EXHIBIT 10.30
[CITIBANK LOGO]
ACCOUNT CONTROL AGREEMENT
DATE: 19th SEPTEMBER 2002
Parties
CITIBANK N.A., AS "SECURED PARTY"
ALLIED WORLD ASSURANCE COMPANY LTD, AS "PLEDGOR"
MELLON BANK, N.A., AS "BANK"
ACCOUNT NUMBER
Background
Pledgor has granted Secured Party a security interest in the financial assets in
the securities account identified above (the ACCOUNT), maintained by Bank for
Pledgor, (including any security entitlement) and in the Account. The parties
are entering into this agreement to provide for the control of the Account as a
means to perfect the security interest of Secured Party. Bank has no
responsibility to Secured Party in respect to the validity or perfection of such
security interest otherwise than to act in accordance with the terms and
conditions of this Agreement.
Agreement
1. The Account
Bank represents and warrants to Secured Party that Bank maintains the Account.
Bank represents and warrants that except for the claim and interest of Pledgor
and Secured Party, or as provided in Section 4 of this Agreement, Bank does not
know of any claim to or interest in the Account or any financial assets credited
thereto. Bank, Pledgor and Secured Party agree that the Account is a SECURITIES
ACCOUNT as that term is defined in Section 8-501(a) of the Uniform Commercial
Code as in effect from time to time in the State of New York (the "NYUCC").
Bank, Pledgor and Secured Party agree that each item of property (whether
investment property, financial asset, security, instrument or cash) credited to
the Account shall be treated as a financial asset within the meaning of Section
8-102(a)(9) of the NYUCC.
2. Control by Secured Party
Bank will comply with all notifications it receives directing it to transfer or
redeem any financial assets credited to the Account (each an ENTITLEMENT ORDER
as defined in Section 8-102(a)(8) of the NYUCC) originated by Secured Party and
shall otherwise treat Secured Party as entitled to exercise the rights in
respect of any financial asset credited to the Account without further consent
by Pledgor.
3. Pledgor's Rights in Account
Subject to this Section 3, until Bank receives an entitlement order from the
Secured Party, Bank may accept and comply with any entitlement order from
Pledgor with regard to the Account or any financial asset as follows:
- Until Bank receives an entitlement order from Secured Party, Bank
shall distribute to Pledgor all cash distributions received in
regard to financial assets in the Account. Cash distributions do not
include any principal received upon redemption or maturity of a
financial asset, and any such cash will be held for the benefit of
Secured Party.
- Prior to sending an entitlement order to Bank, Pledgor shall
determine that the financial assets remaining in the Account will be
equal to or exceed the aggregate value determined by Secured Party
from time to time (the "Required Account Value"). For purposes of
determining the value of any financial asset Pledgor shall (i)
determine that the financial asset is eligible as collateral as
specified in Exhibit A
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hereto and (ii) use the xxxx-to-market value provided by pricing
services used by Bank in connection with the valuation of financial
assets under similar account control arrangements or for Bank's
trust accounts, in each instance after applying the discount
specified in Exhibit A hereto; provided that in determining if the
remaining financial assets are sufficient Pledgor shall use the
xxxx-to-market values of the financial assets reported by such
services not more than the business day prior to the withdrawal or
distribution of any financial asset. Any financial asset that cannot
be valued as provided herein and any financial asset subject to
Bank's lien specified in Section 4 shall have no value in
determining if the financial assets to remain in the Account are
sufficient for purposes of meeting the Required Account Value.
Pledgor may substitute any financial asset for any financial asset
credited to the Account provided that (i) the financial assets
credited to the Account immediately after such substitution meet the
Required Account Value as provided in this Section 3 and (ii) the
financial asset received in such substitution is not subject to any
lien, security interest, charge or claim in regard to settlement or
otherwise.
- Bank shall provide Secured Party with electronic access to view holdings
and activity in the Account.
- Pledgor shall not direct Bank to release all assets in the Account or to
close the Account without Secured Party's consent, and Bank agrees that it
will not release all of the assets or close the Account without Secured
Party's consent.
If Secured Party gives Bank an entitlement order notifying Bank that Secured
Party will exercise exclusive control over the Account, Bank will cease
complying with entitlement orders or other directions concerning the Account
originated by Pledgor
4. Priority of Secured Party's Security Interest
Bank subordinates in favor of Secured Party any interest lien or right of setoff
it may have, now or in the future, against the Account or financial assets
credited to the Account; provided, however, Bank will retain its prior lien on a
financial asset credited to the Account where Bank has paid for such financial
asset but has not received payment therefore from Pledgor and for payment of its
customary fees and expenses pursuant to the agreement under which the Account is
maintained (the "Custody Agreement"), including any overdraft fees.
Bank will not agree with any third party that Bank will accept or comply with
entitlement orders originated by the third party in regard to the Account or any
financial asset credited to the Account.
5. Statements, Confirmations and Notices of Adverse Claims
Bank will send copies of all regular statements for the Account simultaneously
to Pledgor and Secured Party. Upon initial deposit of financial assets into the
Account and not less than monthly, Bank shall provide Secured Party with a
report of the valuation of the financial assets in the Account determined as
required in Section 3 of this Agreement. Bank will use reasonable efforts
promptly to notify Secured Party and Pledgor if any other person claims a
property interest in the Account or any financial asset credited to the Account.
Allied shall cause Secured Party to be provided with current information
concerning the Account via an on-line service of the Bank (currently, via its
"WorkBench" product) by designating Secured Party as an Authorized User
thereunder.
6. Bank's Responsibility
Bank shall have no responsibility or liability with respect to changes in the
standard of any securities in the Account or changes in their value relative to
other currencies or securities, or for any deduction for taxes, levies, or
otherwise from deposits made with any depository, or for any blockage,
confiscation or expropriation, limitation of transferability, or any other
action by any government, de facto or de jure, which affects or could affect the
same, or for any other occurrence beyond its control.
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Except for permitting a withdrawal or delivery in violation of Section 3, Bank
will not be liable to Secured Party for complying with entitlement orders from
Pledgor that are received by Bank before Bank receives and has a reasonable
opportunity to act on an entitlement order from Secured Party.
Bank will not be liable to Pledgor for complying with an entitlement order
originated by Secured Party even if Pledgor notifies Bank that Secured Party is
not legally entitled to issue the entitlement order or notice of exclusive
control, unless:
- Bank takes the action after it is served with an injunction, restraining
order or other legal process enjoining it from doing so, issued by a court
of competent jurisdiction, and had a reasonable opportunity to act on the
injunction, restraining order or other legal process, or
- Bank acts in collusion with Secured Party in violating Pledgor's rights.
This Agreement does not create any obligation of Bank except for those expressly
set forth in this Agreement. In particular, Bank need not investigate whether
Secured Party is entitled under Secured Party's agreement with Pledgor to give
an entitlement order. Bank may rely on notices and communications it believes
given by the appropriate party.
Bank will maintain the Account and financial assets in the same manner as it
maintains accounts and assets for its custodial customers generally. During the
term of this Agreement, Bank will remain a securities intermediary within the
meaning of such term in Section 8-102(a)(14) of the NYUCC and 31 C.F.R. 357.2.
From and after the time Secured Party sends an entitlement order to Bank,
Secured Party shall be entitled to the benefits of the Custody Agreement as if
it were the client thereunder.
7. Indemnity
Pledgor will indemnify, defend and hold harmless Bank, its partners, officers,
directors, employees and agents against claims, liabilities and expenses arising
out of this Agreement (including reasonable attorney's fees and disbursements),
except to the extent such claims, liabilities, and expenses arise from the
Bank's negligence, bad faith or wilful misconduct.
8. Termination; Survival
Secured Party may terminate this Agreement by notice to Bank and Pledgor. Bank
or Pledgor may terminate this Agreement on 30 days' notice to all of the other
parties. Upon receipt of a notice of termination from Pledgor, Bank shall cease
accepting any entitlement order from Pledgor, as specified in Section 3, and any
previous entitlement order delivered by Pledgor shall be deemed to be of no
further force and effect.
If Secured Party notifies Bank that it's security interest in the Account or all
of the financial assets therein has terminated, this Agreement will immediately
terminate.
Section 6, "BANK'S RESPONSIBILITY" and 7, "INDEMNITY," will survive termination
of this Agreement.
9. Governing law
This Agreement, insofar as it relates to the Secured Party's security interest
in the Account, will be governed by the laws of the State of New York, without
regard to its choice of laws provisions.
10. Entire agreement
This Agreement is the entire agreement and supersedes any prior agreements and
contemporaneous oral agreements, of the parties concerning its subject matter.
11. Amendments
No amendment of, or waiver of a right under, this Agreement will be binding
unless it is in writing and signed by the party to be charged.
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12. Severability
To the extent a provision of this Agreement is unenforceable, this Agreement
will be construed as if the unenforceable provision were omitted.
13. Successors and assigns
A successor to or assignee of Secured Party's rights and obligations under the
agreement between Secured Party and Pledgor will succeed to Secured Party's
rights and obligations under this Agreement.
14. Notices
A notice or other communication to a party under this Agreement will be in
writing, (including facsimile) (except that entitlement orders shall be given in
accordance with procedures as Bank may reasonably specify), will be sent to the
party's address set forth below or to such other address as the party may notify
the other parties and will be effective on receipt.
15. 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.
16. Representations
Each party hereto 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 it to the terms of this Agreement.
SIGNATURES
CITIBANK, N.A. PLEDGOR
BY: [ILLEGIBLE] BY: /s/ X.X. Xxxxxx /s/ X. Xxxxxxx
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Citibank, N.A., Allied World Assurance Company Ltd
XX Xxx 000 29 Pembroke Road
Cottons Centre, Xxxx Xxxx HM08
London SE1 2QT Xxxxxxxx
United Kingdom Bermuda
Custodian Bank X.X. XXXXXX
VICE PRESIDENT/TREASURER
BY: /s/ Xxxxxxx X. Manchian
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For and on behalf Mellon Bank, N.A.
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Insurance Custody Department
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