regulatory changes in the states in which we operate that could adversely affect our operations

EX-10.80 12 a34755exv10w80.htm EXHIBIT 10.80 exv10w80
 

Exhibit 10.80
Execution Copy 9-20-06
GAS SUPPLY AGREEMENT
     This Gas Supply Agreement (this “Agreement”), dated effective as of September 1, 2006, is entered into by and between Pacific Summit Energy LLC (“Pacific Summit”), a Delaware limited liability company, Commerce Energy, Inc., a California corporation (“Commerce Energy”) and Houston Energy Services Company, L.L.C., a Texas limited liability company (“HESCO”).
W I T N E S S E T H:
     A. Pacific Summit and HESCO are this date entering into certain NAESB agreements (the “NAESB Agreements”) pursuant to which HESCO will resell to Pacific Summit all of those volumes of gas which comprise HESCO’s existing gas supply positions for the month of September, 2006 and thereafter under those certain gas supply agreements set forth on Exhibit “A” attached hereto and made a part hereof (the “HESCO Gas Supply Agreements”).
     B. Pacific Summit and HESCO have agreed to seek a written novation agreement from each of the counterparties to the HESCO Gas Supply Agreements, whereby Pacific Summit will be solely responsible to such counterparties for-all obligations accruing under the HESCO Gas Supply Agreements for gas deliveries to be made by such counterparties thereunder for any period on or after October 1, 2006 (the “Prospective Obligations”), and whereby HESCO will be expressly released from the Prospective Obligations under each of the HESCO Gas Supply Agreements by such counterparties (collectively, the “Novation Agreements”, and each a “Novation Agreement”).
     NOW, THEREFORE, in consideration of HESCO entering into the NAESB Agreements with Pacific Summit, HESCO and Pacific Summit hereby covenant and agree as follows:
     1. Repurchase of Gas. Pursuant to the NAESB Agreements, Pacific Summit is agreeing to repurchase from HESCO all volumes of gas which HESCO is obligated to purchase under each of the HESCO Gas Supply Agreements during the period from and after September 1, 2006.
     2. Termination of NAESB Forward Gas Supply Positions. HESCO, Commerce Energy and Pacific Summit shall both utilize reasonable commercial efforts to obtain Novation Agreements as to all of the HESCO Gas Supply Agreements prior to the expiration of sixty (60) days following the effective date of this Agreement. HESCO and Pacific Summit further agree that at such time as a Novation Agreement is obtained with respect to a particular HESCO Gas Supply Agreement, then the obligations of HESCO and Pacific Summit as those forward gas supply positions under the corresponding NAESB Agreement which are novated will automatically terminate, so that neither HESCO nor Pacific Summit will have any further obligation to the other with respect thereto. However, if any HESCO Gas Supply Agreement is not covered by a Novation Agreement prior to the expiration of sixty (60) days following the effective date of this Agreement and the failure of such HESCO Gas Supply Agreement to be covered by a Novation Agreement arises directly from Pacific Summit’s failure to utilize reasonable commercial efforts to obtain such Novation Agreement, then the NAESB Agreement corresponding thereto shall be deemed automatically amended as of said date to provide for

 

 

Pacific Summit’s payment to HESCO of an additional $.08 per MMBtu of gas (“Price Premium”) thereafter sold to it under such NAESB Agreement until such time as the HESCO Supply Agreement corresponding to such NAESB Agreement shall be covered by a Novation Agreement. Pacific Summit shall not be required to pay the Price Premium if the failure to obtain the Novation Agreement arises directly or indirectly from any dispute between HESCO and any counterparty over the amount of obligations owed by HESCO to the counter party, or from any failure of HESCO or Commerce to utilize reasonable commercial efforts in obtaining the Novation Agreements.
     3. Notice. Any payment demand, notice, correspondence or other document to be given hereunder by any party to another (herein collectively called “Notice”) shall be in writing and delivered personally or mailed by certified mail, postage prepaid and return receipt requested, or by facsimile, to the addresses set forth below. Notice given by personal delivery or mail shall be effective upon actual receipt, or, if receipt is refused or rejected, upon attempted delivery. Notice given by facsimile shall be effective upon actual receipt if received during the recipient’s normal business hours, or at the beginning of the recipient’s next business day after receipt if not received during the recipient’s normal business hours. All Notices by facsimile shall be confirmed promptly after transmission in writing by certified mail or personal delivery. Any party may change any address to which Notice is to be given to it by giving Notice as provided above of such change of address.
     4. Miscellaneous. THIS AGREEMENT SHALL BE IN ALL RESPECTS GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. No term or provision of this Agreement shall be amended or modified except in a writing signed by HESCO and Pacific Summit. Neither HESCO nor Pacific Summit may assign its rights hereunder without the consent of the other party. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the parties hereto and their permitted successors and assigns. The recitals of this Agreement form a part of this Agreement and are to be utilized in the interpretation of this Agreement. The singular form of nouns, pronouns and verbs shall include the plural and vice versa. This Agreement, together with NAESB Agreements entered into as of the effective date hereof between HESCO and Pacific Summit with respect to HESCO’s resale of gas to Pacific Summit, embodies the entire agreement and understanding between HESCO and Pacific Summit.
(signature page follows.)

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     IN WITNESS WHEREOF, Pacific Summit and HESCO have executed this Agreement effective as of the date first written above.
                 
HOUSTON ENERGY SERVICES       PACIFIC SUMMIT ENERGY LLC
            COMPANY, L.L.C.
 
                
By:
  /s/ Thomas L. Goudie       By:   /s/ Brian Mock
 
               
 
          Thomas L. Goudie,       Name:   Brian Mock
 
               
 
          President       Title:   President
 
               
 
                
Address:       Address:    
 
                
10497 Town & Country Way, Suite 150       4675 MacArthur Court
Houston, Texas 77024       Suite 1170
            Newport Beach, California 92660
 
                
Attn. Thomas L. Goudie       Attn: RanDe Patterson
Fax No.: (713)  ###-###-####       Fax No.: (949)  ###-###-####
         
COMMERCE ENERGY, INC.
 
        
By:
  /s/ Steven S. Boss    
 
       
Name: Steven S. Boss
Title: Chief Executive Officer
Address:
 
        
         
600 Anton Blvd, Suite 2000
Costa Mesa, California 92626
Attn:
        
 
       
Fax No.:
 
       

 

 

EXHIBIT “A”
Gas Supply Agreements
                                   
    Confirm                    
K Type   #   Counterparty     Volume   Price   Location   Term
NAESB
  17080     Seminole Energy marketing     7,500     HSC - $0.13   TXU   Sept 06
NAESB
  17331     Anadarko     23,268     NYMEX LD+0.20   txg-4   Sept 06
NAESB
  17332     Cargill     120,000     NGI +0.005   Socal   Sept 06
NAESB
  17332     Cargill     150,000     NGI +0.03   Socal/ SW Gas   Sept 06
NAESB
  17333     Cargill     54,000     NGI + 0.02   PG&E Citygate   Sept 06
NAESB
  16973     Conoco-Phillips     10,000     NYMEX LD - 0.77   Socal   April ‘06 - Mar’07
NAESB
  16669     Conoco-Phillips     10,000     $9.750       EPNG to SWG Topock   Jan’06 - Dec’06
 
                                  
NAESB
  17341     Infinite Energy     151,890     NYMEX LD +0,79   FGT Zn31 Destin   Sept 06
NAESB
  17340     Infinite Energy     96,690     NYMEX LD +0.12   NGPL /Vermillion   Sept 06
NAESB
  17339     Infinite Energy     109,110     NYMEX LD +0.15   St Landry/Gulf South   Sept 06
NAESB
  16896     Sempra     10,000     NYMEX LD -0.91   PG&E Citygate   Apr ‘06 - Oct’06
NAESB
  16858     Sempra     10,000     NYMEX LD -1.03   socal   Feb’06 - Dec’06
NAESB
  16897     Sempra     10,000     NYMEX LD -1.40   socal   Apr’06- Mar’07
NAESB
  16895     Sempra     10,000     NYMEX LD -1,25   socal   Apr’06 - Oct’06
NAESB
  16916     Sempra     10,000     NYMEX LD -1.40   socal   Apr’06 - Mar ‘07
NAESB
  16916     Sempra     10,000     NYMEX LD -1.05   PG&E Citygate   Apr ‘06 - Mar’07
NAESB
  16940     Sempra     10,000     NYMEX LD - 1.10   Socal Border   Apr’06 - Oct’06
NAESB
  16949     Sempra     10,000     NYMEX LD -1.05   Socal Border   Apr’06 - Mar’07
NAESB
  16955     Sempra     10,000     NYMEX LD -0.84   Socal Border   Apr ‘06 - Ocf06
NAESB
  16955     Sempra.     10,000     NYMEX LD -0.58   PG&E Citygate   Apr’06 - Oct’06
SoCal (Financial
NAESB
  17214     Sempra     2500/Day   Nymex-1.03   Basis)   Apr’06,-Ocf06
NAESfi
  Begtrent   350WDay     $21 + Fuel   FG’I Capacity Release   Apr’06 - Mar’07    
NAESB
  17314     Pacific Summit     10,000     Fixed $9.15   SoCal Border   Oct-’06 - Mar-’07
NAESB
  17347     Pacific Summit     20,000     Fixed $ $5.685   NYMEX Purchase   Oct-06
NAESB
  17347     Pacific Summit I     10,000     Fixed $ $5.70   NYMEX Purchase   Oct-06