Texas REP Enters Supply/Credit Agreement with DTE Energy Trading

Texas retail provider Summer Energy, has entered into various supply and credit agreements with DTE Energy Trading, Inc.

Pursuant to the terms of an energy marketing agreement for electric power, Summer Energy agreed to purchase its electric power and associated services requirements from DTE, and DTE agreed to provide Summer Energy with certain credit facilities to assist Summer Energy in the purchase of its electric power and associated service requirements. Summer Energy also agreed to pay DTE a fixed monthly fee, as well as certain fees based on megawatt-hours purchased.

Summer Energy and DTE also entered into a Credit Agreement, a Security Agreement and a Membership Interest Pledge Agreement.

Pursuant to the Credit Agreement, among other things DTE agreed to (i) provide a guaranty to the Electric Reliability Council of Texas for the benefit of Summer Energy, and (ii) provide commodity loans for the purchase of electricity. Each Commodity Loan and any Credit Guaranty shall bear interest on the outstanding principal amount thereof, from the date such Commodity Loan or Credit Guaranty is issued until it becomes due or is revoked, respectively, at a rate per annum equal to the Prime Rate (as reported by the Wall Street Journal) plus two percent (2%).

Summer Energy covenanted not to, among other things, (a) merge or consolidate with any other person, (b) acquire all or substantially all of the capital stock or property of another person, (c) create, assume or suffer to exist any lien on any property now owned or hereafter acquired by Summer Energy except for permitted liens (as set forth in the Credit Agreement) or (d) become liable for any indebtedness (other than permitted indebtedness, as set forth in the Credit Agreement).

In consideration of the services and credit support provided by DTE to Summer Energy, and pursuant to the Security Agreement, Summer Energy is required to, among other things (i) grant a priority security interest to DTE in all of its assets, equipment and inventory; (ii) require its customers to remit monthly payments into a lockbox account over which DTE has a security interest; and (iii) deliver monthly and annual forecasted and audited statements to DTE.

Pursuant to the Membership Interest Pledge Agreement, parent Summer Energy Holdings, Inc. (SEH) pledged to DTE, and granted to DTE a security interest in all of the membership interests of Summer Energy, LLC owned by SEH, as well as all additional membership interests of Summer Energy, LLC from time to time acquired by SEH.

As part of the transaction, Summer Energy, DTE and BP Energy Company entered into a Novation Agreement, whereby Summer Energy transferred by novation, with an effective novation date of May 1, 2014, to DTE, and DTE accepted, the rights, liabilities, duties and obligations of Summer Energy under and in respect of each transaction entered into pursuant to that certain Master Power Purchase and Sale Agreement dated as of August 9, 2011 between BP Energy Company and Summer Energy, LLC,.