ACCOUNT CONTROL AGREEMENT
Exhibit 10.4
THIS ACCOUNT CONTROL AGREEMENT (this “Agreement”) is dated as of November 27, 2007, among
ALLIED WORLD ASSURANCE COMPANY, LTD (“Pledgor”) with an address at 00 Xxxxxxxx Xxxx, Xxxxxxxx XX00,
Xxxxxxx, XXXXXX BANK, NA., as custodian (“Custodian”), with an address of Xxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, XX 00000, and WACHOVIA BANK, NATIONAL ASSOCIATION (“Administrative Agent”), in its
capacity as the administrative agent for the lenders under the Credit Agreement (the “Credit
Agreement”) among the Pledgor, Allied World Assurance Company Holdings, Ltd and the lenders from
time to time party thereto (the “Lenders”).
Recitals:
Pledgor and the Custodian are parties to a certain Custody Agreement dated as of November 19,
2001 (the “Custody Agreement”), governing the Account (as hereinafter defined);
Pursuant to the Pledge and Security Agreement, dated as of the date hereof, from Pledgor to
the Lenders (the “Security Agreement”), Pledgor has pledged to the Lenders securities account
number AWAF0003002 and related deposit account, if any (collectively, the “Account”) together with
all financial assets, investment property, securities, securities entitlements, cash and other
property therein; and
The Lenders have appointed the Administrative Agent as the Lenders’ agent in relation to the
Security Agreement.
Pledgor, Custodian and Administrative Agent are entering into this Agreement to provide for
the control of the Account and to perfect the security interest of Administrative Agent therein.
The terms “deposit account”, “entitlement holder”, “entitlement order”, “financial asset”,
“investment property”, “proceeds”, “security”, “security entitlement” and “securities intermediary”
shall have the meanings set forth in Articles 8 and 9 of the Uniform Commercial Code as in effect
from time to time in the State of New York (hereinafter, “UCC”).
The Pledgor and the Administrative Agent hereby appoint the Custodian as custodian, bailee and
securities intermediary of all financial assets at any time delivered to, or deposited with, the
Custodian to be credited to the Account. The Custodian hereby accepts the foregoing appointment as
custodian, bailee, securities intermediary and agent.
Therefore, in consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the
parties hereby agree as follows:
1. The Account. Custodian hereby represents and warrants to Administrative Agent and
Pledgor that (a) the Account has been established in the name of Pledgor and (b) to the best of
Custodian’s knowledge, except for the claims and interest of Administrative Agent and Pledgor in
the Account (subject to any claim in favor of Custodian permitted under Section 2), Custodian does
not know of any claim to or interest in the Account. All parties agree that the
Account and all property held by Custodian in the Account or credited to the Account and all
other rights of the Pledgor against the Custodian arising out of the Account will be treated as
investment property under Article 9 of the UCC and financial assets under Article 8 of the UCC.
The Custodian makes no representation or warranty, and shall have no responsibility or liability,
with respect to the effectiveness of this Agreement in perfecting such security interest.
2. Priority of Lien. Custodian hereby acknowledges the security interest granted to
Administrative Agent by Pledgor. Custodian hereby subordinates all liens, encumbrances, claims and
rights of setoff it may have against the Account or any financial asset carried in the Account or
any credit balance in the Account to the security interests of the Administrative Agent and agrees
that, except for its lien on financial assets in the Account to secure payment for financial assets
purchased for the Account and customary fees and charges pursuant to the Custody Agreement, it will
not assert any such lien, encumbrance, claim or right against the Account or any financial asset
and other property carried in the Account or any credit balance in the Account. Custodian will not
agree with any third party that Custodian will comply with entitlement orders concerning the
Account originated by such third party.
3. Control. Custodian will comply at all times with entitlement orders originated by
Administrative Agent concerning the Account without further consent by Pledgor or any other person.
Custodian shall make trades of financial assets and other property held in the account at the
direction of Pledgor, or Pledgor’s authorized representative, and comply with entitlement orders
and such other direction concerning the Account from Pledgor, or Pledgor’s authorized
representatives, until such time as Administrative Agent delivers a written notice to Custodian and
Pledgor that Administrative Agent is thereby exercising exclusive control over the Account (the
“Notice of Exclusive Control”). After Custodian receives the Notice of Exclusive Control,
Custodian will cease complying with entitlement orders or other directions concerning the Account
originated by Pledgor or Pledgor’s representatives.
It is understood and agreed that the Custodian’s duty to comply with instructions and
entitlement orders from the Administrative Agent regarding the Account is absolute, and the
Custodian shall be under no duty or obligation, nor shall it have the authority, to inquire or
determine whether or not such instructions are in accordance with the Security Agreement or any
other agreement, nor seek confirmation thereof from the Pledgor or any other person. In case of
any conflict between the entitlement orders or instructions received by the Custodian from the
Administrative Agent and any entitlement orders or instructions received by the Custodian from the
Pledgor or any other person other than the Administrative Agent in accordance with this Agreement,
the entitlement orders and instructions originated by the Administrative Agent shall prevail.
4. Statements and Notices of Adverse Claims; Access to Reports. Custodian will send
copies of all monthly statements concerning the Account to each of Pledgor and Administrative
Agent, within ten (10) business days of the end of each calendar month and at and as of such other
times as Administrative Agent may reasonably request, in all cases at the address set forth in
Section 12 of this Agreement. Upon receipt of written notice of any lien, encumbrance or adverse
claim against the Account or in any financial asset or other property carried therein, Custodian
will make all reasonable efforts to notify Administrative Agent and Pledgor thereof. Further, upon
any pledge, release or substitution of financial assets or other
property in the Account, Custodian shall notify Administrative Agent within one business day
of such change.
5. Limited Responsibility of Custodian. Custodian shall have no responsibility or
liability to Administrative Agent for making trades of financial assets held in the Account at the
direction of Pledgor, or Pledgor’s authorized representatives, or complying with entitlement orders
concerning the Account from Pledgor, or Pledgor’s authorized representatives, that are received by
Custodian before Custodian receives a Notice of Exclusive Control. Custodian shall have no
responsibility or liability to Pledgor for complying with a Notice of Exclusive Control or
complying with entitlement orders concerning the Account originated by Administrative Agent, even
if Pledgor notifies Custodian that the Administrative Agent is not legally entitled to issue the
entitlement order or Notice of Exclusive Control. Custodian shall have no responsibility or
liability to Administrative Agent with respect to the value of the Account or any asset held
therein. Custodian shall have no duty to investigate or make any determination as to whether a
default exists under any agreement between Pledgor and Administrative Agent and shall comply with a
Notice of Exclusive Control even if it believes that no such default exists. This Agreement does
not create any obligation or duty of Custodian other than those expressly set forth herein.
6. Indemnification of Custodian. Pledgor hereby agrees to indemnify, defend and hold
harmless Custodian, its directors, officers, agents and employees against any and all claims,
causes of action, liabilities, lawsuits, demands and damages, including without limitation, any and
all court costs and reasonable attorney’s fees, in any way related to or arising out of or in
connection with this Agreement or any action taken or not taken pursuant hereto, except to the
extent as a result of Custodian’s gross negligence or willful misconduct.
7. Termination. The rights and powers granted herein to Administrative Agent have
been granted in order to perfect its security interest in the Account, are powers coupled with an
interest and will not be affected by the lapse of time. The obligations of Custodian under
Sections 2, 3 and 5 above shall continue in effect until the earlier of (i) the date on which
Pledgor makes suitable arrangements with the prior written consent of Administrative Agent
following the resignation of Custodian on 30 days’ prior written notice to Administrative Agent and
Pledgor and (ii) Administrative Agent has notified Custodian and Pledgor on 30 days’ prior written
notice in writing that this Agreement is to be terminated.
8. Entire Agreement. This Agreement, any schedules or exhibits hereto and the
instructions and notices required or permitted to be executed and delivered hereunder set forth the
entire agreement of the parties with respect to the subject matter hereof.
9. Amendments. No amendment, modification or (except as otherwise specified in
Section 7 above) termination of this Agreement, nor any assignment of any rights hereunder, shall
be binding on any party hereto unless it is in writing and is signed by each of the parties hereto,
and any attempt to so amend, modify, terminate or assign except pursuant to such a writing shall be
null and void. No waiver of any rights hereunder, shall be binding on any party hereto unless such
waiver is in writing and signed by the party against whom enforcement is sought.
10. Severability. If any term or provision set forth in this Agreement shall be
invalid or unenforceable, the remainder of this Agreement, or the application of such term or
provision to persons or circumstances other than those to which it is held invalid or
unenforceable, shall be construed in all respects as if such invalid or unenforceable term or
provision were omitted.
11. 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 permitted assigns.
12. Notices. Any notice, request or other communication required or permitted to be
given under this Agreement shall be in writing and deemed to have been properly given (i) when
delivered in person, or (ii) when sent by telecopy or other electronic means and electronic
confirmation of error free receipt is received or (iii) upon receipt of notice sent by certified or
registered mail, return receipt requested, postage prepaid, in each case when addressed to the
party at the address (or telecopier number) specified for such party below. Any party may change
its address for notices in the manner set forth above.
Pledgor: |
Allied World Assurance Company, Ltd | |
| 00 Xxxxxxxx Xxxx | ||
| Xxxxxxxx XX 00, Xxxxxxx | ||
| Attn: Xxxxxxxxx Xxxxx | ||
| Telephone: (000) 000-0000 | ||
| Telecopy: (000) 000-0000 | ||
| with copies to: | ||
| Allied World Assurance Company, Ltd | ||
| 00 Xxxxxxxx Xxxx | ||
| Xxxxxxxx XX 00, Xxxxxxx | ||
| Attn: Xxxx Xxxxxxx | ||
| Telephone: (000) 000-0000 | ||
| Telecopy: (000) 000-0000 | ||
| and | ||
| Xxxx X. Xxxxxxx, Esq. | ||
| Xxxxxx Xxxx & Xxxxxx LLP | ||
| 000 Xxxxxxxx Xxxxxx, 00xx Xxxxx | ||
| Xxxxxxxx, XX 00000 | ||
| Telecopy: (000) 000-0000 | ||
Custodian: |
Mellon Bank, N.A. | |
| Xxx Xxxxxx Xxxxxx | ||
| Xxxxxxxxxx, XX 00000 | ||
| Attn: Xxx Xxxxxxx | ||
| Telephone: (000) 000-0000 | ||
| Telephone: (000) 000-0000 |
Administrative Agent: |
Wachovia Bank, National Association, | |
| as Administrative Agent | ||
| 000 Xxxxx Xxxxxxx Xxxxxx, 00xx Xxxxx, XX0000 | ||
| Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000 | ||
| Attn: Will Xxxxx | ||
| Telephone: (000) 000-0000 | ||
| Telecopy: (000) 000-0000 |
13. 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.
14. Choice of Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
15. Waiver of Jury Trial. Pledgor, Custodian and Administrative Agent hereby waive
trial by jury in any judicial proceeding involving, directly or indirectly, any matter in any way
arising out of, or related to, or in connection with this Agreement
16. Representations. Each party hereby represents and warrants that the individual
executing this Agreement on its behalf has the requisite power and authority to do so and to bind
such party to the terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered
as of the day and year first above written.
| ALLIED WORLD ASSURANCE COMPANY, LTD, as Pledgor | ||||
By:
|
/s/ Xxxx X. Xxxxxxx | |||
| Signature | ||||
| Name: Xxxx X. Xxxxxxx | ||||
| Title: Senior Vice President and Chief Financial Officer | ||||
By:
|
/s/ Xxxxxxxxx X. Xxxxx
|
|||
| Signature | ||||
| Name: Xxxxxxxxx X. Xxxxx | ||||
| Title: Vice President and Treasurer | ||||
| MELLON BANK, N.A., as Custodian | ||||
By:
|
/s/ Xxxxx Xxxxx
|
|||
| Signature | ||||
| Name: Xxxxx Xxxxx | ||||
| Title: First Vice President | ||||
| WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent | ||||
By:
|
/s/ Xxxxxxx X. Xxxxx
|
|||
| Signature | ||||
| Name: Xxxxxxx X. Xxxxx | ||||
| Title: Director | ||||
