FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
Exhibit 99.1
FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of
August 1, 2007, is entered into among COMMERCE ENERGY, INC., a California corporation
(“Borrower”), COMMERCE ENERGY GROUP, INC., a Delaware corporation (“Parent”) and
WACHOVIA CAPITAL FINANCE CORPORATION (WESTERN), a California corporation, as Agent and Lender
(“Agent”).
RECITALS
A. Borrower, Parent and Agent have previously entered into that certain Loan and Security
Agreement dated June 8, 2006 (the “Loan Agreement”) as amended by the First Amendment to
Loan and Security Agreement and Waiver dated September 20, 2006 (the “First Amendment”),
the Second Amendment to Loan and Security Agreement and Waiver dated October 26, 2006 (the
“Second Amendment”), the Third Amendment to Loan and Security Agreement and Waiver dated
March 15, 2007 (the “Third Amendment”) and the Fourth Amendment to Loan and Security
Agreement dated June 2007 (the “Fourth Amendment”), pursuant to which Agent and the other
Lender party thereto, have made certain loans and financial accommodations available to Borrower.
Terms used herein without definition shall have the meanings ascribed to them in the Loan
Agreement.
B. Borrower has requested that Agent amend the Loan Agreement on the terms and conditions set
forth herein.
C. Borrower and Parent are entering into this Amendment with the understanding and agreement
that, except as specifically provided herein, none of Agent’s and the other Lender’s rights or
remedies as set forth in the Loan Agreement is being waived or modified by the terms of this
Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Amendment to Loan Agreement. Section 9.17.1 of the Loan Agreement is hereby
amended and restated to read in its entirety as follows:
“9.17.1 Excess Availability. Borrowers shall, on each of the dates
and at all times during each of the periods set forth below, maintain Excess
Availability of not less than the amount set forth opposite such date or
period (as applicable):
| Dates/Periods | Amounts | |||
August 1, 2007 through August 30, 2007 and September 1, 2007
through September 29, 2007 |
$ | 2,500,000 | ||
August 31, 2007 and September 30, 2007 |
$ | 5,000,000 | ||
On and after October 1, 2007 |
$ | 10,000,000” | ||
2. Effectiveness of this Amendment. The effectiveness of this Amendment, and the
waivers provided herein, are conditioned upon the occurrence of each of the following:
(a) Amendment. Agent shall have received this Amendment, fully executed in a
sufficient number of counterparts for distribution to all parties.
(b) Representations and Warranties. The representations and warranties set forth
herein and in the Loan Agreement shall be true and correct.
(c) Other Required Documentation. All other documents and legal matters in connection
with the transactions contemplated by this Amendment shall have been delivered or executed or
recorded and shall be in form and substance satisfactory to Agent.
3. Representations and Warranties. Each of Borrower and Parent represents and
warrants as follows:
(a) Authority. Such party has the requisite corporate power and authority to execute
and deliver this Amendment, and to perform its obligations hereunder and under the Financing
Agreements (as amended or modified hereby) to which it is a party. The execution, delivery and
performance by such party of this Amendment have been duly approved by all necessary corporate
action and no other corporate proceedings are necessary to consummate such transactions.
(b) Enforceability. This Amendment has been duly executed and delivered such party.
This Amendment and each Financing Agreement (as amended or modified hereby) is the legal, valid and
binding obligation of such party, enforceable against such party in accordance with its terms, and
is in full force and effect.
(c) Representations and Warranties. The representations and warranties contained in
each Financing Agreement (other than any such representations or warranties that, by their terms,
are specifically made as of a date other than the date hereof) are correct on and as of the date
hereof as though made on and as of the date hereof.
(d) Due Execution. The execution, delivery and performance of this Amendment are
within the power of such party, have been duly authorized by all necessary corporate action, have
received all necessary governmental approval, if any, and do not contravene any law or any material
contractual restrictions binding on such party.
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(e) No Default. No event has occurred and is continuing that constitutes a Default or
Event of Default.
4. Governing Law. The validity, interpretation and enforcement of this Amendment and
any dispute arising out of the relationship between the parties hereto, whether in contract, tort,
equity or otherwise, shall be governed by the internal laws of the State of California but
excluding any principles of conflicts of law or other rule of law that would cause the application
of the law of any jurisdiction other than the laws of the State of California.
5. Counterparts. This Amendment may be executed in any number of counterparts, each
of which shall be an original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Amendment by telefacsimile or other
electronic method of transmission shall have the same force and effect as the delivery of an
original executed counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile or other electronic method of transmission shall also deliver an
original executed counterpart, but the failure to do so shall not affect the validity,
enforceability or binding effect of this Amendment.
6. Reference to and Effect on the Financing Agreements.
(a) Upon and after the effectiveness of this Amendment, each reference in the Loan Agreement
to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Loan Agreement,
and each reference in the other Financing Agreements to “the Loan Agreement”, “thereof” or words of
like import referring to the Loan Agreement, shall mean and be a reference to the Loan Agreement as
modified and amended hereby.
(b) Except as specifically amended above, the Loan Agreement and all other Financing
Agreements, are and shall continue to be in full force and effect and are hereby in all respects
ratified and confirmed and shall constitute the legal, valid, binding and enforceable obligations
of Borrower or Parent (as applicable) to Agent and the other Lender.
(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of Agent or the other Lender
under any of the Financing Agreements, nor constitute a waiver of any provision of any of the
Financing Agreements.
(d) To the extent that any terms and conditions in any of the Financing Agreements shall
contradict or be in conflict with any terms or conditions of the Loan Agreement, after giving
effect to this Amendment, such terms and conditions are hereby deemed modified or amended
accordingly to reflect the terms and conditions of the Loan Agreement as modified or amended
hereby.
7. Estoppel. To induce Agent to enter into this Amendment and to continue to make
advances to Borrower under the Loan Agreement, Borrower hereby acknowledges and agrees that, as of
the date hereof, there exists no right of offset, defense, counterclaim or objection in favor of
Borrower as against Agent or the other Lender with respect to the Obligations.
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8. Integration. This Amendment, together with the other Financing Agreements,
incorporates all negotiations of the parties hereto with respect to the subject matter hereof and
is the final expression and agreement of the parties hereto with respect to the subject matter
hereof.
9. Severability. In case any provision in this Amendment shall be invalid, illegal or
unenforceable, such provision shall be severable from the remainder of this Amendment and the
validity, legality and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
10. Submission of Amendment. The submission of this Amendment to the parties or their
agents or attorneys for review or signature does not constitute a commitment by Agent to waive any
of its rights and remedies under the Financing Agreements, and this Amendment shall have no binding
force or effect until all of the conditions to the effectiveness of this Amendment have been
satisfied as set forth herein.
IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above
written.
| COMMERCE ENERGY, INC., a California corporation |
||||
| By: | /s/ XXXXXXX X. XXXXXXXX | |||
| Name: | Xxxxxxx X. Xxxxxxxx | |||
| Title: | Assistant Treasurer & Assistant Secretary | |||
| COMMERCE ENERGY GROUP, INC., a Delaware corporation |
||||
| By: | /s/ XXXXXXX X. XXXXXXXX | |||
| Name: | Xxxxxxx X. Xxxxxxxx | |||
| Title: | Vice President, Finance & Accounting, Treasurer & Controller | |||
| WACHOVIA CAPITAL FINANCE CORPORATION (WESTERN), a California corporation, as Agent and Lender |
||||
| By: | /s/ XXXXXX XXXXXX | |||
| Name: | Xxxxxx Xxxxxx | |||
| Title: | Director | |||
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