GAS SUPPLY AGREEMENT
Exhibit 10.80
Execution Copy 9-20-06
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.)
- 2 -
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/ Xxxxxx X. Xxxxxx | By: | /s/ Xxxxx Xxxx | |||||
| Xxxxxx X. Xxxxxx, | Name: | Xxxxx Xxxx | ||||||
| President | Title: | President | ||||||
| Address: | Address: | |||||||
| 00000 Xxxx & Xxxxxxx Xxx, Xxxxx 000 | 0000 XxxXxxxxx Xxxxx | |||||||
| Xxxxxxx, Xxxxx 00000 | Suite 1170 | |||||||
| Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 | ||||||||
| Attn. Xxxxxx X. Xxxxxx | Attn: XxxXx Xxxxxxxxx | |||||||
| Fax No.: (000) 000-0000 | Fax No.: (000) 000-0000 | |||||||
| COMMERCE ENERGY, INC. | ||||
By:
|
/s/ Xxxxxx X. Boss | |||
| Name: Xxxxxx X. Boss | ||||
| Title: Chief Executive Officer | ||||
| Address: | ||||
| 000 Xxxxx Xxxx, Xxxxx 0000 Xxxxx Xxxx, Xxxxxxxxxx 00000 |
||||
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-Xxxxxxxx | 10,000 | NYMEX LD - 0.77 | Socal | April ‘00 - Xxx’00 | |||||||||||
XXXXX
|
00000 | Conoco-Xxxxxxxx | 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 /Xxxxxxxxxx | Sept 06 | |||||||||||
NAESB
|
17339 | Infinite Energy | 109,110 | NYMEX LD +0.15 | St Xxxxxx/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’00 - Xxx ‘00 | |||||||||||
XXXXX
|
00000 | Xxxxxx | 10,000 | NYMEX LD -1.05 | PG&E Citygate | Apr ‘00 - Xxx’00 | |||||||||||
XXXXX
|
00000 | 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 ‘00 - Xxx00 | |||||||||||
XXXXX
|
00000 | Xxxxxx. | 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’00,-Xxx00 | |||||||||||
XXXXxx
|
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 | |||||||||||
