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EXHIBIT 10.73
(LOCKBOX - WITH ACTIVATION)
DEPOSIT ACCOUNT CONTROL AGREEMENT
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This Agreement is entered into as of June 23, 2004, among
Host
America Corporation, Lindley Food Service Corporation and
GlobalNet
Energy Investors, Inc. (each of the foregoing entities,
collectively,
"Company"), Laurus Master Fund, Ltd. ("Lender"), and Fleet
National Bank
("Bank") with respect to the following:
A. Bank has established and maintains for Company the
following post office numbers (the "Lockbox Addresses")
and deposit account numbers (the "Accounts"):
PO Box 33342 Host America Corporation
account #9485371811
PO Box 33344 Lindley Food Service
account #9485371926
PO Box 33345 Globalnet Energy Investors
account #9485371950
B. Bank performs the services described in Exhibit A, which
includes receiving mail at the Lockbox Address, processing
it and depositing all checks and other payment
instructions ("Checks") into the Accounts (the "Lockbox
Service").
C. Company has assigned to Lender a security interest in the
Accounts and in Checks mailed to the Lockbox Address.
D. Company, Lender and Bank are entering into this Agreement
to evidence Lender's security interest in the Accounts and
such Checks and to provide for the disposition of net
proceeds of Checks deposited in the Accounts.
Accordingly, Company, Lender and Bank agree as follows:
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1. (a) This Agreement evidences Lender's control over the
Accounts.
Notwithstanding anything to the contrary in the agreement
between Bank
and Company governing the Accounts, Bank will comply with
instructions
originated by Lender as set forth herein directing the
disposition of
funds in the Accounts without further consent of the
Company.
(b) Company represents and warrants to Lender and Bank that it
has
not assigned or granted a security interest in the Accounts or
any Check
deposited in the Accounts, except to Lender.
(c) Company will not permit the Accounts to become subject to
any
other pledge, assignment, lien, charge or encumbrance of any
kind, other
than Lender's security interest referred to herein.
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2. During the Activation Period (as defined below), Bank shall
prevent
Company from making any withdrawals from the Accounts. Prior to
the
Activation Period, Company may operate and transact business
through the
Accounts in its normal fashion, including making withdrawals
from the
Accounts, but covenants to Lender it will not close the
Accounts.
Furthermore, Bank agrees that it (i) shall not permit Company to
close
the Accounts without written approval from Lender and (ii) will
perform
the services described in Exhibit A, which includes receiving
mail at the
Lockbox Address, processing it and depositing all Checks into
the
Accounts, unless Lender consents to the contrary in writing.
A
reasonable period of time following the commencement of the
Activation
Period, and continuing on each Business Day thereafter, Bank
shall
transfer all available balances in the Accounts to Lender at its
account
specified in the Notice (as defined below). The "Activation
Period"
means the period which commences within a reasonable period of
time not
to exceed two Business Days after Bank's receipt of a written
notice from
Lender in the form of Exhibit B (the "Notice"). A "Business Day"
is each
day except Saturdays, Sundays and Bank holidays. Funds are not
available
if, in the reasonable determination of Bank, they are subject to
a hold,
dispute or legal process preventing their withdrawal.
3. Bank agrees it shall not offset, charge, deduct or
otherwise
withdraw funds from the Accounts, except as permitted by Section
4, until
it has been advised in writing by Lender that all of
Company's
obligations that are secured by the Checks and the Accounts are
paid in
full. Lender shall notify Bank promptly in writing upon payment
in full
of Company's obligations.
4. Bank is permitted to charge the Accounts:
(a) for its fees and charges relating to the Accounts or
associated with the Lockbox Service and this Agreement; and
(b) in the event any Check deposited into the Accounts is
returned unpaid for any reason or for any breach of warranty
claim.
5. (a) If the balances in the Accounts are not sufficient to
compensate Bank for any fees or charges due Bank in connection
with the
Accounts, the Lockbox Service or this Agreement, Company agrees
to pay
Bank on demand the amount due Bank. Company will have breached
this
Agreement if it has not paid Bank, within five days after such
demand,
the amount due Bank.
(b) If the balances in the Accounts are not sufficient to
compensate Bank for any returned Check, Company agrees to pay
Bank on
demand the amount due Bank. If Company fails to so pay Bank
immediately
upon demand, Lender agrees to pay Bank within five days after
Bank's
demand to Lender to pay any amount received by Lender with
respect to
such returned Check. The failure to so pay Bank shall constitute
a
breach of this Agreement.
(c) Company hereby authorizes Bank, without prior notice,
from
time to time to debit any other account Company may have with
Bank for
the amount or amounts due Bank under subsection 5(a) or
5(b).
6. (a) Each Business Day, Bank will send any Checks not
processed
in accordance with the Lockbox Service set-up documents as well
as any
other materials, such as
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invoices, received at the Lockbox Address plus information
regarding the
deposit for the day to the address specified below for Company
or as
otherwise specified in writing by Company to Bank, and will send
a copy
of the deposit advice to the address specified below for
Lender.
(b) In addition to the original Bank statement provided to
Company, Bank will provide Lender with a duplicate of such
statement.
7. (a) Bank will not be liable to Company or Lender for any
expense, claim, loss, damage or cost ("Damages") arising out of
or
relating to its performance under this Agreement other than
those Damages
which result directly from its acts or omissions constituting
negligence
or intentional misconduct.
(b) In no event will Bank be liable for any special,
indirect,
exemplary or consequential damages, including but not limited to
lost
profits.
(c) Bank will be excused from failing to act or delay in
acting, and no such failure or delay shall constitute a breach
of this
Agreement or otherwise give rise to any liability of Bank, if
(i) such
failure or delay is caused by circumstances beyond Bank's
reasonable
control, including but not limited to legal constraint,
emergency
conditions, action or inaction of governmental, civil or
military
authority, fire, strike, lockout or other labor dispute, war,
riot,
theft, flood, earthquake or other natural disaster, breakdown of
public
or private or common carrier communications or transmission
facilities,
equipment failure, or negligence or default of Company or Lender
or (ii)
such failure or delay resulted from Bank's reasonable belief
that the
action would have violated any guideline, rule or regulation of
any
governmental authority.
(d) Bank shall have no duty to inquire or determine whether
Company's obligations to Lender are in default or whether Lender
is
entitled to provide the Notice to Bank. Bank may rely on notices
and
communications it believes in good faith to be genuine and given
by the
appropriate party.
(e) Notwithstanding any of the other provisions in this
Agreement, in the event of the commencement of a case pursuant
to Title
11, United States Code, filed by or against Company, or in the
event of
the commencement of any similar case under then applicable
federal or
state law providing for the relief of debtors or the protection
of
creditors by or against Company, Bank may act as Bank deems
necessary to
comply with all applicable provisions of governing statutes and
shall not
be in violation of this Agreement as a result.
(f) Bank shall be permitted to comply with any writ, levy
order or other similar judicial or regulatory order or process
concerning
the Lockbox Address, the Accounts or any Check and shall not be
in
violation of this Agreement for
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