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  Exhibit 10.86    
    

 AMENDED AND RESTATED

COMMERCE ENERGY GROUP, INC.

2006 STOCK INCENTIVE PLAN  

 

 Stock Option Award Agreement

(for U.S. Employees)  

          

  

 Award No.            

        You (the "Participant") are hereby awarded the following stock option (the
"Option") to purchase Shares of Commerce Energy Group, Inc. (the "Company"), subject to the terms
and conditions set forth in this Stock Option Award Agreement (the "Award Agreement") and in the Amended and Restated Commerce Energy Group, Inc.
2006 Stock Incentive Plan (the "Plan"), which is attached hereto as Exhibit A. A summary of the
Plan appears in its Prospectus, which is attached as Exhibit B. You should carefully review these documents, and consult with your personal
financial advisor, before exercising this Option. 

        By
executing this Award Agreement, you agree to be bound by all of the Plan's terms and conditions as if they had been set out verbatim in this Award Agreement. In addition, you
recognize and agree that all determinations, interpretations, or other actions respecting the Plan and this Award Agreement will be made by the Board of Directors (the
"Board") of Commerce Energy Group, Inc. (the "Company") or any Committee appointed by the Board
to administer the Plan, and shall (in the absence of manifest bad faith or fraud) be final, conclusive and binding on all parties, including you and your heirs and representatives. Capitalized terms
are defined in the Plan or in this Award Agreement. 

        1.    Variable Terms.    This Option shall have, and be interpreted according to, the
following terms, subject to the provisions of the Plan in all instances: 

			
	Name of Participant:	 	John H. Bomgardner, II
	
Type of Stock Option:	
 	
o    Incentive Stock Option (ISO)(1)
	

 	
 	
ý    Non-Incentive Stock Option(2)
	
Number of Shares subject to Option:	
 	
50,000
	
Option Exercise Price per Share:	
 	
$1.17
	
Grant Date:	
 	
July 21, 2008
	
Reverse Vesting (per Plan Section):	
 	
o    Allowed in accordance with Section 6 of the Plan.
	

 	
 	
ý    Not allowed.

	(1)
	If
an ISO is awarded to a person owning more than 10% of the voting power of all classes of stock of the Company or of any Subsidiary, then the term of the
Option cannot exceed 5 years and the exercise price must be at least 110% of the Fair Market Value (100% for any other employee who is receiving ISO awards).

	(2)
	The
exercise price of a non-ISO must be at least 100% of the Fair Market Value. 

 

        2.    Vesting Schedule:    (Establishes the Participant's rights to exercise this Option with
respect to the Number of Shares stated above, subject to acceleration per Section 3 below and to any shareholder approval requirement set forth in the Plan.) 

					
	o	 	100% on Grant Date.
	
 o	
 	
    % on each of the first    (#) annual (     quarterly/     monthly) anniversary dates of the Participant's Continuous Service
after the Grant Date.
	Lifetime Transfer:	 	o	 	Allowed pursuant to Section 9 below only for Non-Incentive Stock Option.
	Expiration Date:	 	ý	 	6 years (1-9) after Grant Date; or
	 	 	o	 	10 years after Grant Date

        3.    Accelerated Vesting; Change in Corporate Control.    To the extent you have not
previously vested in your rights with respect to this Award, your Award will become– 

	o
	      %
vested if your Continuous Service ends due to your death or "disability" within
the meaning of Section 409A of the Code;

	o
	      %
vested if your Continuous Service ends due to your retirement at or after you
have attained the age of            and completed at least            full years of Continuous Service;

	o
	according
to the following schedule if your Continuous Service ends due to an Involuntary Termination that
occurs within the one year period following a Change in Control: 

					
	Date on which Your Involuntary Termination

Occurs (by reference to Date of Award)

 
	 	Portion of Your Award As to which Vesting Accelerates 	 
	Before 1st Anniversary	 	 	 	%
	Between 1st and 2nd Anniversary	 	 	 	%
	After 2nd Anniversary	 	 	 	%

        4.    Term of Option.    The term of the Option will expire at 5:00 p.m. (P.D.T. or
P.S.T., as applicable) on the Expiration Date. 

        5.    Manner of Exercise.    The Option shall be exercised in the manner set forth in the
Plan, using the exercise form attached hereto as Exhibit C. The amount of Shares for which the Option may be exercised is cumulative; that is, if
you fail to exercise the Option for all of the Shares vested under the Option during any period set forth above, then any Shares subject to the Option that are not exercised during such period may be
exercised during any subsequent period, until the expiration or termination of the Option pursuant to Sections 2 and 7 of this Award Agreement and the terms of the Plan. Fractional Shares may
not be purchased. 

        6.    Special ISO Provisions.    If designated as an ISO, this Option shall be treated as an
ISO to the extent allowable under Section 422 of the Code, and shall otherwise be treated as a Non-ISO. If you sell or otherwise dispose of Shares acquired upon the exercise of an
ISO within 1 year from the date such Shares were acquired or 2 years from the Grant Date, you agree to deliver a written report to the Company within 10 days following the sale or
other disposition of such Shares detailing the net proceeds of such sale or disposition. 

        7.    Termination of Continuous Service.    If your Continuous Service with the Company and/or
its Affiliates (the "Company Group") is terminated for any reason, this Option shall terminate on the date on which you cease to have any right to exercise the Option pursuant to the terms and
conditions set forth in Section 6 of the Plan. 

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        8.    Long-term Consideration for Award.    The Participant recognizes and agrees
that the Company's key consideration in granting this Award is securing the long-term commitment of the Participant to serve as a key employee who will advance and promote the business
interests and objectives of the Company Group. Accordingly, the Participant agrees that this Award shall be subject to the terms and conditions set forth in Section 25 of the Plan (relating to
the termination, rescission and recapture if you violate certain commitments made therein to the Company Group), as well as to the following terms and conditions as material and indivisible
consideration for this Award: 

        (a)    Fiduciary Duty.    During his or her employment with the Company Group the Participant shall devote his or her
full energies, abilities, attention and business time to the performance of his or her job responsibilities and shall not engage in any activity which conflicts or interferes with, or in any way
compromises, his or her performance of such responsibilities. 

        (b)    Confidential Information.    The Participant recognizes that by virtue of his or her employment with the
Company Group, he or she will be granted otherwise prohibited access to confidential information and
proprietary data which are not known, and not readily accessible to the competitors of the Company Group. This information (the "Confidential Information") includes, but is not limited to, current and
prospective customers; the identity of key contacts at such customers; customers' particularized preferences and needs; marketing strategies and plans; financial data; personnel data; compensation
data; proprietary procedures and processes; and other unique and specialized practices, programs and plans of the Company Group and their respective customers and prospective customers. The
Participant recognizes that this Confidential Information constitutes a valuable property of the Company Group, developed over a significant period of time and at substantial expense. Accordingly, the
Participant agrees that he or she shall not, at any time during or after his or her employment with the Company Group, divulge such Confidential Information or make use of it for his or her own
purposes or the purposes of any person or entity other than the Company Group. 

        (c)    Non-Solicitation of Customers.    The Participant recognizes that by virtue of his or her
employment with the Company Group he or she will be introduced to and involved in the solicitation and servicing of existing customers of the Company Group and new customers obtained by the Company
Group during his or her employment. The Participant understands and agrees that all efforts expended in soliciting and servicing such customers shall be for the permanent benefit of the Company Group.
The Participant further agrees that during his or her employment with the Company Group the Participant will not engage in any conduct which could in any way jeopardize or disturb any of the customer
relationships of the Company Group. The Participant also recognizes the legitimate interest of the Company Group in protecting, for a reasonable period of time after his or her employment with the
Company Group, the customers of the Company Group. Accordingly, the Participant agrees that, for a period beginning on the date hereof and ending twelve (12) months after termination of
Participant's employment with the Company Group, regardless of the reason for such termination, the Participant shall not, directly or indirectly, without the prior written consent of the Chief
Executive Officer of the Company, market, offer, sell or otherwise furnish any products or services substantially similar to those offered by the Company Group to any customer of the Company Group. 

        (d)    Non-Solicitation of Employees.    The Participant recognizes the substantial expenditure of time
and effort which the Company Group devotes to the recruitment, hiring, orientation, training and retention of its employees. Accordingly, the Participant agrees that, for a period beginning on the
date hereof and ending twenty four (24) months after termination of Participant's employment with the Company Group, regardless of the reason for such termination, the Participant shall not,
directly or indirectly, for himself or herself or on behalf of any other person or entity, solicit, offer employment to, hire or otherwise retain the services of any employee of the Company Group. For
purposes of the foregoing, "employee of the Company Group" shall include any person who was 

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an
employee of the Company Group at any time within six (6) months prior to the prohibited conduct. 

        (e)    Survival of Commitments; Potential Recapture of Award and Proceeds.    The Participant acknowledges and agrees
that the terms and conditions of this Section regarding confidentiality and non-solicitation shall survive both (i) the termination of Participant's employment with the Company
Group for any reason, and (ii) the termination of the Plan, for any reason. The Participant acknowledges and agrees that the grant of Options in this Award Agreement is just and
adequate consideration for the survival of the restrictions set forth herein, and that the Company Group may pursue any or all of the following remedies if the Participant either violates the terms of
this Section or succeeds for any reason in invalidating any part of it (it being understood that the invalidity of any term of this Section would result in a failure of consideration for the
Award): 

	(i)
	declaration
that the Award is null and void and of no further force or effect;

	(ii)
	recapture
of any cash paid or Shares issued to the Participant, or any designee or beneficiary of the Participant, pursuant to the Award; and

	(iii)
	recapture
of the proceeds, plus reasonable interest, with respect to any Shares that are both issued pursuant to this Award and sold or otherwise disposed
of by the Participant, or any designee or beneficiary of the Participant. 

The
remedies provided above are not intended to be exclusive, and the Company Group may seek such other remedies as are provided by law, including equitable relief. 

        (f)    Acknowledgement.    The Participant acknowledges and agrees that his or her adherence to the foregoing
requirements will not prevent him or her from engaging in his or her chosen occupation and earning a satisfactory livelihood following the termination of his or her employment with the Company
Group.] 

        9.    Designation of Beneficiary.    Notwithstanding anything to the contrary contained herein
or in the Plan, following the execution of this Award Agreement, you may expressly designate a beneficiary (the "Beneficiary") to your interest in the
Option awarded hereby. You shall designate the Beneficiary by completing and executing a designation of beneficiary agreement substantially in the form attached hereto as  Exhibit D (the
"Designation of Beneficiary") and delivering an executed copy of the Designation
of Beneficiary to the Company. 

        10.    Restrictions on Transfer.    This Award Agreement may not be sold, pledged, or
otherwise transferred without the prior written consent of the Committee. Notwithstanding the foregoing, the Participant may transfer this Option if allowed under Section 1 for a
Non-Incentive Stock Option (i) by instrument to an inter vivos or testamentary trust (or other entity) in which each beneficiary is a permissible gift recipient, as such is set
forth in subsection (ii) of this Section, or (ii) by gift to charitable
institutions or by gift or transfer for consideration to any of the following relatives of the Participant (or to an inter vivos trust, testamentary trust or other entity primarily for the benefit of
the following relatives of the Participant): any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, domestic partner, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, and shall include adoptive relationships. Any transferee of the Participant's rights shall succeed and be subject to all of the terms of this Award Agreement and
the Plan. 

        11.    Taxes.    By signing this Award Agreement, you acknowledge that you shall be solely
responsible for the satisfaction of any taxes that may arise (including taxes arising under Sections 409A or 4999 of the Code), and that neither the Company Group nor the Administrator shall
have any obligation whatsoever to pay such taxes. Notwithstanding anything to the contrary herein, upon exercise 

4

 

of
an Option, certificates for Shares shall not be delivered to you unless you have made arrangements satisfactory to the Committee to satisfy tax-withholding obligations. 

        12.    Notices.    Any notice or communication required or permitted by any provision of this
Award Agreement to be given to you shall be in writing and shall be delivered personally or sent by certified mail, return receipt requested, addressed to you at the last address that the Company had
for you on its records. Each party may, from time to time, by notice to the other party hereto, specify a new address for delivery of notices relating to this Award Agreement. Any such notice shall be
deemed to be given as of the date such notice is personally delivered or properly mailed. 

        13.    Binding Effect.    Except as otherwise provided in this Award Agreement or in the Plan,
every covenant, term and provision of this Award Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors,
transferees, and assigns. 

        14.    Modifications.    This Award Agreement may be modified or amended at any time, in
accordance with Section 15 of the Plan and provided that you must consent in writing to any modification that adversely alters or impairs any rights or obligations under this Award Agreement. 

        15.    Headings.    Section and other headings contained in this Award Agreement are for
reference purposes only and are not intended to describe, interpret, define or limit the scope or intent of this Award Agreement or any provision hereof. 

        16.    Severability.    Every provision of this Award Agreement and of the Plan is intended to
be severable. If any term hereof is illegal or invalid for any reason, such illegality or invalidity shall not affect the validity or legality of the remaining terms of this Award Agreement. 

        17.    Counterparts.    This Award Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. 

        18.    Plan Governs.    By signing this Award Agreement, you acknowledge that you have
received a copy of the Plan and that your Award Agreement is subject to all the provisions contained in the Plan, the provisions of which are made a part of this Award Agreement and your Award is
subject to all interpretations, amendments, rules and regulations which from time to time may be promulgated and adopted pursuant to the Plan. In the event of a conflict between the provisions of this
Award Agreement and those of the Plan, the provisions of the Plan shall control. 

        19.    Governing Law.    The laws of the State of Delaware shall govern the validity of this
Award Agreement, the construction of its terms, and the interpretation of the rights and duties of the parties hereto. 

        20.    Not a Contract of Employment.    By executing this Award Agreement you acknowledge and
agree that (i) any person who is terminated before full vesting of an award, such as the one granted to you by this Award Agreement, could claim that he or she was terminated to preclude
vesting; (ii) you promise never to make such a claim; (iii) nothing in this Award Agreement or the Plan confers on you any right to continue an employment, service or consulting
relationship with the Company Group, nor shall this Award Agreement or the Plan affect in any way your right or the right of the Company Group, as applicable, to terminate your employment, service, or
consulting relationship at any time, with or without Cause; and (iv) the Company would not have granted this Award to you but for these acknowledgements and agreements. 

        21.    Investment Purposes.    You acknowledge that you are receiving your Options for
investment purposes only and without any present intention of selling or distributing the Options or the Shares underlying such Options. 

5

 

        BY
YOUR SIGNATURE BELOW, along with the signature of the Company's representative, you and the Company agree that the Option is awarded under and governed by the terms and conditions of
this Award Agreement and the Plan. 

							
	 	 	 COMMERCE ENERGY GROUP, INC.	 	 
	

 	
 	
By:	
 	
/s/ Gregory L. Craig

  Name: Gregory L. Craig

Title: Chief Executive Officer	
 	

 
	

 	
 	
 PARTICIPANT	
 	

 
	

 	
 	
The undersigned Participant hereby accepts the terms of this Award Agreement and the Plan.	
 	

 
	

 	
 	
By:	
 	
/s/ John H. Bomgardner, II

 	
 	

 
	

 	
 	
Name of Participant: JOHN H. BOMGARDNER, II

	
 	

 

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 Exhibit A  

 AMENDED AND RESTATED

COMMERCE ENERGY GROUP, INC.

2006 STOCK INCENTIVE PLAN  

 

 Plan Document  

 

 Exhibit B  

 AMENDED AND RESTATED

COMMERCE ENERGY GROUP, INC.

2006 STOCK INCENTIVE PLAN  

 

 Plan Prospectus  

 

 Exhibit C  

 AMENDED AND RESTATED

COMMERCE ENERGY GROUP, INC.

2006 STOCK INCENTIVE PLAN  

 

 Form of Exercise of Stock Option Award Agreement  

 

			
	Attention:	 	Commerce Energy Group, Inc.

2006 Stock Incentive Plan Committee

600 Anton Boulevard

Costa Mesa, California 92626

Dear
Sir or Madam: 

        The
undersigned elects to exercise his/her Stock Option to purchase                  shares of Common Stock of Commerce Energy Group, Inc. (the "Company")
under and pursuant to a
Stock Option Award Agreement dated as
of                                    . 

        1.     o
Delivered herewith is a certified or bank cashier's or teller's check and/or shares of Common Stock held by the
undersigned for at least six months*, valued at the closing sale price of the stock on the business day prior to the date of exercise, as follows: 

						
	$	                	 	 	 	in cash or check
	 	 	 	 	 
	$	                	 	 	 	in the form of                shares of Common Stock, valued at $        per share
	 	 	 	 	 
	$	                	 	 Total	 	 
	 	 	 	 	 

        2.     o
Delivered herewith are irrevocable instructions to a broker approved by the Company to deliver promptly to the Company the
amount of sale or loan proceeds to pay the exercise price.** 

        If method 1 is chosen, the name or names to be on the stock certificate or certificates and the address and Social Security Number of such person(s) is as
follows: 

			
	Name:	 	

 

			
	
 Address:	
 	

 

			
	
 Social Security Number	
 	

 

			
	

 	
 	
Very truly yours,
	

  Date	
 	

  Optionee

	*
	The
Committee may waive the six months' requirement in its discretion.

	**
	The
Committee must approve this method in writing before your election 

 Exhibit D  

 AMEDED AND RESTATED

COMMERCE ENERGY GROUP, INC.

2006 STOCK INCENTIVE PLAN  

  

 Designation of Beneficiary  

 

        In
connection with Award Agreements between Commerce Energy Group, Inc. (the "Company")
and                                    , an individual residing
at                                    (the "Recipient"), the Recipient hereby designates the person specified below as the beneficiary of the Recipient's interest in
Awards as defined in the Amended and Restated Commerce Energy Group, Inc. 2006 Stock Incentive Plan (the "Plan"). This designation shall remain
in effect until revoked in writing by the Recipient. 

			
	Name of Beneficiary:	 	

 
	
 Address:	
 	

 
	
 Social Security No.:	
 	

 

        This
beneficiary designation relates to any and all of Recipient's rights under the following Award or Awards: 

	o
	any
Award that Recipient has received under the Plan.

	o
	the                                    Award
that Recipient received pursuant to an award agreement
dated                                    ,
        between Recipient and the Company. 

        The Recipient understands that this designation operates to entitle the above-named beneficiary to the rights conferred by an Award from the date this form is
delivered to the Company until such date as this designation is revoked in writing by the Recipient, including by delivery to the Company of a written designation of beneficiary executed by the
Recipient on a later date. 

					
	 	 	Date:	 	 
	

 	
 	
By:	
 	

  [Recipient Name]
	
 Sworn to before me this

    day of            , 200

  Notary Public

County of

State of

	
 	

 	
 	

 

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  Exhibit 10.87    
    

 
 

  INDEMNIFICATION AGREEMENT    
    

        This Indemnification Agreement (this "Agreement") is made and entered into as of
July 21, 2008, by and between Commerce Energy Group, Inc., a Delaware corporation (the "Corporation"), and John H. Bomgardner, II,
an individual ("Indemnitee"). 

Recitals

        A.    Indemnitee
performs valuable services to the Corporation in his capacity as an officer of the Corporation pursuant to an agreement between the Corporation and Indemnitee,
dated as of July 21, 2008 (the "Agreement"). 

        B.    The
Amended and Restated Certificate of Incorporation (the "Certificate") and the Second Amended and Restated Bylaws (the
"Bylaws") of the Corporation provide for the indemnification of the officers and directors of the Corporation as authorized by the Delaware General
Corporation Law, as amended (the "DGCL"). 

        C.    The
Certificate, the Bylaws and the DGCL, by their non-exclusive nature, permit contracts between the Corporation and its directors, officers, employees and
other agents with respect to indemnification of such persons. 

        D.    In
accordance with the authorization provided by the Certificate, the Bylaws and the DGCL, the Corporation is entitled to purchase a policy or policies of directors' and
officers' liability insurance covering certain liabilities which may be incurred by its directors and officers in the performance of their duties to the Corporation. 

        E.    As
a result of developments affecting the terms, scope and availability of such insurance, there exists general uncertainty as to the extent of protection afforded such
persons by such insurance and by statutory and bylaw indemnification provisions. 

        F.     In
order to induce Indemnitee to serve as an officer of the Corporation, the Corporation has determined and agreed to enter into this Agreement with Indemnitee. 

 Agreement  

        1.    Indemnity of Indemnitee.    The Corporation shall hold harmless, indemnify and advance expenses to Indemnitee as
provided in this Agreement and to the fullest extent authorized, permitted or required by the provisions of the Certificate, the Bylaws, the DGCL and the Employment Agreement, as the same may be
amended from time to time (but only to the extent that such amendment permits the Corporation to provide broader indemnification rights than were permitted by the Certificate, the Bylaws, the DGCL or
the Employment Agreement prior to adoption of such amendment); provided, however, that the Corporation shall not be required to indemnify Indemnitee in
connection with any proceeding (or part thereof) initiated by Indemnitee, or any proceeding by Indemnitee against the Corporation or its directors, officers, employees or other agents, unless
(a) such indemnification is expressly required to be made by law, (b) the proceeding was authorized by the Board of Directors of the Corporation, (c) such indemnification is
provided by the Corporation, in its sole discretion, pursuant to the powers vested in the Corporation under the DGCL, or (d) the proceeding is initiated with respect to a proceeding to enforce
rights to indemnification pursuant to Section 8 hereof. The rights of Indemnitee provided under the preceding sentence shall include, but shall
not be limited to, the rights set forth in the other sections of this Agreement. 

        2.    Additional Indemnity.    In addition to and not in limitation of the indemnification otherwise provided for
herein, and subject only to the exclusions set forth in Section 3 hereof, the Corporation hereby further agrees to hold harmless and indemnify
Indemnitee: 

        (a)   Against
all damages, costs, liabilities, losses, expenses (including attorney's fees), judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement
actually and 

reasonably
incurred or suffered by Indemnitee in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, to which he
is a party or a witness, by reason of the fact that Indemnitee is or was a director, officer, employee or other agent of the Corporation or any subsidiary thereof or is or was serving at the request
of the Corporation as a director, officer, employee or other agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with
respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or
agent or in any other capacity while serving as a director, officer, employee or agent; and 

        (b)   Otherwise
to the fullest extent as may be provided to Indemnitee by the Corporation under the non-exclusivity provisions of the DGCL. 

        3.    Limitations on Additional Indemnity.    No indemnity pursuant to  Section 2 hereof shall be paid by the Corporation:

        (a)   On
account of any claim against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Corporation pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory law; 

        (b)   On
account of Indemnitee's conduct that was knowingly fraudulent or deliberately dishonest, or that constituted willful misconduct; 

        (c)   On
account of, or attributable to, Indemnitee's conduct that constituted a breach of Indemnitee's duty of loyalty to the Corporation; 

        (d)   For
which full payment has actually been made to Indemnitee under a valid and collectible insurance policy or under a valid and enforceable indemnity clause, bylaw or
agreement, except in respect of any excess beyond payment under such insurance, clause, bylaw or agreement; 

        (e)   The
payment of which by the Corporation under this Agreement is not permitted by applicable law; 

        (f)    If
indemnification is not lawful (and, in this respect, both the Corporation and Indemnitee have been advised that the Securities and Exchange Commission believes that
indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication) or is prohibited by any applicable state securities laws with respect to any violation of applicable federal or state securities laws; or 

        (g)   In
connection with any proceeding (or part thereof) initiated by Indemnitee, or any proceeding by Indemnitee against the Corporation or its directors, officers,
employees or other agents, unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the Corporation,
(iii) such indemnification is provided by the Corporation, in its sole discretion, pursuant to the powers vested in the Corporation under the DGCL, or (iv) the proceeding is initiated
pursuant to Section 8 hereof. 

        4.    Continuation of Indemnity.    All agreements and obligations of the Corporation contained herein shall continue
during the period Indemnitee is a director, officer, employee or other agent of the Corporation or any subsidiary thereof (or is or was serving at the request of the Corporation as a director,
officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise) and shall continue thereafter so long as Indemnitee shall be
subject to any possible claim or threatened, pending or completed action, suit or proceeding, whether civil, criminal, arbitrative, administrative or investigative, by reason of the fact that
Indemnitee was (i) a director, officer, employee or other agent of the Corporation or any subsidiary thereof or (ii) serving in any other capacity referred to herein, and shall inure to
the benefit of Indemnitee's heirs, executors and administrators. 

        5.    Partial Indemnification.    Indemnitee shall be entitled under this Agreement to indemnification by the
Corporation for a portion of the expenses (including attorneys' fees), witness fees, damages, judgments, fines and amounts paid in settlement and any other amounts that Indemnitee becomes legally
obligated to pay in connection with any action, suit or proceeding referred to in Section 2 hereof even if not entitled hereunder to
indemnification for the total amount thereof, and the Corporation shall indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. 

        6.    Notification and Defense of Claim.    Not later than thirty (30) days after receipt by Indemnitee of
notice of the commencement of any action, suit or proceeding, Indemnitee will, if a claim in respect thereto is to be made against the Corporation under this Agreement, notify the Corporation of the
commencement thereof, but the omission to so notify the Corporation will not relieve it from any liability which it may have to Indemnitee otherwise than under this Agreement. With respect to any such
action, suit or proceeding as to which Indemnitee notifies the Corporation of the commencement thereof: 

        (a)   The
Corporation will be entitled to participate therein at its own expense; 

        (b)   Except
as otherwise provided below, the Corporation may, at its option and jointly with any other indemnifying party similarly notified and electing to assume such
defense, assume the defense thereof, with counsel reasonably satisfactory to Indemnitee. After notice from the Corporation to Indemnitee of its election to assume the defense thereof, the Corporation
will not be liable to Indemnitee under this Agreement for any legal or other expenses subsequently incurred by Indemnitee in connection with the defense thereof, except for reasonable costs of
investigation or otherwise as provided below. 

        (c)   Indemnitee
shall have the right to employ separate counsel in such action, suit or proceeding, but the fees and expenses of such counsel incurred after notice from the
Corporation of its assumption of the defense thereof shall be at the expense of Indemnitee unless (i) the employment of counsel by Indemnitee has been authorized by the Corporation,
(ii) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Corporation and Indemnitee in the conduct of the defense of such action, or (iii) the
Corporation shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of Indemnitee's separate counsel shall be at the expense of the
Corporation. The Corporation shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the Corporation or as to which Indemnitee shall have made the
conclusion provided for in (ii) above; and 

        (d)   The
Corporation shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any action or claim effected without its written
consent, which shall not be unreasonably withheld. The Corporation shall be permitted to settle any action, except that it shall not settle any action or claim in any manner which would impose any
penalty or limitation on Indemnitee without Indemnitee's written consent, which may be given or withheld in Indemnitee's sole discretion. 

        7.    Expenses.    The Corporation shall pay the expenses incurred by Indemnitee in defending any proceeding in
advance of its final disposition, provided that, to the extent required by the DGCL, the payment of expenses in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking by Indemnitee to repay all amounts advanced if it should be ultimately determined by final judicial decision from which there is no further
right to appeal that Indemnitee is not entitled to be indemnified under this Agreement or otherwise. 

        8.    Enforcement.    Any right to indemnification or advances granted by this Agreement to Indemnitee shall be
enforceable by or on behalf of Indemnitee only in the Chancery Court of the State of Delaware or any court of competent jurisdiction in the State of California if (a) the claim for
indemnification or advances is denied, in whole or in part, or (b) no disposition of such claim is made within sixty (60) days of request therefor. Indemnitee, in such enforcement
action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting his claim. It shall be a defense to 

any
action for which a claim for indemnification is made under Section 2 hereof (other than an action brought to enforce a claim for advancement of expenses pursuant to Section 7 hereof,
provided that the required undertaking has been tendered to the Corporation) that Indemnitee is not entitled to indemnification because of the limitations set forth in Section 3 hereof, but the
burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors or its shareholders) to have made a determination prior to the
commencement of such enforcement action that indemnification of Indemnitee is proper in the circumstances, nor an actual determination by the Corporation (including its Board of Directors or its
shareholders) that such indemnification is improper, shall be a defense to the action or create a presumption that Indemnitee is not entitled to indemnification under this Agreement or otherwise. 

        9.    Subrogation.    In the event of payment under this Agreement, the Corporation shall be subrogated to the extent
of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Corporation
effectively to bring suit to enforce such rights. 

        10.    Non Exclusivity of Rights.    The rights conferred on Indemnitee by this Agreement shall not be exclusive of
any other right which Indemnitee may have or hereafter acquire under any statute, provision of the Certificate, the Bylaws, agreement, vote of shareholders or directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding office. 

        11.    Survival of Rights.    

	(a)
	The
rights conferred on Indemnitee by this Agreement shall continue after Indemnitee has ceased to be a director, officer, employee or other agent of the
Corporation or to serve at the request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, join venture, trust, employee benefit plan or other
enterprise and shall inure to the benefit of Indemnitee's heirs, executors and administrators.

	(b)
	The
Corporation shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Corporation, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such
succession had taken place. 

        12.    Severability.    Each of the provisions of this Agreement is a separate and distinct agreement and independent
of the others, so that if any provision hereof shall be held to be invalid for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of the other provisions
hereof. Furthermore, if this Agreement shall be invalidated in its entirety on any ground, then the Corporation shall nevertheless indemnify Indemnitee to the fullest extent provided by the
Certificate, the Bylaws, the DGCL or any other applicable law. 

        13.    Jurisdiction.    The Corporation and Indemnitee each hereby agree that any action instituted under this
Agreement may be brought in the Chancery Courts of the State of Delaware or any court of competent jurisdiction within the State of California. 

        14.    Governing Law.    This Agreement shall be interpreted and enforced in accordance with the laws of the State of
Delaware. 

        15.    Amendment and Termination.    No amendment, modification, termination or cancellation of this Agreement shall
be effective unless in writing signed by both parties hereto. 

        16.    Identical Counterparts.    This Agreement may be executed in counterparts, each of which shall for all purposes
be deemed to be an original but both of which together shall constitute but one and the same Agreement. Only one such counterpart need be produced to evidence the existence of this Agreement. 

        17.    Headings.    The headings of the sections of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction hereof. 

        18.    Notices.    All notices, requests, demands and other communications hereunder shall be in writing and shall be
deemed to have been duly given (a) upon delivery if delivered by hand to the party to whom
such notice or other communication shall have been directed, or (ii) if mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so
mailed: 

        (a)   If
to Indemnitee, to: 

John
H. Bomgardner, II 

        (b)   If
to the Corporation, to: 

Commerce
Energy Group, Inc.

600 Anton Boulevard, Suite 2000

Costa Mesa, CA 92626

Attn: Chief Executive Officer 

or
to such other address(es) as may have been furnished to/by Indemnitee to/by the Corporation. 

        IN
WITNESS WHEREOF, the parties hereto have duly executed this Indemnification Agreement as of the day and year first above written. 

			
	 "Indemnitee"
	 	/s/ John H. Bomgardner, II

  John H. Bomgardner, II
	 "Corporation"
	 	 COMMERCE ENERGY GROUP, INC.,

a Delaware Corporation

 

							
	 	 	By:	 	/s/ Gregory L. Craig

 
	 	 	 	 	Name:	 	Gregory L. Craig
	 	 	 	 	Title:	 	Chief Executive Officer

QuickLinks

Exhibit 10.87

INDEMNIFICATION AGREEMENT

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