COLLATERAL ACCOUNT CONTROL
AGREEMENT
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”).
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:
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:
261941108) or Fidelity Institutional Money Market Government
(ticker: FIGXX; CUSIP: 316175108).
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
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.
2
ARTICLE III
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
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 a
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