Exhibit 10.31

INVESTMENT MANAGEMENT AGREEMENT – FIXED INCOME

THIS AGREEMENT, dated as of the 26 day of June, 2003, by and between Asset
Allocation & Management Company, L.L.C, an Delaware limited liability company
having its principal place of business at Thirty North LaSalle Street, 35th
Floor, Chicago, Illinois, 60602 (herein “AAM”), and Max Re Ltd., having its
principal place of business at Max Re House, 2 Front Street, Hamilton, HM 11
Bermuda (herein “Client”).

In consideration of the promises set forth in this Agreement, AAM and Client
agree as follows:

 

1. Authorization As Investment Advisor.

Subject to the terms and conditions set forth herein, Client hereby designates
and appoints AAM as investment adviser for the management of securities with
regard to the cash and securities listed in Exhibit A, which is attached hereto,
and such other cash and securities (other than those identified as Unmanaged
Assets, as defined below) as shall be subsequently contained in Client’s account
by reason of purchases, sales, exchanges, withdrawals, additions or otherwise.
Assets placed in the Client’s account by the Client that are not managed by AAM
are either separately identified on Schedule A or shall be identified
subsequently (“Unmanaged Assets”). AAM shall include Unmanaged Assets in its
periodic reports to the Client, but will exclude their value in calculating
AAM’s advisory fees.

AAM shall have full authority and discretion to supervise the management of said
cash and securities (other than Unmanaged Assets), including, without
limitation, authority and discretion to select, purchase and sell securities and
to determine timing and means of execution for such selection, sales or
purchases, in accordance with the investment guidelines set forth on Exhibit B
hereto (the “Investment Guidelines”). The Client may modify the Investment
Guidelines from time to time; provided, that, any such modification shall be
effective only upon the provision of notice of such modification by the Client
in accordance with the notice provisions herein.

 

2. Advisory Fees.

For its investment advisory services, AAM shall be compensated based on a
percentage of the value, as determined below, of all assets in the Client’s
account (excluding Unmanaged Assets) as of the last trading day of each calendar
month. The applicable percentages for calculating the advisory fee are set forth
on the schedule of fees attached hereto. Upon sixty (60) days prior written
notice to Client, AAM may amend or change the schedule of compensation.

AAM will value all of the securities in the portfolio on a monthly basis
utilizing reputable industry standard pricing services or direct dealer quotes.
Where the market value of any security is not readily available from standard
pricing sources, AAM will price the security through multiple direct dealer
quotes.

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Advisory fees will be payable quarterly in arrears within thirty (30) days after
receipt of AAM’s invoice by the Client. Any advisory fee payable for less than a
full calendar quarter shall be pro-rated. Upon any termination of this Agreement
other than at the end of a calendar quarter, the advisory fee shall be
calculated as of the termination date.

 

3. Term of Agreement.

This Agreement shall be effective as of the date of this Agreement and shall
continue in effect until terminated by either party upon thirty (30) days prior
written notice.

In the event of termination of this Agreement, this Agreement, except for
Section 4 (Limitation of Liability), Section 12 (Confidentiality), Section 14
(Arbitration), and this Section 3 (Term of Agreement), shall immediately become
void and have no further force or effect. Section 9 (Confidentiality) shall
survive for a one year period following the termination date. Termination of
this Agreement will not affect the Client’s obligation to pay advisory fees in
accordance with Section 2 (Advisory Fees) through the date of termination.

Upon termination of this Agreement and upon specific written request, AAM shall
within twenty (20) business days return to the Client all books and records of
the Client, and all other information relating to the Client’s account then in
the possession of AAM, except for any software or other intellectual property
that is proprietary to, or owned or licensed by, AAM or any of its affiliates,
which shall remain the property of AAM.

 

4. Limitation of Liability.

AAM shall be liable to and indemnify the Client to the extent any loss,
liability, or damage results from the negligence or bad faith of AAM, violation
of applicable law by AAM or the reckless disregard by AAM of its obligations and
duties under this Agreement.

Except as set forth in the immediately preceding paragraph of this Section 4
(Limitation of Liability), neither AAM nor any of its employees, stockholders,
members, managers, or any officers, or directors shall be liable hereunder for
any action performed or omitted to be performed or for any errors or judgments
in connection with AAM’s services rendered under this Agreement. The federal
securities laws impose liabilities under certain circumstances on persons who
act in good faith, and therefore, nothing herein shall in any way constitute a
waiver or limitation of any rights which Client may have under any federal
securities laws.

 

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5. Selection of Brokers.

Where AAM places orders for the execution of transactions, AAM may select such
brokers and dealers for execution on such markets and at such process or
commission rates as AAM determines in its good faith judgment to be in the best
interests of Client. AAM may take into consideration in the selection of such
brokers and dealers not only the available prices and rates of brokerage
commissions, but also other relevant factors (such as, without limitation,
execution capabilities and the value of its ongoing relationship with such
brokers and dealers) without having to demonstrate that such factors are of a
direct benefit to Client.

 

6. Custodianship of Cash and Securities.

Under no circumstances shall AAM act as custodian for or hold Client’s cash and
securities. AAM may issue instructions to the client’s custodian as may be
appropriate in connection with the settlement of transactions initiated by AAM
hereunder.

 

7. Duties of AAM.

AAM shall manage the Client’s account in accordance with the Investment
Guidelines; provided, however, that AAM will not be responsible for giving the
Client investment advice or taking any other action with respect to Unmanaged
Assets.

At reasonable times and upon reasonable notice, AAM shall provide access to all
books, records, accounts, facilities, and personnel that relate specifically to
the performance of its obligations to the Client under this Agreement to the
internal and independent auditors and regulators of the Client.

Within six (6) days following the end of each month, AAM shall send to the
Client monthly written reports showing the identity, cost and current market
value of the assets in the Client’s account and each transaction made for the
Client’s account during the period covered by the report.

At the close of each business day, AAM shall provide to the Client an electronic
trade blotter detailing the transaction that occurred during such business day,
in a form reasonably agreed by the parties.

AAM, a limited liability company, shall notify Client of any substantial change
subsequent to the date of this Agreement in the ownership of the limited
liability company. Such notification shall be made in accordance with the notice
provisions herein.

 

8. No Assignment.

This Agreement and the rights and obligations hereunder shall not be subject to
assignment by AAM except with the written consent of Client.

 

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9. Representations:

Each party hereto represents that (a) the execution of and performance
contemplated under this Agreement do not and will not violate or abridge any
obligation or duty of such party, (b) this Agreement has been authorized by
appropriate action and when executed and delivered will be binding upon such
party in accordance with its terms, and (c) it will deliver to the other party
such evidence of such authority as such other party may reasonably require,
either by way of a certified resolution or otherwise.

AAM represents, warrant and covenants to the Client that (i) it is, and will
remain during the term of this Agreement, a registered investment adviser under
the Investment Advisers Act of 1940, as amended; and (ii) it currently has, and
agrees that it will maintain, the skilled personnel, computer hardware and
software, and other facilities necessary to prepare the reports and perform the
services required by this Agreement.

 

10. Client Directions.

The names and specimen signatures of each individual who is authorized to give
directions to AAM on the Client’s behalf under this Agreement are set forth on
Exhibit C, as may be amended from time to time by the Client in accordance with
the notice provisions herein. Directions received by AAM from the Client must be
signed by at least one such person. If AAM receives directions from the Client
that are not signed by a person that AAM reasonably believes is authorized to do
so, the Client shall not be required to comply with such directions until it
verifies that the directions are properly authorized by the Client.

 

11. Employees of AAM.

Without the express prior written consent of AAM, Client shall not directly or
indirectly employ or solicit for employment any employee of AAM, or its
affiliates, during the term of this Agreement and for a period of 12 months
after termination of the Agreement; provided, however, that the foregoing
provision will not prevent the Client from employing any such person if such
person contacts the Client on his or her own initiative in response to a
published general solicitation not specifically targeted at such person.

 

12. Confidentiality.

From time to time in the course of the performance of this Agreement, the Client
and AAM will be providing each other with certain financial, strategic and other
information. Except as required by law, regulation, stock exchange rule or legal
process and except as otherwise permitted by this Agreement, all such
information of a non-public nature that is obtained by one party pursuant to
this Agreement shall be held in confidence by such party and may not be
disclosed to any other person without the prior written consent of the other
party.

 

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13. Notices.

All notices and other communications required or permitted to be given pursuant
to this Agreement shall be in writing and shall be considered as properly given
or made if (i) sent by overnight delivery by a nationally recognized air courier
service, or (ii) mailed by registered or certified mail, return receipt
requested, and if addressed to the respective address listed below:

 

A.    If to the Client, to:    Max Re Ltd.       Max Re House, 2 Front Street   
   Hamilton, BM HM KX    Attention:    Keith S. Hynes       Executive Vice
President & CFO B.    If to AAM, to:    Asset Allocation & Management Company,
L.L.C.       Thirty North LaSalle Street, 35th Floor       Chicago, IL 60602   
Attention:    [Randall K. Zeller       President and Chief Executive Officer]

All notices will be deemed effective upon receipt. Any party may change its
address for the receipt of notices by providing notice, in the manner provided
in this Section 13, to each other party.

 

14. Arbitration.

In the event of any dispute, controversy or claim which relates to, arises out
of, or is connected with this Agreement (including, without limitation, the
creation, validity, interpretation, breach or termination of this Agreement),
each party shall designate an officer whose task it will be to meet and in good
faith resolve the matter amicably. Any such matter which has not been mutually
resolved by the parties shall, on the written demand be either party to the
other party, be determined and settled in Hamilton, Bermuda by a panel of three
arbitrators in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. The award entered by the arbitrators shall be final and
binding on both parties. Such award shall specify the factual and legal basis
for the award, shall not include any multiple, punitive or exemplary damages,
and shall remain confidential. The cost of the arbitration shall be borne
equally by the Client and AAM; each party shall bear its own expenses (including
counsel fees) incurred in connection with the arbitration

 

15. Complete Agreement.

This Agreement contains the full agreement between AAM and the Client and
supersedes any and all agreements, oral or written, which may have been
heretofore entered into between AAM and the Client.

 

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16. Amendment.

No amendment to this Agreement will be effective unless in writing and signed by
each of the parties and no waiver of compliance with any provision or condition,
and no consent provided for in this Agreement, shall be effective unless in a
writing duly executed by the party sought to be charged with such waiver or
consent; provided, however, that the Client may amend Exhibits A, B and C by
providing notice to AAM in accordance with Section 13 herein.

 

17. Governing Law.

This Agreement shall be construed and enforced in accordance with the laws of
the State of New York, without reference to the choice of law rules thereof.

 

18. Severability.

In the event that any provision or condition in this Agreement shall be invalid,
illegal, or unenforceable under applicable law of mandatory application, the
validity, legality, and enforceability of that provision or condition in other
instances and of the remaining provisions and conditions shall not in any way be
affected thereby.

 

19. Headings.

Section headings are for convenience of reference only and shall not affect the
construction of this Agreement.

 

20. Counterparts.

This Agreement may be executed in two or more counterparts, each of which when
executed shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement on the day, month,
and year above written.

 

AAM:     ASSET ALLOCATION & MANAGEMENT COMPANY, L.L.C.       By:  

/s/ Randall K. Zeller

        Randall K. Zeller, President & Chief Executive Officer CLIENT:     MAX
RE LTD.       By:  

/s/ Peter A. Minton

        Peter A. Minton, Executive Vice President & Chief Risk Officer

 

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