exv10w1



 






Exhibit 10.1




AGREEMENT FOR CONSULTING SERVICES




     This Consulting Services Agreement (“Agreement”) is made and entered into by and between
Lawrence Clayton, Jr. (“CONSULTANT”) and Commerce Energy Group, Inc. (“COMMERCE”).



W I T N E S S E T H




     WHEREAS, COMMERCE desires to retain the services of CONSULTANT to provide the consulting
services specified in this Agreement; and



     WHEREAS, CONSULTANT desires to provide consulting services for the benefit of COMMERCE and any
of its parents, direct or indirect subsidiaries, affiliates, divisions or related entities
(collectively, referred to herein as “Commerce and its Related Entities”);



     NOW, THEREFORE, in consideration of the mutual promises contained herein, and other good and
valuable consideration, the parties hereto agree as follows:



ARTICLE I — SERVICES TO BE PROVIDED




     A. Nature of Services. CONSULTANT shall provide to COMMERCE and its related entities, such
advice and suggestions, and perform such tasks and assignments as directed, orally or in writing,
by COMMERCE, including but not limited to the areas of finance, accounting and financial oversight.



     B. Exclusive Representative. Clayton will be the exclusive representative of CONSULTANT
assigned to COMMERCE pursuant to this consulting relationship. During the course of this
Agreement, CONSULTANT and Clayton will report directly to the Chief Executive Officer of COMMERCE.
CONSULTANT and Clayton represent that they are free to undertake the services required by this
Agreement and each represents that they have the capability, experience and means necessary to
perform the services in accordance with applicable industry and professional standards and shall
take all reasonable and necessary precautions to protect all persons or property from injury or
damage.



     C. Right of Control. CONSULTANT shall have exclusive control over the means, manner, methods
and processes by which the services called for by this Agreement are performed.



     D. Non-exclusive Services. Except as prohibited in this Section, or elsewhere in this
Agreement, CONSULTANT may engage in such other consulting, business and/or commercial activities as
it desires during the term of this Agreement. Notwithstanding the foregoing, to prevent conflicts
of interest and unauthorized disclosure of COMMERCE’s confidential and proprietary business
information and trade secrets, during the term of this Agreement CONSULTANT shall not and during
Clayton’s employment with CONSULTANT, will cause Clayton not to, directly or indirectly, for
compensation or otherwise, become an employee of or render any consulting or other services of a
business or



 









 




commercial nature which competes with COMMERCE, without the express written consent of
COMMERCE.




ARTICLE II — COMPENSATION FOR SERVICES




     A. Consulting Fee. As payment and consideration for the services to be provided and promises
made herein by CONSULTANT, COMMERCE agrees to pay CONSULTANT the total sum of two hundred dollars
($200) per hour or a maximum of one thousand, five hundred dollars ($1,500) per day and seven
thousand, five hundred dollars ($7,500) per week (the “Consulting Fee”). The Consulting Fee shall
be invoiced by CONSULTANT bi-monthly, documenting time worked and accomplishments achieved and any
authorized expenses (original receipts required) for which CONSULTANT seeks reimbursement.
COMMERCE shall pay such invoices with 15 days of receipt and verification of expenses. The
Consulting Fee shall include materials and supplies used in the ordinary course of performing
services under this Agreement, but shall not include special materials/supplies, use of which shall
be authorized by COMMERCE in advance of purchase, and reimbursement of such expenses shall be
invoiced to COMMERCE as noted above. COMMERCE shall reimburse CONSULTANT for pre-approved,
authorized and reasonable business expenses incurred in performing the services specified to be
provided under this Agreement



     B. Tax Obligations. CONSULTANT understands and agrees that all compensation to which he is
entitled under the Agreement shall be reported on an IRS Form 1099, and that he is solely
responsible for all income and/or other tax obligations, if any, including but not limited to all
reporting and payment obligations, if any, which may arise as a consequence of any payment under
this Agreement.



     C. No Benefits. CONSULTANT understands and agrees that since it is not an employee of
COMMERCE, it shall not be entitled to any of the benefits provided to employees of COMMERCE,
including, but not limited to stock options; participation in retirement benefit plans; holidays
off with pay; vacation time off with pay; paid leaves of absence of any kind; and insurance
coverage of any kind, specifically including, but not limited to, medical and dental insurance,
workers’ compensation insurance and state disability insurance.



ARTICLE III — TERM AND TERMINATION




     A. Effective Date of Agreement. This Agreement shall become effective on August 1, 2005, as
long as it has been signed by both parties hereto.



     B. Term of Agreement. The initial term of this Agreement shall continue in full force and
effect until September 30, 2005. This Agreement may be extended upon mutual agreement of the
parties at any time prior to its termination.



     C. Termination Prior to Expiration of Term. Either party may cancel this Agreement in writing
at any time, in which case CONSULTANT shall be paid for consulting



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services rendered through the date of termination. Notwithstanding anything to the contrary
herein, the aggregate minimum fee paid to the CONSULTANT shall be eight thousand dollars ($8,000).




ARTICLE IV — PROPRIETARY RIGHTS




     A. No Impediments to Providing Consulting Services. CONSULTANT represents that it is not
party to any agreement with any individual or business entity, including any relating to protection
of alleged trade secrets or confidential business information, that would prevent CONSULTANT from
providing the consulting services required under this Agreement or that would be violated by the
providing of said consulting services.



     B. Proprietary Information. CONSULTANT and Clayton acknowledge and agree that they will
execute the form of Confidentiality and Non-Disclosure Agreement attached hereto as Exhibit
A (the “Confidentiality Agreement”).



     C. No Solicitation of Employees. CONSULTANT and Clayton further agrees, that during the term
of this Agreement and for a period of one year after its termination, they will not directly or
indirectly, either on its own behalf or on behalf of any other person or entity, attempt to
persuade or solicit any person who is an employee of COMMERCE or its related entities to terminate
such employment. In addition, CONSULTANT and Clayton agree that after the termination of this
Agreement each will not seek to obtain or misappropriate any of the Commerce Confidential
Information (as defined in the Confidentiality Agreement) from any of the current or former
employees of COMMERCE and its Related Entities.



     D. Violations. CONSULTANT agrees that COMMERCE and its Related Entities would be irreparably
harmed by any actual or threatened violation of the promises in this Article IV, and therefore,
that, in addition to other remedies, COMMERCE and its Related Entities will be entitled to an
injunction prohibiting CONSULTANT from committing any such violations.



ARTICLE V — MISCELLANEOUS PROVISIONS




     A. Independent Contractor Status. CONSULTANT understands and agrees that it is an
independent contractor and is not an employee of COMMERCE and its Related Entities and shall not
become an employee of COMMERCE and its Related Entities by virtue of the performance of the
services called for under this Agreement. CONSULTANT shall not represent itself as an agent of
COMMERCE and its Related Entities and may not commit or obligate COMMERCE and its Related Entities
in any way to other parties, unless specifically authorized by COMMERCE and its Related Entities.



     B. Office Space. CONSULTANT understand and agrees that he will be expected to work on or at
the premises of COMMERCE and its Related Entities in providing the consulting services under this
Agreement. Accordingly, CONSULTANT shall be



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provided with an office and access to telephone, facsimile and internet services at COMMERCE.
CONSULTANT shall at its own expense acquire, operate, maintain and repair or replace any office and
equipment and supplies as maybe required for its performance of consulting services under this
Agreement, however COMMERCE shall at its own expense maintain and repair or replace any office and
equipment and supplies made available to CONSULTANT at COMMERCE or its Related Entities as maybe
required for CONSULTANT to perform services under this Agreement.




     C. Sub-Consultants and Other Contractors. In order to perform the consulting services under
this Agreement, CONSULTANT may from-time-to-time be required to engage the services of
sub-Consultants, vendors or other contractors. However, CONSULTANT is not authorized to engage the
services of such sub-Consultants, vendors or other contractors on behalf of COMMERCE and its
Related Entities, unless it has obtained written authorization from COMMERCE to do so in advance.
To the extent such advance authorization has been obtained, COMMERCE will pay for the services
provided by such sub-Consultants, vendors and/or other contractors.



     D. No Purchases. CONSULTANT shall not purchase materials or supplies for the accounts of
COMMERCE and its Related Entities, or otherwise hold itself out as being authorized to make
purchases for which COMMERCE and its Related Entities would be billed directly by the seller of the
materials or supplies, unless such purchase is authorized by COMMERCE in advance in writing.



     E. Compliance with Governmental Requirements. CONSULTANT will maintain in force and/or
secure all required licenses, permits, certificates and exemptions necessary for the performance of
its services under this Agreement, and at all times shall comply with all applicable federal, state
and local laws, regulations and orders.



     F. Indemnification. CONSULTANT shall be liable in any case of illness, injury or death, and
in any case of loss or damage to CONSULTANT’S property or equipment, either owned or rented and
operated by CONSULTANT, arising out of or related to performance of services under this Agreement,
regardless of whether caused or brought on by any director, officer, employee or agent of COMMERCE
and its Related Entities or on any other theory of legal liability and CONSULTANT shall release,
defend, protect, indemnify and hold harmless COMMERCE and its Related Entities from and against
loss, cost, claim, obligation to indemnify another, loss of service, loss of wages, suit, judgment,
award or damage, whether know or unknown, on account of such illness, injury or death, loss or
damage.



     CONSULTANT shall indemnify and hold COMMERCE and its related entities, and the directors,
officers, agents, representatives and employees of all such entities, harmless from and against any
and all liabilities, losses, damages, costs, expenses, causes of action, claims, suits, legal
proceedings and similar matters, including without limitation reasonable attorneys’ fees, resulting
from or arising out of the failure of CONSULTANT to comply with and perform fully the obligations
hereunder, or resulting from any act or omission on the part of CONSULTANT. If any cause of
action, claim, suit or other legal



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proceeding is brought against CONSULTANT in connection with any services rendered under this
Agreement, CONSULTANT shall promptly notify COMMERCE upon learning of any such proceeding.




     COMMERCE shall indemnify and hold CONSULTANT and his agents, representatives and heirs,
harmless from and against any and all liabilities, losses, damages, costs, expenses, causes of
action, claims, suits, legal proceedings and similar matters, including without limitation
reasonable attorneys’ fees, resulting from or arising out of the performance of any act
specifically requested or authorized by COMMERCE in connection with this Agreement. This promise
does not apply to any actions arising out of or in connection with the operation of any motor
vehicle by CONSULTANT or his employees or agents. If any cause of action, claim, suit or other
legal proceeding is brought against COMMERCE in connection with any services provided by CONSULTANT
under this Agreement, COMMERCE shall promptly notify CONSULTANT upon learning of any such
proceeding.



     G. Notices. Any and all notices and other communications hereunder shall have been deemed to
have been duly given when delivered personally or 48 hours after being mailed, certified or
registered mail, return receipt requested, postage prepaid, in the English language, to the
addresses set forth below the signatures of the parties hereto or to such other address as either
of the parties hereto may from time-to-time designate to the other party in writing.



     H. Waiver. No purported waiver by either party hereto of any provision of this Agreement or
of any breach thereof shall be deemed a waiver of such provision or breach unless such waiver is in
writing signed by the party making such waiver. No such waiver shall be deemed to be a subsequent
waiver of such provision or waiver of any subsequent breach of the same or any other provision
hereof.



     I. Severability. The provisions of this Agreement are severable, and if any part of it is
found to be unenforceable, the other paragraphs shall remain fully valid and enforceable.



     J. Assignment. CONSULTANT’S rights and obligations under this Agreement may not be assigned
without the prior written consent of COMMERCE.



     J. Arbitration. This Agreement is made and entered into in the State of California, and
shall in all respects be interpreted and governed by and under the laws of the State of California.
Any dispute regarding any aspect of this Agreement or any act which allegedly has or would violate
any provision of this Agreement or any law (hereinafter “Arbitrable Dispute”) shall be submitted to
arbitration in Orange County, California, before an experienced arbitrator licensed to practice law
in California and selected in accordance with the rules of the Judicial Arbitration and Mediation
Services, Inc. (“JAMS”), or such other service as the parties may agree upon, as the exclusive
remedy for any such claim or Arbitrable Dispute. The decision of the arbitrator shall be final,
conclusive and binding upon the parties. Should any party to this Agreement pursue any Arbitrable
Dispute by any



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method other than said arbitration, the responding party shall be entitled to recover from the
initiating party all damages, costs, expenses and attorneys’ fees incurred as a result of such
action. This section shall not restrict the right of COMMERCE to go to court seeking equitable
relief for a violation of Articles I (C) and IV of this Agreement.




     K. Sole and Entire Agreement. This Agreement sets for the entire agreement between the
parties hereto pertaining to the subject matter hereof, and fully supersedes any and all prior
agreements or understandings between the parties hereto, whether written or oral, pertaining to the
subject matter hereof. No change in, modification of, or addition, amendment or supplement to this
Agreement shall be valid unless set forth in writing and signed and dated by each of the parties
hereto subsequent to the execution of this Agreement.



	 	 	 
	 

	 	/s/ LAWRENCE CLAYTON, JR. 
	 

	 	 
	 

	 	LAWRENCE CLAYTON, JR.
	 

	 	600 Anton Boulevard, Suite 2000
	 

	 	Costa Mesa, California 92626
	 

	 	Fax: (714) 481-6567







	 	 	 
	 

	 	COMMERCE ENERGY GROUP, INC.
	 
	 	 
	 

	 	By: /s/ STEVEN S. BOSS
	 

	 	 
	 

	 	Steven S. Boss
	 

	 	Chief Executive Officer

	 

	 	600 Anton Boulevard, Suite 2000

	 

	 	Costa Mesa, California 92626

	 

	 	Fax: (714) 481-6567







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Exhibit A




CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT




     This Agreement is entered into as of this 1st day of August 2005, (the “Effective Date”) by
and between Commerce Energy Group, Inc., a Delaware corporation (“Commerce”) and The Financial
Advisory Group and its principal, Lawrence Clayton, Jr. (collectively, “Receiving Party”).



Recitals




     WHEREAS, Receiving Party will be performing consulting services (the “Engagement”) for
Commerce and any of its parents, direct or indirect subsidiaries, affiliates, divisions or related
entities (collectively, “Commerce and its Related Entities”);



     WHEREAS, Commerce wishes to release, and Receiving Party wishes to receive, certain
confidential and proprietary financial and other information for the purpose stated below; and



     WHEREAS, each party recognizes that there is a need to provide for the protection of the
Commerce Confidential Information (as defined below) from any unauthorized copying, use, and/or
disclosure and from Receiving Party refraining from performing certain acts as a result of
receiving such information;



Agreement




     NOW THEREFORE, in consideration for the mutual representations and covenants contained herein,
the parties hereby agree as follows:



     1. As used herein, the term “Commerce Confidential Information” shall mean information
relating to Commerce and its Related Entities’ past, present or future business activities,
including, but not limited to its financing plans and proposals, certain consulting and other
agreements, certain potential acquisition, disposition or restructuring transactions, projections,
budgets and cash flow analysis. Commerce Confidential Information also includes documents prepared
by Receiving Party which embody such Commerce Confidential Information. Commerce Confidential
Information shall not mean any such information:




	 	a.	 	that is or becomes publicly available without breach of this
Agreement;
	 
	 	b.	 	that is released for disclosure by Commerce with its written
consent;
	 
	 	c.	 	that was in Receiving Party’s possession, free of any
obligation for Receiving Party to hold it in confidence, when it was
communicated to Receiving Party;




 









 






	 	d.	 	that was developed by Advisors (hereinafter defined) of
Receiving Party independently of and without relevance to any information
communicated to Receiving Party by Commerce; and
	 
	 	e.	 	that was communicated in response to a valid order by a court
or other government body, is required to be disclosed by applicable law or was
necessary to establish the rights of either party under this Agreement.





     2. The sole purpose for which Commerce Confidential Information is to be provided is to allow
Receiving Party to provide services to Commerce and its Related Entities under the Engagement (the
“Stated Purpose”).



     3. Except as an authorized representative of Commerce may otherwise consent in writing,
Receiving Party shall hold in trust and confidence of Commerce all Commerce Confidential
Information, and Receiving Party shall not disclose to any third party, including without
limitation any company, person, entity or committee or use such information for any purpose other
than those listed above. In addition, Receiving Party acknowledges that the Commerce Confidential
Information constitutes material non-public information for purposes of federal and state
securities laws and that as long as such information remains Commerce Confidential Information,
Receiving Party is precluded from using such information in any manner other than for the Stated
Purpose.



     4. Commerce and Receiving Party agree that they will not disclose the terms and conditions,
and subject matter of this Agreement without the written consent of the other party; provided
however, that Receiving Party may disclose such terms to his Advisors consistent with the
provisions of Paragraph 5 herein.



     5. Notwithstanding anything to the contrary herein, Receiving Party shall disclose Commerce
Confidential Information to those of its employees, representatives and advisors (collectively
“Advisors”) who Receiving Party determines needs to know and then only on the condition that there
is an acknowledgement in writing to Receiving Party by each such Advisor that he shall be bound by
the terms and conditions of this Agreement.



     6. Receiving Party shall segregate Commerce Confidential Information at all times from the
confidential materials of others so as to prevent commingling.



     7. Receiving Party shall maintain adequate procedures to prevent improper disclosure of any
Commerce Confidential Information and to prevent loss of any Commerce Confidential Information. In
the event of any such loss or disclosure, Receiving Party shall notify Commerce immediately.



     8. Receiving Party shall return to Commerce all Commerce Confidential Information upon request
by Commerce. Any information which by virtue of its nature cannot be returned must be destroyed
and so certified by Receiving Party.



     9. All Commerce Confidential Information (including copies) shall remain the property of
Commerce party, and shall be returned to Commerce after Receiving Party’s



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need for it has expired, or upon request of Commerce, and in any event, upon completion or
termination of this Agreement, except that Receiving Party may, instead of returning, destroy
copies containing Receiving Party’s analysis or evaluation of Commerce Confidential Information.




     10. Receiving Party agrees that no failure or delay by Commerce in exercising any right under
this Agreement will operate as a waiver of Commerce’s rights under this Agreement nor will any
single exercise by Commerce of its rights or partial exercise of its rights prevent Commerce from
later exercising rights under this Agreement.



     11. Receiving Party specifically acknowledges that Commerce would be irreparably injured by
any breach of this Agreement and that Commerce shall be entitled to equitable relief, including
injunctive relief and orders for specific performance, in the event any breach of the provisions of
this Agreement should occur or threaten to occur. Injunctive and similar remedies shall not be
deemed to be the exclusive remedies for a breach of this Agreement, and a breaching party shall
remain liable for all other remedies available at law or in equity upon any breach of this
Agreement.



     12. Receiving Party understands that willingness to provide Commerce Confidential Information
does not commit Commerce to enter into any transaction or relationship with Receiving Party. If
such a relationship is formed, Receiving Party agrees that Commerce Confidential Information shall
be released to third parties only, if at all, in accordance with Commerce’s policies.



     13. This Agreement shall continue in full force and effect for so long as Commerce continues
to provide Commerce Confidential Information for the purpose of the Engagement. The obligations
under this Agreement will continue for a period of two (2) years after the termination of the
Engagement.



     14. This Agreement may only be modified in writing signed by both parties.



     15. This Agreement shall be governed by and construed in accordance with the laws of the State
of California and the United States of America, excluding that body of law relating to choice of
laws.



     16. This Agreement may be executed in one or more counterparts, each of which shall be deemed
an original and all of which together shall constitute one and the same instrument.



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     IN WITNESS WHEREOF, each of the parties has executed this Agreement as of the date first above
written.



	 	 	 
	 

	 	/s/ LAWRENCE CLAYTON, JR.
	 

	 	 
	 

	 	LAWRENCE CLAYTON, JR.







	 	 	 
	 

	 	COMMERCE ENERGY GROUP, INC.
	 
	 	 
	 

	 	By:
             
       
  /s/ STEVEN S. BOSS
	 

	 	 
	 

	 	Steven S. Boss
	 

	 	Chief Executive Officer







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