ACCOUNT CONTROL AGREEMENT June 5, 2009
Exhibit 99.2
June 5,
2009
BNP
Paribas (the “Secured Party”); Flagstone Reassurance Suisse, S.A. (the
“Customer”); and JPMORGAN CHASE BANK, N.A. (in its capacity as a “securities
intermediary” as defined in Section 8-102 of the UCC, the “Bank”) hereby agree
as follows:
PREAMBLE
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1.
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The
Bank has established, at the request of the Customer, a securities custody
account number G12040 in the name of the Customer (the
“Account”).
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2.
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The
Customer has granted the Secured Party a security interest in the Account
pursuant to that certain Letter of Credit and Reimbursement Agreement,
dated as of June 5, 2009, by and between the Customer and the Secured
Party.
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3.
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The
Secured Party and the Customer and the Bank, at the request of the Secured
Party and the Customer, are entering into this Agreement to provide for
the control of the Account and to perfect the security interest of the
Secured Party in the Account. It is understood that the Bank
has no responsibility with respect to the validity or perfection of the
security interest otherwise than to act in accordance with the terms of
this Agreement.
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DEFINITIONS
As used
herein the following terms shall have the following meanings:
Entitlement Holder shall mean
a person identified in the records of the Bank as the person having a Security
Entitlement against the Bank.
Entitlement Order shall have
the meaning given to such term in Section 8-102 of the UCC.
Financial Assets shall have
the meaning given to such term in Section 8-102(a)(9) of the UCC, excluding any
cash credit balance that may be maintained in the Account.
Pledged Assets shall mean any
Financial Assets and any cash credit balance which may be maintained in the
Account.
Security Entitlement shall
mean the rights and property interest of an Entitlement Holder with respect to a
Financial Asset specified in Part 5 of Article 8 of the New York Uniform
Commercial Code (the “UCC”).
UCC shall mean the Uniform
Commercial Code as in effect from time to time in the State of New
York.
TERMS
Section 1. The Account. (a)
The Account is a “securities account” (as defined in Section 8-501 of the
UCC). Pledged Assets currently maintained in the Account do not
reflect any Financial Assets which are registered in the name of the Customer,
payable to the Customer’s order, or specifically endorsed to the Customer, which
have not been endorsed to the Bank or in blank. To the Bank’s
knowledge, the Security Entitlements arising out of the Financial Assets carried
in the Account are valid and legally binding obligations of the Bank, and except
for the claims and interest of the Secured Party and the Customer in the Account
(subject to any claim in favor of the Bank permitted under Section 2 hereof),
the Bank has not been notified in writing of any claim to or interest in the
Account.
Section
2. Pledged Assets.
The Secured Party and the
Customer agree that all securities that are transferred into the Account as
Pledged Assets shall be fully paid for and that all trade settlements of
transactions for such securities shall be completed prior to transfer of such
securities into the Account as Pledged Assets. The Bank shall be
entitled to reverse any cash credit previously made to the Account due to error
or the non-receipt of any income or divided distribution.
Section 3. Priority of
Lien. The Bank hereby acknowledges the security interest
granted to the Secured Party by the Customer. The Bank hereby waives
and releases all liens, encumbrances, claims and rights of setoff it may have
against the Account or any Pledged Assets carried in the Account, except that
the Bank shall retain a lien on any Pledged Assets in the Account for the
payment of its fees and for the payment of any Pledged Assets credited to the
Account for which payment or reimbursement to the Bank has not been made or
received. The Bank will not agree with any third party to comply with
Entitlement Orders concerning the Account originated by such third party without
the prior written consent of the Secured Party and the Customer.
Section
4. Control. The Bank agrees that if at any time it
shall receive from the Secured Party any Entitlement Order or other directives
with respect to the Account and the Pledged Assets (each such Entitlement Order
or directive, a “Secured Party Order”), the Bank will comply with such Secured
Party Orders without further consent by the Customer. (Exhibit B attached hereto
contains the names of persons authorized to give to the Bank Secured Party
Orders and other directives regarding the Pledged Assets on behalf of the
Secured Party.) Notwithstanding anything to the contrary contained
herein, (i) upon the delivery by the Secured Party and receipt by the Bank of a
written notice to the Bank in the form annexed hereto as Exhibit C, that the
Secured Party is thereby exercising exclusive control over the Account (such
notice may be referred to herein as the “Notice of Exclusive Control”), the Bank
will promptly cease complying with Entitlement Orders or other directions
concerning the Account originated by the Customer or its representatives; and
(ii) if at any time the Bank shall receive conflicting orders from the Secured
Party and the Customer, the Bank shall follow the Secured Party Orders and not
the orders or directives of the Customer.
Section 5. Payment of
Income; Voting Rights; Withdrawals. Unless the Bank has
received a Notice of Exclusive Control or a Secured Party Order to the contrary,
the Bank shall (a) without further action by the Customer or Secured Party, (i)
remit or make available to the Customer all interest, dividends and other income
on the Financial Assets in the Account, and (ii) pursuant to the terms of the
Account agreement with the Customer, send to the Customer any proxies and other
voting rights and corporate actions received by the Bank in respect of the
Pledged Assets and follow any instructions and directions from the Customer in
respect of such proxies and rights, and (b) comply with each Entitlement Order
and other directive received from the Customer.
Section 6. Statements,
Confirmations and Notices of Adverse Claims; Taxes. (a) The
Bank will send or make available by electronic means copies of all statements
and confirmations concerning the Account to each of the Customer and the Secured
Party, at the address set forth herein or such other address or location as
instructed by the Customer and the Secured Party. Such statements
will include the previous month’s detailed listing of unaudited valued
securities holdings of all Pledged Assets, which listing shall be prepared,
updated and available to each of the Customer and the Secured Party as of the
last business day of each month the Bank shall be open for commercial banking
business (the “Information”). Such monthly statements shall be
prepared by the Bank utilizing the same pricing information and sources the Bank
generally uses for this purpose.
(b) Except
for the claims and interests of the Secured Party, the Bank and the Customer,
the Bank does not know of any lien on, or claim to, or interest in, the Account
or in any Pledged Asset. If any person notifies the Bank of its
assertion of any lien, encumbrance or adverse claim against the Account or in
the Pledged Assets contained therein, the Bank will promptly notify the Secured
Party and the Customer thereof.
(c) All
items of income, gain, expense and loss, if any, recognized in the Account and
all interest, if any, relating to the Account, shall be reported to the Internal
Revenue Service and all state and local taxing authorities under the name and
taxpayer identification number of the Customer
Section 7. Responsibility
of the Bank. The Bank shall have no responsibility or
liability to the Secured Party for executing settlements of Financial Assets
held in the Account at the direction of the Customer or its authorized
representatives, or complying with Entitlement Orders or other directions
concerning the Account from the Customer or its authorized representatives,
which are received by the Bank before the Bank has received, and had a
reasonable opportunity to comply with, a Notice of Exclusive Control or other
conflicting Entitlement Order or other directives delivered by the Secured
Party. The Bank shall have no responsibility or liability to the
Customer for complying with a Notice of Exclusive Control or complying with
Secured Party Orders. The Bank shall have no duty to investigate or
make any determination as to whether a default exists under any agreement
between the Customer and the Secured Party and shall comply with a Notice of
Exclusive Control or Secured Party Orders even if it believes that no such
default exists. This Agreement does not create any obligation or duty
for the Bank other than those expressly set forth herein.
Section 8. Standard of
Care. Notwithstanding any provision contained herein or in any
other document or instrument to the contrary, neither the Bank nor any of its
officers, employees or agents shall be liable for (i) following the instruction
of the Secured Party and (ii) in all other respects, shall not be liable for any
action taken or not taken by it (or them) under or in connection with this
Agreement, except for the Bank’s (or their) own gross negligence or willful
misconduct. In no event shall the Bank be liable for indirect,
special or consequential damages of any kind whatsoever (including lost profits
and lost business opportunity) even if it is advised of the possibility of such
damages and regardless of the form of action in which any such damages may be
claimed. Without limiting the foregoing, and notwithstanding any
provision to the contrary elsewhere, the Bank and its officers, employees and
agents:
(a) shall
have no responsibilities, obligations or duties other than those expressly set
forth in this Agreement, and no implied duties, responsibilities or obligations
shall be read into this Agreement against the Bank; without limiting the
foregoing, the Bank shall have no duty to preserve, exercise or enforce rights
in the Pledged Assets (against prior parties or otherwise);
(b) may
in any instance where the Bank determines that it lacks or is uncertain as to
its authority to take or refrain from taking certain action, or as to the
requirements of this Agreement under any circumstance before it, delay or
refrain from taking action unless and until it has received instructions from
the Secured Party or advice from legal counsel (or other appropriate advisor),
as the case may be;
(c) so
long as it and they shall have acted (or refrained from acting) in good faith,
shall not be liable for any error of judgment in any action taken, suffered or
omitted by, or for any act done or step taken, suffered or omitted by, or for
any mistake of fact or law, unless such action constitutes gross negligence or
willful misconduct on its (or their) part;
(d) may
consult with legal counsel selected by it (or other experts for the Secured
Party or the Customer), and shall not be liable for any action taken or not
taken by it or them in good faith in accordance with the advice of such
experts;
(e) will
not be responsible to the Secured Party for any statement, warranty or
representation made by any party other than the Bank in connection with this
Agreement;
(f) will
have no duty to ascertain or inquire as to the performance or observance by the
Customer of any of the terms, conditions or covenants of any security agreement
with the Secured Party;
(g) will
not be responsible to the Secured Party or the Customer for the due execution,
legality, validity, enforceability, genuineness, effectiveness or sufficiency of
this Agreement, (provided, however, that the Bank warrants below that the Bank
has legal capacity to enter into this Agreement);
(h) will
not incur any liability by acting or not acting in reliance upon any notice,
consent, certificate, statement or other instrument or writing believed by it or
them to be genuine and signed or sent by the proper party or
parties;
(i) will
not incur liability for any notice, consent, certificate, statement, wire
instruction, telecopy, or other writing which is delayed, canceled or changed
without the actual knowledge of the Bank;
(j) shall
not be deemed to have or be charged with notice or knowledge of any fact or
matter unless a written notice thereof has been received by the Bank at the
address and to the person designated in (or as subsequently designated pursuant
to) this Agreement;
(k) shall
not be obligated or required by any provision of this Agreement to expend or
risk the Bank’s own funds, or to take any action (including but not limited to
the institution or defense of legal proceedings) which in its or their judgment
may cause it or them to incur or suffer any expense or liability; provided,
however, if the Bank elects to take any such action it shall be entitled to
security or indemnity for the payment of the costs, expenses (including but not
limited to attorneys’ fees) and liabilities which may be incurred therein or
thereby, satisfactory to the Bank;
(l) shall
not incur any liability for acts or omissions of any domestic or foreign
depository or book-entry system for the central handling of Financial Assets or
any domestic or foreign custodian or subcustodian; and
(m) shall
not be responsible for the title, validity or genuineness of any Financial Asset
in or delivered into the Account.
Section
9. Indemnification of the Bank.
(a) The
Customer agrees to indemnify and hold the Bank and its directors, officers,
agents and employees (collectively the “Indemnitees”) harmless from and against
any and all claims, liabilities, losses, damages, fines, penalties, and
expenses, including out-of-pocket and incidental expenses and legal fees
(collectively “Losses”) that may be imposed on, incurred by, or asserted
against, the Indemnitees or any of them for following any Entitlement Orders,
Secured Party Orders, instructions or other directions upon which the Bank is
authorized to rely pursuant to the terms of this Agreement.
(b) In
addition to and not in limitation of paragraph (a) immediately above, the
Customer also agrees to indemnify and hold the Indemnitees and each of them
harmless from and against any and all Losses that may be imposed on, incurred
by, or asserted against, the Indemnitees or any of them in connection with or
arising out of the Bank’s performance under this Agreement, provided the
Indemnitees have not acted with gross negligence or engaged in willful
misconduct.
(c) The
Secured Party agrees to indemnify and hold the Indemnitees harmless from and
against any and all Losses that may be imposed on, incurred by, or asserted
against, the Indemnitees or any of them for following any Entitlement Orders,
Secured Party Orders, instructions or other directions of the Secured Party upon
which the Bank is authorized to rely pursuant to the terms of this
Agreement.
(d) The
foregoing indemnifications shall survive any termination of this
Agreement
Section 10. Compliance
with Legal Process and Judicial Orders. If any Pledged Assets
subject to this Agreement are at any time attached or levied upon, or in case
the transfer, delivery, redemption or withdrawal of any such Pledged Assets
shall be stayed or enjoined, or in the case of any other legal process or
judicial order affecting such Pledged Assets, the Bank is authorized to comply
with any such order in any matter as the Bank or its legal counsel reasonably
deems appropriate. If the Bank complies with any process, order,
writ, judgment or decree relating to the Pledged Assets subject to this
Agreement, then the Bank shall not be liable to the Customer or the Secured
Party or to any other person or entity even if such order or process is
subsequently modified, vacated or otherwise determined to have been without
legal force or effect.
Section 11. Force
Majeure. The Bank shall not be responsible for delays or
failures in performance resulting from acts beyond its control. Such
acts shall include but not be limited to acts of God, strikes, lockouts, riots,
acts of war or terrorism, epidemics, nationalization, expropriation, currency
restrictions, governmental regulations superimposed after the fact, fire,
communication line failures, power failures, earthquakes or other
disasters.
Section
12. Representations. Each of the parties represents
and warrants that (i) it is duly incorporated or organized and is validly
existing in good standing in its jurisdiction of incorporation or organization,
(ii) the execution, delivery and performance of this Agreement and all documents
and instruments to be delivered hereunder or thereunder have been duly
authorized, (iii) the person executing this Agreement on its behalf has been
duly authorized to act on its behalf, (iv) this Agreement constitutes its legal,
valid, binding and enforceable agreement, and (v) its entry into this Agreement
will not violate any agreement, law, rule or regulation by which it is bound or
by which any of its assets are affected.
Section 13. Customer
Agreement. In the event of a conflict between this Agreement and any
other agreement between the Bank and the Customer relating to the Account, the
terms of this Agreement will prevail, and in all other respects the terms of the
other agreement relating to the Account shall apply with respect to any matters
not covered by this Agreement. Regardless of any provision in any
such agreement, the State of New York shall be deemed to be the Bank’s location
for the purposes of this Agreement and the perfection and priority of the
Secured Party’s security interest in the Account.
Section
14. Termination. The rights and powers granted
herein to the Secured Party have been granted in order to perfect its security
interest in the Account, are powers coupled with an interest and will neither be
affected by the bankruptcy of the Customer nor by the lapse of
time. The obligations of the Bank under this Agreement shall continue
in effect until (i) the date on which the security interest of the Secured Party
in the Account has been terminated and the Secured Party has notified the Bank
of such termination in writing, or (ii) this Agreement is terminated pursuant to
the terms hereof. Any of the parties may terminate this Agreement
upon 30 days’ prior written notice to both of the other parties hereto; provided, however, that any
Pledged Assets which have not been released by the Secured Party at or prior to
the time of termination shall be transferred to a substitute bank designated by
the Customer and acceptable to the Secured Party. The provisions of
Sections 7 and 8 shall survive the termination of this Agreement.
Section 15. Entire
Agreement. This Agreement and the exhibits hereto and the
agreements and instruments required to be executed and delivered hereunder set
forth the entire agreement of the parties with respect to the subject matter
hereof and supersede and discharge all prior agreements (written or oral) and
negotiations and all contemporaneous oral agreements concerning such subject
matter and negotiations. There are no oral conditions precedent to
the effectiveness of this Agreement.
Section
16. Amendments. No amendment, modification or
termination of this Agreement or waiver of any right hereunder shall be binding
on any party hereto unless it is in writing and is signed by all of the parties
hereto.
Section
17. 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 terms or provisions 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.
Section
18. 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 assigns. The Secured Party may assign its
rights hereunder only with the express written consent of the Bank and by
sending prior written notice of such assignment to the Customer. The
Customer shall not assign any right, title or interest hereunder. The
terms of this Agreement shall be binding on and shall apply to any successor
account to the Account.
Section 19. Rules of
Construction. In this Agreement, words in the singular number
include the plural, and in the plural include the singular; words of the
masculine gender include the feminine and the neuter, and when the sense so
indicates words of the neuter gender may refer to any gender and the word “or”
is disjunctive but not exclusive. The captions and section numbers
appearing in this Agreement are inserted only as a matter of
convenience. They do not define, limit or describe the scope or
intent of the provisions of this Agreement.
Section
20. Notices. Any notice, request, entitlement Order
or other communication required or permitted to be given under this Agreement
shall be in writing and deemed to have been properly given when delivered in
person, or when sent by telecopy or other electronic means (acceptable to the
Bank, if to the Bank) and electronic confirmation of error free receipt is
received, or after being sent by certified or registered United States mail,
return receipt requested, postage prepaid:
If to the
Bank:
JPMORGAN
CHASE BANK, N.A.
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Attention:▇▇▇▇▇▇▇
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Telephone:(▇▇▇)
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Telecopier:(▇▇▇)
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If to the
Customer:
Flagstone
Réassurance Suisse, ▇▇
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Attention:
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Telephone:
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Telecopier:
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If to the
Secured Party:
BNP
Paribas
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Attention:
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Telephone:(▇▇▇)
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Facsimile:(▇▇▇)
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Section
21. 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.
Section 22. Choice of
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to laws as to
conflicts of laws, and shall be binding on the parties hereto and their
respective successors and assigns. Regardless of any provision in any
other agreement, for purposes of the UCC, the State of New York shall be the
jurisdiction of the Bank for purposes of Sections 8-110 of the UCC.
Section
23. Fees. The Customer shall pay to the Bank the
compensation agreed upon in writing from time to time and any other includable
expenses incurred in connection herewith.
Section 24. Consent to
Jurisdiction and Service. The Secured Party and the Customer
each hereby absolutely and irrevocably consents and submits to the jurisdiction
of the courts of the State of New York and of any Federal court located in the
County and State of New York in connection with any actions or proceedings
brought against the Secured Party or the Customer by the Bank or by the Secured
Party or the Customer against the Bank and arising out of or relating to this
Agreement. Each party hereto hereby irrevocably waives any objection
on the grounds of venue, forum non conveniens, or any similar grounds, and
irrevocably consents to service of process by mail or in any other manner
permitted by New York law, and irrevocably waives its right to any jury
trial.
IN
WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the
date set forth above.
BNP PARIBAS, as Secured
Party
By:
___________________
Name:
_________________
Title:
__________________
By:
___________________
Name:
_________________
Title:
__________________
FLAGSTONE REASSURANCE SUISSE, SA,
as Customer
By:
___________________
Name:
_________________
Title:
__________________
JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION
By:
___________________
Name:_________________
Title:__________________
EXHIBIT
B
[List
of names of signers on behalf of Secured Party]
EXHIBIT
C
[to
be placed on Secured Party’s Letterhead]
NOTICE
OF EXCLUSIVE CONTROL
_____________
___, 2009
JPMorgan
Chase Bank, N.A.
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▇▇▇ ▇▇▇▇,
▇▇, ▇▇▇▇▇-▇▇▇▇
Attention:▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Re:
Account Control Agreement dated as of May __, 2009 (the “Agreement”) among BNP
Paribas, as Secured Party,
Flagstone
Reassurance Suisse, S.A. as Customer, and JPMorgan Chase Bank, as Bank, relating
to Securities Account No.__________
Ladies
and Gentlemen:
This
constitutes the Notice of Exclusive Control referred to in the above referenced
Agreement.
BNP
PARIBAS
By:
_____________________
Name:
Title: