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.)




- 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/ 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) 463-5032	 	 	 	Fax No.: (949) 777-3233






	 	 	 	 	 
	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