EXHIBIT 10.70
RESTRICTED ACCOUNT AGREEMENT
----------------------------
This Restricted
Account Agreement (this "Agreement") is entered into
this 23rd day of June 2004, by and among
NORTH FORK BANK, a New York
banking corporation with offices at 275
Broadhollow Road, Melville, New
York 11747 (together with its successors
and assigns, the "Bank"), HOST
AMERICA CORPORATION, a Colorado corporation
with offices at 2 Broadway,
Hamden, CT 06518 (together with its successors and
assigns, the
"Company"), and LAURUS MASTER FUND, LTD., a
Cayman Islands corporation
with offices at 825 Third Avenue, 14th
Floor, New York, New York 10022
(together with its successors and assigns,
"Laurus"). Unless
otherwise
defined herein, capitalized terms used
herein shall have the meaning
provided such terms in the Purchase
Agreement referred to below.
WHEREAS, Laurus
has provided financing to the Company, which
financing is evidenced by a Securities
Purchase Agreement (as amended,
modified or supplemented from time to time,
the "Purchase Agreement") and
the Related Agreements referred to
therein;
WHEREAS, the
Company and Laurus have retained the Bank to provide
certain services with respect to the
Restricted Account (as defined
below); and
WHERERAS, the
Company and Laurus have agreed that an amount of cash
equal to $4,000,000 shall be deposited by
Laurus on behalf of the Company
by wire transfer of immediately available
funds into the Restricted
Account, which cash shall be held by the
Bank for the benefit of Laurus,
as security for the Company's and its
Subsidiaries' obligations under the
Purchase Agreement and the Related
Agreements. For the
purposes of this
Agreement, the "Restricted Account" shall
mean that certain deposit
account (as defined in Section 9-102 of the
Uniform Commercial Code as in
effect in the State of New York on the date
hereof) described on
Exhibit
B hereto, which Restricted Account shall be
maintained at the Bank and
shall be in the sole dominion and control
of Laurus;
NOW THEREFORE,
in consideration of the mutual promises contained
herein and for other good and valuable
consideration the sufficiency of
which is hereby acknowledged, the parties
hereto agree as follows:
1. The Bank is hereby
authorized to accept for deposit into the
Restricted Account the sum of $4,000,000.
The Bank hereby agrees
to hold
any and all monies, and other amounts from
time to time on deposit and/or
held in the Restricted Account for the
benefit of the Laurus and shall
not release any monies held in the
Restricted Account until such time as
the Bank shall have received a notice from
Laurus substantially in the
form attached hereto as Exhibit A (a
"Release Notice").
Following the
receipt of a Release Notice from Laurus,
the Bank agrees to promptly
disburse the amount of cash referred to in
such Release Notice to such
account as Laurus shall determine in its
sole discretion. The
Bank
hereby agrees that it will only comply with
written instructions
originated by Laurus directing disposition
of funds in the Restricted
Account. The Company hereby irrevocably
authorizes the Bank to comply
with any and all instructions given to the
Bank by Laurus with respect to
the Restricted Account without further
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consent by the Company. The Bank, the Company and Laurus
agree that the
Restricted Account is in Laurus' sole
dominion and control.
2. Each of the Company, Laurus
and the Bank hereby agrees that the
Restricted Account shall not be closed, and
the account name and account
number in respect thereof shall not be
changed, in any case, without the
consent of the Laurus, except as
specifically provided for in Section 9
below.
3. The Bank hereby subordinates
any claims and security interests
it may have against, or with respect to,
the Restricted Account
(including any amounts from time to time on
deposit therein) to the
security interests of Laurus therein, and
agrees that no amounts shall be
charged by it to, or withheld or set-off or
otherwise recouped by it
from, the Restricted Account or any amounts
from time to time on deposit
therein; provided that, in connection with
all service charges and any
other charges which the Bank is entitled to
receive in connection with
the servicing and maintaining of the
Restricted Account (such charges,
collectively, the "Charges"), each of the
Company, Laurus and the Bank
hereby agrees that the Bank will collect
such Charges in the following
manner: (i) first, the Bank will charge
other deposit accounts maintained
by the Company with the Bank, (ii) second,
in the event
that there are
insufficient collected funds in such other
deposit accounts to pay such
Charges, the Bank will promptly notify the
Company and Laurus with
respect to same and, within seven (7) business
days of the Company's
receipt of such notice, the Company shall
pay to the Bank the full amount
of such Charges then due, and (iii) third,
if the Company fails
to pay
to the Bank such Charges then due within
the time period set forth in the
preceding clause (ii), the Bank will
promptly provide a written notice to
Laurus of such occurrence and, in such case, the Bank is
hereby
authorized, f
