BLOCKED ACCOUNT CONTROL AGREEMENT (WITH LOCKBOX SERVICES)
Exhibit 10.64
BLOCKED ACCOUNT CONTROL AGREEMENT
(WITH LOCKBOX SERVICES)
(WITH LOCKBOX SERVICES)
Commerce Energy, Inc.
000 Xxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxx
000 Xxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxx
Ladies and Gentlemen:
Please be advised that pursuant to certain agreements between Commerce Energy, Inc.
(“Company”) and Tenaska Power Services Co. (“Lender”), Company will cause all checks, drafts and
other orders of payments made payable to Company to be mailed to XX Xxx 000000,Xxxxxxxxxx, Xxxx
00000-0000 (the “Lockbox”) maintained at U.S. Bank National Association (“Depository Bank”). All
payments mailed to the Lockbox shall be deposited to deposit account
number [*] (such
account, together with all substitutions and replacements therefore, the “Deposit Account”) located
at Depository Bank, and subject to the terms of the Deposit Agreements (defined below). The Lockbox
account and the Deposit Account shall each be styled “Tenaska Power Services Co. as Pledgee of
Commerce Energy, Inc.”.
1. Deposit Agreements. The terms and conditions of this Agreement are in addition to any deposit
account agreements and other related agreements that Company has with Depository Bank, including
without limitation all agreements concerning banking products and services, treasury management
documentation, account booklets containing the terms and conditions of the Deposit Account,
signature cards, fee schedules, disclosures, specification sheets and change of terms notices
(collectively, the “Deposit Agreements”). The provisions of this Agreement shall supersede the
provisions of the Deposit Agreements only to the extent the provisions herein are inconsistent with
the Deposit Agreements, and in all other respects, the Deposit Agreements shall remain in full
force and effect; provided, however, that any claim of inconsistency or potential inconsistency
between the Deposit Agreements and this Agreement shall be resolved in favor of having this
Agreement govern. All items received at the Lockbox shall be deposited into the Deposit Account,
and shall then be processed according to the provisions of the Deposit Agreements, as amended by
this Agreement.
2. Security Interest. Company has granted to Lender a security interest in, among other property,
the Lockbox, the Deposit Account and all credits or proceeds thereto and all monies, checks and
other instruments held or deposited therein (all of which shall be included in the definition of
the “Deposit Account”). Company and Depository Bank each represents and warrants that there are no
perfected liens or encumbrances with respect to the Deposit Account and covenants with Lender that
it shall not enter into any acknowledgment or agreement that gives any other person or entity
except Lender control over, or any other security interest, lien or title in, the Deposit Account.
3. Lender’s Rights. Until such time as Depository Bank shall have received notice from Lender in a
Timely Manner, funds on deposit from time to time in the Deposit Account shall
[*]=information
redacted pursuant to a confidential treatment request. Such omitted
information has been filed separately with the Securities and
Exchange Commission.
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be disbursed as
Company may direct. As used in this Agreement, “Timely Manner” means receipt of the relevant
notice, notice revocation or instruction at a time and in a manner affording Depository Bank a
reasonable opportunity to act thereon. Lender simultaneously shall provide Company with such
notice. After Depository Bank has received a notice, and until such time as Depository Bank has
received contrary notice from Lender in a Timely Manner that a default has been waived or has
ceased to exist: (i) Lender shall have immediate access to and control over the Deposit Account and
the items deposited therein; (ii) Company shall have no control whatsoever over items deposited
into the Deposit Account; (iii) Company irrevocably authorizes Depository Bank, without
investigation, to comply with any requests of Lender with regard to deposits in and withdrawals
from the Deposit Account, including, without limitation, directions of Lender to transfer the
balance of the Deposit Account to Lender pursuant to payment, transfer and withdrawal orders and
changes to such orders given from time to time by Lender’s officers (“Transfer Orders”) without the
consent of Company; (iv) Lender shall have exclusive dominion and control of the Deposit Account
and all items deposited therein, and Depository Bank shall not comply with any directions from
Company regarding the Deposit Account unless Lender gives its written consent thereto in advance;
(v) Depository Bank is authorized and directed to supply any necessary endorsement and to deposit
all monies and instruments received by Depository Bank for the account of
Company; and (vi) Company agrees it shall not make any attempt to access the Deposit Account or funds therein.
Company; and (vi) Company agrees it shall not make any attempt to access the Deposit Account or funds therein.
4. Returned Items and Fees. Company and Depository Bank acknowledge notice of and recognize
Lender’s continuing security interest in the Deposit Account and in all items deposited in the
Deposit Account and in the proceeds thereof. Depository Bank hereby disclaims any lien or security
interest in the Deposit Account and subordinates any statutory or contractual right or claim of
offset or lien resulting from any transaction which involves the Deposit Account. Notwithstanding
the foregoing, in the event any checks or other items which were deposited or credited to the
Deposit Account are returned, reversed, refunded or charged back for insufficient funds or for any
other reason (“Returned Items”), Depository Bank may charge the Deposit Account or other accounts
of Company maintained at Depository Bank. If there are insufficient funds in the Deposit Account or
any of Company’s other accounts to cover the Returned Items, Company agrees to immediately
reimburse Depository Bank for the amount of such shortfall. If Company fails to pay the amount
demanded by Depository Bank, Lender agrees to reimburse Depository Bank within three (3) business
days of demand thereof by Depository Bank for any Returned Items to the extent Lender received
payment in respect thereof pursuant to section 3. In the event that Depository Bank charges the
Deposit Account for Returned Items, or requires Lender to reimburse for Returned Items, Company
agrees to reimburse the Deposit Account within three (3) Business Days. Depository Bank shall
charge all fees and expenses (“Fees”) related to the Deposit Account to the Deposit Account.
5. Indemnity. Company agrees to defend, indemnify and hold Depository Bank and its directors,
officers, employees, attorneys, successors and assigns (collectively “Depository Bank”) harmless
from and against any and all claims, losses, liabilities, costs, damages and expenses, including,
without limitation, reasonable legal and accounting fees (collectively,
“Claims”), arising out of or in any way related to this Agreement, excepting only liability arising
out of Depository Bank’s gross negligence or willful misconduct. Without regard to Company’s
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indemnification obligations to Depository Bank, Lender agrees to: (i) reimburse Depository Bank for
any Returned Items (the proceeds of which were received by Lender) and (ii) defend, indemnify and
hold Depository Bank harmless from and against any and all Claims arising out of Depository Bank’s
compliance with Lender’s instructions. Lender’s obligations to Depository Bank hereunder shall in
no way operate to release Company from its obligations to Lender and shall not impair any rights or
remedies of Lender to collect any such amounts from Company. IN NO EVENT WILL DEPOSITORY BANK BE
LIABLE FOR ANY INDIRECT DAMAGES, LOST PROFITS, SPECIAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES WHICH
ARISE OUT OF OR IN CONNECTION WITH THE SERVICES CONTEMPLATED BY THIS AGREEMENT EVEN IF DEPOSITORY
BANK HAS BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGES.
6. Depository’s Bank’s Responsibility. The duties of Depository Bank are strictly limited to those
set forth in this Agreement and Depository Bank is not acting as a fiduciary for any party hereto.
Depository Bank shall be protected in relying on any form of instruction or other notice purporting
to be from Lender which Depository Bank, in good faith, believes to be genuine and what it purports
to be. Depository Bank shall have no duty to inquire as to the genuineness, validity, or
enforceability of any such instruction or notice even if Company notifies Depository Bank that
Lender is not legally entitled to originate any such instruction or notice. The Deposit Account and
all actions and undertakings by Depository Bank shall be subject to all rules and regulations
relating to the Deposit Account and to applicable law.
7. Termination. This Agreement shall not be terminable by Company so long as any obligations of
Company to Lender are outstanding and unpaid. This Agreement may be terminated by Depository Bank
upon thirty (30) days prior written notice to all parties; provided that no termination shall be
effective until thirty (30) days following the termination of all outstanding transactions between
Company and Lender and provided, further, that Depository Bank may terminate this Agreement
immediately in the event Lender fails to make payments to Depository Bank in accordance with
section 4 above. This Agreement may be terminated by Lender in a writing sent to Depository Bank in
which Lender releases Depository Bank from any further obligation to comply with instructions
originated by Lender with respect to the Deposit Account. Any available funds remaining in the
Deposit Account upon termination or deposited in thereafter shall be transferred in accordance with
the provisions of section 3 above after deduction for any amounts otherwise reimbursable to
Depository Bank as provided hereunder. Termination shall not affect the rights and obligations of
any party hereto with respect to any period prior to such termination.
8. Legal Process and Insolvency. In the event Depository Bank receives any form of legal process
concerning the Deposit Account, including, without limitation, court orders, levies, garnishments,
attachments, and writs of execution, or in the event Depository Bank learns of any insolvency
proceeding concerning Company, including, without limitation, bankruptcy, receivership, and
assignment for the benefit of creditors, Depository Bank will respond to such legal process or
knowledge of insolvency in the normal course or as required by law.
9. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of
the State of New York, without recourse to conflict of law or choice of law
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principles. The parties
agree that New York is the “bank’s jurisdiction” for purposes of the Uniform Commercial Code.
10. Notices. Except as otherwise provided in this Agreement, all notices and other communications
required under this Agreement shall be in writing and may be personally served or sent by United
States Mail or courier or by facsimile, and shall be deemed given when delivered in person or
received by facsimile or upon deposit in the United States Mail or with such courier at the address
specified below. Any party may change its address for notices hereunder by notice to all other
parties given in accordance with this section 10.
| Company: | Commerce Energy, Inc. | |||
| 000 Xxxxx Xxxx. | ||||
| Xxxxx 0000 | ||||
| Xxxxx Xxxx, Xxxxxxxxxx 00000 | ||||
| Attn: Xxx Xxxxxx | ||||
| Facsimile: (000) 000-0000 | ||||
| Telephone: (000) 000-0000 | ||||
| Lender: | Tenaska Power Services Co. | |||
| 0000 X. Xxxxx Xxxx., Xxxxx 000 | ||||
| Xxxxxxxxx, Xxxxx 00000 | ||||
| Attn: Xxxxx Xxxxxx, President | ||||
| Facsimile: (000) 000-0000 | ||||
| Telephone: (000) 000-0000 | ||||
| Depository Bank: | U.S. Bank National Association | |||
| 000 Xxxxxx Xxxxxx | ||||
| Xxxxxxxxxx, Xxxx 00000 | ||||
| Attn: Xxxxxxx Xxxxxxx, Vice President | ||||
| Facsimile: (000) 000-0000 | ||||
| Telephone: (000) 000-0000 |
11. Miscellaneous. This Agreement shall bind and benefit the parties and their respective
successors and assigns. This Agreement may be amended only with the prior written consent of all
parties hereto. None of the terms of this Agreement may be waived except as Depository Bank may
consent thereto in writing. No delay on the part of Depository Bank in exercising any right, power
or privilege hereunder shall operate as a waiver hereof, nor shall any single or partial exercise
of any right, power or privilege hereunder preclude other or further exercise thereof or the
exercise of any right, power or privilege. The rights and remedies specified herein are cumulative
and are not exclusive of any rights or remedies which Depository Bank would otherwise have.
12. Counterparts. This Agreement may be executed in any number of counterparts and by the different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one and the same
instrument.
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13. Jury Trial Waiver. COMPANY, LENDER AND DEPOSITORY BANK HEREBY WAIVE ALL RIGHTS TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING ARISING OUT OF, OR RELATING TO, THIS AGREEMENT OR SERVICES RENDERED IN
CONNECTION WITH THIS AGREEMENT.
Dated as of: August 1, 2005
| Commerce Energy, Inc. | ||||||
| By: | /s/ R. Xxxx Xxxxx | |||||
| Name: | R. Xxxx Xxxxx | |||||
| Title: | V.P. Risk Management | |||||
| Tenaska Power Services Co. | ||||||
| By: | /s/ Xxxxx Xxxxxx | |||||
| Name: | Xxxxx Xxxxxx | |||||
| Title: | President | |||||
| ACCEPTED: | U.S. BANK NATIONAL ASSOCIATION DEPOSITORY BANK | |||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||||
| Name: | Xxxxxxx X. Xxxxxxx | |||||
| Title: | Vice President | |||||
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