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 Agreeme
