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EXHIBIT 4.11
CASH COLLATERAL ACCOUNT AGREEMENT
CASH COLLATERAL ACCOUNT AGREEMENT, dated January , 1996 (this
"Agreement"), made by [NAME OF SUBSIDIARY GUARANTOR], a [Liberian] [Bahamian]
corporation (the "Pledgor") and UNITED STATES TRUST COMPANY OF NEW YORK, a bank
and trust company organized under the New York Banking Law (the "Trustee"), for
the Holders under the Indenture referred to below.
PRELIMINARY STATEMENTS:
(1) The Pledgor has opened a special non-interest bearing cash collateral
account with the Trustee at its office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Account No. (the "Cash Collateral Account") in the name of
the Pledgor but under the sole control and dominion of the Trustee and subject
to the terms of this Agreement.
(2) The Pledgor has entered into an Indenture dated as of January , 1996
(as it may hereafter be amended or otherwise modified from time to time, the
"Indenture"), among Teekay Shipping Corporation (the "Company"), the Pledgor,
certain of the Company's other subsidiaries, and the Trustee, pursuant to which,
among other things, the Company has provided for the authentication and delivery
of the Securities, and the Trustee has agreed to act for the benefit of the
Holders. Capitalized terms not otherwise defined herein shall have the meanings
ascribed to such terms in the Indenture.
(3) The Cash Collateral Account constitutes a portion of the Trust Estate
under the Indenture, and it is a condition precedent to the issuance of the
Securities under the Indenture that the Pledgor shall have made the pledge and
assignment contemplated by this Agreement.
NOW THEREFORE, in consideration of the premises, the Pledgor hereby agrees
with the Trustee for its benefit and the ratable benefit of the Holders as
follows:
SECTION 1. Pledge and Assignment. The Pledgor hereby pledges and assigns
to the Trustee for its benefit and the ratable benefit of the Holders, and
grants to the Trustee for its benefit and the ratable benefit of the Holders a
security interest in, the following collateral (the "Collateral"):
(i) the Cash Collateral Account, all funds held therein and all
certificates and instruments, if any, from time to time representing or
evidencing the Cash Collateral Account;
(ii) all notes, certificates of deposit, deposit accounts, checks and
other
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instruments from time to time hereafter delivered to or otherwise possessed
by the Trustee for or on behalf of the Pledgor in substitution for or in
addition to any or all of the then existing Collateral;
(iii) all interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the then existing Collateral; and
(iv) all proceeds of any and all of the foregoing Collateral.
SECTION 2. Security for Obligations. This Agreement secures the payment
of the principal of (and premium, if any) and interest on the Securities, the
payment of all sums of money (whether for principal, premium, if any, interest,
fees, expenses or otherwise) from time to time payable by the Company under the
Indenture, or by the Pledgor and the other Guarantors under the Guarantor
Security Documents (collectively, the "Obligations"), and to secure as well the
performance and observance of all agreements, covenants and provisions contained
in the Indenture and the Security Documents. Without limiting the generality of
the foregoing, this Agreement secures the payment of all amounts which
constitute part of the Obligations and would be owed by the Pledgor, the Company
or the other Guarantors to the Trustee or the Holders under the Indenture, the
Securities or any Security Document, but for the fact that they are
unenforceable or not allowable due to of the existence of a bankruptcy,
reorganization or similar proceeding involving the Pledgor, the Company or any
other Guarantor.
SECTION 3. Delivery of Collateral. All certificates or instruments, if
any, representing or evidencing the Collateral shall be delivered to and held by
or on behalf of the Trustee pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Trustee. The Trustee shall have the right, at any time in its discretion, to
transfer to or to register in the name of the Trustee or any of its nominees any
or all of the Collateral. The Trustee shall provide notice to the Company of any
such transfer or registration. In addition, the Trustee shall have the right at
any time to exchange certificates or instruments representing or evidencing
Collateral for certificates or instruments of smaller or larger denominations.
SECTION 4. Maintaining the Account. So long as any security shall remain
outstanding:
(a) The Pledgor will maintain the Cash Collateral Account with the
Trustee.
(b) It shall be a term and condition of the Cash Collateral Account,
notwithstanding any term or condition to the contrary in any other
agreement relating to
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the Cash Collateral Account, and except as otherwise provided by the
provisions of Section 12 hereof, that no amount (including interest on the
Cash Collateral Account) shall be paid or released to or for the account
of, or withdrawn by or for the account of, the Pledgor or any other person
or entity from the Cash Collateral Account.
The Cash Collateral Account shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other appropriate banking or governmental authority, as may now or
hereafter be in effect.
SECTION 5. Payment and Investment of Amounts in the Account.
(a) Upon the occurrence and during the continuation of an Event of
Default, at the request of the Trustee, the Pledgor will cause all amounts
assigned under both the Assignment of Time Charter and the Assignment of
Freights and Hires to be paid directly into the Cash Collateral Account.
(b) If requested by the Pledgor, the Trustee will, subject to the
provisions of Sections 5(c) and 11 hereof, from time to time (i) invest
amounts on deposit in the Cash Collateral Account in Permitted Investments
as the Pledgor may select by written instructions to the Trustee and (ii)
invest interest paid on the Permitted Investments referred to in clause (i)
above, and reinvest other proceeds of any such Permitted Investments which
may mature or be sold, in each case in such Permitted Investments as the
Pledgor may select by written instructions to the Trustee (the Permitted
Investments referred to in clauses (i) and (ii) above being collectively
"Investments"). Interest and proceeds that are not invested or reinvested
in Investments as provided above shall be deposited and held in the Cash
Collateral Account. If the Pledgor shall make no such request, the Trustee
may, but shall be under no obligation to, invest amounts on deposit in the
Cash Collateral Account in such Permitted Investments (except for direct
obligations of, or obligations unconditionally guaranteed by, countries
other than the United States of America) as it in its sole discretion may
select.
(c) Except to the extent set forth in Section 12 hereof, the
Trustee will apply amounts in the Cash Collateral Account in accordance
with the applicable provisions of the Indenture.
SECTION 6. Representations and Warranties. The Pledgor represents and
warrants as follows:
(a) The Pledgor has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the [Republic of Liberia]
[Commonwealth of the Bahamas], has the corporate power and authority to
own, lease and operate the properties used in its business and to conduct
its business as currently conducted and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the Pledgor
and its subsidiaries, taken as a
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whole.
(b) This Agreement has been duly authorized, executed and delivered
by, and, when executed and delivered by the Pledgor on the Closing Date,
will be a valid and binding agreement of, the Pledgor, enforceable against
the Pledgor in accordance with its terms, except as (i) the enforceability
thereof may be limited by applicable bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws affecting creditors'
rights generally and (ii) rights of acceleration, if applicable, and the
availability of equitable remedies may be limited by equitable principles
of general applicability (regardless of whether in a proceeding in equity
or at law).
(c) The Pledgor is the legal and beneficial owner of the Collateral
free and clear of any lien, security interest, option or other charge or
encumbrance except for the security interest created by this Agreement.
(d) The pledge and assignment of the Collateral pursuant to this
Agreement creates a valid and perfected first priority security interest in
the Collateral, securing the payment of the Obligations.
(e) No consent of any other person or entity and no authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required (i) for the pledge
and assignment by the Pledgor of the Collateral pursuant to this Agreement
or for the execution, delivery or performance of this Agreement by the
Pledgor, (ii) for the perfection or maintenance of the security interest
created hereby (including the first priority nature of such security
interest) or (iii) for the exercise by the Trustee of its rights and
remedies hereunder.
(f) The execution and delivery by the Pledgor of, and the performance
by the Pledgor of its obligations under, this Agreement, and the
consummation of the transactions contemplated thereby, (i) will not
contravene (A) any provision of applicable law, (B) the certificate or
articles of incorporation or by-laws of the Pledgor, (C) any agreement or
other instrument binding upon the Pledgor that is material to the Pledgor,
or (D) any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Pledgor, (ii) will not result in or
require the creation or imposition of any Lien upon or with respect to any
of the properties of the Pledgor, except for the security interest created
by this Agreement, or constitute a default under any agreement, contract,
ordinance, license or permit.
(g) There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
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SECTION 7. Further Assurances. The Pledgor agrees that at any time and
from time to time, at its expense, the Pledgor will promptly execute and deliver
all further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Trustee may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
hereby or to enable the Trustee to exercise and enforce its rights and remedies
hereunder with respect to any Collateral.
SECTION 8. Transfers and Other Liens. The Pledgor agrees that it will not
(i) sell, assign (by operation of law or otherwise) or otherwise dispose of, or
grant any option with respect to, any of the Collateral, or (ii) create or
permit to exist any lien, security interest, option or other charge or
encumbrance upon or with respect to any of the Collateral, except for the
security interest under this Agreement.
SECTION 9. Trustee Appointed Attorney-in-Fact. The Pledgor hereby
appoints the Trustee as attorney-in-fact (which power shall be deemed coupled
with an interest), with full authority in the place and stead of the Pledgor,
and in the name of the Pledgor or otherwise, from time to time in the Trustee's
discretion to take any action and to execute any instrument which the Trustee
may deem necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation, to receive, indorse and collect all instruments
made payable to the Pledgor representing any interest payment, dividend or other
distribution in respect of the Collateral or any part thereof and to give full
discharge for the same.
SECTION 10. Trustee May Perform. If the Pledgor fails to perform any
agreement contained herein, the Trustee may itself perform, or cause performance
of, such agreement, but the Trustee shall not be obligated to do so, and the
expenses of the Trustee incurred in connection therewith shall be payable by the
Pledgor under Section 13.
SECTION 11. The Trustee's Duties. The terms and provisions of Sections
8.01 through 8.04, inclusive, and 8.07 through 8.12, inclusive, of the Indenture
are incorporated herein by reference, and shall be applicable to this Agreement
and the duties and responsibilities of the Trustee hereunder. The powers
conferred on the Trustee hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Trustee shall have
no duty as to any Collateral, as to ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, tenders or other matters relative
to any Collateral, whether or not the Trustee has or is deemed to have knowledge
of such matters, or as to the taking of any necessary steps to preserve rights
against any parties or any other rights pertaining to any Collateral. The
Trustee shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which United States Trust Company of New
York accords its own property. The Trustee shall not be liable to the Company or
to anyone else for any loss which may be incurred by reason of any investment of
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the Collateral pursuant to the terms of this Agreement. To the extent that the
Trustee becomes liable for the payment of taxes, including withholding taxes, in
respect of income derived from the investment of the Collateral hereunder or any
payment made hereunder, the Trustee may pay such taxes. The Trustee may withhold
from any payment or release of monies from time to time comprising the Cash
Collateral Account such amount as the Trustee estimates to be sufficient to
provide for the payment of such taxes not yet paid, and may use the sum withheld
for that purpose. The Company shall indemnify the Trustee for, and hold it
harmless against, any liability for taxes and for any penalties or interest in
respect of taxes on such investment income, payments or release of monies.
SECTION 12. Remedies upon Default. If any Event of Default under the
Indenture shall have occurred and be continuing:
(a) The Trustee may, without notice to the Pledgor except as required
by law, and at any time or from time to time, charge, set off and otherwise
apply all or any part of the Cash Collateral Account against the
Obligations or any part thereof.
(b) The Trustee may also exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code in effect in the State of New York at
that time (the "NYUCC") (whether or not the NYUCC applies to the affected
Collateral), and may also, without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Trustee's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the Trustee may
deem commercially reasonable. The Pledgor agrees that, to that extent
notice of sale shall be required by law, at least ten days' notice to the
Pledgor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification.
The Trustee shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Trustee may adjourn any
public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(c) Any cash held by the Trustee as Collateral and all cash proceeds
received by the Trustee in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral may, in the
discretion of the Trustee, be held by the Trustee as collateral for, and/or
then or at any time thereafter be applied (after payment of any amounts
payable to the Trustee pursuant to Section 13) in whole or in part by the
Trustee for the ratable benefit of the Holders against, all or any part of
the Obligations in such order as the Trustee shall elect and as provided in
the Indenture. Any surplus of such cash or cash proceeds held by the
Trustee and remaining after payment in full of all the Obligations shall be
paid over to the Pledgor or to whomsoever may be lawfully entitled
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to receive such surplus.
SECTION 13. Expenses. The Pledgor will upon demand pay to the Trustee the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which the Trustee may
incur in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Trustee or the Holders hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.
SECTION 14. Security Interest Absolute. The obligations of the Pledgor
under this Agreement are independent of the Obligations, and a separate action
or actions may be brought and prosecuted against the Pledgor to enforce this
Agreement, irrespective of whether any action is brought against the Company or
any other Guarantor or whether the Company or any other Guarantor is joined in
any such action or actions. All rights of the Trustee and security interests
hereunder, and all obligations of the Pledgor hereunder, shall be absolute and
unconditional irrespective of:
(i) any lack of validity or enforceability of the Indenture, the
Securities, any Security Document or any other agreement or instrument
relating thereto;
(ii) any change in the time, manner or place or payment or, or in any
other term or, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Indenture or the
Securities or any Security Document;
(iii) any taking, exchange, release or non-perfection of any other
collateral, or any taking, release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the Obligations;
(iv) any manner of application of collateral, or proceeds thereof, to
all or any of the Obligations, or any manner of sale or other disposition
of any collateral for all or any of the Obligations or any other assets of
the Pledgor, the Company or any other Guarantor or the Charterer or any of
their respective subsidiaries;
(v) any change, restructuring or termination of the corporate
structure or existence of the Pledgor, the Company or any other Guarantor
or any of their respective subsidiaries; or
(vi) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third party
pledgor.
SECTION 15. Amendments, Etc. No amendment or waiver of any provision
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of this Agreement, and no consent to any departure by the Pledgor herefrom shall
in any event be effective unless the same shall be in writing and signed by the
Trustee, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 16. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic,
telex or cable communication) and mailed, telecopied, telegraphed, telexed,
cabled or delivered to it, to the Pledgor or to the Trustee, at their respective
addresses specified in the Indenture, or, as to any party, at such other address
as shall be designated by such party in a written notice to the other party. All
such notices and other communications shall be effective (i) if sent by telex,
cable or telephonic telecopier, upon transmission, (ii) if delivered by hand
(including by independent courier service), upon delivery to the addressee and
(iii) if sent by first-class mail, postage prepaid, on the fifth (5th) calendar
day after mailing.
SECTION 17. Continuing Security Interest. This Agreement shall create a
continuing security interest in the Collateral and shall (i) remain in full
force and effect until (x) the payment in full of the Obligations and all other
amounts payable under this Agreement or (y) the Termination and Release shall
have occurred, (ii) be binding upon the Pledgor, its successors and assigns, and
(iii) inure to the benefit of, and be enforceable by, the Trustee, the Holders
and their respective successors, transferees and assigns. Upon (x) the payment
in full of the Obligations and all other amounts payable under this Agreement or
(y) the occurrence of the Termination and Release, the security interest granted
hereby shall terminate and all rights to the Collateral shall revert to the
Pledgor. Upon any such termination, the Trustee will, at the Pledgor's expense,
return to the Pledgor such of the Collateral as shall not have been sold or
otherwise applied pursuant to the terms hereof and execute and deliver to the
Pledgor such documents as the Pledgor shall reasonably request to evidence such
termination.
SECTION 18. Governing Law; Terms. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 19. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of a manually executed counterpart of this Agreement.
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IN WITNESS WHEREOF, the Pledgor have caused this Agreement to be duly
executed and delivered by its officers thereunto duly authorized as of the date
first above written.
[NAME OF SUBSIDIARY GUARANTOR]
By:
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Name:
Title:
ACCEPTED AND AGREED:
UNITED STATES TRUST COMPANY
OF NEW YORK
By:
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Name:
Title:
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