SECURITIES ACCOUNT CONTROL AGREEMENT
This Securities Account Control Agreement (as amended, restated,
supplemented or otherwise modified from time to time, this "Agreement") is made
and entered into as of January 31, 2006, among TORTOISE NORTH AMERICAN ENERGY
CORPORATION, a Maryland corporation (the "Debtor"), U.S. BANK NATIONAL
ASSOCIATION, as lender (the "Secured Party"), and U.S. BANK NATIONAL
ASSOCIATION, in its capacity as custodian (the "Custodian"). All references
herein to the "UCC" shall mean the Uniform Commercial Code as in effect in the
State of Pennsylvania.
W I T N E S S E T H:
WHEREAS, the Financial Assets in the Securities Account (as such terms are
hereinafter defined) are assets of the Debtor and the Debtor has full authority
pursuant to its organizational documents and otherwise to borrow moneys and to
grant a security interest to the Secured Party in the Financial Assets contained
in the Securities Account;
WHEREAS, the Secured Party and the Debtor have entered into a Credit
Agreement dated as of January 31, 2006 (as amended or otherwise modified from
time to time, the "Loan Agreement"), pursuant and subject to the terms and
conditions of which the Secured Party is to make certain loans to the Debtor;
WHEREAS, as a condition to making such loans the Debtor must provide to the
Secured Party a first priority lien and perfected security interest in the
Securities Account; and
WHEREAS, the parties are entering into this Agreement for the purpose of
perfecting the Secured Party's security interest in the Securities Account by
granting the Secured Party control over the Securities Account.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Debtor, the Secured Party and the Custodian hereby agree as follows:
Section 1. Establishment of Securities Account. The Custodian hereby
confirms that (i) the Custodian has established account number 291150800 in the
name of the Debtor (such account and any successor account, the "Securities
Account"), (ii) the Securities Account is an account to which Financial Assets
are or may be credited, and the Custodian shall, subject to the terms of this
Agreement, treat the Secured Party as
entitled to exercise the rights that comprise any Financial Asset credited to
the Securities Account, and (iii) all property delivered to the Custodian by or
on behalf of the Debtor for the Securities Account will be promptly credited to
the Securities Account.
Section 2. Financial Assets Election. The Custodian hereby agrees that each
item of property (whether investment property, financial asset, security,
instrument or cash) credited to the Securities Account (collectively, the
"Financial Assets") shall be treated as a "financial asset" within the meaning
of Article 8 of the UCC.
Section 3. Entitlement Orders. If at any time the Custodian shall receive
any entitlement order (as such term is defined in Article 8 of the UCC) from the
Secured Party directing transfer or redemption of any Financial Asset relating
to the Securities Account, including any instructions to transfer, sell, redeem,
close open trades or otherwise liquidate assets in the Securities Account, the
Custodian agrees that it shall comply with such entitlement order without
further consent by the Debtor or any other person.
Section 4. Subordination of Lien; Waiver of Set-Off. In the event that the
Custodian has or subsequently obtains by agreement, operation of law or
otherwise a security interest in the Securities Account or any security
entitlement credited thereto, the Custodian hereby agrees that such security
interest shall be subordinate to the security interest of the Secured Party
(except for any such security interest arising out of a transaction described in
subpart (iii) of the following sentence). The Financial Assets and other items
deposited in the Securities Account will not be subject to deduction, set-off,
banker's lien, or any other right in favor of any person other than the Secured
Party (except that the Custodian may set off (i) all amounts due to the
Custodian in respect of its customary fees and expenses for the routine
maintenance and operation of the Securities Account, (ii) the face amount of any
checks which have been credited to the Securities Account but are subsequently
returned unpaid because of uncollected or insufficient funds), and (iii) until
such time as the Debtor pays the Custodian the purchase price thereof, the
purchase price of any Financial Asset purchased by the Debtor through the
Custodian and credited to the Securities Account in a transaction in which
payment of the purchase price was due at the time of purchase.
Section 5. Choice of Law. This Agreement shall be governed by the laws of
the State of Pennsylvania, including without limitation the laws thereof with
respect to perfection, the effect of perfection and non-perfection, and the
priority of security interests. Regardless of any provision in any other
agreement, for purposes of the UCC, Pennsylvania shall be deemed to be the
Custodian's jurisdiction.
Section 6. Indemnification. The Debtor hereby agrees to indemnify and hold
harmless the Custodian and its affiliates, officers, directors, employees and
agents
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from and against any and all claims, expenses, causes of action, liabilities,
lawsuits and damages, including without limitation court costs and reasonable
attorneys' fees, in any way related to or arising out of or in connection with
this Agreement or the Securities Account, except such as may arise from the
gross negligence or willful misconduct of the Custodian.
Section 7. Conflict with Other Agreements. This Agreement supplements the
Debtor's existing agreements with the Custodian and in no way is this Agreement
intended to abridge any rights that the Custodian might otherwise have, except
as expressly provided herein. In the event of any conflict between this
Agreement (or any portion hereof) and any other agreement now existing or
hereafter entered into between the Custodian and the Debtor, the terms of this
Agreement shall prevail and the Secured Party's security interest in the
Securities Account will be prior to any other security interest therein.
Section 8. Amendments; Waiver. No amendment or modification of this
Agreement or waiver of any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by all of the parties hereto.
Section 9. Notice of Adverse Claims. Except for the claims and interest of
the Secured Party and of the Debtor in the Securities Account, the Custodian
does not know of any claim to, or interest in, the Securities Account or in any
Financial Asset credited thereto. If any person asserts any lien, encumbrance or
adverse claim (including any writ, garnishment, judgment, warrant of attachment,
execution or similar process) against the Securities Account or in any Financial
Asset carried therein, the Custodian will promptly notify the Secured Party and
the Debtor thereof. Furthermore, the Debtor agrees that it will not enter into
any agreement or document purporting to grant any security interest in the
Securities Account without the prior written consent of the Secured Party.
Section 10. [Intentionally Omitted]
Section 11. Maintenance of Securities Account. In addition to, and not in
lieu of, the obligation of the Custodian to honor entitlement orders as agreed
in Section 3 hereof, the Custodian agrees to maintain the Securities Account as
follows:
(i) Notice of Sole Control. If at any time the Secured Party delivers
to the Custodian a Notice of Sole Control in substantially the form set forth in
Exhibit A hereto (a "Notice of Sole Control"), the Custodian agrees that after
receipt of such notice, it will take all directions, instructions and
entitlement orders with respect to the Securities Account and the Financial
Assets therein solely from the Secured Party without notice to or consent of the
Debtor.
(ii) Voting Rights. Until such time as the Custodian receives a Notice
of Sole Control from the Secured Party, but at no time thereafter unless the
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Secured Party has provided written notice to the Custodian of revocation of such
Notice of Sole Control, the Debtor shall direct the Custodian with respect to
the voting of Financial Assets credited to the Securities Account.
(iii) Trading Instructions. Until such time as the Custodian receives
a Notice of Sole Control from the Secured Party, but at no time thereafter
unless the Secured Party has provided written notice to the Custodian of
revocation of such Notice of Sole Control, the Debtor may direct the Custodian
with respect to substitution and disposition of Financial Assets held in the
Securities Account and otherwise provide instructions and entitlement orders to
the Custodian with respect to Financial Assets in the Securities Account.
(iv) Notices, Statements and Confirmations. The Custodian will
promptly send copies of all statements, confirmations and other correspondence
concerning the Securities Account and/or any Financial Assets credited thereto
to the Secured Party at its address set forth in Section 15 of this Agreement
upon request by the Secured Party from time to time.
(v) Tax Reporting. All items of income, gain expenses and loss
recognized in the Securities Account shall be reported to the Internal Revenue
Service and all state and local taxing authorities under the name and taxpayer
identification number of the Debtor.
Section 12. Limited Responsibility. The Custodian shall have no
responsibility or liability to the Secured Party for accepting and processing
instructions related to trading and voting in the Securities Account prior to
delivery to the Custodian of a Notice of Sole Control, and shall have no
responsibility or liability to the Secured Party with respect to the value of
the Securities Account or any asset therein. The Custodian shall have no
responsibility or liability to the Debtor for complying with instructions or
entitlement orders concerning the Securities Account which are originated by the
Secured Party. The Custodian shall have no duty to investigate or make any
determination as to whether a default exists under any agreement between the
Secured Party and the Debtor or as to whether the Secured Party is authorized to
give a Notice of Sole Control. This Agreement does not create any obligation or
duty of the Custodian other than those expressly set forth herein.
Section 13. Representations, Warranties and Covenants of the Custodian. The
Custodian hereby makes the following representations, warranties and covenants:
(i) The Securities Account has been established as set forth in
Section 1 above and the Securities Account will be maintained in the manner set
forth herein until termination of this Agreement. The Custodian shall not change
the name or account number of the Securities Account without the prior written
consent of the Secured Party.
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(ii) This Securities Account Control Agreement is the valid and
legally binding obligation of the Custodian and enforceable against the
Custodian in accordance with its terms.
(iii) The Custodian has not entered into, and until the termination of
the this Agreement will not enter into, any agreement with any other person
relating to the Securities Account and/or any Financial Assets credited thereto
pursuant to which it has agreed to comply with entitlement orders of such
person. The Custodian has not entered into any other agreement with the Debtor
purporting to limit or condition the obligation of the Custodian to comply with
entitlement orders as set forth in Section 3 hereof.
Section 14. Successors. The terms of this Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
successors and assigns.
Section 15. Notices. Except as otherwise expressly provided in this
Agreement, any notice, request or other communication required or permitted to
be given under this Agreement shall be in writing and shall be delivered in
person, or sent by telecopy, overnight courier or certified or registered United
States mail, postage prepaid, addressed to the party at its address set forth
below:
Debtor: Tortoise North American Energy Corporation
00000 Xxxxxx Xxxx., Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxx 00000
Attn: Xxxxx Xxxxxxx
Fax: (000) 000-0000
Secured Party: U.S. Bank National Association
0000 Xxxx 00xx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxx 00000
Attention: Xxxx Xxxxxxx
Fax: (000) 000-0000
Custodian: U.S. Bank National Association
Institutional Custody Services
000 X. Xxxxx Xx.
Xxxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Tel: (000) 000-0000
Any party may change its address for notices in the manner set forth above.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if
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delivered by hand or overnight courier service or sent by telecopy or on the
date five (5) Business Days after dispatch by certified or registered mail if
mailed (or, if sooner, on the date of actual receipt), in each case delivered,
sent or mailed (properly addressed) to such party as provided in this Section 15
or in accordance with the latest unrevoked directions from such party given in
accordance with this Section 15.
Section 16. Termination. The rights and powers granted herein to the
Secured Party have been granted in order to perfect its security interest in the
Securities Account and are powers coupled with an interest and will neither be
affected by the bankruptcy of Debtor nor by the lapse of time. The obligations
of the Custodian hereunder shall continue in effect until the security interest
of the Secured Party in the Securities Account has been terminated and the
Secured Party has notified the Custodian of such termination in writing.
Section 17. Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.
Section 18. Severability. The invalidity, illegality or unenforceability of
any provision of this Agreement shall not affect the validity, legality or
enforceability of any of the other provisions of this Agreement, which shall
remain in full force and effect.
[signature page(s) to follow]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
first date set forth above.
TORTOISE NORTH AMERICAN ENERGY CORPORATION
(as Debtor)
By: /s/ Xxxxx Xxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
U.S. BANK NATIONAL
ASSOCIATION (as
Secured Party)
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
U.S. BANK NATIONAL
ASSOCIATION (as
Custodian)
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
Title: Vice President
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EXHIBIT A
U.S. BANK NATIONAL ASSOCIATION
[Date]
U.S. Bank National Association, as Custodian
Institutional Custody Services
000 X. Xxxxx Xx.
Xxxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Re: Notice of Sole Control
Ladies and Gentlemen:
As referenced in the Securities Account Control Agreement, dated January
31, 2006, among Tortoise North American Energy Corporation, us as Secured Party
and you as Custodian (a copy of which is attached), we hereby give you notice of
our sole control over Securities Account number 291150800 (the "Securities
Account") and all Financial Assets credited thereto. You are hereby instructed
not to accept any directions, instructions or entitlement orders with respect to
the Securities Account or the Financial Assets credited thereto from any person
other than the Secured Party, unless otherwise ordered by a court of competent
jurisdiction.
Very truly yours,
U.S. BANK NATIONAL
ASSOCIATION, as Secured
Party
By:
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Name:
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Title:
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