it is approved by Party A. 
Pending such acceptance, the budget for the following fiscal year shall
be the budget that was applicable for the prior fiscal year.

 

(B)                                On a monthly
basis, but not later than 10 days prior to the end of each month, Party B will
deliver to Party A an updated monthly budget for the next succeeding month,
accompanied by updated projected budgets for the immediately following two
months.  Each such budget shall (1) be
prepared in good faith and based on reasonable assumptions, (2) be
prepared on a basis consistent with the operating budget delivered for such
calendar year and the budget delivered in respect of the preceding month, and
shall reconcile any material differences from such budgets, (3) provide
for the timely payment of all obligations to Party A under this Agreement, (4) not
project any expenditures greater than projected cash flows, (5) provide
for the timely payment of all Taxes, including all federal, provincial and
local withholding taxes, all sales and use taxes and all gross receipts taxes
and (6) be satisfactory to Party A in its reasonable discretion as a
creditor of such Specified Entity.

 

(xiv)                         Matched
Trading Book. 
Except to the extent set forth on Exhibit 12(a)(xiv) hereto,
Party B shall maintain a matched trading book such that at all times (1) each
sale by Party B of a quantity of Energy at a fixed forward price is hedged by
an Energy Swap or Power Transaction maintained by Party B with Party A pursuant
to this Agreement in respect of an equal notional quantity of Energy (unless
Party A determines that a lower notional quantity is appropriate to take into account
such factors as Party A’s forecast of Party B’s Customer attrition/churn or
forecast modifications), with a lower fixed forward price and (with respect to
Energy Swaps) with a floating price index that 

 

42

 

reasonably hedges the market price of Energy at the relevant
Delivery Point of such sale, all as reasonably satisfactory to Party A and (2) for
any floating price purchase by Party B of a quantity of Energy, there is a
floating price sale of an equal quantity of Energy by Party B at the same
Delivery Point and with a higher floating sale price based on the same pricing
index used in the corresponding floating price purchase.

 

(xv)                            Adjusted Consolidated Tangible Net Worth.  MX Holdings shall
at all times maintain an Adjusted Consolidated Tangible Net Worth of at least
$60,000,000 (calculated in accordance with GAAP).

 

(xvi)                         Access to Records
and Billing Systems.  Such party will
provide Party A with access (remote or otherwise) to such party’s records
and billing systems as part of ongoing review and audit procedures of Party
A.  Within six months of the Closing Date
(and from time to time, as requested by Party A), such party shall provide
Party A with copies of all of such party’s information technology
infrastructure systems (including, without limitation, billing systems)
required to realize the value of all customer contracts and required associated
licenses (at no cost to Party A and updated as necessary from time to
time) so that Party A can operate such party’s business in the event of a
foreclosure by Party A pursuant to the terms of this Agreement and the other
ISDA Documents.  As an alternative to the
foregoing, Party A may agree in writing to an arrangement where such party
provides Party A and its personnel with control of such party’s operations
through access to, and control of, such party’s disaster recovery facilities in
the event of a Default or Potential Termination Event hereunder or under the
other Master ISDAs.  Party A acknowledges
the confidential nature of such information technology infrastructure and in no
event shall Party A disclose to or share with any third parties any of such
information technology infrastructure without the express written consent of
Party B.

 

(xvii)                      Novation or Termination of Certain Transactions.  Party B and MX
Energy shall use commercially reasonable efforts to novate or terminate all
transactions underlying the Indebtedness permitted by clause (iii) of the
definition of “Permitted Indebtedness” set forth in Part 14 as promptly as
practicable, but in any event within 30 days of the Closing Date.

 

(xviii)                   Reimbursement Obligation.

 

(A)                              In the event (a) that
Party A or any other Person on behalf of Party A performs any obligation of
Party B to a EDC, ISO or any other third party (it being understood that
nothing in this clause (a) shall be construed to require any such
performance by Party A) or (b) that any payment, disbursement or
performance under any Credit Support has been made to any EDC, ISO or any other
third party, in either case (whether or not the obligations secured thereby are
now or hereafter existing), Party B shall, within one Business Day of a written
demand therefor made by Party A, (i) in the case of clause (a), pay to
Party A an amount, as reasonably calculated by Party A, equal to the total
amount it will cost Party A or such other Person on behalf of Party A to
perform such obligation; (ii) in the case of clause (b), pay to Party A
all amounts paid or disbursed under any Credit Support and (iii) pay to
Party A any other cost or expense of any nature reasonably incurred by Party A
(including any taxes and reasonable attorneys’ fees and expenses) in connection
with the foregoing (including any such taxes, costs and expenses incurred by
Party A to third parties that issue Credit Support) (collectively, the “Reimbursement
Obligation”).  Interest shall be
payable on the Reimbursement Obligation from the date of payment by Party A or
such other issuer of Credit Support to the beneficiary until payment by Party B
in full at the applicable rate which would be payable on any Outstanding
Amounts which were then overdue. The Reimbursement Obligation hereunder is
unqualified, unconditional and absolute and is irrespective of whether Party A
is the issuer of Credit Support and, in the case of clause (a), upon any such
performance by Party A.

 

(B)                                In addition to, and without
in any way limiting the foregoing:

 

43

 

(1)                                  Party B’s obligations under
this clause (xviii) shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which Party B or any Specified Entity of Party B may have or have had
against Party A, any issuer of Credit Support, any beneficiary of a Credit
Support or any other Person.

 

(2)                                  Party B agrees that Party A
and any other issuer of Credit Support shall not be responsible for, and the
Reimbursement Obligation under this clause shall not be affected by, among
other things: (a) the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, (b) any dispute between or among Party B or
any Specified Entity of Party B and any beneficiary of any Credit Support or
any other party to which such Credit Support may be transferred, (c) any
claims whatsoever of Party B or any Specified Entity of Party B against any
beneficiary of such Credit Support or any transferee thereof, (d) any
change in the time, manner or place of payment of, or in any other term of, all
or any of the obligations of Party B or any Specified Entity of Party B in
respect of any Credit Support or any other amendment or waiver of or any
consent to departure from the terms of any Credit Support or any document
executed or delivered in connection with the issuance or payment thereof, (e) any
adverse change in the business,  operations, properties,
assets, condition (financial or otherwise) or prospects of Party B or any of the
Specified Entities of Party B (individually or taken as a whole), (f) any
breach hereof or of any other ISDA Document by any party thereto, (g) any
other circumstance or happening whatsoever, whether or not similar to any of
the foregoing, (h) the fact that a potential event of default, event of
default, potential termination event or termination event (each, however
defined) shall have occurred and be continuing, or (i) any payment by
Party A or any other issuer of Credit Support against presentation of any
document or certificate that does not strictly comply with the terms of such
Credit Support, or any payment made by Party A or any other issuer of Credit
Support under any Credit Support to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any beneficiary
or any transferee of any Credit Support, including arising in connection with
any proceeding of the type described in Section 5(a)(vii).

 

(3)                                  No issuer of Credit Support
shall be liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any such Credit Support, except that Party A shall be liable
for errors and omissions directly caused primarily by its own (and not any
other Person’s) gross negligence or willful misconduct.

 

(C)                                In addition to, and without
in any way limiting the foregoing:

 

(1)                                  The role of any issuer of
Credit Support in connection with any draft presented for payment under any
Credit Support which is a letter of credit issued to secure Party B’s
obligations to third parties shall, in addition to any payment obligation
thereunder, be limited to determining that the documents (including each draft)
delivered under such letter of credit in connection with such presentment are
in conformity with such letter of credit. 
In addition, Party B agrees that, in paying any drawing or demand for
payment under any Credit Support, neither Party A nor any other issuer of any
Credit Support shall not have any responsibility to inquire as to the validity
or accuracy of any document presented in connection with such drawing or demand
for payment or the authority of the Person executing or delivering the same.

 

44

 

(2)                                  No issuer of
Credit Support nor any of the respective correspondents, participants or
assignees of such issuer shall be liable for the due execution, effectiveness,
validity or enforceability of any document delivered in connection with the
issuance or payment of such Credit Support.

 

(3)                                  Party B hereby
assumes all risks of the acts or omissions of any beneficiary or transferee
with respect to its use of any Credit Support; provided, however,
that this assumption is not intended to, and shall not, preclude Party B from
pursuing such rights and remedies as it may have against such beneficiary or
transferee at law or under any other agreement. 
No issuer of Credit Support, nor any of the respective correspondents,
participants or assignees of such issuer shall be liable or responsible for any
of the matters described in the preceding clause (xviii)(B).  In furtherance and not in limitation of the
foregoing: (a) any issuer of Credit Support may accept documents that
appear on their face to be in order and substantially comply with the terms of
the Credit Support, without responsibility for further investigation,
regardless of any notice or information to the contrary; and (b) no issuer
of Credit Support shall be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Credit Support instrument or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective for
any reason.  Without duplication of any
obligation of Party B hereunder, in addition to amounts payable as provided
herein, Party B hereby agrees to protect, indemnify, pay and hold harmless Party
A from and against any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including all reasonably incurred fees, expenses
and disbursements of any law firm or other external counsel) which Party A may
incur or be subject to as a consequence, direct or indirect, of (i) the
issuance of any Credit Support by it or any other Person, or (ii) the
failure to honor a drawing or demand for payment under any Credit Support as a
result of any act of any Governmental Authority.

 

(xix)                           Interest Rate Swaps.

 

(A)                              Within 30 days following the
Closing Date, Party B shall cause MX Holdings to cause its counterparties under
those certain interest rate swaps set forth on Exhibit 12(a)(xix) (the “RBS
Novated Transactions”) to novate their positions under such transactions to
The Royal Bank of Scotland plc. 
Concurrently with each such novation, The Royal Bank of Scotland plc and
each such third party shall enter into back-to-back offsetting interest rate swaps
having the same notional quantities, fixed and floating prices, and remain
tenors with respect to each RBS Novated Transaction and otherwise on terms
satisfactory to The Royal Bank of Scotland plc in its sole discretion (each
such back-to-back hedge, an “RBS Sleeve Transaction”).  The parties agree that, prior to the novation
of the RBS Novated Transactions pursuant to this Part 12(a)(xix) and
notwithstanding any provision herein to the contrary, MX Holdings shall have
the right to reduce the aggregate notional amount of the RBS Novated Transactions
by liquidating a portion of such RBS Novated Transactions or by entering into
off-setting interest rate swaps with the counterparties to such transactions; provided,
however, that in no event shall MX Holdings reduce the aggregate
notional amount of such RBS Novated Transactions to an amount less than
$60,000,000 without Party A’s prior written approval. To the extent that Party
B enters into off-setting interest rate swaps with third parties pursuant to
this Part 12(a)(xix), Exhibit 12(a)(xix) shall be amended to include
such off-setting swaps.

 

(B)                                Concurrently with the
novations of the RBS Novated Transactions and only to the extent the aggregate
notional amount of the RBS Novated Transactions exceeds $60,000,000, Party B
shall reduce the notional amount of the RBS Novated Transactions to 

 

45

 

$60,000,000 by liquidating a portion of such RBS Novated Transactions
or by entering into off-setting interest rate swaps with The Royal Bank of
Scotland plc.

 

(C)                                If, at any time following
the novation of the RBS Novated Transactions, the outstanding amount of the
obligations hedged by the RBS Novated Transactions (the “Hedged Obligations”)
is reduced, Party B shall promptly reduce the notional amount of the RBS
Novated Transactions to an amount equal to the then outstanding amount of
Hedged Obligations, through a transaction with The Royal Bank of Scotland plc,
and shall provide Party A with prompt notice of such reduction.

 

(xx)                              Further Assurances.

 

(A)                              Subject to the terms and
conditions of this Agreement, Party B and each such Specified Entity agrees to
use all commercially reasonable efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary, proper or advisable
under Applicable Laws to consummate and make effective the transactions
contemplated by this Agreement and the other Specified Agreements.  In case at any time any further action or the
performance of any function is necessary or desirable to carry out the purposes
of the Specified Agreements or to allow Party A or its Affiliates to enter into
any Transaction or take any other action specified therein, the proper officers
and directors of Party B and each such Specified Entity shall take all such
necessary action and shall cause any such functions to be performed.

 

(B)                                Without limiting the
generality of Part 12(a)(xx)(A), upon the approval by Party A of any ISO
or EDC not listed on Exhibit 7(j) with respect to any Designated
Jurisdiction, and prior to the execution of any Energy purchase and sale
agreement with a Customer served by such ISO or EDC, Party B shall cause such
ISO or EDC to irrevocably agree to make all payments owing to Party B or to any
Specified Entity of Party B directly to a Lockbox Account covered by the
Wachovia Control Agreement.

 

Part 13.                                                    Negative Covenants

 

(a)                                  General Covenants.  Each Specified
Entity of Party B, Party B in respect of each Specified Entity of Party B and
Party B as to itself as set forth below, agrees with Party A that, at all times
prior to the Discharge of ISDA Obligations:

 

(i)                                     Indebtedness.  Party B and each such Specified Entity will
not, at any time directly or indirectly create, incur, assume, guarantee or
otherwise be or become liable for any Indebtedness, except Permitted
Indebtedness.

 

(ii)                                  Liens.  Party B and each such Specified Entity will
not create, assume, incur or suffer to exist any Lien upon or with respect to
any Property now owned or hereafter acquired by it (including the Collateral),
or assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof, except for Permitted Liens.

 

(iii)                               Merger and Consolidation; Disposition of Assets; New
Subsidiaries.

 

(A)                              Except as otherwise
permitted by this Agreement, Party B and each such Specified Entity shall not
be a party to any merger or consolidation or, except in the ordinary course of
business, transfer, sell, assign (except as contemplated by the ISDA Security
Documents), convey, lease, sublease or otherwise dispose of any of its Property
or business (whether now owned or hereafter acquired) or otherwise effect an
Asset Sale, except that Party B and each such Specified Entity may (i) dispose
of any obsolete or worn-out Property no longer required in connection with the
operation of its business and (ii) dispose of Property that is replaced by
other Property of like utility in its business.

 

46

 

(B)                                Party B and each such
Specified Entity shall not create or cause to be created any Subsidiary other
than those listed on Exhibit 5(j)(iv) without (i) the consent of
Party A and (ii) any such Subsidiary executing and delivering to Party A a
Guarantee and Collateral Agreement Joinder (as such term is defined in the
Guarantee and Collateral Agreement).

 

(iv)                              Organizational Documents; Capitalization; Fiscal Year; Legal
Form.  Party B and each such Specified Entity will
not amend or modify its constitutional documents (including the Certificate of
Incorporation and the Bylaws), alter its authorized capitalization, change its
legal form or change its fiscal year without the consent of Party A.

 

(v)                                 No Other Business.  Party B and each such Specified Entity will
not engage in, or permit any of its Affiliates to engage in, (A) with respect
to Party B, any business other than the purchase and sale of Energy to
Customers and other activities necessary in connection therewith, (B) with
respect to MX Energy and MX Canada, any business other than the purchase and
sale of Gas to residential or small commercial end-users of Gas and other
activities necessary in connection therewith, (C) with respect to
Infometer.com, any business other than providing consultations and audits with
respect to energy supply procurement and improving energy efficiency and other
activities in connection therewith, (D) with respect to Online Choice, any
business other than the commissioned sale of consumer
products such as telecom services and satellite TV for
homeowners and small businesses (provided that
such products may not be sold door-to-door)
and other activities in connection therewith and (E) with respect to MX
Holdings and the MX Holdcos (other than Infometer.com), any other business
other than owning equity interests in Party B, MX Canada, MX Energy or another
MX Holdco.

 

(vi)                              Permitted Investments.  Party B and each such Specified Entity will
not make, or permit to remain outstanding, any Investments except Permitted
Investments.

 

(vii)                           Leases and Sale-Leasebacks.  Party B and each such Specified Entity will not become or
remain liable as lessee, as guarantor or as other surety with respect to any
lease, whether an operating lease or a capital lease, of any Property (whether
real, personal or mixed), whether now owned or hereafter acquired (A) that
Party B or such Specified Entity has sold or transferred, or is to sell or
transfer, to any other Person or (B) that Party B or such Specified Entity
intends to use for substantially the same purpose as any other property that
has been or is to be sold or transferred by it to any Person in connection with
such lease.

 

(viii)                        Capital Expenditures.  Party B and each such Specified Entity shall
not make or incur any Capital Expenditures (including obligations under Capital
Lease Obligations) other than in a Budget approved by Party A in accordance
with Part 12(a)(xiii).

 

(ix)                                Acquisitions.  Without the prior consent of Party A, Party B
and each such Specified Entity will not make any Acquisition.

 

(x)                                   Restricted Payments.  Party B and each such Specified Entity may
not, directly or indirectly, declare or make Restricted Payments; provided,
however, that the following Restricted Payments may be made:

 

(A)                              scheduled payments of
principal and interest on the Old Notes when due and payable;

 

(B)                                purchase of Old
Notes, provided that no Default or Potential Termination Event exists prior to
or immediately following any such purchase, and provided further that the
following conditions are met:

 

(1)                                  the Collateral
Coverage Ratio is at least 1.50:1.00, immediately prior to and after giving
effect to such purchase;

 

47

 

(2)                                  the purchase
price represents at least a 10% discount from the face amount of the Old Notes
purchased; and

 

(3)                                  the aggregate
cash amount of purchases of Old Notes pursuant to this Part 13(a)(x)(B) shall
not exceed $2,000,000;

 

(C)                                scheduled payments of
interest and any related Tax Gross-Up Amounts on the Notes when due and
payable;

 

(D)                               prepayment of the Old Notes
and/or the Notes pursuant to a Qualified Initial Public Offering;

 

(E)                                 prepayment of the Notes in
accordance with Section 3.10 of the Intercreditor Agreement (including
Replacement Debt incurred by MX Holdings that complies with such Section 3.10);

 

(F)                                 prepayment
of the Notes in accordance with Section 3.11 of the Intercreditor
Agreement, provided that:

 

(1)                                  Party
A is satisfied that, immediately prior to and after giving effect to the
transaction contemplated by such Section 3.11, no Default or Potential
Termination Event has occurred or is continuing under any ISDA Document; and

 

(2)                                  Party
B ensures that Party A receives (at the time of the closing thereof) from the
proceeds of such transaction original margin in the form of cash, to be
deposited to the Swap Note Sub Account pursuant to the MX Energy Agreement in
an amount equal to: (x) if the Collateral Coverage Ratio at such time is
less than 2.00 to 1.00, the greater of (i) 10% of the proceeds of such
transaction and (ii) such amount as is necessary to cause the Collateral
Coverage Ratio to be 1.80 to 1.00, except that (y) where the Collateral
Coverage Ratio at such time is greater than 1.80 to 1.00 but less than or equal
to 2.00 to 1.00, 10% of the proceeds of such transaction.  If the Collateral Coverage Ratio at such time
exceeds 2.00 to 1.00, there shall be no requirement to provide original margin
in the form of cash pursuant to this clause;

 

provided, that any proceeds of such transaction
that exceed the payment contemplated by Section 3.11 of the Intercreditor
Agreement plus what is required to be deposited to the Swap Note Sub Account
pursuant to clause (2) above shall be immediately deposited to the Party A
Sub Account for the MX Energy Agreement.

 

The foregoing does not constitute a waiver or
limitation of any right of Party A or obligation of Party B or the Specified
Entities of Party B hereunder or under any other Specified Agreement.

 

(G)                                payments necessary to make
Restricted Payments permitted by this Part 13(a)(x);

 

(H)                               payments necessary to fund
the Escrow Account in accordance with the Indenture;

 

(I)                                    payments to fund loans
permitted by clause (iv) of the definition of “Permitted Indebtedness”;

 

48

 

(J)                                   dividend
payments or other distributions made by MX Holdings to the holders of its
Equity Interests solely in the Common Stock or other common equity interests of
such Person on a pro rata basis; and

 

(K)                               payments
by MX Holdings to (i) purchase, redeem or otherwise acquire shares of its
common stock or other common equity interests or warrants or options to acquire
any such shares held by any current or former officer, director or employee of
MX Holdings (or their assigns, heirs or estates); provided that the aggregate
price paid for all such purchases, redemptions or acquisitions by MX Holdings
shall not exceed $1,000,000 in any twelve month period and (ii) repurchase
Equity Interests deemed to occur upon the exercise of stock options or warrants
to the extent such Equity Interests represent a portion of the exercise price
of those options or warrants or corresponding statutory withholding taxes due
in connection with such exercise.

 

(xi)                                Material Contracts; Etc.

 

(A)                              Except as permitted by this
Agreement, Party B and each such Specified Entity shall not without the prior
written consent of Party A (i) cancel or terminate any Material Contracts
to which it is a party or consent to or accept any cancellation or termination
thereof prior to the scheduled expiration thereof, (ii) sell, assign
(other than pursuant to the ISDA Security Documents) or otherwise dispose of
(by operation of law or otherwise) any part of its interest in any Material
Contract, (iii) waive any default under or breach of any material
provision of any Material Contract or waive, fail to enforce, forgive,
compromise, settle, adjust or release any material right, interest or
entitlement, howsoever arising, under, or in respect of any Material Contract,
or (iv) amend, supplement, modify or in any way vary or agree to any
variation of any material provisions of any Material Contract or of the
performance of any material covenant or obligation by any other Person under
any Material Contract (in each case as in effect on the date of this Agreement
and as thereafter amended, supplemented or modified in accordance with this
clause (A)).

 

(B)                                Except as permitted by this
Agreement, Party B and each such Specified Entity shall not enter into any
Material Contract not in effect on the date of this Agreement without the prior
written consent of Party A other than (i) renewal of existing agreements on
substantially consistent terms, (ii) as may be required by Applicable Law
or (iii) to refinance the Notes to the extent permitted by the
Intercreditor Agreement. .

 

(C)                                Party B and each such
Specified Entity shall not enter into any contract or agreement, other than the
Specified Agreements, which restricts the ability of Party B or such Specified
Entity to:  (i) enter into
amendments, modifications, supplements or waivers of the Material Contracts, (ii) sell,
transfer or otherwise dispose of its property, (iii) create, incur, assume
or suffer to exist any Lien upon any of its Property other than Permitted
Liens, or (iv) create, incur, assume, suffer to exist or otherwise become
liable with respect to any Indebtedness other than Permitted Indebtedness; provided,
however, that the preceding restrictions shall not apply to: (A) agreements
or instruments governing Permitted Indebtedness and any amendments or other
modifications thereto (including any refinancing thereof); provided that such
amendments or modifications are no more restrictive, when taken as a whole,
when compared to those contained in those agreements as in effect on the
Closing Date, or (B) customary non-assignment provisions in contracts,
leases, intellectual property licenses entered into in the ordinary course of
business.

 

(D)                               Party B and each such
Specified Entity shall not enter into any contract or agreement interfering in
any way with Party A’s ability to have a first-priority perfected Lien on the
Collateral, subject to Permitted Liens.

 

49

 

(xii)                             Transactions with Interested Persons and Non Arms’-Length
Dealing.  All transactions that Party B or any
Specified Entity of Party B enters into will be on an arm’s length basis and,
if the transaction is with an Interested Person or a Person holding, directly
or indirectly, more than 1% of the equity or voting shares of Party B or any
Specified Entity of Party B, then the transaction will be on terms that are at
least as favorable to Party B or such Specified Entity as those available from
an independent third party; provided, however, that the foregoing
limitation shall not apply to (a) transactions between Party B or any
Specified Entity of Party B and Party A, (b) employment agreements entered
into in the ordinary course of business that are consistent with current
practices and at compensation levels that are consistent with compensation
levels for similar positions in comparable companies (1) in similar
industries, (2) of the same size and (3) in the same geographic area,
(c) the issuance of equity securities permitted hereby, (d) Director’s
fees as permitted by the Certificate of Incorporation, (e) payments or
transactions with respect to the Notes as permitted under the Intercreditor
Agreement and (f) Restricted Payments permitted hereby.

 

(b)                                 Transactional Negative Covenants.  Party B as to
itself as set forth below, agrees with Party A that, at all times prior to the
Discharge of ISDA Obligations:

 

(i)                                     Long Term Transactions.  Party B shall not enter into any (A) physically
settled transactions in respect of Energy for a fixed forward price with a
supply term (measured from the first day of Energy delivery) of greater than 24
months, (B) any Swap Transaction with a term greater than 24 months (measured
from the commencement of the first calculation period thereof), or (C) any
transaction that has a term that expires on a date that is 27 or more months
from the date such transaction was entered into, in each case without the prior
written consent of Party A.

 

(ii)                                  Volumetric Tenor.  Party B shall not directly or indirectly sell
any commodity at a fixed price, or enter into a Swap Transaction or an Option
Transaction, which when combined with all transactions entered into between
Party B and its Customers, would cause the average tenor weighted by notional
and actual volume of all physically and financially settled Energy transactions
entered into by Party B to exceed 14 months in duration.

 

(iii)                               Counterparty Limitations.
Party B shall not directly or indirectly purchase any commodity from, or enter
into any financially settled Swap Transaction, Option Transaction or other
derivative transaction with, any Person other than Party A; provided, however,
that Party B may purchase Energy (a) from EDCs, ISOs or other third
parties approved by Party A, in its sole discretion, solely for balancing
purposes or in connection with the purchase of bundled services and (b) upon
the failure of Party A to satisfy an obligation to schedule a delivery of
Energy to Party B on any Day, in accordance with clause (c)(i) of the
Power Annex.

 

(iv)                              Required Hedges.

 

(A)                              Except to the extent
expressly permitted by Part 12(a)(xiv), Party B shall not directly or
indirectly enter into any transaction for the sale of Energy with any Customer
involving a fixed forward price unless prior to, or contemporaneously with,
entering into any such sale transaction, Party B shall have entered into a Swap
Transaction, Option Transaction or physical forward transaction with Party A in
respect of an equal notional or actual quantity of Energy (unless Party A
determines that a lower quantity is appropriate to take into account such
factors as Party A determines reasonable, including Party A’s forecast of Party
B’s Customer attrition/churn or forecast modifications), with a lower fixed
forward price with respect to physically settled transactions or with a
floating price index with respect to a Swap Transaction that hedges the market
price of Energy at the relevant Delivery Point of such sale transaction, all in
form and substance reasonably satisfactory to Party A;

 

(B)                                Notwithstanding anything
herein to the contrary, Party B shall not (1) incur any obligation to sell
Energy to a Customer with a term of greater than 365 days, or (2) take a 

 

50

 

long fixed forward price position in Energy pursuant to the exception
to Part 12(a)(xiv) unless prior to, or contemporaneously with, the
incurrence of any such obligation, Party B shall have offset the exposure
associated with the portion of the term of such obligation in excess of 365
days (the “Excess Term”) with Party A (x) by having Party A
purchase one or more Put Options for Energy with respect to the Excess Term
with a notional amount to be determined by Party A, or (y) provided that
such obligation has not already been hedged pursuant to Part 12(a)(xiv) by
purchasing Call Options from Party A for the Excess Term with a notional amount
to be determined by Party A, or (z) in some other manner acceptable to
Party A.  Party B acknowledges and agrees
that in the event that Party A purchases Put Options pursuant to this Part 13(b)(iv)(B),
Party B shall pay to Party A a fee equal to the amount of the premium paid by
Party A for such Put Options which fee shall be paid on the next Energy
Settlement Date following the date such Put Option was entered into by Party
A.  Party B further acknowledges and
agrees that Party A shall have no obligation to purchase any Put Options or
enter into any Call Option with Party B pursuant to this Part 13(b)(iv)(B) and
that any such transactions shall be entered into by Party A in its sole
discretion.

 

(v)                                 Fixed Price Contract Mix.  Party B shall not, during any twelve month
period, enter into any new fixed price contracts where the Residential
Customer- Equivalents of such contracts are greater than 75% of all the
Residential Customer- Equivalents of all new contracts entered into in a
Contract Year.

 

(vi)                              Limit on Transaction Size.        Without the prior written consent of Party A, Party B shall
not directly or indirectly sell Energy to any Person if the reasonably
forecasted purchases of such Person indicate purchases from Party B of more
than (A) 160 Mwhs on average per day, (B) $440,000 in actual billed
amounts for any 30-day period at the time of such sale, or (C) if MX
Energy is concurrently selling Gas to such Person, 9 Mwhs on average per day.

 

(vii)                           Limit on Customer Demand.  Party B shall not enter into any fixed priced
forward transaction for the sale of Energy with a Customer if the forecasted
annual quantity of Energy consumed by such Customer for Energy, as determined
by Party B and approved by Party A, is greater than 3% of the Party B Customer
Load for Energy.

 

(viii)                        Limit on Notional Exposure.  Party B shall not enter into any transaction
for the sale of Energy with a Customer involving a fixed forward price if,
after giving effect to the Transaction that would be required under Part 12(a)(xiv)
hereof in order to hedge the price risk associated with such sale transaction,
the amount determined in accordance with the following formula would equal or
exceed $260,000,000:

 

(A)                              First, for each Swap
Transaction entered into (i) by Party B with Party A with respect to
Energy and (ii) by MX Energy with Party A with respect to Gas, determine
the product of:

 

(1)                                  the remaining notional
quantity in respect of such Transaction as at the time of the determination
thereof (in MMBtu or Mwh, as the case may be); multiplied by

 

(2)                                  the fixed forward price
payable by Party B or MX Energy, as applicable, with respect to that
Transaction;

 

(B)                                Second, determine the
sum of the amounts calculated in accordance with Part 13(b)(viii)(A) above
for all Swap Transactions with respect to Gas and Energy between (i) Party
B and Party A and (ii) MX Energy and Party A (the “Swap Exposure”);

 

51

 

(C)           Third, for each physically
settled Transaction for the purchase of Energy entered into by Party B with
Party A and for each physically settled Transaction for the purchase of Gas
entered into by MX Energy with Party A, in each case where the relevant commodity
is being purchased by Party B for a forward fixed price (each, a “Fixed-Price
Physical Transaction”), determine the product of:

 

(1)           the remaining quantity of Gas or Energy to be
delivered in respect of such Fixed Price Physical Transaction as at the time of
the determination thereof (in MMBtu or MWh, as the case may be); multiplied by

 

(2)           the fixed forward price payable by Party B or MX Energy, as
applicable, with respect to that Fixed-Price Physical Transaction;

 

(D)          Fourth, determine the sum of the
amounts calculated in accordance with Part 13(b)(viii)(C) above for
all Fixed-Price Physical Transactions with respect to Gas and Energy between (i) Party
B and Party A and (ii) MX Energy and Party A (the “Fixed Physical
Exposure”); and

 

(E)           Fifth, determine the sum of the
Swap Exposures and the Fixed Physical Exposures.

 

(ix)           Designated Jurisdictions.
Party B shall not market or enter into financially or physically settled
transactions in respect of Energy in any jurisdiction, other than a Designated
Jurisdiction for such commodity, without the prior written consent of Party A.

 

(x)            Fixed Price Limit.  Party B shall not enter into financially or
physically settled transactions in respect of Energy as purchaser for a fixed
forward price of greater than $100/Mwh (except with respect to Zone J in New
York for which the fixed forward price shall not exceed $125/Mwh) (based on
either the relevant strip prices or average price per trade), without the prior
written consent of Party A; provided, however, that Party A, in
its sole discretion and with two Business Days notice to Party B, may increase
or decrease such fixed price limit and, provided further, that Party B
may request a waiver of the fixed price limit on a per trade basis and Party A
shall use commercially reasonable efforts to respond to such request within
trading hours on the date of such request.

 

(xi)          RCE Limits.  Party B shall not enter into new contracts
with Customers in any Contract Year if the sum of (A) the number of
Residential Customer-Equivalents associated with all new contracts for Energy
entered into with Customers by Party B or MX Canada, as applicable, during such
Contract Year and (B) the number of Residential Customer-Equivalents
associated with all new contracts for Gas entered into with Customers (as
defined in the MX Energy Agreement) by MX Energy, during such Contract Year,
would exceed 235,000 Residential Customer-Equivalents during such Contract
Year; provided, however, that, notwithstanding the foregoing,
Party B, without the prior written consent of Party A, shall not enter into any
contract for the sale of Energy with any Customer if, as the result of entering
into such contract, the aggregate number of Fixed Price Customer-Equivalents
served by Party B and MX Energy would exceed 325,000 in the aggregate.

 

(xii)         Customer Load.  Party B shall not purchase Energy or any
related Product hereunder or otherwise for any reason other than to serve Party
B’s actual or forecasted aggregate Energy Customer Load.

 

(xiii)        Limitation on Sales.  Party B shall not directly or indirectly sell
Energy to any Person except for, and limited to the extent of, (A) Energy
sold to an EDC or other approved third-party for balancing purposes, and (B) Energy
sold to a Customer of Party B in the ordinary course of its business.

 

52

 

Part 14. Additional
Definitions

 

(a)           Section 14 is hereby amended to add the following
additional definitions:

 

“AAA” has the meaning
specified in Part 5(c)(vii).

 

“Account Control Agreement”
means, as applicable, the Huntington Control Agreement or the Wachovia Control
Agreement.

 

“Acquisition” means any
transaction, or any series of related transactions, consummated on or after the
date of this Agreement, by which Party B, any Specified Entity of Party B (a) acquires
any going business or all or substantially all of the assets of any firm,
corporation or limited liability company, or division thereof, whether through
purchase of assets, merger or otherwise or (b) directly or indirectly
acquires (in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the outstanding
ownership interests of a partnership or limited liability company.

 

“Additional RECs” has the
meaning specified in Part 7(a)(viii).

 

“Adjusted Consolidated Tangible Net Worth” means, as
of any date of determination with respect to MX Holdings, all items which in
accordance with GAAP would be included under shareholders’, partners’ or
members’ equity on a consolidated balance sheet of MX Holdings less intangible
assets (which shall not include any and all amounts associated with the
capitalized acquisition cost of Customers of Party B, MX Energy and MX Canada)
adjusted for (i) non-cash impact on earnings on Storage Gas due to lower
of cost or market valuation, (ii) non-cash impact on earnings on Storage
Gas due to variance from weighted average cost method of inventory calculation,
(iii) non-cash assets from FAS133 Gains (derivatives), (iv) non cash
liabilities from FAS133 Losses (derivatives), (v) non-cash impact on
earnings of compensation expense from FAS 123R application and (vi) settled
financial hedges since the beginning of the latest storage injection season
(i.e. April 1st), but in no case longer than 365 days, for inventory
before the inventory is sold to customers.

 

“Aggregate
Credit Support Amount” means, on any date of determination, the aggregate face
amount of all Credit Support provided under all Master ISDAs.

 

“Aggregate
Unpaid Value” means the aggregate value of (i) all amounts owed for
commodities delivered under all Master ISDAs for which the applicable
Settlement Date has not occurred, (ii) all amounts owed under Swap
Transactions with respect to calculation periods that have expired but for
which the applicable Settlement Date has not occurred, (iii) all
Outstanding Amounts under all Master ISDAs (as defined in each such Master
ISDA), (iv) all accrued and unpaid Financing Fees and Credit Support Fees
under all Master ISDAs, and (v) the amount of any Credit Support posted by
Party A that was applied to satisfy in whole or in part any obligation of Party
B or any Specified Entity of Party B to a third party and which amount has not
been repaid to Party A.

 

“Aggregated Collateral
Accounts” means all Collateral Accounts established under all Master ISDAs.

 

“Amegy” means Amegy Bank
National Association, a national banking association.

 

“Ancillary Services” means
any of the services identified by a Transmission Provider in its transmission
tariff as “ancillary services” including regulation and frequency response,
energy imbalance, operating reserve-spinning and operating
reserve-supplemental, as specified in the relevant transaction.

 

“Applicable Law” means any
constitution, statute, law, rule, regulation, ordinance, judgment, order,
decree, permit, or any published directive, guideline, Governmental Approval,
requirement or other governmental restriction which has the force of law, or
any published determination by, or interpretation of any of the foregoing by,
any judicial authority or Governmental Authority binding on a given Person
whether in effect as of the date of this Agreement or 

 

53

 

thereafter and in each case
as amended (including all Environmental Laws and any of the foregoing
pertaining to land use or zoning restrictions).

 

“Asset Sale” means any
direct or indirect sale, issuance, conveyance, transfer, lease (other than
operating leases entered into in the ordinary course of business), assignment
or other transfer for value by Party B or any of the Specified Entities of
Party B (including any Sale and Leaseback Transaction) to any Person other than
Party B or a Specified Entity of Party B of: (1) any Capital Stock of
Party B or a Specified Entity of Party B; or (2) any other property or
assets of Party B or any Specified Entity of Party B other than in the ordinary
course of business other than (a) any sale or issuance of Equity Interests
of MX Holdings, (b) dispositions of assets that are not critical to the
operation of the business of Party B or any Specified Entity of Party B having
a fair market value (as to Party B and all Specified Entities of Party B,
collectively) of $500,000 or less for any one such disposition or $1,000,000 or
less for all such dispositions in any fiscal year of MX Holdings and (c) dispositions
of accounts to LDCs or EDCs under guaranteed receivables agreements entered
into in the ordinary course of business in accordance with the terms hereof.

 

“Auditor” means such firm or
firms of independent public accountants of recognized international standing as
any party or any Specified Entity may, from time to time, appoint as auditors
of such party or Specified Entity with the prior written consent of Party A.

 

“Bankruptcy Code” has the
meaning specified in Part 5(k)(iii).

 

“Base Price” has the meaning
specified in Part 7(e).

 

“Base Rate” means the rate
of interest per annum (rounded upwards if necessary to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page or http://www.bba.org.uk/bba/ (or
any successor page) as the British Bankers Association London Interbank offered
rate for two-month deposits in U.S. Dollars at approximately 11 a.m.
London time two Business Days prior to the date of determination.

 

“Bill Matrix” has the meaning
specified in Part 11(g).

 

“Board of Directors” means,
as to any Person, the board of directors (or similar governing body) of such
Person or any duly authorized committee thereof.

 

“Bring Down Review” has the
meaning specified in Part 7(j).

 

“Budget” means any budget
prepared in accordance with Part 12(a)(xiii).

 

“Business Day” means any day
that is not a Saturday or Sunday in the United States or a day on which banking
institutions chartered by the State of New York or the United States are
required or authorized to be closed.

 

“Bylaws” means the Third
Amended and Restated Bylaws of MX Holdings.

 

“Call Option” means an
Option Transaction, which may be physically or financially settled, that gives
the holder the right to buy a certain quantity of an underlying commodity from
the seller of such Option Transaction, at a specified price on or up to a
specified expiration date or during a specified exercise period.

 

“Capacity” shall have the
meaning specified in Part 6.

 

“Capital Expenditures”
means, for any period, the aggregate of amounts that would be reflected as
additions to property, plant or equipment on a balance sheet prepared in
accordance with GAAP.

 

“Capital Lease Obligations”
of any Person means the obligations of such Person to pay rent or other amounts
under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to
be classified and accounted for as capital leases on a balance sheet of such
Person 

 

54

 

under GAAP, and the amount
of such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.

 

“Capital Stock” means:

 

(i)            with respect to any Person
that is a corporation, any and all shares, interests, participations or other
equivalents (however designated and whether or not voting) of corporate stock,
including each class of Common Stock and Preferred Stock of such Person, and
all options, warrants or other rights to purchase or acquire any of the
foregoing; and

 

(ii)           with respect to any Person
that is not a corporation, any and all partnership, membership or other equity
interests of such Person, and all options, warrants or other rights to purchase
or acquire any of the foregoing.

 

“Certificate of
Incorporation” means the Second Amended and Restated Certificate of
Incorporation of MX Holdings.

 

“Change of Control” means
the occurrence of one or more of the following events with respect to Party B
or any Specified Entity of Party B (each, a “Subject Person”):

 

(i)            any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all
or substantially all of the assets of a Subject Person to any Person or group
of related Persons for purposes of Section 13(d) of the Securities
Exchange Act of 1934, as amended (a “Group”), together with any
Affiliates thereof (whether or not otherwise in compliance with the provisions
of the Indenture) other than, with respect to MX Holdings, to the Permitted Holders;

 

(ii)           the approval by the holders
of Capital Stock of any Subject Person of any plan or proposal for the
liquidation or dissolution of such Subject Person (whether or not otherwise in
compliance with the provisions of the Indenture);

 

(iii)          any Person or Group (other
than the Permitted Holders and any entity formed by the Permitted Holders for
the purpose of owning Capital Stock of MX Holdings) shall become the owner,
directly or indirectly, beneficially or of record, of shares representing more
than 50% of the aggregate ordinary voting power represented by the issued and
outstanding Capital Stock of any Subject Person; or

 

(iv)          any Person (or related group
of Persons) that is not a holder of Equity Interests in any Subject Person on
the date hereof should hereafter acquire, directly or indirectly, the
beneficial ownership of (a) Equity Interests having the power to elect a
majority of the Board of Directors of such Subject Person or (b) any other
ownership interest enabling it to exercise control of any Subject Person;

 

provided, however, that no
holders of shares of Class A Exchange Common Stock, Class C Common
Stock or Common Stock shall be deemed to constitute a Group for the purpose of
determining whether a Change of Control has occurred solely by virtue of being
a party to the Class A Voting Agreement, the Class C Voting Agreement
and/or the Stockholders Agreement, respectively.

 

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

 

“Class A Exchange
Common Stock” means the shares of newly created Class A Common Stock of MX
Holdings, par value $0.01 per share.

 

55

 

“Class A Voting
Agreement” means that certain agreement, dated as of September 22, 2009,
among the holders of the Class A Exchange Common Stock.

 

“Class B Common Stock”
means the shares of newly created Class B Common Stock of MX Holdings, par
value $0.01 per share.

 

“Class C Common Stock”
means the shares of newly created Class C Common Stock of MX Holdings, par
value $0.01 per share.

 

“Class C Voting
Agreement” means that certain agreement, dated as of September 22, 2009,
among the holders of the Class C Common Stock.

 

“Closing Date” means the
date of execution of this Agreement.

 

“Code” means the Internal
Revenue Code of 1986, as amended from time to time.

 

“Collateral” means all
collateral of whatsoever nature purported to be subject to the Lien of any ISDA
Security Document.

 

“Collateral Accounts” means
the Lockbox Accounts, the Party A Sub Account and the Swap Note Sub Account.

 

“Collateral Coverage Ratio”
means the ratio, on any date of determination, as determined by Party A in a
commercially reasonable manner of (A) (i) the aggregate amount of
Party B’s and MX Energy’s accounts receivable due from any LDC or EDC or from a
customer (whether billed or unbilled) when the accounts receivable due from
such customer are not purchased by a LDC or EDC, in each case, less than 90
days past due at such time net of any estimated net Taxes due in respect
thereof and net of any LDC/EDC Delivery Charges (except to the extent Party B
has provided cash margin to such LDC or EDC for such charges plus (ii) the
aggregate amount of cash held in the Collateral Accounts minus (iii) $2,000,000
plus (iv) the value of any positive Gas or Energy imbalances for the
account of Party B at any LDCs or EDCs minus (v) the value of any negative
Gas or Energy imbalances for the account of Party B at any LDCs or EDCs, plus (vi) the
aggregate amount of any mark-to-market gain for Party B’s and each Specified
Entity of Party B’s account on any forward position held by Party B or any such
Specified Entity with Party A or any customers of Party B or any such Specified
Entity (excluding Prompt Month mark-to-market Gas position gains up to
$10,000,000 in the aggregate)  minus (vii) the
aggregate amount of any mark-to-market loss for Party B’s and each Specified
Entity of Party B’s account on any forward position held by Party B or any such
Specified Entity with Party A or any customers of Party B or any such Specified
Entity (excluding Prompt Month mark-to-market Gas position losses up to
$10,000,000 in the aggregate), plus (viii) the value of Initial Storage
Gas and the value of any Storage Gas to which Party B has title and with
respect to which Party A has a perfected Lien (determined by Party A based on
the lower of Party B’s cost of such Storage Gas or the market value of such
Storage Gas with such market value determined by Party A on a quarterly (or, if
Party A deems it appropriate in its sole discretion, on a more frequent) basis
based on the relevant LDC cash out/liquidation value of such Storage Gas in the
event of Party B’s default under such LDC’s retail program), to (B) (i) the
aggregate value of Energy, Gas (including Storage Gas), Capacity (including
UCAP) and Ancillary Services delivered to, but not yet paid for by, Party B and
each Specified Entity of Party B plus (ii) any accrued but unpaid
Financing Fees due hereunder or under the MX Energy Agreement minus (iii) with
respect to any Storage Gas to which Party A has title other than Initial
Storage Gas, the difference between (1) the value of such Storage Gas
based on the lower of Party A’s weighted average cost of such Storage Gas or
the market value of such Storage Gas with such market value determined by Party
A on a quarterly (or, if Party A deems it appropriate in its sole discretion,
on a more frequent) basis based on the relevant LDC cash out/liquidation value
of such Storage Gas in the event of Party B’s default under such LDC’s retail
program and (2) Party A’s weighted average cost of such Storage Gas, as
determined by Party A plus (iv) all other amounts owed by Party B and each
Specified Entity of Party B  to Party A
under or in connection with this Agreement not covered by any other sub-clause
of this definition.

 

“Common Stock” of any Person
means any and all shares, interests or other participations in, and other
equivalents (however designated and whether voting or non-voting) of such
Person’s common stock, whether outstanding on the 

 

56

 

Closing Date or issued after
the Closing Date, and includes, without limitation, all series and classes of
such common stock.

 

“Consolidated Net Worth”
means, as of any date of determination with respect to MX Holdings, all items
which in accordance with GAAP, would be included under shareholders’, partners’
or members’ equity on a consolidated balance sheet of MX Holdings.

 

“Contract Price” has the meaning specified in Part 7(b).

 

“Contract Year” means (i) for the first Contract
Year, the period from the Closing Date through September 30, 2010, and (ii) for
each subsequent Contract Year, each successive twelve month period; provided,
that the final Contract Year shall end on August 31, 2012.

 

“control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “controlling” and “controlled” have the
meanings correlative thereto.

 

“Corresponding Third Party
Transaction” has the meaning specified in Part 10(b)(ii).

 

“Credit Support” means all
letters of credit, letters of indemnity, guarantees and any other credit support
issued, provided or arranged for by Party A in accordance with the terms hereof
to any EDC, ISO or any other third party to cover such third party’s exposure
to Party B, or as posted by Party A in connection with its capacity as a
load-serving entity, financially responsible party or qualified scheduling
entity.

 

“Credit Support Amount”
means, on any date of determination, the aggregate face amount of all Credit
Support that Party B would be required to post to EDCs and ISOs if such Credit
Support were not being provided by Party A pursuant to this Agreement, as
reasonably determined by Party A.

 

“Credit Support Fee” means,
for any day, an amount calculated as follows:

 

(i)            If on such day, the
Aggregated Collateral Accounts are not in Surplus, then the Credit Support Fee
for such day shall be the product of the Aggregate Credit Support Amount
multiplied by the Primary Rate.

 

(ii)           If on such day, the
Aggregated Collateral Accounts are in Surplus and the Aggregate Credit Support
Amount is less than $27,000,000, then the Credit Support Fee for such day shall
be the product of the Aggregate Credit Support Amount multiplied the Primary
Rate.

 

(iii)          If on such day, the
Aggregated Collateral Accounts are in Surplus and the Aggregate Credit Support
Amount exceeds $27,000,000, then for such day, the Credit Support Fee for such
day shall be the sum of (A) $27,000,000 multiplied by the Primary Rate,
and (B) the Aggregate Credit Support Amount (less $27,000,000) multiplied
by the Secondary Rate; provided, however, that if, on such day, a
Termination Event or Event of Default has occurred and is continuing, with
immediate effect (and without regard to whether there is a Surplus), the Credit
Support Fee for such day shall be the product of the Aggregate Credit Support
Amount multiplied by the Primary Rate.

 

“Customer” means any
residential or small commercial end-user of Energy that is served by Party B
and by an approved EDC in any Designated Jurisdiction.

 

“DAM” has the meaning
specified in Part 8(a).

 

“Default” means any event or
condition which constitutes an Event of Default or which upon notice, lapse of
time or both would, unless cured or waived, become an Event of Default.

 

“Definitions” has the
meaning specified in Part 5(a).

 

57

 

“Delivery Period” means the
period during which deliveries are to be made as agreed to by Party A and Party
B in a Power Transaction.

 

“Delivery Point” has the
meaning specified in the Power Annex.

 

“Designated Jurisdictions”
means the jurisdictions listed on Exhibit 7(j).

 

“Discharge of ISDA
Obligations” means the occurrence of all of the following:

 

(i)            indefeasible payment in full
in cash of settlement amounts, termination payments, the principal of and
interest (including interest accruing on or after the commencement of any
Insolvency or Liquidation Proceeding, whether or not such interest would be
allowed in such Insolvency or Liquidation Proceeding) and premium (if any) on
all amounts outstanding under or that would be due upon the termination of the
Master ISDAs and constituting ISDA Obligations, including reimbursement
obligations;

 

(ii)           indefeasible payment in full
in cash of all other ISDA Obligations that are outstanding and unpaid at the
time such settlement amounts, termination payments, principal, interest and
premium (if any) on all amounts outstanding under the Master ISDAs are paid in
full in cash (other than any obligations for taxes, indemnifications, damages
and other contingent liabilities in respect of which no claim or demand for
payment has been made at such time);

 

(iii)          irrevocable termination or
expiration of all commitments, if any, of Party A to extend credit or undertake
transactions that would constitute, or give rise to, ISDA Obligations; and

 

(iv)          irrevocable termination or
cash collateralization (in an amount and manner reasonably satisfactory to
Party A, but in no event greater than 105% of the aggregate undrawn face
amount) of all Credit Support issued under or pursuant to the terms of the
Master ISDAs and constituting ISDA Obligations.

 

“Disqualified
Capital Stock” means that portion of any Capital Stock which, by its terms
(or by the terms of any security into which it is convertible or for which it
is exchangeable at the option of the holder thereof), or upon the happening of
any event (other than an event which would constitute a Change of Control or an
Asset Sale), matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof (except, in each case, upon the occurrence of a Change of Control or an
Asset Sale) on or prior to the final maturity date of the Notes.

 

“Dollar” or “$” means the
lawful currency of the United States of America.

 

“Due Date” shall mean the
Energy Due Date or the Exposure Fee Due Date, as the context requires.

 

“EDC” means the local
distribution company responsible for delivering Energy to Party B’s Customers
in a particular geographic area.

 

“Energy” means three-phase,
60-cycle alternating current electric energy, expressed in megawatt hours.

 

“Energy Adder” has the
meaning specified in Exhibit 14(a)(i).

 

“Energy Customer Load” means
the aggregate annual Energy load requirements of all Customers of Party B, as
reasonably determined by Party A.

 

“Energy Due Date” has the
meaning specified in Part 9.

 

“Energy Option” means a
physically or financially settled option transaction that provides the buyer
the right, but not the obligation, to enter into a transaction where the
underlying price is based upon the price of Energy.

 

“Energy Settlement Date” has
the meaning specified in Part 9.

 

58

 

“Energy Swap” means any swap
transaction where the floating or fixed price is based upon the price of Energy
or any related index for the price of Energy.

 

“Energy Swap Settlement Date”
has the meaning specified in Part 9.

 

“Environmental Claim” means,
with respect to any Person, any written notice, claim, administrative,
regulatory or judicial action, suit, judgment or demand by any other Person
alleging or asserting such first Person’s liability for investigator costs,
cleanup costs, government response costs, damages to natural resources or other
Property of such first Person, personal injuries, fines or penalties arising
out of, based on or resulting from (i) the presence, Use, threatened
Release or Release into the environment of any Hazardous Material at any
location, whether or not owned by such first Person or (ii) any fact,
circumstance, condition or occurrence forming the basis of any violation, or
alleged violation, of any Environmental Law. 
The term Environmental Claim shall include any claim by any Governmental
Authority for enforcement, delineation, investigation, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and any claim by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
resulting from the presence of Hazardous Materials or arising from alleged
injury or threat of injury to the environment.

 

“Environmental Laws” means
all laws, rules, regulations, treaties, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment (including its effect on human health and safety), preservation or
reclamation of natural resources, the management, Release or threatened Release
of any Hazardous Material, waste disposal arrangements or to health and safety
matters.

 

“EPT” means Eastern
Prevailing Time.

 

“Equity Interests” means
shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights entitling the
holder thereof to purchase or acquire any such equity interest; provided,
however, that any instruments evidencing Indebtedness convertible into
or exchangeable for common stock of Party B or a Specified Entity of Party B
will be deemed Indebtedness and not Equity Interests, unless any such
instruments would be accounted for in accordance with GAAP as shareholders’
equity.

 

“ERCOT” means the Electric
Reliability Council of Texas.

 

“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended from time to time, and the
regulations promulgated thereunder.

 

“ERISA Affiliate” means any
trade or business (whether or not incorporated) that, together with Party B, is
treated as a single employer under Section 414(b) or (c) of the
Code or, solely for purposes of Section 302 of ERISA and Section 412
of the Code, is treated as a single employer under Section 414 of the
Code.

 

“ERISA Event” means (a) any
“reportable event”, as defined in Section 4043 of ERISA or the regulations
issued thereunder with respect to a Plan (other than an event for which the
30-day notice period is waived); (b) the existence with respect to any
Plan of an “accumulated funding deficiency” (as defined in Section 412 of
the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of
ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by Party B or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by Party B or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the
incurrence by Party B or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal of Party B or any of its ERISA Affiliates
from any Plan or Multiemployer Plan; or (g) the receipt by Party B or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from
Party B or any ERISA Affiliate of any notice, concerning the imposition upon
Party B or any of its ERISA Affiliates of Withdrawal Liability or a
determination that a Multiemployer Plan is insolvent or in reorganization,
within the meaning of Title IV of ERISA.

 

59

 

“Escrow Account” means the
segregated escrow account established pursuant to the Escrow Agreement.

 

“Escrow Agreement” means
that certain Escrow and Security Agreement dated as of September 22, 2009,
among the Trustee, MX Holdings and Law Debenture Trust Company of New York, as
escrow agent.

 

“Excess Term” has the
meaning specified in Part 13(b)(iv)(B).

 

“Existing ISDA Master
Agreement” has the meaning specified in Part 5(m).

 

“Exposure Fee Due Date” has
the meaning specified in Part 10(b)(iv).

 

“Extended Term” has the
meaning specified in Part 5(h).

 

“FERC” means the United
States Federal Energy Regulatory Commission.

 

“Financing Fee” means
interest on the Outstanding Amounts, calculated on a daily basis, at (a) the
Base Rate plus 5% per annum, or (b) Party A’s relevant business unit’s
actual cost of funds plus 5% per annum, whichever is greater; provided,
however, that with respect to any past due Outstanding Amount the Financing Fee
shall be calculated at the Default Rate.

 

“Financing Fee Settlement
Date” has the meaning specified in Part 9(e).

 

“Fixed-Price Physical
Transaction” has the meaning specified in Part 13(b).

 

“Fixed Physical Exposure”
has the meaning specified in Part 13(b).

 

“fuel” means natural gas,
coal, oil and the products and by-products thereof.

 

“GAAP” means generally accepted
accounting principles in the United States consistently applied.

 

“Gas” means any mixture of
hydrocarbons and noncombustible gases in a gaseous state consisting primarily
of methane.

 

“Gas Annex” means the
Sub-Annex E to the 2005 ISDA Commodity Definitions (Physically-settled North
American Gas Transactions).

 

“Governmental Approval”
means (i) any authorization, consent, approval, license, lease, ruling,
permit, tariff, certification, exemption, filing, variance, claim, order,
judgment, decree, by or with, (ii) any declaration of or with or (iii) any
registration by or with, any Governmental Authority, in each case relating to (a) the
due execution and delivery of, or the performance by each intended party of,
any Material Contract of its obligations or the exercise of its rights under,
each Material Contract to which it is (or is intended to be) a party or (b) with
respect to Party B, any Specified Entity of Party B or any Affiliate of such
Specified Entity, the grant by Party B, such Specified Entity or such Affiliate
of the Liens created pursuant to the ISDA Security Documents to which Party B,
such Specified Entity or such Affiliate of such Specified Entity is a party,
the validity, enforceability and perfection of such Liens and the exercise by
Party A of its rights and remedies under such ISDA Security Documents.

 

“Governmental Authority”
means the government of any jurisdiction, or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, board, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.

 

“Group” has the meaning specified in clause (i) of the
definition of “Change of Control”.

 

“Guarantee” of or by any
Person (the “guarantor”) means any obligation, contingent or otherwise,
of the guarantor guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person 

 

60

 

(the “primary obligor”) in
any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation or to purchase (or to advance or supply funds for the purchase of)
any security for the payment thereof, (ii) to purchase or lease property,
securities or services for the purpose of assuring the owner of such Indebtedness
or other obligation of the payment thereof, (iii) to maintain working
capital, equity capital or any other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (iv) as an account party in respect of
any letter of credit or letter of guaranty issued to support such Indebtedness
or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.

 

“Guarantee and Collateral
Agreement” means the Guarantee and Collateral Agreement to be entered into
among Party A, Party B and the Specified Entities, as may be amended, modified,
restated or supplemented.

 

“Hazardous Materials” means
all explosive or radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.

 

“Hedged Obligations” has the
meaning specified in Part 12(a)(xix)(C).

 

“Hedging Transaction” means
any Specified Transaction or any other transaction that would be a Specified
Transaction if it were entered into by Party A and Party B.

 

“Holder” means a beneficial
owner of the Notes.

 

“Huntington” means The
Huntington National Bank, a national banking association.

 

“Huntington Control
Agreement” means the Deposit Account Control Agreement among Party B,
Huntington and Party A, in the form of Exhibit 11(b)(ii).

 

“Imaged Agreement” has the
meaning specified in Part 5(e).

 

“Impairment” means, with
respect to any Governmental Approval, the rescission, termination,
cancellation, repeal, invalidity, suspension (other than by reason of an event
of force majeure to the extent suspension by reason of an event of force
majeure is expressly permitted by such Governmental Approval or results from
Applicable Law), injunction, inability to satisfy stated conditions to
effectiveness or amendment, modification or supplementation.  The verb “Impair” shall have a correlative
meaning.

 

“including” and “include”
are not limiting and are deemed followed by the words “without limitation”.

 

“Indebtedness” means with
respect to any Person, without duplication:

 

(i)            all obligations of such
Person for borrowed money;

 

(ii)           all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments;

 

(iii)          all Capitalized Lease
Obligations of such Person;

 

(iv)          all obligations of such
Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all obligations under any title retention
agreement (but excluding trade accounts payable and other accrued liabilities
arising in the ordinary course of business that are not overdue by 120 days or
more or are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted);

 

61

 

(v)           all obligations for the reimbursement of any obligor on
any letter of credit, banker’s acceptance or similar credit transaction;

 

(vi)          guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (i) through (v) above and clause (viii) below;

 

(vii)         all obligations of any other Person of the type referred to
in clauses (i) through (vi) above and clause (viii) below which
are secured by any Lien on any property or asset of such Person; and

 

(viii)        all obligations under currency
agreements and interest swap agreements of such Person.

 

“Indemnified Liabilities”
has the meaning specified in Part 5(r).

 

“Indemnitee” has the meaning
specified in Part 5(r).

 

“Indenture” means the
indenture, dated as of September 22, 2009, among MX Holdings, the
Guarantors and the Trustee, under which the Notes were issued.

 

“Infometer.com” means
Infometer.com Inc., a Delaware corporation.

 

“Insolvency or Liquidation
Proceeding”  means:

 

(i)            any case commenced
by or against Party B or any Specified Entity of Party B under Title 11, U.S.
Code or any similar federal or state law for the relief of debtors, any other
proceeding for the reorganization, recapitalization or adjustment or
marshalling of the assets or liabilities of Party B or any Specified Entity of
Party B, any receivership or assignment for the benefit of creditors relating
to Party B or any Specified Entity of Party B or any similar case or proceeding
relative to Party B or any Specified Entity of Party B or its creditors, as
such, in each case whether or not voluntary;

 

(ii)           any liquidation,
dissolution, marshalling of assets or liabilities or other winding up of Party
B or any Specified Entity of Party B, in each case whether or not voluntary and
whether or not involving bankruptcy or insolvency, other than a liquidation or
dissolution of Party B or a Specified Entity of Party B in connection with (a) a
merger or consolidation of such Person with or into a Specified Entity of Party
B or Party B, as the case may be, or (b) a transfer of substantially all
assets of Party B or a Specified Entity of Party B to a Specified Entity of
Party B or Party B, as the case may be, in the case of each of the preceding
clauses (a) and (b), in a transaction that is permitted under the Master
ISDAs; or

 

(iii)          any other
proceeding of any type or nature in which substantially all claims of creditors
of Party B or any Specified Entity of Party B are determined and any payment or
distribution is or may be made on account of such claims.

 

“Intercreditor Agreement”
means the Intercreditor and Subordination Agreement, dated as of September 22,
2009, by and among MX Holdings, the pledgors from time to time party thereto,
Sempra Energy Trading LLC, in its capacity as facility agent, and Law Debenture
Trust Company of New York, in its capacity as indenture trustee, as it may be
amended from time to time.

 

“Interested Person” means,
in respect of Party B or any Specified Entity of Party B, (a) any Person
which has a Ten Percent Interest in Party B or any such Specified Entity, (b) any
Person in which Party B or any such Specified Entity has a Ten Percent
Interest, or (c) if a Person has a Ten Percent Interest in Party B or any
such Specified Entity and in other Persons, such other Persons.

 

“Investment” means, for any
Person: (i) the acquisition (whether for cash, property, services or
securities or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities of any other
Person or any agreement to make any such acquisition (including any “short sale”
or any sale of any securities at a time when such securities are not owned by
the Person entering into such sale), (ii) the making of any 

 

62

 

deposit with, or advance,
loan or other extension of credit to, any other Person (including the purchase
of property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such property to such Person), but excluding
any such advance, loan or extension of credit having a term not exceeding
ninety (90) days arising in connection with the sale of inventory or supplies
by such Person in the ordinary course of business, (iii) the entering into
of any Guarantee of, or other contingent obligation with respect to,
Indebtedness or other liability of any other Person and (without duplication)
any amount committed to be advanced, lent or extended to such Person or (iv) any
capital contribution to (by means of any transfer of cash or other property to others
or any payment for property or services for the account or use of others) any
other Person.

 

“investment company” has the
meaning specified in Part 5(j)(xv).

 

“ISDA Documents” means the
Master ISDAs, trade confirmations under the Master ISDAs or otherwise, Credit
Support issued in connection with Master ISDAs, the ISDA Security Documents and
each of the other agreements, schedules, annexes, confirmations, documents and
instruments providing for, relating to or evidencing any other ISDA
Obligations, and any other document or instrument executed or delivered at any
time in connection with, or giving rise to, any ISDA Obligations, to the extent
such are effective at the relevant time, as each may be amended, amended and
restated, supplemented, modified, renewed, replaced, refinanced or extended,
restructured or otherwise modified, in whole or in part, from time to time in
accordance with its terms and with the provisions of this Agreement.

 

“ISDA Obligations” means any
settlement amount, termination payment, principal (including reimbursement
obligations with respect to Credit Support whether or not drawn), interest
(including, to the extent legally permitted, all interest accrued thereon after
the commencement of any Insolvency or Liquidation Proceeding at the rate,
including any applicable post-default rate, specified in the ISDA Documents,
even if such interest is not enforceable, allowable or allowed as a claim in
such proceeding), premium (if any), fees, indemnifications, reimbursements,
expenses and other liabilities to be paid or performed under the ISDA
Documents.

 

“ISDA Security Documents”
means, collectively, the Guarantee and Collateral Agreement and any and all
guarantees, security agreements, pledge agreements, collateral assignments,
mortgages, collateral agency agreements, control agreements, deeds of trust or
other grants or transfers for security executed and delivered by Party B or any
Specified Entity of Party B creating (or purporting to create) a Lien securing
ISDA Obligations in favor of Party A, in each case, as amended, amended and
restated, supplemented, modified, renewed, restated, replaced, refinanced or
extended, restructured or otherwise modified, in whole or in part, from time to
time, in accordance with its terms and with the provisions of this Agreement.

 

“ISO” means any independent
electric system operator, regional transmission operator or similar entity
including the NYISO, ERCOT, PJM, NEPOOL and any other independent electric
system operator, regional transmission operator or similar entity added to the
list set forth on Exhibit 7(j) from time to time.

 

“LDC” means the local
distribution company responsible for delivering Gas to MX Energy’s Customers in
a particular geographic area.

 

“LDC/EDC Delivery Charges”
means, with respect to any billed and unbilled accounts receivable outstanding
as at any time of the determination thereof, the portion of such accounts
receivable that constitutes amounts owed by Party B’s Customers for services
provided by an LDC or EDC with respect to which Party B has an equal account
payable obligation to such LDC or EDC.

 

“Lien” means (i) any
mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or
security interest of any kind in, on or of such Property, (ii) the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having substantially
the same economic effect as any of the foregoing) relating to such Property, (iii) in
the case of securities, any purchase option, call or similar right of a third
party with respect to such securities, (iv) any right of set off,
recoupment, combination of accounts or similar rights; and in each case whether
by contract, operation of law or otherwise and (v) any agreement to give
any interest described in clauses (i) through (iv).

 

63

 

“Loan” has the meaning specified in Part 10(b)(v).

 

“Lockbox Account” has the
meaning specified in Part 11(b)(i).

 

“Management Incentive Plan”
has the meaning specified in the Stockholders Agreement.

 

“Margin” means all cash held
in the Party A Sub Account under all Master ISDAs.

 

“Master ISDAs” shall mean
this Agreement, the MX Energy Agreement and any additional ISDA Master
Agreement entered into between Party A and any Specified Entity of Party B
(other than MX Energy).

 

“Material Adverse Effect”
means (a) a material adverse effect on (i) Party B or Party B and
Party B’s Specified Entities taken as a whole, (ii) the ability of Party B
or any Specified Entity of Party B to perform any of its material obligations
under any Material Contracts to which it is a party or (iii) the aggregate
value of the Collateral or the validity or priority of the security interests
in such Collateral, or (b) a material adverse change (as reasonably
determined by Party A in its sole discretion) in (i) the financial
condition, the results of operations, business, prospects or results of
operations of Party B or Party B and Party B’s Specified Entities taken as a whole,
or (ii) the collection rate or accounts receivable for Party B or any
Specified Entity of Party B;

 

“Material Contracts” means
the Notes, the Indenture, the Old Notes, the Old Notes Indenture, any
Replacement Debt (and, if applicable, any indenture related thereto), any
contract or agreement to which Party B or any Specified Entity of Party B is a
party under which Party B or such Specified Entity, as applicable, shall have
obligations (or a right to receive revenues) over the term of such contract or
agreement in excess of $3,500,000, or the then equivalent of such amount in
another currency or currencies (or such other amount as approved by the Party
A) or which is otherwise material to the business or operation of Party B or
such Specified Entity, as applicable and any other contract or agreement that
is necessary or advisable for the conduct of the business of Party B or any
Specified Entity of Party B as contemplated by this Agreement.

 

“Maturity Date” means, with
respect to a Loan, the maturity date for such Loan specified on Exhibit 10(d)(i).

 

“Minimum Energy Quantity”
has the meaning specified in Part 7(a).

 

“Missing Day” has the
meaning specified in Part 5(f)(2).

 

“Moody’s” means Moody’s
Investors Service, Inc., or any successor thereof.

 

“Multiemployer Plan” means a
multiemployer plan as defined in Section 4001(a)(3) of ERISA with
respect to which Party B or any of its ERISA Affiliates may have any liability,
contingent or otherwise.

 

“MX Canada” means MxEnergy
(Canada) Ltd., a Nova Scotia corporation.

 

“MX Energy” means MxEnergy
Inc., a Delaware corporation.

 

“MX Energy Agreement” means
that certain ISDA Master Agreement, of even date herewith, entered into between
Party A and MX Energy.

 

“MX Holdco” means any
Specified Entity of Party B other than MX Holdings, Party B, MX Canada and MX
Electric.

 

“MX Holdings” means MxEnergy
Holdings Inc., a Delaware corporation.

 

“NEPOOL” means ISO New
England.

 

“Notes Escrow Account” means
the segregated escrow account established pursuant to the Escrow Agreement.

 

64

 

“Notes” means the 13.25%
Senior Subordinated Secured Notes due 2014 of MX Holdings.

 

“NYMEX” means The New York
Mercantile Exchange, or any successor thereof.

 

“Offering Memorandum” means
that certain Second Amended and Restated Confidential Offering Memorandum and
Consent Solicitation Statement of MX Holdings, dated as of August 27,
2009, as amended through the Closing Date.

 

“Officers’ Certificate”
means a certificate signed by two officers of MX Holdings, at least one of whom
shall be the principal executive officer or principal financial officer of MX
Holdings, and delivered to the Trustee.

 

“Old Notes” means the
Floating Rate Senior Notes Due 2011 of MX Holdings.

 

“Old Notes Indenture” means
the indenture, dated as of August 4, 2006, among MX Holdings, Law
Debenture Trust Company of New York, as trustee, and Deutsche Bank Trust
Company Americas, as registrar and paying agent, as amended through the Closing
Date.

 

“Online Choice” means
OnlineChoice Inc., a Delaware corporation.

 

“Operating Account” means
account number 2079961065281 at Wachovia.

 

“Option Transaction” means a
transaction that provides the buyer the right, but not the obligation, to
purchase or sell a commodity specified in such transaction.

 

“Outstanding Amount” means
at any time, all amounts (including Credit Support Fees and Financing Fees and
amounts payable on the Energy Settlement Dates set out in Part 10(b)) not
paid on the applicable Settlement Date and any other amount owed to Party A.

 

“Outstanding Power
Transaction” has the meaning specified in the Power Annex.

 

“Overnight LIBOR” means for
any Business Day the rate of interest per annum (rounded upwards if necessary
to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page or
http://bba.org.uk/bba/ (or any successor page) as the British Bankers
Association London Interbank offered rate for overnight deposits in U.S.
Dollars at approximately 11 a.m. London time two Business Days prior to
the date of determination.

 

“Part” means, unless
otherwise specified, a Part of the Schedule to the Master Agreement.

 

“Party A Sub Account” means
a sub account of Party A’s general working capital account which shall be
identified as relating to this Agreement, or any replacement custodial account
established in accordance with Part 11(f).

 

“Party B Customer Load”
means the full Energy load requirements of Party B’s Customers.

 

“PBGC” means the Pension
Benefit Guaranty Corporation referred to and defined in ERISA and any successor
entity performing similar functions.

 

“Permitted Holders” means
Jeffrey A. Mayer, Denham Commodity Partners LP, Charter Mx LLC and Camulos
Capital LP, and their respective Affiliates.

 

“Permitted Indebtedness”
means the following Indebtedness:

 

(i)            Indebtedness incurred under the ISDA Documents;

 

(ii)           Indebtedness incurred with respect to any LDC, EDC or ISO
in connection with Party B’s balancing obligations;

 

65

 

(iii)          for a period of 90 days following the Closing Date, letters
of credit issued by SocGen for the account of Party B that are outstanding on
the Closing Date and that are secured by Credit Support arranged for by Party
A;

 

(iv)          loans from MX Holdings or a MX Holdco, subordinated to the
ISDA Obligations on terms satisfactory to Party A in its sole discretion, to MX
Energy or MX Canada necessary to pay ISDA Obligations of MX Energy or MX Canada
then due and payable;

 

(v)           the Notes in a principal amount not to exceed $75,000,000
(and Replacement Debt that is incurred pursuant to, and compliant with, Section 3.10
of the Intercreditor Agreement);

 

(vi)          the Old Notes in a principal amount not to exceed
$10,000,000;

 

(vii)         Guarantees of MX Holdings or any Wholly-Owned Subsidiary of
MX Holdings in respect of Permitted Indebtedness;

 

(viii)        (a) Indebtedness
incurred to finance the acquisition, construction or improvement of any fixed
or capital assets and (b) Indebtedness in respect of Capital Leases and
synthetic lease obligations and extensions, renewals and replacements of any
such Indebtedness that do not increase the outstanding principal amount
thereof; provided that (x) in the case of Indebtedness to finance the
acquisition, construction or improvements of fixed or capital assets, such
Indebtedness is incurred prior to or within 120 days after such acquisition or
the completion of such construction or improvement and (y) the aggregate
principal amount of Indebtedness permitted by this paragraph shall not exceed
$250,000 at any time outstanding;

 

(ix)           unsecured Indebtedness in an aggregate principal amount
not to exceed $500,000 at any time outstanding;

 

(x)            Indebtedness required to satisfy regulatorily-required
credit requirements not satisfied by Party A on behalf of Party B;

 

(xi)           Indebtedness consisting of obligations relating to surety
bonds outstanding as of the Closing Date, as set forth on Exhibit 14(a)(ii);

 

(xii)          for a period of 30 days following the Closing Date,
Indebtedness consisting of the RBS Novated Transactions (to the extent such
transactions have not been novated to The Royal Bank of Scotland plc) set forth
on Exhibit 12(a)(xix); and

 

(xiii)         following the novation of such
transactions to The Royal Bank of Scotland plc, Indebtedness consisting of RBS
Novated Transactions.

 

“Permitted Investments”
means, as of the date of this Agreement, any of the following owned by Party B
or any Specified Entity of Party B: (i) securities issued or directly and
fully guaranteed or insured by the United Sates or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having maturities of not more than
six months from the date of acquisition; (ii) time deposits and
certificates of deposit, with maturities of not more than six months from the
date of acquisition, of any domestic or international commercial bank of
recognized standing having capital and surplus in excess of $500,000,000 (or
whose holding company meets such standard) and having a rating on its
commercial paper of at least “A-l” or the equivalent thereof by S&P or at
least “P-l” or the equivalent by Moody’s; (iii) investments in money
market funds substantially all the assets of which are comprised of securities
of the types described in clauses (i) and (ii) above; (iv) investments
in the Subsidiaries listed on Exhibit 5(j)(iv) which subsist as of
the date of this Agreement; (v) Indebtedness between Party B and any of
the Specified Entities of Party B or between any of the Specified Entities of
Party B incurred solely for the purposes of facilitating the payment of any
amounts due to Party A under any Master ISDA, so long as such Indebtedness is
subordinated to all ISDA Obligations on terms satisfactory to Party A in its
sole discretion; (vi) Equity Interests in a Wholly-Owned Subsidiary of
Party B or a Wholly-Owned Subsidiary 

 

66

 

of a Specified Entity of
Party B; (vii) any other investment which Party A agrees in writing shall
constitute a “Permitted Investment”; (viii) investments consisting of
extensions of credit in the nature of accounts receivable or notes receivable
arising from the grant of trade credit in the ordinary course of business, and
investments received in satisfaction or partial satisfaction thereof from
financially troubled account debtors to the extent reasonably necessary in
order to prevent or limit loss and (ix) Guarantees constituting Permitted
Indebtedness.

 

“Permitted Liens” means:

 

(i)            Liens in favor of Party A created under the ISDA Security
Documents;

 

(ii)           Liens to secure the Notes (and
Replacement Debt that is incurred pursuant to, and compliant with, Section 3.10
of the Intercreditor Agreement); provided that such
Liens (other than with respect to the Notes Escrow Account) shall be
subordinate to the Liens securing the ISDA Obligations of Party B and the
Specified Entities of Party B under the ISDA Documents in accordance with the
Intercreditor Agreement.

 

(iii)          Liens in connection with workmen’s compensation;
unemployment insurance or other social security or pension obligations;

 

(iv)          mechanics’, workmen’s, materialmen’s, suppliers’,
construction or like liens, in each case (A) for amounts not yet due and
payable or (B) for amounts due and payable with respect to ordinary course
claims being contested in good faith and for which adequate reserves (in
accordance with GAAP) have been established or bond is posted;

 

(v)          Liens for taxes, assessments or
governmental charges or levies on Party B’s or any Specified Entity of Party B’s
Property not yet delinquent or, if delinquent, which are being contested in
good faith and for which adequate reserves (in accordance with GAAP) have been
established;

 

(vi)          Liens (including first-priority Liens if required) in
connection with any account receivables purchase program entered into between
Party B or any Specified Entity of Party B and any EDC listed on Exhibit 7(j);

 

(vii)         attachment or judgment liens to the extent not constituting
an Event of Default; provided that (A) the existence of such liens
could not reasonably be expected to result in a Material Adverse Effect and (B) such
liens are discharged within 60 days of the creation thereof;

 

(viii)        Liens in favor of third parties in any
Collateral having in the aggregate a fair market value not to exceed $500,000
for Party B and all Specified Entities of Party B taken as a whole;

 

(ix)           Liens arising out of judgments or
awards in respect of which MX Holdings or any its Subsidiaries shall in good
faith be prosecuting an appeal or proceedings for review in respect of which
there shall be secured a subsisting stay of execution pending such appeal or
proceedings; provided that the aggregate amount of all such judgments or awards
(and any cash and the fair market value of any property subject to such Liens)
does not exceed $500,000 for Party B and all Specified Entities of Party B
taken as a whole, at any time outstanding;

 

(x)            rights of set-off of banks, EDCs and ISOs in the ordinary
course of banking and trading arrangements;

 

(xi)           Liens
securing Permitted Indebtedness under Subparagraph (viii) of the
definition of “Permitted Indebtedness” 
in any fixed or capital assets and improvements thereto or equipment
hereafter acquired (or, in the case of improvements, constructed) by MX
Holdings or any of its Subsidiaries; provided that (a) such Liens do not
at any time encumber any property other than the property financed by such
Indebtedness and the proceeds thereof, (b) the Indebtedness secured
thereby does not exceed the lesser of the cost or fair market value of the
property being acquired or financed on the date of acquisition or financing,
and (c) in 

 

67

 

the
case of purchase money security interests, such security interests are created
within 120 days after such acquisition (or completion of such improvements);
and

 

(xii)          Liens on cash margin delivered to The
Royal Bank of Scotland plc or a third party securing Indebtedness permitted by
Subparagraphs (xii) and (xiii) of the definition of “Permitted Indebtedness”.

 

“Person” means an
individual, partnership, corporation, limited liability company, unincorporated
organization, trust or joint venture, or a Governmental Authority or political
subdivision thereof.

 

“Plan” means any employee
pension benefit plan (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code or Section 302
of ERISA, and in respect of which Party B or any ERISA Affiliate is (or, if
such plan were terminated, would under Section 4069 of ERISA be deemed to
be) an “employer” as defined in Section 3(5) of ERISA.

 

“Potential Termination Event”
means an event or condition which constitutes a Termination Event or which,
upon notice, lapse of time or both, would, unless cured or waived, become a
Termination Event.

 

“Power Annex” has the
meaning specified in Part 6.

 

“Power Transaction” has the
meaning specified in the Power Annex.

 

“Preferred Stock” of any
Person means any Capital Stock of such Person that has preferential rights to
any other Capital Stock of such Person with respect to dividends or redemptions
or upon liquidation.

 

“Primary Rate” means (i) the
greater of 4% per annum and (ii) the Base Rate (matching the term of the
applicable Credit Support document or instrument) plus 3.00% per annum;
provided that a Credit Support instrument with no termination, expiration or
maturity date shall be presumed to have a duration of two years.

 

“Private Equity” has the
meaning specified in the
Intercreditor Agreement.

 

“Product” has the meaning specified in the Power Annex.

 

“Promissory Note” means a
promissory note substantially in the form of Exhibit 10(c)(ii).

 

“Prompt Month” means the
nearest month of delivery for which NYMEX futures prices are published during
the applicable trading month.

 

“Property” means any right
or interest in or property of any kind whatsoever, whether real, personal or
mixed and whether tangible or intangible, including, cash, securities, accounts
and contract rights.

 

“Put Option” means an Option
Transaction, which may be physically or financially settled, that gives the
holder the right to sell a certain quantity of an underlying commodity to the
seller of such Option Transaction, at a specified price on or up to a specified
expiration date or during a specified exercise period.

 

“Qualified Capital Stock”
means any Capital Stock that is not Disqualified Capital Stock.

 

“Qualified Custodian” means a domestic office of a
commercial bank, trust company or financial institution organized under the
laws of the United States (or any state or a political subdivision thereof)
having assets of at least $10 billion and a long term debt or deposit rating of
at least (i) A3 by Moody’s or (ii) A- by S&P.

 

“Qualified Initial Public
Offering” has the meaning specified in the Intercreditor Agreement.

 

“Quantity” has the meaning specified in the Power Annex.

 

68

 

“Quoted Price” means any
price, discount or premium to a Commodity Reference Price (for purposes of
determining a floating price) or Option Transaction premium quoted by Party A
(before adding any relevant Energy Adder) for (i) any Power Transaction
where Party B is the buyer, (ii) any fixed-for-floating Energy Swap where
Party B is the fixed price payer, (iii) any Energy Swap that is a
locational basis swap, or (iv) any Energy Option; such prices, discounts
or premiums, as the case may be, shall be reflective of market offers or
offer-side discounts and premiums, as the case may be, adjusted for market
conditions for similar quantities of Energy, similar periods and tenors, at
like Delivery Points, and with counterparties whose credit quality is
satisfactory to Party A.

 

“Quoted Purchase Price”
means any price, discount or premium to a Commodity Reference Price (for
purposes of determining a floating price) or Option Transaction premium quoted
by Party A (before adding any applicable credit) for (i) any Power
Transaction where Party B is the seller, (ii) any fixed-for-floating
Energy Swap where Party B is the floating price payer, (iii) any Energy
Swap that is a locational basis swap or (iv) any Energy Option; such
prices, discounts or premiums, as the case may be, shall be reflective of
market bids or bid-side index prices, discounts and premiums, as the case may
be, adjusted for market conditions for similar quantities of Energy, similar
periods and tenors, at like Delivery Points, and with counterparties whose
credit quality is satisfactory to Party A.

 

“Rating” means, with respect
to any entity, the ratings assigned to such entity by each of the Rating
Agencies.

 

“Rating Agencies” means
Moody’s and/or S&P, as applicable, and any successor thereto.

 

“RBS Novated Transaction”
has the meaning specified in Part 12(a)(xix)(A).

 

“RBS Sleeve Transaction” has
the meaning specified in Part 12(a)(xix)(A).

 

“RECs” has the meaning
specified in Part 7(a)(viii).

 

“Registration Rights
Agreement” means the Registration Rights Agreement, dated as of September 22,
2009, among MX Holdings and certain of the Stockholders party thereto, as the
same may be amended from time to time.

 

“Reimbursement Obligation”
has the meaning specified in Part 12(a)(xviii).

 

“Related Agreements” means,
collectively, the ISDA Documents, the Intercreditor Agreement, the Stockholders
Agreement and the Registration Rights Agreement.

 

“Release” means any release,
spill, emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor environment,
including the movement of Hazardous Materials through ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata.

 

“Replacement Debt” has the
meaning specified in the
Intercreditor Agreement.

 

“Reporting Company” has the
meaning specified in Part 12(a)(vi).

 

“Residential Customer-
Equivalent” means each 100 MMBtus, with respect to Gas, and each 10Mws, with
respect to Energy, of Party B Customer Load.

 

“Responsible Officer” means,
with respect to Party B and any Specified Entity of Party B, a director, the
president, chief executive officer, general counsel, chief operating officer, chief
financial officer, principal accounting officer, treasurer or any vice
president of Party B or such Specified Entity as the case may be.

 

“Restricted Payment” means
any instance where Party B and the Specified Entities of Party B will, directly
or indirectly:

 

(i)            declare or pay any dividend or make any distribution,
whether in cash, securities or other property (other than dividends or
distributions payable in Qualified Capital Stock), on or in respect of any
Equity Interests to the holders thereof;

 

69

 

(ii)           make any payment (whether in cash, securities or other
property), including any sinking fund or similar fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such Equity Interests in Party B or any Specified Entity of
Party B or any option, warrant or other right to acquire any such Equity
Interests in Party B or any Specified Entity of Party B;

 

(iii)           make any interest or principal payment on, purchase,
defease, redeem, repay, prepay, decrease or otherwise acquire or retire for
value, prior to any scheduled final maturity, scheduled repayment or scheduled
sinking fund payment, the Old Notes or any Indebtedness of Party B or any Specified
Entity of Party B that is subordinated or junior in right of payment to the
ISDA Obligations, other than payments to the Notes Escrow Account in accordance
with the terms of the Intercreditor Agreement; and

 

(iv)          make any Investment (other than Permitted Investments).

 

“Sale and Leaseback
Transaction” means any direct or indirect arrangement with any Person or to
which any such Person is a party, providing for the leasing to Party B or a
Specified Entity of Party B of any property, whether owned by Party B or any
Specified Entity of Party B at the Closing Date or later acquired, which has
been or is to be sold or transferred by Party B or such Specified Entity to
such Person or to any other Person from whom funds have been or are to be
advanced by such Person on the security of such Property.

 

“Schedule” means the act of
Party A, Party B, any EDC, any ISO or any relevant Transmission Provider
notifying, requesting, and confirming to each other relevant party the quantity
of Energy to be delivered on any Day, as the case may be, or the quantity of
UCAP to be delivered in respect of any month.

 

“Secondary Rate” means 1.00%
per annum.

 

“SET” has the meaning
specified in Part 5(l).

 

“Settlement Date” shall mean
the Energy Settlement Date, the Financing Fee Settlement Date or the Energy
Swap Settlement Date, as the context requires.

 

“Sleeve Transaction” has the
meaning specified in Part 7(e).

 

“S&P” means Standard &
Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or
any successor thereof.

 

“SocGen” means Société
Générale, a French bank.

 

“Solvent” when used with
respect to any Person, means that, as of any date of determination, (a) the
amount of the “present fair saleable value” of the assets of such Person will,
as of such date, exceed the amount of all “liabilities of such Person,
contingent or otherwise”, as of such date, as such quoted terms are determined
in accordance with applicable federal and state laws (or, with respect to MX
Canada, applicable Canadian federal or provincial laws) governing
determinations of the insolvency of debtors, (b) the present fair saleable
value of the assets of such person will, as of such date, be greater than the
amount that will be required to pay the liability of such Person on its debts
as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they
mature.  For purposes of this definition,
(i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right
to payment, whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (y) right to an equitable remedy
for breach of performance if such breach gives rise to a right to payment,
whether or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

 

“Specified Agreements”
means, collectively, the ISDA Documents, the Intercreditor Agreement, the
Stockholders Agreement and the Registration Rights Agreement.

 

70

 

“Stockholders” means the
holders of Capital Stock in MX Holdings.

 

“Stockholders Agreement”
means the Stockholders Agreement dated the date hereof among MX Holdings and
the Stockholders party thereto.

 

“Storage Gas” has the
meaning specified in the MX
Energy Agreement.

 

“Subject Person” has the
meaning specified in the
definition of “Change of Control”.

 

“Subsidiary” means, with
respect to any Person (the “parent”) at any date, any corporation,
limited liability company, partnership, association or other entity the accounts
of which would be consolidated with those of the parent in the parent’s
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date, as well as any other corporation, limited
liability company, partnership, association or other entity (i) of which
securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (ii) that is, as of such date,
otherwise controlled, by the parent or one or more subsidiaries of the parent
or by the parent and one or more subsidiaries of the parent.

 

“Surplus” means that the
amount held in the Aggregated Collateral Accounts at the time of determination
exceeds the aggregate amount of all outstanding settlement payments under all
Transactions (as such term is defined in the applicable Master ISDA) under all
Master ISDAs (whether or not the applicable Settlement Dates have occurred).

 

“Swap Exposure” has the
meaning specified in Part 13(b).

 

“Swap Note Collateral” means
the funds deposited in the Swap Note Sub Account pursuant to Part 10(b)(vi).

 

“Swap Note Sub Account”
means a sub account of Party A’s general working capital account which shall be
identified as relating to this Agreement and holding Swap Note Collateral, or
any replacement custodial account established in accordance with Part 11(f).

 

“Swap Transaction” means any
swap, contract for differences, or other financially settled derivative
transaction (other than an Option Transaction), including any such transaction
entered into under this Agreement.

 

“Tax” has the meaning
specified in the Master Agreement except that, for purposes of the provisions
of this Agreement (whether or not incorporated by reference into the Master
Agreement), that definition shall be amended by deleting the phrase “in respect
of any payment under this Agreement other than a” and inserting in its place “including
any income, value added, sales”.

 

“Tax Gross-Up Amounts” has
the meaning specified in the Intercreditor Agreement.

 

“Ten Percent Interest”
means, in respect of any Person, 10% of any class of securities in the
aggregate, whether held directly or indirectly.

 

“Terminate” means terminate
and/or liquidate, and any right granted in this Agreement to terminate
Transactions is a right to terminate and/or liquidate.  “Termination” shall be similarly construed.

 

“Termination Currency” has
the meaning specified in Part 1(g).

 

“Termination Date” has the
meaning specified in Part 5(h).

 

“Third Party Exposure Fees”
has the meaning specified in Part 10(b)(iv).

 

“Third Party Future
Calculation Period” has the meaning specified in Part 10(b)(vi).

 

“Third Party Liquidation
Payments” has the meaning specified in Part 10(b)(i).

 

71

 

“Third Party Notional Amount”
has the meaning specified in Part 10(b)(iv)

 

“Third Party Novation
Payments” has the meaning specified in Part 10(b)(iii).

 

“Third Party Novation
Transactions” has the meaning specified in Part 10(b)(iii).

 

“Third Party Transactions”
has the meaning specified in Part 10(b)(i).

 

“Threshold Amount” has the
meaning specified in Part 1(c).

 

“Transmission Provider” has
the meaning specified in the Power Annex

 

“Transporter” has the
meaning specified in the Gas Annex.

 

“Trustee” means Law
Debenture Trust Company of New York, as trustee under the Indenture, and it
successors and assigns.

 

“UCAP” means the electricity
product that is required to be purchased by load-serving entities in the NYISO
control area.

 

“Use” means, with respect to
any Hazardous Material and with respect to any Person, the generation,
manufacture, processing, distribution, handling, use, treatment, recycling or
storage of such Hazardous Material or transportation to or from the property of
such Person of such Hazardous Material.

 

“Wachovia” means Wachovia
Bank National Association, a national banking association.

 

“Wachovia Control Agreements”
means the Account Control Agreements among Party A, Party B, the other parties
thereto and Wachovia, in the forms of Exhibit 11(b)(i)(A) and Exhibit 11(b)(i)(B).

 

“Wholesale Transfer” has the
meaning specified in the Certificate of Incorporation.

 

“Wholly-Owned Subsidiary” of
any Person means any Subsidiary of such Person of which all the outstanding
Equity Interests (other than in the case of a foreign Subsidiary, directors’
qualifying shares or an immaterial amount of shares required to be owned by other
Persons pursuant to Applicable Law) is owned by such Person or any Wholly-Owned
Subsidiary of such Person.

 

72

 

IN
WITNESS WHEREOF, the parties have executed this Schedule as of the date
specified on the first page hereof.

 

	
   

  	
   

  	
   

  
	
   

  	
  SEMPRA
  ENERGY TRADING LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael D. Mitchell

  
	
   

  	
   

  	
  Name:
  Michael D. Mitchell

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MXENERGY
  ELECTRIC INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jeffrey Mayer

  
	
   

  	
   

  	
  Name:
  Jeffrey Mayer

  
	
   

  	
   

  	
  Title:
  President and Chief Executive Officer

  

 

 

Acknowledged
and Agreed:

 

 

	
  MXENERGY
  HOLDINGS INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name:
  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MXENERGY
  INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name:
  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MXENERGY
  (CANADA) LTD.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name:
  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ONLINECHOICE,
  INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name:
  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:
  President and Chief Executive Officer

  	
   

  

 

[Signature Page to Power ISDA Schedule]

 

 

	
  MXENERGY
  GAS CAPITAL HOLDINGS CORP.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name:
  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MXENERGY ELECTRIC CAPITAL HOLDINGS CORP.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name:
  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MXENERGY
  GAS CAPITAL CORP.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name:
  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MXENERGY
  ELECTRIC CAPITAL CORP.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name:
  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MXENERGY CAPITAL HOLDINGS CORP.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Jeffrey Mayer

  	
   

  
	
   

  	
  Name:
  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  INFOMETER.COM
  INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jeffrey Mayer

  	
   

  
	
   

  	
  Name:
  Jeffrey Mayer

  	
   

  
	
   

  	
  Title:
  President and Chief Executive Officer

  	
   

  

 

[Signature Page to Power ISDA Schedule]

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