COLLATERAL ACCOUNT CONTROL AGREEMENT
Exhibit 99.1
AGREEMENT (the “Agreement”), dated as of December 3, 2010, among American International Group,
Inc. (“Pledgor”), Federal Reserve Bank of New York (“Secured Party”) and The Bank of New York
Mellon (“Securities Intermediary”).
W I T N E S S E T H :
WHEREAS, Secured Party and Pledgor have entered into the Guarantee and Pledge Agreement dated
as of September 22, 2008 (as amended, the “Pledge Agreement”), pursuant to which Pledgor has agreed
to pledge to Secured Party the Collateral (as defined below) in order to secure the repayment of
Pledgor’s obligations under the Credit Agreement dated as of September 22, 2008 (as amended, the
“Credit Agreement”), between Pledgor, as borrower, and Secured Party, as lender; and
WHEREAS, Secured Party and Pledgor have requested Securities Intermediary to hold the
Collateral and to perform certain other functions as more fully described herein; and
WHEREAS, Securities Intermediary has agreed to act on behalf of Secured Party and Pledgor in
respect of Collateral delivered to Securities Intermediary by Pledgor for the benefit of Secured
Party, subject to the terms hereof;
NOW THEREFORE, in consideration of the mutual promises set forth hereafter, the Parties agree
as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
Whenever used in this Agreement, the following words shall have the meanings set forth below:
1. “Account” shall mean the USD account, number 828444, that is a securities account in
which Collateral shall be deposited, or caused to be deposited, by Pledgor and pledged to Secured
Party, and any subaccounts thereunder.
2. “Collateral” shall mean each item of property and all proceeds thereof held in the Account.
3. “Depository” shall mean, for purposes of this Agreement only, the Federal Reserve Bank of
New York for receiving and delivering securities maintained by the Fedwire Securities Service, The
Depository Trust Company and any other clearing corporation within the meaning of Section
8-102(a)(5) of the UCC or otherwise authorized to act as a securities depository or clearing
agency, and their respective successors and nominees.
4. “Exclusive Control Notice” shall have the meaning ascribed thereto in Article III, Section
1 hereto.
5. “Party” means a party to this Agreement.
6. “Permitted Investment” means Dreyfus Treasury Prime Cash Management-Institutional Shares
(ticker: DIRXX; CUSIP: 000000000) or Fidelity Institutional Money Market Government (ticker:
FIGXX; CUSIP: 000000000).
7. “UCC” shall mean the Uniform Commercial Code as in effect in the State of New York.
8. “Written Instructions” shall mean written communications received by Securities
Intermediary via S.W.I.F.T., tested telex, e-mail, letter, facsimile transmission, or other method
or system specified by Securities Intermediary as available for use in connection with this
Agreement, provided, however, that any Written Instruction delivered by Pledgor to Securities
Intermediary pursuant to Article III, Section 1 hereof with respect to the investment or transfer
of Collateral shall constitute “Written Instructions” hereunder only if accompanied by Pledgor’s
written certification that it has given Secured Party not less than 24 hours’ prior written notice
of the matters referred to in such written communication and it is accompanied by a copy of what
purports to be a complete copy of such prior written notice as delivered to Secured Party.
The terms “entitlement holder”, “entitlement order”, “financial asset”, “investment property”,
“proceeds”, “security”, “securities account” and “securities intermediary” shall have the meanings
set forth in Articles 8 and 9 of the UCC.
ARTICLE II
APPOINTMENT AND STATUS OF SECURITIES INTERMEDIARY;
ACCOUNTS
APPOINTMENT AND STATUS OF SECURITIES INTERMEDIARY;
ACCOUNTS
1. Appointment; Identification of Collateral. (a) Secured Party and Pledgor each
hereby appoints Securities Intermediary to perform its duties as hereinafter set forth and
authorizes Securities Intermediary to hold the Collateral in the Account in registered form in its
name or the name of its nominees. The Parties agree that all financial assets (except cash) in the
Account will be registered in the name of Securities Intermediary or the name of its nominees and
no financial asset in the Account will be registered in the name of Pledgor, payable to the order
of Pledgor or specially indorsed to Pledgor unless such financial asset has been further indorsed
to Securities Intermediary or in blank. Securities Intermediary hereby accepts such appointment
and agrees to establish and maintain the Account and appropriate records identifying the Collateral
in the Account as pledged by Pledgor to Secured Party. Pledgor hereby authorizes Securities
Intermediary to comply with all Written Instructions, including entitlement orders, originated by
Secured Party with respect to the Collateral without further consent or direction from Pledgor or
any other party. The Parties hereby agree that the Account is and will remain a securities account
as defined in Section 8-501(a) of the UCC and that Secured Party is an entitlement holder with
respect to the Account.
2. Status of Securities Intermediary and “Financial Asset” Election. The Parties
agree that Securities Intermediary is a securities intermediary and intend that each item of
property (whether investment property, financial asset, security, instrument, cash or other
property) held in the Account shall be treated as a “financial asset” within the meaning of
Sections 8-102(a)(9) and 8-103 of the UCC.
3. Use of Depositories. Secured Party and Pledgor hereby authorize Securities
Intermediary to utilize Depositories to the extent possible in connection with its performance
hereunder. Collateral held by Securities Intermediary in or maintained by a Depository will be
held subject to the regulations, rules, terms and conditions applicable to such Depository. Where
Collateral is held in or maintained by a Depository, Securities Intermediary shall identify on its
records as belonging to Pledgor and pledged to Secured Party a quantity of financial assets
(including securities or security entitlements) as part of a fungible bulk of financial assets held
in Securities Intermediary’s account at such Depository. Financial assets deposited in or
maintained by a Depository will be represented in accounts that include only assets held by
Securities Intermediary for its customers.
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ARTICLE
III
COLLATERAL SERVICES
COLLATERAL SERVICES
1. Transfers; Substitutions; Investment of Funds. The Account shall be operated
solely on the Written Instructions of Pledgor, which may direct the investment of cash in the
Account as set forth below until receipt by Securities Intermediary of Written Instructions from
Secured Party terminating Pledgor’s rights to give such Written Instructions relating to the
Account (an “Exclusive Control Notice”), whereupon the right to give
such Written Instructions shall be vested solely with Secured Party. All transfers of non-cash
Collateral into or out of the Account shall be made free of payment. Securities Intermediary shall
invest and reinvest the cash in the Account in one or more Permitted Investments in accordance with
the Written Instructions of Pledgor, as soon as reasonably practicable following Securities
Intermediary’s receipt of such Written Instructions. Securities Intermediary will not be liable
for any losses resulting from any investment made in accordance with the terms of this Article III,
Section 1. In the absence of Written Instructions directing the investment of the cash in the
Account in accordance with this Agreement, such cash shall remain uninvested.
Solely as an agreement between Pledgor and Secured Party, Secured Party agrees that it shall
not give an Exclusive Control Notice to Securities Intermediary under the terms of the foregoing
unless a Default or Event of Default (as defined in the Credit Agreement) has occurred or Secured
Party otherwise deems itself insecure with respect to the obligations secured by the Account and
the assets credited thereto.
2. Payment of Proceeds. Until Securities Intermediary receives a Written Instruction
from Secured Party to the contrary, Securities Intermediary shall credit to the Account all
proceeds, including without limitation all interest and principal payments, received by it with
respect to the Collateral. For tax reporting purposes, all earnings on Permitted Investments shall
be considered the property of Pledgor. Pledgor shall furnish Securities Intermediary upon
execution of this Agreement, and as subsequently required, all appropriate U.S. tax forms and
information in order for Securities Intermediary to comply with U.S. tax regulations.
3. No Lien or Pledge by Securities Intermediary. Securities Intermediary agrees that
the Account and the Collateral in the Account shall not be subject to any security interest, lien
or right of set-off by Securities Intermediary or any third party claiming through Securities
Intermediary, and Securities Intermediary shall not pledge, encumber, hypothecate, transfer,
dispose of, or otherwise grant any third party an interest in the Collateral.
4. Notice of Adverse Claims. Except for the claims and interests of Secured Party and
Pledgor, Securities Intermediary does not know of any claim to, or interest in, the Account, any
financial asset credited thereto or any security entitlement in respect thereof. Upon receipt of
written notice of any lien, encumbrance or adverse claim against the Account or any portion of the
Collateral carried therein, Securities Intermediary shall use reasonable efforts to notify Secured
Party and Pledgor as promptly as practicable under the circumstances.
ARTICLE IV
GENERAL TERMS AND CONDITIONS
GENERAL TERMS AND CONDITIONS
1. Standard of Care; Indemnification. (a) Except as otherwise expressly provided
herein, Securities Intermediary shall not be liable for any costs, expenses, damages, liabilities
or claims, including attorneys’ fees (“Losses”) incurred by or asserted against Pledgor or Secured
Party, except those Losses arising out of the negligence or willful misconduct of Securities
Intermediary. Securities Intermediary shall have no liability whatsoever for the action or
inaction of any Depository. In no event shall Securities Intermediary be liable for special,
indirect or consequential damages, or lost profits or loss of business, arising in connection with
this Agreement.
(b) Pledgor agrees to indemnify Securities Intermediary and hold Securities Intermediary
harmless from and against any and all Losses sustained or incurred by or asserted against
Securities Intermediary by reason of or as a result of any action or inaction, or arising out of
Securities Intermediary’s performance hereunder, including reasonable fees and expenses of counsel
incurred by Securities Intermediary in a successful defense of claims by Pledgor or Secured Party,
except Pledgor shall not indemnify Securities Intermediary for those Losses arising out of
Securities Intermediary’s or Secured Party’s negligence or willful misconduct. Secured Party
agrees
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to indemnify Securities Intermediary for Losses sustained or incurred by or asserted against
Securities Intermediary arising out of Secured Party’s negligence or willful misconduct or Secured
Party’s Written Instruction in connection with this Agreement, except Secured Party shall not
indemnify Securities Intermediary for those Losses arising out of Securities Intermediary’s
negligence or willful misconduct. This indemnity shall be a continuing obligation of Pledgor and
Secured Party, as applicable, and their respective successors and assigns, notwithstanding the
termination of this Agreement.
2. No Obligation Regarding Quality of Collateral. Without limiting the generality of
the foregoing, Securities Intermediary shall be under no obligation to inquire into, and shall not
be liable for, any Losses incurred by Pledgor, Secured Party or any other person as a result of the
receipt or acceptance of fraudulent, forged or invalid Collateral, or Collateral which otherwise is
not freely transferable or deliverable without encumbrance in any relevant market.
3. No Responsibility Concerning Pledge Agreement or Credit Agreement. Pledgor and
Secured Party hereby agree that, notwithstanding references to the Pledge Agreement or the Credit
Agreement in this Agreement, Securities Intermediary has no interest in, and no duty,
responsibility or obligation with respect to, the Pledge Agreement or the Credit Agreement
(including without limitation, no duty, responsibility or obligation to monitor Pledgor’s or
Secured Party’s compliance with the Pledge Agreement or the Credit Agreement or to know the terms
of the Pledge Agreement or the Credit Agreement).
4. No Duty of Oversight. Securities Intermediary is not at any time under any duty to
monitor the value of any Collateral in the Account or whether the Collateral is of a type required
to be held in the Account, or to supervise the investment of, or to advise or make any
recommendation for the purchase, sale, retention or disposition of any Collateral.
5. Advice of Counsel. Securities Intermediary may, with respect to questions of law,
obtain the advice of counsel and shall be fully protected with respect to anything done or omitted
by it in good faith in conformity with such advice.
6. No Collection Obligations. Securities Intermediary shall be under no obligation to
take action to collect any amount payable on Collateral in default, or if payment is refused after
due demand and presentment.
7. Fees and Expenses. Pledgor agrees to pay to Securities Intermediary the fees as
may be agreed upon from time to time. Pledgor shall reimburse Securities Intermediary for all
costs associated with transfers of Collateral to Securities Intermediary and records kept in
connection with this Agreement. Pledgor shall also reimburse Securities Intermediary for
out-of-pocket expenses which are a normal incident of the services provided hereunder.
8. Effectiveness of Written Instructions. Securities Intermediary shall be entitled
to rely upon any Written Instructions actually received by Securities Intermediary and reasonably
believed by Securities Intermediary to be duly authorized and delivered, in accordance with the
Agreement including, without limitation, Written Instructions sent via unsecured facsimile or
e-mail transmission. Securities Intermediary may request that Pledgor and Secured Party deliver a
certificate setting forth the names of individuals and or titles of officers authorized at such
time to take specific actions pursuant to this Agreement and shall be entitled to rely upon such
certificate until a new certificate is delivered to Securities Intermediary.
9. Recording of Telephone Conversations. The Parties acknowledge that telephone
conversations made in connection with this Agreement may be recorded.
10. Inspection. Upon reasonable advance request and provided Securities Intermediary
shall suffer no significant disruption of its normal activities, Secured Party or Pledgor shall
have access to Securities Intermediary’s books and records relating to the Account during
Securities Intermediary’s normal business hours. Upon reasonable request, copies of any such books
and records shall be provided to Secured Party or Pledgor at its expense.
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11. Accounts Disclosure. Securities Intermediary is authorized to supply any
information regarding the Account which is required by any law or governmental regulation now or
hereafter in effect.
12. Force Majeure. Securities Intermediary shall not be responsible or liable for any
failure or delay in the performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control, including, without
limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances;
sabotage; epidemics; riots; interruptions, loss or malfunctions of
utilities, computer (hardware or software) or communications service; accidents; labor disputes; acts of civil
or military authority; governmental actions; and inability to obtain labor, material, equipment or
transportation.
13. Pricing Services. Securities Intermediary may, as an accommodation, provide
pricing or other information services to Pledgor and/or Secured Party in connection with this
Agreement. Securities Intermediary may utilize any vendor (including securities brokers and
dealers) believed by it to be reliable to provide such information. Under no circumstances shall
Securities Intermediary be liable for any loss, damage or expense suffered or incurred by Pledgor
or Secured Party as a result of errors or omissions with respect to any pricing or other
information utilized by Securities Intermediary hereunder.
14. No Implied Duties. Securities Intermediary shall have no duties or
responsibilities whatsoever except such duties and responsibilities as are specifically set forth
in this Agreement, and no covenant or obligation shall be implied against Securities Intermediary
in connection with this Agreement. Securities Intermediary has not entered into, and until the
termination of this Agreement will not enter into, any agreement with any person relating to the
Account and/or any financial asset held thereto pursuant to which it has agreed, or will agree, to
comply with the entitlement orders of such person. No provision of this Agreement shall require
Securities Intermediary to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of any of its rights or
powers, if repayment of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
ARTICLE V
MISCELLANEOUS
MISCELLANEOUS
1. Termination. This Agreement shall terminate upon (a) Securities Intermediary’s
receipt of Written Instructions from Secured Party expressly stating that Secured Party no longer
claims any security interest in the Collateral and Securities Intermediary’s subsequent transfer of
the Collateral from the Account pursuant to Pledgor’s Written Instructions, or (b) not less than
ninety (90) days’ prior written notice of termination by any Party to the other Parties, provided
that termination pursuant to (b) above shall not affect or terminate Secured Party’s security
interest in the Collateral. Upon termination pursuant to (b) above, Securities Intermediary shall
follow such reasonable Written Instructions of Secured Party concerning the transfer of the
Collateral. Except as otherwise provided herein, all obligations of the Parties to each other
hereunder shall cease upon termination of this Agreement.
2. Notices. (a) Any notice or other instrument in writing authorized or required by
this Agreement to be given to Securities Intermediary shall be sufficiently given if addressed to
Securities Intermediary and received by it at its offices at the address provided below, or at such
other place as Securities Intermediary may from time to time designate in writing.
The Bank of New York Mellon
Attention: Dealing and Trading
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxxxxxxx.xxxxxx@xxxxxxxxx.xxx
Attention: Dealing and Trading
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxxxxxxx.xxxxxx@xxxxxxxxx.xxx
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(b) Any notice or other instrument in writing authorized or required by this Agreement to be
given to Pledgor shall be sufficiently given if addressed to Pledgor and received by it at its
offices at the address provided below, or at such other place as Pledgor may from time to time
designate in writing.
American International Group, Inc.
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
Telephone: (000) 000-0000
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
Telephone: (000) 000-0000
(c) Any notice or other instrument in writing authorized or required by this Agreement to be
given to Secured Party shall be sufficiently given if addressed to Secured Party and received by it
at its offices at the address provided below, or at such other place as Secured Party may from time
to time designate in writing.
Federal Reserve Bank of New York
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Vice President
Fax: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxx.xxxxxxx@xx.xxx.xxx
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Vice President
Fax: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxx.xxxxxxx@xx.xxx.xxx
with a copy to:
Federal Reserve Bank of New York
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx, Counsel and Assistant Vice President
Fax: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxxx.xxxxxxxx@xx.xxx.xxx
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx, Counsel and Assistant Vice President
Fax: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxxx.xxxxxxxx@xx.xxx.xxx
3. Cumulative Rights; No Waiver. Each and every right granted to Securities
Intermediary hereunder or under any other document delivered hereunder or in connection herewith,
or allowed it by law or equity, shall be cumulative and may be exercised from time to time. No
failure on the part of Securities Intermediary to exercise, and no delay in exercising, any right
will operate as a waiver thereof, nor will any single or partial exercise by Securities
Intermediary of any right preclude any other future exercise thereof or the exercise of any other
right.
4. Severability; Amendments; Assignment. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions shall not in any way be affected thereby.
This Agreement may not be amended or modified in any manner except by a written agreement executed
by the Parties. This Agreement shall extend to and shall be binding upon the Parties, and their
respective successors and assigns; provided, however, that this Agreement shall not be assignable
by any party without the written consent of the other parties.
5. Governing Law; Jurisdiction; Jury Trial Waiver; Waiver of Immunity. This Agreement
shall be construed in accordance with the laws of the State of New York. The State of New York
shall be deemed to be Securities Intermediary’s jurisdiction for purposes of the UCC (including,
without limitation, Section 8-110 thereof). Each Party hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each Party hereby irrevocably and unconditionally
agrees
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that all claims in respect of any such action or proceeding may be heard and determined in
such New York State or, to the extent permitted by law, in such federal court. Each Party agrees
that a final judgment in any such action or proceeding shall be conclusive. Each Party hereby
irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so,
any objection that it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any New York State or federal court.
Each Party hereby irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such court.
Each Party hereby unconditionally and irrevocably waives any and all right to trial by jury in
any action, suit, counterclaim, or cross claim arising in connection with, out of, or otherwise
relating to this Agreement, the Collateral, or any transaction or agreement arising therefrom or
related thereto.
If Pledgor or its property is now, or in the future becomes, entitled to any immunity, whether
characterized as sovereign or otherwise (including, without limitation, immunity from set-off, from
service of process, from jurisdiction of any court or tribunal, from attachment in aid of
execution, from attachment prior to the entry of a judgment, or from execution upon a judgment) in
any legal proceeding in Federal or State courts in the United States of America, or in the courts
of the country where Pledgor is chartered, or in the courts of the country in which Pledgor
principally conducts its business, then Pledgor expressly and irrevocably waives, to the maximum
extent permitted by law, any such immunity. To the extent Pledgor receives any such entitlement in
the future, Pledgor shall promptly notify Secured Party of such entitlement.
6. No Third-Party Beneficiaries. In performing hereunder, Securities Intermediary is
acting solely on behalf of Secured Party and Pledgor and no contractual or service relationship
shall be deemed to be established hereby between Securities Intermediary and any other person.
7. Headings. Section headings are included in this Agreement for convenience only and
shall have no substantive effect on its interpretation.
8. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall, together, constitute only
one instrument.
9. USA PATRIOT ACT. Pledgor and Secured Party hereby acknowledge that Securities
Intermediary is subject to federal laws, including the Customer Identification Program (CIP)
requirements under the USA PATRIOT Act and its implementing regulations, pursuant to which
Securities Intermediary must obtain, verify and record information that allows Securities
Intermediary to identify each of Pledgor and Secured Party. Accordingly, prior to opening the
Account hereunder Securities Intermediary will ask Pledgor and/or Secured Party to provide certain
information including, but not limited to, Pledgor’s and/or Secured Party’s name, physical address,
tax identification number and other information that will help Securities Intermediary to identify
and verify each of Pledgor’s and Secured Party’s identity such as organizational documents,
certificate of good standing, license to do business, or other pertinent identifying information.
Pledgor and Secured Party agree that Securities Intermediary cannot open the Account hereunder
unless and until Securities Intermediary verifies Pledgor’s and/or Secured Party’s identity in
accordance with its CIP.
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IN WITNESS WHEREOF, Secured Party, Pledgor and Securities Intermediary have caused this
Agreement to be executed by their respective officers, thereunto duly authorized, as of the day and
year first above written.
| AMERICAN INTERNATIONAL GROUP,
INC., as Pledgor |
|||||
| By: | /s/ Xxxxxx X. Gender | ||||
| Title: | Vice President and Treasurer | ||||
| FEDERAL RESERVE BANK OF NEW YORK, as Secured Party |
|||||
| By: | /s/ Xxxxx X. Xxxxxxx | ||||
| Title: | Vice President | ||||
| THE BANK OF NEW YORK MELLON, as Securities Intermediary |
|||||
| By: | /s/ Xxxxxx X. Xxxxxxxxx | ||||
| Title: | Managing Director | ||||
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