Document:

exv10w73

 

Exhibit 10.73

FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

     THIS FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated
June 26, 2007, is entered into among COMMERCE ENERGY, INC., a California corporation
(“Borrower”), COMMERCE ENERGY GROUP, INC., a Delaware corporation (“Parent”) and
WACHOVIA CAPITAL FINANCE CORPORATION (WESTERN), a California corporation, as Agent and Lender
(“Agent”).

RECITALS

     A. Borrower, Parent and Agent have previously entered into that certain Loan and Security
Agreement dated June 8, 2006 (the “Loan Agreement”) as amended by the First Amendment to
Loan and Security Agreement and Waiver dated September 20, 2006 (the “First Amendment”),
the Second Amendment to Loan and Security Agreement and Waiver dated October 26, 2006 (the
“Second Amendment”) and the Third Amendment to Loan and Security Agreement and Waiver dated
March 15, 2007 (the “Third Amendment”), pursuant to which Agent and the other Lender party
thereto, have made certain loans and financial accommodations available to Borrower. Terms used
herein without definition shall have the meanings ascribed to them in the Loan Agreement.

     B. Borrower has requested that Agent amend the Loan Agreement on the terms and conditions set
forth herein.

     C. Borrower and Parent are entering into this Amendment with the understanding and agreement
that, except as specifically provided herein, none of Agent’s and the other Lender’s rights or
remedies as set forth in the Loan Agreement is being waived or modified by the terms of this
Amendment.

AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

     1. Amendment to Loan Agreement. Section 9.19 of the Loan Agreement is hereby amended
and restated to read in its entirety as follows:

“9.19. Capital Expenditures. Borrower and Guarantors shall
not make Capital Expenditures (excluding acquisitions permitted
under Section 9.10(i) hereof) in excess of $6,000,000 in the
aggregate during the fiscal year ending July 31, 2007 and $5,000,000
in the aggregate during each subsequent fiscal year.”

     2. Effectiveness of this Amendment. The effectiveness of this Amendment, and the
waivers provided herein, are conditioned upon the occurrence of each of the following:

          (a) Amendment. Agent shall have received this Amendment, fully executed in a
sufficient number of counterparts for distribution to all parties.

 

 

          (b) Representations and Warranties. The representations and warranties set forth
herein and in the Loan Agreement shall be true and correct.

          (c) Other Required Documentation. All other documents and legal matters in connection
with the transactions contemplated by this Amendment shall have been delivered or executed or
recorded and shall be in form and substance satisfactory to Agent.

     3. Representations and Warranties. Each of Borrower and Parent represents and
warrants as follows:

          (a) Authority. Such party has the requisite corporate power and authority to execute
and deliver this Amendment, and to perform its obligations hereunder and under the Financing
Agreements (as amended or modified hereby) to which it is a party. The execution, delivery and
performance by such party of this Amendment have been duly approved by all necessary corporate
action and no other corporate proceedings are necessary to consummate such transactions.

          (b) Enforceability. This Amendment has been duly executed and delivered such party.
This Amendment and each Financing Agreement (as amended or modified hereby) is the legal, valid and
binding obligation of such party, enforceable against such party in accordance with its terms, and
is in full force and effect.

          (c) Representations and Warranties. The representations and warranties contained in
each Financing Agreement (other than any such representations or warranties that, by their terms,
are specifically made as of a date other than the date hereof) are correct on and as of the date
hereof as though made on and as of the date hereof

          (d) Due Execution. The execution, delivery and performance of this Amendment are
within the power of such party, have been duly authorized by all necessary corporate action, have
received all necessary governmental approval, if any, and do not contravene any law or any material
contractual restrictions binding on such party.

          (e) No Default. No event has occurred and is continuing that constitutes a Default or
Event of Default.

     4. Governing Law. The validity, interpretation and enforcement of this Amendment and
any dispute arising out of the relationship between the parties hereto, whether in contract, tort,
equity or otherwise, shall be governed by the internal laws of the State of California but
excluding any principles of conflicts of law or other rule of law that would cause the application
of the law of any jurisdiction other than the laws of the State of California.

     5. Counterparts. This Amendment may be executed in any number of counterparts, each
of which shall be an original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Amendment by telefacsimile or other
electronic method of transmission shall have the same force and effect as the delivery of an
original executed counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile or other electronic method of transmission shall also deliver

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an original executed counterpart, but the failure to do so shall not affect the validity,
enforceability or binding effect of this Amendment.

     6. Reference to and Effect on the Financing Agreements.

          (a) Upon and after the effectiveness of this Amendment, each reference in the Loan Agreement
to “this Agreement”, “hereunder”, “hereof’ or words of like import referring to the Loan Agreement,
and each reference in the other Financing Agreements to “the Loan Agreement”, “thereof’ or words of
like import referring to the Loan Agreement, shall mean and be a reference to the Loan Agreement as
modified and amended hereby.

          (b) Except as specifically amended above, the Loan Agreement and all other Financing
Agreements, are and shall continue to be in full force and effect and are hereby in all respects
ratified and confirmed and shall constitute the legal, valid, binding and enforceable obligations
of Borrower or Parent (as applicable) to Agent and the other Lender.

          (c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of Agent or the other Lender
under any of the Financing Agreements, nor constitute a waiver of any provision of any of the
Financing Agreements.

          (d) To the extent that any terms and conditions in any of the Financing Agreements shall
contradict or be in conflict with any terms or conditions of the Loan Agreement, after giving
effect to this Amendment, such terms and conditions are hereby deemed modified or amended
accordingly to reflect the terms and conditions of the Loan Agreement as modified or amended
hereby.

     7. Estoppel. To induce Agent to enter into this Amendment and to continue to make
advances to Borrower under the Loan Agreement, Borrower hereby acknowledges and agrees that, as of
the date hereof, there exists no right of offset, defense, counterclaim or objection in favor of
Borrower as against Agent or the other Lender with respect to the Obligations.

     8. Integration. This Amendment, together with the other Financing Agreements,
incorporates all negotiations of the parties hereto with respect to the subject matter hereof and
is the final expression and agreement of the parties hereto with respect to the subject matter
hereof.

     9. Severability. In case any provision in this Amendment shall be invalid, illegal or
unenforceable, such provision shall be severable from the remainder of this Amendment and the
validity, legality and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

     10. Submission of Amendment. The submission of this Amendment to the parties or their
agents or attorneys for review or signature does not constitute a commitment by Agent to waive any
of its rights and remedies under the Financing Agreements, and this Amendment shall have no binding
force or effect until all of the conditions to the effectiveness of this Amendment have been
satisfied as set forth herein.

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     IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above
written.

	 	 	 	 	 	 	 
	 	 	COMMERCE ENERGY, INC., a California

	 	 	corporation
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Lawrence Clayton, Jr.	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	Lawrence Clayton, Jr.	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	CFO	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	COMMERCE ENERGY GROUP, INC.,
	 	 	a Delaware corporation
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Lawrence Clayton	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	Lawrence Clayton, Jr.	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	CFO	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	WACHOVIA CAPITAL FINANCE
	 	 	CORPORATION (WESTERN),
	 	 	a California corporation, as Agent and Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Carlos Valleo	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	Carlos Valleo	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	Director	 	 
	 

	 	 	 	 	 	 

- 4 -exv10w76

 

Exhibit 10.76

SECOND AMENDMENT

TO THE

SECURITY AGREEMENT

     Commerce Energy, Inc. (“Customer”) and Tenaska Power Services Co. (“TPS”) are Parties to the
Security Agreement effective August 1, 2005 (“Agreement”). Customer and TPS enter into this Second
Amendment to the Agreement (“Second Amendment”) effective June 22, 2007 (“Effective Date”).

     WHEREAS, Customer and TPS are Parties to the Agreement;

     WHEREAS, the Parties desire to amend the Agreement by adding and revising language to the
Covenants section; and

     Now, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by both Parties, Customer and TPS hereby agree as follows:

SECOND AMENDMENT

	1.	 	Unless otherwise defined in this Second Amendment, capitalized terms used in this Second
Amendment shall have the same meaning as that given to such terms in the Agreement.
	 
	2.	 	After Section 2(g), the Parties agree to insert a new paragraph in Section 2 as follows:

(h) “Customer may be allowed by TPS to exempt any of its customers that exceed an average
on-peak load of one (1) MWh per hour for any calendar month (“Large Retail Load”) from
Collateral in (a) – (g) above if Customer has purchased energy to meet such Large Retail
Load’s expected full requirements from a wholesale energy supplier other than TPS
(“Alternative Supplier”) and so informs TPS in writing of such circumstance, and in such
notice, informs TPS of the duration of Customer’s sales arrangement with the Alternative
Supplier to supply such Large Retail Supplier. Customer shall provide confirming
documentation of the supply arrangement from the Alternative Supplier or cause the
Alternative Supplier to provide written confirmation directly to TPS. In the event Customer
grants, or intends to grant, a security interest to the Alternative Supplier or other third
party in the receivables from the Large Retail Load, Customer shall cause the Alternative
Supplier or other third party to enter into a reasonable intercreditor agreement with TPS
concerning the respective security interest rights of TPS and Alternative Supplier or other
third party. TPS agrees that once such a notice is received, and a reasonable intercreditor
agreement is entered, TPS will (i) refrain from enforcing, and waive for the duration of
such sales arrangement with the Alternative Supplier to supply the Large Retail Load, any
Security Interest that it may have in receivables from such Large Retail Load, (ii) no
longer consider such as part of the Collateral for the duration of the term of Customer’s
sales arrangement with the Alternative Supplier to supply the Large Retail Load, and (iii)
in any intercreditor agreement entered with an Alternative Supplier or other third party
shall subordinate its Security Interest in receivables from the Large Retail Load to that of
the Alternative Supplier or other third party for the duration of Customer’s sales
arrangement with the Alternative Supplier to supply the Large Retail Load. In the Collateral
Balance Report furnished to TPS

 

 

pursuant to Section 6(e), Customer shall show TPS a line item subtracting any exempted Large
Retail Load receivables from the Credit Amount”

	3.	 	The Parties agree to amend Section 6(e)(ii)(1) of Section 6 of the Agreement to:

(a) delete the number “100%” in line 1 thereof, and replace it with “80%”, and

(b) delete the phrase “ninety (90)” in line two thereof, and replace it with “thirty (30)”.

	4.	 	The Parties agree to amend Section 6(e)(ii) of the Agreement to add a new subsection (2)
as follows:

     “(2) 50% of all Accounts which have been billed by Commerce Energy to the account
debtor, the payment of which is not less than thirty-one (31) days, and not more than sixty
(60) days past due; plus”.

	5.	 	The Parties agree to renumber the remaining subsections of Section 6 following the newly
inserted subsection (2), and to add the word “plus” to the end of such renumbered subsections
(3), (4), (5), and (6).
	 
	6.	 	The Parties agree to amend the renumbered subsection (4) of Section 6(e)(ii) to add the
phrase “,up to, but not to exceed, the minimum Lockbox Balance requirement of One Hundred
Thousand Dollars (“$100,000”) after the phrase “other than Non-ERCOT Funds” in line one.
	 
	7.	 	The Parties agree to amend the renumbered subsection (7) of Section 6(e)(ii) by

(a) striking “100%” in line one, and substituting therefore “80%;” and

(b) deleting the period at the end of the subsection, converting it to a semicolon, and
inserting thereafter the phrase:

“provided that the contribution of (1), (2), (3) and (7) above shall not exceed fifteen
million dollars ($15,000,000.00) (“Credit Limit”) for purposes of calculating the Credit
Amount in 6(e)(ii), for the period commencing with the Effective Date of this Second
Amendment through June 1, 2008; provided that TPS will raise the Credit Limit to twenty two
million ($22,000,000.00) for the limited term of July 1 through September 20, 2007 as long as
there has not been a material adverse change, or occurrence of a circumstance which could
result in material adverse change, to Customer’s credit worthiness in TPS’s sole reasonable
opinion. The Parties mutually agree that on or before May I of each year, they will begin
discussions to determine if the Credit Limit should be adjusted and will agree, in writing as
an amendment to the Security Agreement, on any such adjustments to the Credit Limit for the
next twelve months ending June 1 of the following year. The Parties shall reach agreement no
later than May 15 (or if May 15 is not a Business Day, the next Business Day) . Absent mutual
agreement, the existing Credit Limit shall remain in effect.”

	8.	 	The Parties agree to amend Section 6(f) by adding the phrase
“excluding Non-ERCOT Funds” after “the balance of the Lockbox” in line one.
	 
	9.	 	After Section 6(1), the Parties agree to insert the following language as section (m):

 

 

pursuant to Section 6(e), Customer shall show TPS a line item subtracting any exempted Large
Retail Load receivables from the Credit Amount.”

	3.	 	The Parties agree to amend Section 6(e)(ii)(1) of Section 6 of the Agreement to:

(a) delete the number “100%” in line 1 thereof, and replace it with “80%”, and

(b) delete the phrase “ninety (90)” in line two thereof, and replace it with “thirty (30)”.

	4.	 	The Parties agree to amend Section 6(e)(ii) of the Agreement to add a new subsection (2)
as follows:

     “(2) 50% of all Accounts which have been billed by Commerce Energy to the account
debtor, the payment of which is not less than thirty-one (31) days, and not more than sixty
(60) days past due; plus”.

	5.	 	The Parties agree to renumber the remaining subsections of Section 6 following the newly
inserted subsection (2), and to add the word “plus” to the end of such renumbered subsections
(3), (4), (5), and (6).

	6.	 	The Parties agree to amend the renumbered subsection (4) of Section 6(e)(ii) to add the
phrase “,up to, but not to exceed, the minimum Lockbox Balance requirement of One Hundred
Thousand Dollars (“$100,000”) after the phrase “other than Non-ERCOT Funds” in line one.

	7.	 	The Parties agree to amend the renumbered subsection (7) of Section 6(e)(ii) by

(a) striking “100%” in line one, and substituting therefore “80%;” and

(b) deleting the period at the end of the subsection, converting it to a semicolon, and
inserting thereafter the phrase:

“provided that the contribution of (1), (2), (3) and (7) above shall not exceed fifteen
million dollars ($15,000,000.00) (“Credit Limit”) for purposes of calculating the Credit
Amount in 6(e)(ii), for the period commencing with the Effective Date of this Second
Amendment through June 1, 2008; provided that TPS will raise the Credit Limit to twenty two
million ($22,000,000.00) for the limited term of July 1 through September 20, 2007 as long
as there has not been a material adverse change, or occurrence of a circumstance which could
result in material adverse change, to Customer’s credit worthiness in TPS’s sole reasonable
opinion. The Parties mutually agree that on or before May 1 of each year, they will begin
discussions to determine if the Credit Limit should be adjusted and will agree, in writing
as an amendment to the Security Agreement, on any such adjustments to the Credit Limit for
the next twelve months ending June 1 of the following year. The Parties shall reach
agreement no later than May 15 (or if May 15 is not a Business Day, the next Business Day) .
Absent mutual agreement, the existing Credit Limit shall remain in effect.”

	8.	 	The Parties agree to amend Section 6(f) by adding the phrase “excluding Non-ERCOT
Funds” after “the balance of the Lockbox” in line one.

	9.	 	After Section 6(1), the Parties agree to insert the following language as section (m):

 

 

“(m) Notice. The Parties agree that Customer will provide TPS at least one Business
Day advance notice that Customer desires for TPS to provide an executable wholesale energy
supply quote to supply energy to a new or existing customer where the wholesale supply
sought by Customer is either: (i) for quantities which exceed 10 MWh per hour average during
the on-peak hours for a month, or (ii) for a term duration greater than twelve consecutive
months, or (iii) the commencement of energy delivery exceeds twelve consecutive months in
the future.”

	10.	 	Unless expressly changed by this Second Amendment, all other terms of the Agreement shall
remain in full force and effect.

	11.	 	This Second Amendment may be executed in multiple counterparts, including facsimile
counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
	 
	12.	 	This Second Amendment contains the entire agreement between the Parties with respect to the
subject matter of this Second Amendment and supersedes any previous understandings,
commitments, or agreements, oral or written, with respect to such subject matter of this
Second Amendment.

     WHEREFORE, the Parties acknowledge and agree to this Second Amendment effective as of the
Effective Date.

	 	 	 	 	 	 	 	 	 	 	 
	TENASKA POWER SERVICES CO.	 	 	 	COMMERCE ENERGY, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Trudy Harper
	 	 	 	By:
	 	/s/ R. Nick Cioll	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Trudy Harper
	 	 	 	Name:
	 	R. Nick Cioll	 	 
	Title:

	 	President
	 	 	 	Title:
	 	Chief Risk Officer

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