RELEASE AGREEMENT
Exhibit
10.19
This
Release Agreement is entered into this 16th day of April 2008 by and among
Commerce Energy, Inc., a California corporation (“Commerce”), Tenaska
Power Services Co., a Nebraska corporation (“Tenaska”) and
Wachovia Capital Finance Corporation (Western) (“Wachovia”) as agent
for the lenders party to that certain Loan and Security Agreement dated
June 8, 2006 as amended (the “Loan Agreement”) with
respect to the following facts:
A. Pursuant
to the Loan Agreement, Wachovia is providing various credit facilities to
Commerce secured by the personal property of Commerce;
B. Tenaska
is supplying energy to Commerce, and to secure its obligations and liabilities
to Tenaska in connection therewith, Commerce granted Tenaska a security interest
in certain personal property as described in the Security Agreement dated
August 1, 2005 as amended (the “Security Agreement”);
and
C. The
parties hereto now desire that pursuant to the Loan Agreement, Wachovia arrange
for the issuance by Wachovia Bank, National Association of a standby letter of
credit for the original face amount of $7,000,000 in favor of Tenaska (as
beneficiary) and in the form of Exhibit A attached
hereto and incorporated herein by reference (the “LC”), as well as
$3,000,000 collateral in the form of cash wired to Tenaska, both in substitution
of the collateral provided under the Security Agreement.
NOW
THEREFORE, Tenaska hereby agrees that one (1) business day after
receipt by Tenaska of the original LC signed by duly authorized representatives
of Wachovia Bank, National Association and cash and in consideration
thereof: (a) Tenaska shall be deemed to have released and
terminated and shall have released and terminated any and all of its security
interests in the assets and property of Commerce, including without limitation
the collateral provided under the Security Agreement; (b) Commerce and
Wachovia together with their agents shall be authorized to file UCC termination
statements for any and all UCC financing statements naming Commerce as debtor
and Tenaska as secured party, including without limitation those filed with the
California Secretary of State on July 15, 2005 as filing number
05-7034378774 and on August 5, 2005 as filing number 05-7036775585;
(c) one (1) business day after receipt by Tenaska of the original
LC signed by duly authorized representatives of Wachovia Bank, National
Association, Tenaska shall deliver to U.S. Bank National Association a written
instrument releasing and terminating any and all of its rights, remedies and
interests with respect to deposit account number [*] and post office lockbox
number 644010, Xxxxxxxxxx, Xxxx 00000-0000; and (d) Tenaska shall execute
and deliver such further documents and take such further action as may be
reasonably requested by Commerce or Wachovia to effectuate or evidence the
foregoing release and termination by Tenaska of its security interests in the
assets and property of Commerce.
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COMMERCE
ENERGY, INC.
By:
/s/ Xxxxxxx X.
Xxxxxxxx
Name:
Xxxxxxx X.
Xxxxxxxx
Title:
Asst
Treasurer
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TENASKA
POWER SERVICES CO.
By:
/s/ Xxxxx
Xxxxxx
Name:
Xxxxx
Xxxxxx
Title:
President
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WACHOVIA
CAPITAL FINANCE Corporation (WESTERN), as
agent
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|
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By:
/s/ Xxxxxx
Xxxxxx
Name:
Xxxxxx
Xxxxxx
Title:
Director
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[*] =
Information redacted pursuant to a confidential treatment
request. Such omitted information has been filed separately with the
Securities and Exchange Commission.
LEGAL_US_W # 59144342.1
- -
EXHIBIT
A
IRREVOCABLE
STANDBY LETTER OF CREDIT NUMBER
|
LETTER
OF CREDIT AMOUNT
|
ISSUE
DATE
|
EXPIRY
DATE
|
|
USD 7,000,000.00
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BENEFICIARY: APPLICANT:
TENASKA
POWER SERVICES
CO. COMMERCE
ENERGY, INC.
0000 X.
XXXXX XXXX., XXXXX
000 000
XXXXX XXXX., XXXXX 0000
XXXXXXXXX,
XX
00000 XXXXX XXXX, XX 00000
WE HEREBY
OPEN OUR IRREVOCABLE STANDBY LETTER OF CREDIT IN YOUR FAVOR FOR THE ACCOUNT OF
THE ABOVE REFERENCED APPLICANT IN THE AGGREGATE AMOUNT OF (SEVEN MILLION AND
00/100 U.S. DOLLARS) USD 7,000,000.00 WHICH IS AVAILABLE BY PAYMENT UPON
PRESENTATION OF THE FOLLOWING DOCUMENTS:
1. A
DRAFT AT SIGHT DRAWN ON WACHOVIA BANK, NATIONAL ASSOCIATION, DULY ENDORSED ON
ITS REVERSE SIDE THEREOF BY THE BENEFICIARY, AND BEARING THE CLAUSE, “DRAWN
UNDER WACHOVIA BANK, NATIONAL ASSOCIATION STANDBY LETTER OF CREDIT
NO. .”
2. THE
ORIGINAL LETTER OF CREDIT AND ANY AMENDMENTS ATTACHED THERETO. (IF
YOUR DEMAND DRAFT REPRESENTS A PARTIAL DRAWING HEREUNDER, WE WILL ENDORSE THE
ORIGINAL. IF, HOWEVER, YOUR DEMAND REPRESENTS A FULL DRAWING OR IF
SUCH DRAWING IS PRESENTED ON THE DAY OF THE RELEVANT EXPIRATION DATE HEREOF, WE
WILL HOLD THE ORIGINAL FOR OUR FILES AND REMOVE SAME FROM
CIRCULATION.)
3. A
DATED STATEMENT ISSUED ON THE LETTERHEAD OF THE BENEFICIARY AND PURPORTEDLY
SIGNED BY AN AUTHORIZED REPRESENTATIVE STATING: THE UNDERSIGNED
HEREBY REPRESENTS AND WARRANTS THAT THE AMOUNT OF THE ACCOMPANYING DRAFT
REPRESENTS AND COVERS CERTAIN UNPAID INVOICES OWED BY APPLICANT TO
BENEFICIARY. WE THEREFORE DEMAND PAYMENT IN THE AMOUNT OF (INSERT
AMOUNT) AS SAME IS DUE AND OWING.
4. COPY(IES)
OF INVOICE(S) MARKED “UNPAID”.
PARTIAL
DRAWINGS ARE PERMITTED.
IT IS A
CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE DEEMED AUTOMATICALLY
EXTENDED WITHOUT WRITTEN AMENDMENT FOR ONE YEAR PERIODS FROM THE PRESENT OR ANY
FUTURE EXPIRY DATE UNLESS AT LEAST SIXTY (60) DAYS PRIOR TO SUCH EXPIRATION
DATE, WE SEND THE BENEFICIARY NOTICE AT THE ABOVE STATED ADDRESS BY OVERNIGHT
COURIER THAT WE ELECT NOT TO EXTEND THIS LETTER OF CREDIT BEYOND THE INITIAL OR
ANY EXTENDED EXPIRY DATE THEREOF.
ALL BANK
CHARGES ARE FOR THE ACCOUNT OF THE APPLICANT.
THIS
IRREVOCABLE LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR
UNDERTAKING. THIS UNDERTAKING IS INDEPENDENT OF AND SHALL NOT IN ANY
WAY BE MODIFIED, AMENDED, AMPLIFIED, OR INCORPORATED BY REFERENCE TO ANY
DOCUMENT, CONTRACT, OR AGREEMENT REFERENCED HEREIN.
CONTINUED
ON NEXT PAGE WHICH FORMS AN INTEGRAL PART OF
THIS
LETTER OF CREDIT
LEGAL_US_W # 59144342.1
IRREVOCABLE
STANDBY LETTER OF CREDIT NO. PAGE NO. 2
WE HEREBY
AGREE WITH YOU THAT DRAFT(S) DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS AND
CONDITIONS OF THIS CREDIT SHALL BE DULY HONORED IF PRESENTED TOGETHER WITH
DOCUMENT(S) AS SPECIFIED AT OUR OFFICE LOCATED AT 000 XXXXXX XXXXXX, MAIL CODE
NC6034, XXXXXXX XXXXX, XX 00000, ATTENTION: STANDBY LETTERS OF CREDIT
ON OR BEFORE THE ABOVE STATED EXPIRY DATE, OR ANY EXTENDED EXPIRY DATE IF
APPLICABLE.
EXCEPT AS
OTHERWISE EXPRESSLY STATED HEREIN, THIS LETTER OF CREDIT IS SUBJECT TO THE
UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS, (2007 REVISION) THE
INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 600.
SINCERELY,
_________________________
AUTHORIZED
SIGNATURE
THE
ORIGINAL OF THIS LETTER OF CREDIT CONTAINS AN EMBOSSED SEAL OVER THE AUTHORIZED
SIGNATURE.
PLEASE
DIRECT ANY CORRESPONDENCE INCLUDING DRAWING OR INQUIRY QUOTING OUR REFERENCE
NUMBER TO:
WACHOVIA
BANK, NATIONAL ASSOCIATION
000
XXXXXX XXXXXX, MAIL CODE XX0000
XXXXXXX
XXXXX, XXXXX XXXXXXXX 00000
OUR
CUSTOMER CARE PHONE NUMBER FOR ANY QUERIES IS 000-000-0000
OUR FAX
NUMBER IS 000-000-0000
LEGAL_US_W # 59144342.1
