Exhibit 10.37

MAX AT LLOYD’S LTD

AND

DEUTSCHE ASSET MANAGEMENT (UK) LIMITED

 

 

DISCRETIONARY INVESTMENT MANAGEMENT

AGREEMENT

 

 

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CONTENTS

 

Clause

   Page

1. DEFINITIONS

   2

2. APPOINTMENT OF THE INVESTMENT MANAGER

   4

3. THE PORTFOLIO

   4

4. REPRESENTATIONS BY THE INVESTMENT MANAGER

   4

5. REPRESENTATIONS BY CLIENT

   4

6. DISCRETIONARY AUTHORITY AND INVESTMENT GUIDELINES

   5

7. OUTSOURCING, DELEGATION, USE OF AGENTS AND ASSIGNMENT

   6

8. DEALING AND BEST EXECUTION

   6

9. DERIVATIVES

   8

10. UNINVESTED CASH

   8

11. SECURITIES LENDING BORROWING AND OVERDRAFTS

   8

12. VALUATIONS, CONFIRMATIONS AND PERIODIC STATEMENTS

   9

13. SAFEKEEPING, SETTLEMENT AND COLLECTION

   9

14. TAXATION

   9

15. REPORTING

   9

16. RECORDS

   9

17. FEES AND CHARGES

   10

18. CONFIDENTIALITY

   10

19. LIABILITY AND INSURANCE

   11

20. COMPLAINTS

   11

21. TERMINATION

   12

22. CLIENT AUTHORISED SIGNATORIES

   12

23. INSTRUCTIONS, COMMUNICATIONS AND NOTICES

   12

24. CLASSIFICATION

   14

25. AMENDMENTS

   14

26. ENTIRE AGREEMENT

   14

27. VAT

   14

28. CONTRACT RIGHTS

   15

29. CHEQUE PAYMENTS

   15

30. GOVERNING LAW

   15

APPENDIX I

   16

APPENDIX II

   18

APPENDIX III

   19

APPENDIX IV

   20

APPENDIX V

   21

APPENDIX VI

   22

Schedule 1

   23

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THIS AGREEMENT is made on 5th June 2009 between:-

 

(1)

MAX AT LLOYD’S LTD, a company incorporated in England and Wales whose registered
offices is at 4th Floor 70 Gracechurch Street London EC3VOXL (the “Client”); and

 

(2) DEUTSCHE ASSET MANAGEMENT (UK) LIMITED, a company incorporated in England
and Wales whose registered office is at One Appold Street, London, EC2A 2UU,
England (the “Investment Manager”).

WHEREAS:

 

A. The Client is the Lloyd’s Managing Agent appointed by the underwriting
members of Lloyd’s Syndicate 1400 whose assets include the assets within the
Portfolio.

 

B. The Client wishes to appoint the Investment Manager to manage the Portfolio.

 

C. The Investment Manager agrees to manage the Client’s Portfolio subject to the
terms and conditions set out in this Agreement.

IT IS AGREED:-

 

1. DEFINITIONS

In this Agreement:

 

Authorised Signatories    means those persons of the Client identified in
Appendix II; Client Limit Order    means a specific instruction from the Client
to the Investment Manager to buy or sell a financial instrument at a specified
price limit or better and for a specified size; Client Money Rules    means the
rules set out in the Client Assets Sourcebook of the FSA Rules; Contingent
Liability Investments    means a Derivatives transaction where a client may be
liable to make further payments; Contract for Differences    means a contract
relating to fluctuations in an index, price or other criterion; Custodian   
means the person (if any) named as the custodian charged with providing custody
services for the Portfolio; Derivative    Means any transaction which is a rate
swap transaction, swap option, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity Index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option, credit protection
transaction, credit swap, credit default swap, credit default option, total
return swap, credit spread transaction, repurchase transaction, reverse
repurchase transaction, buy/sell-back transaction, securities lending
transaction, weather index transaction or forward purchase or sale of a
security, commodity or other financial instrument or interest (including any
option with respect to any of these transactions) or which is a type of
transaction that is similar to any transaction referred to here that is
currently or in the future becomes recurrently entered into in the financial
markets and which is a forward, swap, future, option or other derivative on one
or more rates, currencies, commodities, equity securities or other equity
instruments, debt securities or other debt instruments, economic indices of
measures of economic risk or value, or other benchmarks against which payments
or deliveries are to be made, or any combination of any of the above, or any
other transaction identified as a derivative;

 

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FSA    means the Financial Services Authority set up pursuant to the FSMA to
regulate the financial services industry in the United Kingdom as amended,
supplemented or replaced from lime to time: FSA Rules    means the rules
established by the FSA as amended, supplemented or replaced from time to time;
FSMA    means the Financial Services and Markets Act 2000; Future    means
rights under a contract for the sale of a commodity or any other property under
which delivery is to be made at a future date at a price agreed upon when the
contract is made; Group Companies    means a member of a group of companies
controlled by Deutsche Bank AG; Initial Composition and Initial Value    means
respectively, the composition and value of the assets (collectively and
individually) comprising the Portfolio at the time when the Investment Manager
first assumes management of the Portfolio; Investment Guidelines    means the
guidelines and constraints relating to the investment of the Portfolio, as
attached at Schedule 1 and further referred to in Appendix III; Investment
Objectives    means the investment objectives relating to the investment of the
Portfolio as outlined in Appendix III; MiFID    means the Markets in Financial
Instruments Directive; Multilateral Trading Facility (MTF)    means a
multilateral system set up in accordance with MiFID, which brings together
multiple buying and selling interests in financial instruments in accordance
with non-discretionary rules in a way that results in a contract; Option   
means an option to acquire or dispose of investments, currencies or commodities:
Portfolio    means the assets identified in paragraph 3 of Appendix I, together
with any other assets entrusted by the Client to the management of the
Investment Manager and held by the Custodian; Regulated Market    means a
multilateral system which brings together or facilitates the bringing together
of multiple buying and selling interests in financial instruments in accordance
with non-discretionary rules in a way that results in a contract in respect to
the financial instruments admitted to trading under its rules and/or systems and
which is authorised and functions regularly in accordance with the requirements
of MiFID; Reports    means any contract notes, periodic valuations and any other
information on the Portfolio; Soft Commission Agreements    means an agreement
between the Investment Manager or a Group Company and a broker or counterparty
under which the Investment Manger or Group Company receives certain goods and/or
services as a result of the placing of business on behalf of customers;
Specified Address    means the address of the relevant party as set out in
paragraph 4 of Appendix I, or such other address as that party may from time to
time specify by notice given in accordance with Clause 25.3; U.K. Anti-Money
Laundering Laws    means any applicable anti-money laundering laws in the United
Kingdom including, without limitation, the Proceeds of Crime Act 2003, the
Terrorism Act 2000, the Money Laundering Regulations 2003 and the anti-money
laundering rules of the FSA;

 

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2. APPOINTMENT OF THE INVESTMENT MANAGER

 

2.1 The Client hereby appoints the Investment Manager as discretionary
investment manager of the Client’s Portfolio.

 

2.2 This Agreement will come into effect upon its execution by the parties or on
the commencement date set out in paragraph 2 of Appendix I, whichever occurs
later.

 

3. THE PORTFOLIO

 

3.1 The Client has established arrangements for the safekeeping of Portfolio
cash, securities and other assets (and its documents of title) with Citibank
(the “Custodian”).

 

3.2 The Client has placed or will forthwith place the Portfolio with the
Custodian.

 

3.3 The Custodian is a qualified custodian as defined in Section 206(4)-2 of the
U.S. Investment Advisers Act of 1940, as amended (the “Advisers Act”).

 

4. REPRESENTATIONS BY THE INVESTMENT MANAGER

The Investment Manager represents, warrants and undertakes to the Client that:

 

  (i) it is authorised and regulated by the FSA, whose address is 25, The North
Colonnade, Canary Wharf, London E14 5HS;

 

  (ii) it is a Group Company; and

 

  (iii) it takes investment decisions solely with reference to the interests of
its clients and without regard to the interests of other Group Companies or
their clients. Strict segregation of function is observed between the management
and personnel of the Investment Manager and those of Group Companies engaged in
other non-asset management or custodial activities. The Investment Manager does
not have access to price-sensitive information derived from the activities of
other Group Companies until it is published.

 

5. REPRESENTATIONS BY CLIENT

The Client represents, warrants and undertakes to the Investment Manager on a
continuing basis that:-

 

  (i) it has the authority to enter into this Agreement, and that it has taken
all steps necessary to appoint the Investment Manager to perform the services
envisaged in this Agreement and the transactions contemplated by this Agreement,
as permitted from time to time by the Client in the Investment Guidelines or
within the Client’s authority (“Transactions”) are duty authorised by the Client
pursuant to the Client’s policies, board resolution(s), trust agreement(s) or
enabling legislation, or other supporting documents satisfactory to the
Investment Manager and any Transaction counterparty, and are in the Client’s
opinion, suitable investments for the Client. When the Client enters into
Transactions with one or more futures commission merchants or other transaction
counterparties, such Transactions will be the legal, valid and binding
obligations of the Client and are consistent with and permissible for the Client
and/or the Portfolio;

 

  (ii) it is duly authorised and empowered to perform its duties and obligations
hereunder and that the terms of this Agreement do not constitute a breach of any
obligations by which the Client is bound whether arising by contract, operation
of law or otherwise;

 

  (iii) the assets comprising the Portfolio are and will remain free of all
liens, charges and other encumbrances, and that the Client is absolutely
entitled to pass ownership of Portfolio assets with full title guarantee as if
it was beneficially entitled thereto;

 

  (iv) as a condition of the provision of services by the Investment Manager
hereunder, it will produce to the Investment Manager such documents as the
Investment Manager may require, including but not limited to the Trust Deed
relating to the Portfolio, as evidence of the Client’s authority to enter into
this Agreement, and will forthwith advise the Investment Manager of any
variation of or supplements to such documents;

 

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  (v) it will notify the Investment Manager promptly if there is any material
change in any of the above information or to its circumstances generally, and
will provide such other relevant information as the Investment Manager may from
time to time reasonably require in order to fulfil its legal, regulatory and
contractual obligations. The Client acknowledges that a failure to provide such
information may adversely affect the quality of the services that the Investment
Manager may provide;

 

  (vi) the Client acknowledges that the Investment Manager is required to comply
with all U.K. Anti-Money Laundering Laws. The Client warrants that (i) the
Portfolio has not been, or shall not be, derived from, or related to, any
activities that are deemed criminal under English law and (ii) the Portfolio
shall not cause the Investment Manager or any of its Group Companies to be in
violation of any of the U.K. Anti-Money Laundering Laws or the anti-money
laundering laws, rules or regulations of any other applicable jurisdiction;

 

  (vii) it will not deal, except through the Investment Manager, with any of the
assets of the Portfolio and will not authorise anyone else to deal in any of the
assets of the Portfolio;

 

  (viii) it will ensure the Custodian is obliged to comply with any instructions
of the Investment Manager given in accordance with this Agreement;

 

  (ix) it will ensure that the objectives and guidelines in the Agreement do not
contravene any regulations, rules, policies or guidelines applicable to the
Client, and that it will immediately inform the Investment Manager in case of
any such contravention occurring after the date hereof. It is the sole
responsibility of the Client to ensure that no such contravention will occur,
and the Investment Manager will accept no liability whatsoever in connection
therewith;

 

  (x) any information which it has provided to the Investment Manager in
relation to its status, residence and domicile for taxation purposes is complete
and correct, and agrees to provide any further information properly required by
any competent authority

 

  (xi) the Client is a Qualified Institutional Buyer (“QIB”), as such term is
defined in Rule 144A(a)(1)(i) of the Securities Act of 1933, as amended. The
Client shall promptly notify the Investment Manager in writing if the Client
ceases to be a QIB and further agrees to provide such evidence of its status as
a QIB as the Investment Manager may reasonably request from time to

 

6. DISCRETIONARY AUTHORITY AND INVESTMENT GUIDELINES

 

6.1 Subject to the Investment Guidelines during the period of this Agreement,
the Client hereby delegates full discretionary authority to the Investment
Manager to manage the Portfolio as agent for the Client, with a view to
achieving the Investment Objectives and without prior reference to the Client
(subject to Clauses 11.3, 21.4 and 21.5) to:-

 

  (i) take all routine or day to day decisions in respect of the Portfolio;

 

  (ii) make all investment decisions in respect of the Portfolio;

 

  (iii) subscribe for, purchase, sell, exchange, convert investments or
otherwise effect transactions in Portfolio assets, and to sign any documentation
required in connection with such transactions and negotiate and execute
counterparty and account opening documentation;

 

  (iv) place orders for the execution of Portfolio transactions on any market,
with or through such brokers, dealers, agents, market makers or issuers as the
Investment Manager may select, including, without limitation, its affiliates,
domestic or foreign, subject to terms of business agreed with the Investment
Manager or implied by market practice; and

 

  (v) issue instructions to the Custodian in connection with (i) the receipt,
delivery or retention of Portfolio assets (including, without limitation, cash)
and (ii) in the exercise of all powers and discretions conferred on the owner of
such assets;

 

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6.2 The Investment Guidelines will not be breached as a result of any events or
circumstances outside the reasonable control of the Investment Manager
including, but not limited to, changes in the price or value of assets of the
Portfolio brought about solely through movements in the market. In the event
that the Portfolio, or any investment of the Portfolio, exceeds or otherwise
fails to comply with the Investment Guidelines as a result of changes in market
conditions, the Investment Manager shall take such corrective action, in its
sole discretion, as it deems advisable.

 

6.3 Notwithstanding the provisions of Clause 6.1, the Client shall be entitled
to give instructions directly to the Custodian for withdrawals from the
Portfolio and to notify the Investment Manager in advance of this amount,
subject to sufficient cash being available for any such withdrawals. In the
event that cash is not available the Investment Manager shall liquidate such
Portfolio assets as are necessary as soon as reasonably practicable.

 

6.4 The Investment Guidelines may be amended at any time either by written
agreement between the Investment Manager and the Client or by the Client on
written notice to the Investment Manager. Any such amendment proposed by the
Client will take effect on the later of the date specified in the notice, or ten
business days after receipt of the notice by the Investment Manager, unless the
Investment Manager in the meantime gives notice to the contrary or requests an
extension of time.

 

6.5 Advice may be given by the Investment Manager to the Client in such manner
as may be agreed with the Client or additionally as the Investment Manager
thinks fit.

 

6.6 The Client agrees that the Investment Manager is not responsible for
exercising any voting rights relating to any of the securities or assets in the
Portfolio. The Client further agrees that it will provide for any action to be
taken in connection with the exercise of voting rights. The Client agrees that
the Investment Manager will not provide any legal advice or act for the Client
in any class action proceedings involving securities or assets of the Portfolio
or issuers of such securities or assets.

 

7. OUTSOURCING, DELEGATION, USE OF AGENTS AND ASSIGNMENT

 

7.1 The Investment Manager shall be entitled to outsource or sub-delegate, where
necessary, the performance of any of its functions (including any of its
critical operational functions or investment services) under this Agreement to
other Group Companies or other third parties and may provide information about
the Client and the Portfolio to any such Group Companies or third parties. The
Investment Manager’s liability to the Client for matters so outsourced or
delegated shall not be affected thereby.

 

7.2 The Investment Manager may also, where reasonable, employ agents (including
Group Companies) to perform any administrative, dealing or ancillary services
required to enable the Investment Manager to perform its services under this
Agreement and may provide information about the Client and the Portfolio to any
such persons.

 

7.3 The Client may not assign any of its rights and obligations under this
Agreement without the prior written approval of the Investment Manager.

 

7.4 Subject to giving not less than 30 days prior written notice to the Client,
the Investment Manager may transfer or assign its rights and obligations under
this Agreement, whether in whole or in part, to any of its Group Companies.

 

8. DEALING AND BEST EXECUTION

 

8.1

The Investment Manager will secure best execution of all Portfolio transactions
and may deal on such markets or exchanges and with such counterparties as it
thinks fit. In securing best execution, it is the Investment Manager’s policy to
consider various factors including the size and type of the transaction, the
nature and character of the markets involved, commission rates offered by
available brokers and brokers’ execution experience, integrity and financial
responsibility. Summary details of the Investment Manager’s best execution
policy are attached as Appendix VI of this Agreement. The Client agrees that all
transactions will be effected in accordance with the rules and regulations of
the relevant market or

 

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exchange, and that the Investment Manager may take all such steps as may be
required or permitted by such rules and regulations and/or by good market
practice. The Client expressly agrees that the Investment Manager may trade
outside of a Regulated Market or MTF.

 

8.2 The Client instructs the Investment Manager not to make public Client Limit
Orders in respect of shares admitted to trading on a regulated market which are
not immediately executed under prevailing market conditions.

 

8.3 If any counterparty fails to deliver any necessary documents or to complete
any transaction, the Investment Manager will take all reasonable steps on behalf
of the Client to rectify such failure or assist the Client in obtaining
compensation in lieu thereof. All resulting reasonable costs and expenses
property incurred by the Investment Manager are required to be paid by the
Client.

 

8.4 The Investment Manager may, on behalf of the Client, enter into transactions
with other clients of the Investment Manager provided such transactions are in
accordance with its best execution policy.

 

8.5 The Investment Manager may aggregate transactions for the Portfolio with
those of other clients and of its employees and of Group Companies and their
employees. The Investment Manager will allocate such transactions on a fair and
reasonable basis in accordance with applicable regulations. The Client
recognises that each individual aggregated transaction may operate to the
advantage or disadvantage of the Client. When a Portfolio transaction has been
aggregated in accordance with this Clause 8.6, the Client agrees that the
relevant investment must be allocated to the Portfolio within three business
days of the transaction.

 

8.6 The Client acknowledges that Group Companies are involved in many different
commercial activities and the Investment Manager acts for a wide range of
clients, some of which may have similar objectives to those of the Client. At
times, these activities may cause departments of the Group Companies to give
advice to clients that may cause these clients to take actions adverse to the
interests of the Client. Any Group Company’s managing directors, directors,
officers and employees (“Personnel”) may serve as directors of companies the
securities of which the Portfolio may purchase, sell, or hold. The Group
Companies and Personnel may give advice, and take action, with respect to any of
the Group Company’s clients or proprietary accounts that may differ from the
advice given, or may involve a different timing or nature of action taken, than
with respect to any one or all of the Investment Manager’s advisory accounts,
and effect transactions for such clients of proprietary accounts at prices or
rates that may be more or less favourable than for the Portfolio.

Except where the Client has stated otherwise in Part B of Appendix III and
subject always to the obligations regarding best execution, the Investment
Manager shall have discretion to effect, without prior reference to the Client,
transactions in which the Investment Manager or a Group Company has directly or
indirectly a material interest or a relationship of any description with another
party which may involve a potential conflict with the Investment Manager’s duty
to the Client. Nothing in this Agreement shall prevent the Investment Manager or
a Group Company entering transactions with or for the Client, including
programme trades, acting as both market-maker and broker, principal or agent,
dealing with other Group Companies and other clients, and generally effecting
transactions as provided above, to which the Client consents accordingly.
Neither the Investment Manager nor any Group Company shall be liable to account
to the Client for any profit, commission or remuneration made or received from
or by reason of such transactions or any connected transactions. A statement
giving examples of actual or potential material interests and conflicts which
may arise will be made available by the Investment Manager to the Client on its
request.

The Investment Manager maintains and operates effective organisational and
administrative arrangements, with a view to taking all reasonable steps to
prevent conflicts of interest from adversely affecting the interests of our
clients Further information about how we identify and manage potential conflicts
of interests can be found in the summary of the Deutsche Bank Group’s global
conflicts of interest policy (http://db.com/en/content/policy conflicts of
interest.htm) or is available from the Investment Manager upon request.

 

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8.7 The Investment Manager confirms that it will notify the Client of any
conflict of interest to which it is subject in relation to the Portfolio in
accordance with any applicable requirements of the FSA.

 

8.8 The Client hereby authorizes the Investment Manager to effect agency
transactions and agency cross-transactions through affiliated broker-dealers and
the Client acknowledges that the Investment Manager, in effecting or executing
agency cross transactions, will have potentially conflicting divisions of
loyalties and responsibilities regarding the parties to the transactions. The
Client represents and warrants that the Client agrees that any entity or person
associated with the Investment Manager that is a member of a US national
securities exchange is authorized to effect any transaction on such exchange for
the Portfolio that is permitted by Section 11 (a) of the Exchange Act and Rule
11a2-2(T) thereunder, and the Client consents to the retention of compensation
for such transactions.

 

8.9 The Client hereby approves the purchase of securities in a public offering
or a Rule 144A offering where an affiliate of the Investment Manager is a member
or a manager of the syndicate and/or the trustee of the underlying assets of the
security.

 

8.10 The Investment Manager may act as adviser or manager to long term insurers
and the operators of collective investment schemes in which the Portfolio may
invest. The Client acknowledges that it understands the nature of the Investment
Manager’s dual role.

 

8.11 The Investment Manager will normally act as the agent of the Client, who
will therefore be bound by its actions under this Agreement. Nevertheless, none
of the services to be provided hereunder nor any other matter shall give rise to
any fiduciary or equitable duties which would prevent or hinder the Investment
Manager, or any Group Company, in transactions with or for the Client, including
programme trades, acting as both market-maker and broker, principal or agent,
dealing with other Group Company and other customers, and generally effecting
transactions as provided above, to which the Client consents accordingly.

 

9. DERIVATIVES

 

9.1 The Investment Manager may not effect transactions in Derivatives.

 

10. UNINVESTED CASH

 

10.1 Except where the Client makes its own banking arrangements, the Investment
Manager, or where relevant, the Custodian, will arrange for:

 

  (a) accounts to be opened in the name and on behalf of the Client and the
Investment Manager or where relevant, the Custodian, may give instructions to
the relevant bank regarding such accounts; or

 

  (b) cash balances to be held in accounts opened in accordance with the Client
Money Rules.

 

11. SECURITIES LENDING, BORROWING AND OVERDRAFTS

 

11.1 The Investment Manager may, where separately agreed in writing with the
Client, make arrangements to:

 

  (a) lend to a third party, investments or documents of title or certificates
evidencing title to investments comprising the Portfolio or part of it;

 

  (b) borrow on the Client’s behalf against the security of such investments or
other property in circumstances where the Investment Manager considers this to
be in the best interests of the Portfolio; and

 

  (c) deposit such investments with a third party by way of collateral.

 

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11.2 Any income or fees received (net of charges and expenses) in relation to
such loans will be added to the Portfolio.

 

11.3 The Investment Manager may not, without the written consent of the Client,
commit the Client to supplement the assets of the Portfolio by borrowing on the
Client’s behalf or by committing the Client to a contract which may require the
Client to supplement such assets.

 

11.4 The Investment Manager may direct the Custodian to retain a lien or
security interest over any assets of the Portfolio to the extent that any costs,
losses or claims detailed in this Agreement (or any other agreement), for which
the Client is obliged to indemnify the Investment Manager, remain unpaid.

 

12. VALUATIONS, CONFIRMATIONS AND PERIODIC STATEMENTS

 

12.1 A valuation showing the Initial Composition and Initial Value is attached
(or will be supplied as soon as reasonably practicable) and constitutes (or will
then constitute) part of the Agreement. The basis of all valuations will be as
stated in the first valuation unless otherwise notified.

 

12.2 The Investment Manager agrees to provide to the Client written confirmation
of transactions to the extent required by the Client, and in accordance with,
the FSA Rules.

 

12.3 The Investment Manager agrees to provide periodic statements to the Client
setting out the value and composition of the Portfolio to the extent required by
the Client, and in accordance with, the FSA Rules.

 

13. SAFEKEEPING, SETTLEMENT AND COLLECTION

 

13.1 The parties agree that the Custodian, pursuant to separate contractual
arrangements, will be solely responsible for the safekeeping of Portfolio assets
(and their documents of title) on behalf of the Client, and will attend to the
settlement of all Portfolio transactions and to the collection of income
receivable in respect of the Portfolio. The Client acknowledges that the
Investment Manager will not hold Portfolio securities (or their documents of
title) on behalf of the Client.

 

13.2 To the extent that the Custodian selected by the Client uses an affiliate
of the Investment Manager as a local sub-custodian, the Client hereby consents
to any transaction effected as a service with such local sub-custodian necessary
to invest and hold assets in such local market on the same terms and conditions
as other similarly situated clients of such Custodian. The Client hereby
approves the use of deposit accounts of Deutsche Bank AG or an affiliate.

 

14. TAXATION

The Investment Manager’s services do not include the provision of advice on
matters of taxation and, unless otherwise agreed in writing, the Investment
Manager shall not be required to have regard to such matters in providing
services under this Agreement. The Client and any professional tax adviser of
the Client remain responsible for the management of the Portfolio’s affairs for
tax purposes.

 

15. REPORTING

 

15.1 The Investment Manager will provide the Client with reports in respect of
the Portfolio as provided in Appendix IV.

 

15.2 Where the Investment Manager or any Group Company is entitled to receive
commission or other remuneration from any party other than the Client relating
to an investment transaction effected for the Portfolio, it will not be obliged
to advise the Client of that fact prior to effecting the transaction; details of
any such remuneration will be included on the relevant contract note.

 

16. RECORDS

The Investment Manager will maintain records of all transactions effected for
the Portfolio.

 

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17. FEES AND CHARGES

 

17.1 The Investment Manager’s remuneration for its services under this Agreement
will be as set out in Appendix V. The Investment Manager is also entitled to the
reimbursement of those reasonable costs and expenses which are incurred by the
Investment Manager on behalf of the Client and agreed by the Client in advance.

 

17.2 The Client will be liable for any costs properly incurred under this
Agreement, including reasonable commissions, transfer and registration fees and
for taxes and other similar transaction costs and transaction-related fees and
expenses, custody or sub-custody fees and other fiscal liabilities.

 

17.3 All fees payable by the Client under this Agreement shall be exclusive of
any value added tax.

 

18. CONFIDENTIALITY

 

18.1 Neither the Investment Manager, the Custodian nor any Group Company is
obliged to disclose to the Client or to take into consideration information
either:

 

  (i) the disclosure of which by it to the Client would or might be a breach of
duty or confidence to any other person; or

 

  (ii) which comes to the notice of an employee, officer or agent of the
Investment Manager, the Custodian or of a Group Company, but properly does not
come to the actual notice of an individual managing the Portfolio.

 

18.2 The Investment Manager will respect and protect the confidentiality of all
information concerning the Portfolio and will not, without the Client’s prior
consent, disclose any such information to a third party (other than a Group
Company) except: (i) in connection with its performance under this Agreement
(which may include, without limitation, disclosure of the names of the Client to
any broker, dealer or market maker (including, without limitation, futures
commission merchants) and consultants); or (ii) as required, requested or
permitted by law, competent authority or court of competent jurisdiction; or
(iii) if such information is already in, or comes into, the Investment Manager’s
possession as a result of activities unrelated to, or from sources other than,
the Client; or (iv) if such information is or becomes available to the public or
industry sources other than as a result of disclosure by the Investment Manager;
or (v) on the Client’s default either under this Agreement or under any other
agreement which the Investment Manager has entered into on the Client’s behalf
pursuant to this Agreement, whereupon the Investment Manager may disclose to a
third party the Client’s names, addresses and such other information either as
the Investment Manager deems necessary or as any counterparty reasonably
requires.

 

18.3 The Investment Manager may collect, use and disclose personal data about
the Client, or individuals associated with the Client, so that the Investment
Manager can carry out its obligations to the Client and for other related
purposes, including monitoring and analysis of their business, crime prevention,
legal and regulatory compliance by the Investment Manager or other Group
Companies of other services. The Investment Manager may also transfer such
personal data to any country, including countries outside the European Economic
Area, for any purpose set out above. The Client hereby consents to the
processing and use of its data by the Investment Manager pursuant to this clause
19.3.

 

18.4 The Client hereby authorizes the Investment Manager to share information
about the Client and the Client’s account (“Client Account Data”) with
affiliates of the Investment Manager (collectively with the Manager, “DeAM”)
from time to time for the purpose of: (i) supervising and supporting the
management of DeAM’s business relationship with the Client and /or (ii) allowing
DeAM Management (or its duly authorized designees) to provide general support to
all of DeAM’s clients globally. The Client is aware that as a result of such
access to Client Account data, an Investment Manager affiliate may be forced
under its local law to disclose available Client information to local
governmental authorities, agencies or courts.

 

18.5 The Client will keep confidential at all times information acquired in the
context of the implementation of this Agreement. This information includes,
without limitation, information regarding investments made by the Investment
Manager in connection with the Portfolio. This does not apply to disclosure
required where the client is bound to disclose under compulsion of law or where
requested by any court or regulatory agencies, or to its professional advisers
where reasonably necessary.

 

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19. LIABILITY AND INSURANCE

 

19.1 In performing its obligations under this Agreement, the Investment Manager
will act with reasonable skill and care. Except as provided in Clause 19.2:

 

  (i) the Investment Manager will not be responsible for any act, omission or
default of any broker, dealer, market maker, deposit-taker or other agent
selected by the Investment Manager, provided that the Investment Manager has not
acted negligently in selecting or utilising the services of such broker, dealer,
market maker, deposit-taker or other agent; and

 

  (ii) the Investment Manager shall have no liability to the Client except in
the event of the breach of contract, negligence, wilful default or fraud of its
employees.

 

19.2 The Investment Manager accepts responsibility for loss to the Client for
which its agents are legally liable where such agents are Group Companies, to
the extent that such loss is due to the agent’s breach of contract, negligence,
wilful default or fraud.

 

19.3 Insurance cover is maintained for the Investment Manager in respect of
professional negligence, employees’ fidelity and all-risk cover in respect of
securities.

 

19.4 The Client shall indemnify the Investment Manager against all losses and
claims which may be incurred by it or made against it either (i) as a result of
any third party claiming to be entitled to investments which form part of the
Portfolio at the time when the Investment Manager first assumes management of
the Portfolio; or (ii) by any third party in connection with the Investment
Manager’s services under this Agreement, together with all reasonable costs and
expenses (including, but not limited to, legal counsel fees and expenses)
properly incurred by the Investment Manager in connection with such claims or
losses, except to the extent that any claim or loss is due to the negligence,
wilful default or fraud of the Investment Manager’s employees. The Investment
Manager shall inform the Client of any such claims or losses in respect of which
an indemnity is sought under this Agreement.

 

19.5 A statement describing clients’ rights to compensation in the event of the
Investment Manager’s inability to meet any of its liabilities is available on
request.

 

19.6 The Investment Manager shall not in any event have any liability to the
Client to the extent that performance of its obligations under or pursuant to
this Agreement is delayed, prevented or impeded, and any such delay, failure or
impediment will not constitute a breach of this Agreement, if such delay
failure, impediment is due to any cause whatsoever outside the investment
Manager’s reasonable control. Events outside the Investment Manager’s reasonable
control shall include without limitation: Government action, including, without
limitation, expropriation, nationalisation, and the imposition of currency
restrictions: acts of war, terrorism, insurrection or revolution; acts of God;
breakdown or failure of transmission or communications or computer facilities;
postal or other strikes or industrial action, the failure or disruption of any
stock exchange, clearing house, settlements system or market, any change to law,
order or regulation of a governmental, supranational or regulatory body.

 

19.7 No warranty or undertaking is given by the Investment Manager as to the
performance or profitability of the Portfolio or any part of it nor that the
Investment Objectives will be successfully achieved.

 

19.8 Nothing in this Agreement shall exclude any liability of the Investment
Manager arising under FSMA, any rules and regulations made under it, or the FSA
Rules.

 

20. COMPLAINTS

The Investment Manager maintains procedures in accordance with the FSA Rules for
the effective consideration and handling of customer complaints. Complaints will
be considered promptly by the Compliance Department of the Investment Manager
who is not personally involved in the subject matter of the complaint.

 

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21. TERMINATION

 

21.1 This Agreement may be terminated by the Client on thirty days’ written
notice to the Investment Manager, or by the Investment Manager on not less than
ninety days’ prior written notice to the Client or by the Investment Manager at
any time by written notice if so required by any competent regulatory authority.

 

21.2 Termination will be without prejudice to the completion of transactions
already initiated which will be completed expeditiously by the Investment
Manager to the extent that matters are within its control.

 

21.3 Termination will not affect accrued rights, indemnities, existing
commitments or any contractual provision intended to survive termination and
will be without penalty or other additional payment unless otherwise specified
in this Agreement. The Client will pay (i) the fees of the Investment Manager
pro rata to the date of termination and (ii) any additional expenses necessarily
incurred by the Investment Manager in terminating the Agreement and will bear
any tosses necessarily realised in settling or concluding outstanding
obligations.

 

21.4 On notice of termination, the Investment Manager will, unless directed
otherwise by the Client, continue to manage the Portfolio until the termination
date, and is authorised in any event, without prior notice to the Client, to
arrange for the retention and/or realisation of such assets as may be required
to settle transactions entered into prior to the actual date of termination, and
to pay any outstanding liabilities of the Client.

 

21.5 Following notice of termination of this Agreement, the Client will promptly
give the Investment Manager all necessary instructions concerning the
liquidation or transfer of the assets comprising the Portfolio, and (subject to
Clauses 21.2, 21.3, 21.4 and 23.4) the Investment Manager will act in accordance
with such instructions.

 

21.6 Either party may terminate the Agreement without notice if the other party
is pronounced bankrupt, if a moratorium is declared in respect of the other
party or over the other party’s assets, if a receiver, and administrator or
liquidator of the other party shall be appointed, if the other party shall make
any composition or arrangement with its creditors, if required by any
regulatory, judicial or governmental authority or if the other party shall
commit a material breach of any of the provisions of this Agreement and shall
fail to remedy such breach within 14 days of receiving written notice from the
first party specifying the breach.

 

22. CLIENT AUTHORISED SIGNATORIES

 

22.1 The Authorised Signatories are authorised, on the Client’s behalf, to issue
instructions, acknowledgements and notices to the Investment Manager and to
agree to amendments to this Agreement in accordance with Clause 25.1.

 

22.2 Amendments to the current list of the Authorised Signatories may be made at
any time, on written notice, signed by the relevant number of Authorised
Signatories as detailed in Appendix II.

 

22.3 The Investment Manager shall be entitled to act, in accordance with Clause
23 on instructions given by Authorised Signatories as identified in Appendix II
or as subsequently amended pursuant to Clause 22.2. The Investment Manager shall
incur no liability for any action taken on Such instructions, in the absence of
express written notice of any change in the Authorised Signatories.

 

23. INSTRUCTIONS, COMMUNICATIONS AND NOTICES

 

23.1 Subject to Clauses 23.2, 23.3, 23.5 and 23.10, all instructions,
acknowledgments and notices will be given by letter which may be either
delivered personally, posted or sent by facsimile or email transmission (except
that any notice pursuant to Clause 21.1 may not be given by email transmission)
to the relevant party at the Specified Address.

 

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23.2 The Investment Manager will not act upon any instructions or notices
received by facsimile or email transmission until confirmed by letter delivered
personally or by post, or confirmed orally by any one of the Authorised
Signatories. Without prejudice to Clause 19, the Investment Manager shall have
no liability for failing to act on any instruction or notice which is not
received in a readable form.

 

23.3 The Investment Manager may rely and act on and treat as binding any
instruction or communication which purports to have been given (and which is
accepted by it in good faith as having been given) by persons authorised or
notified by the Client unless the Investment Manager has received written notice
to the contrary, whether or not the authority of any such person has ceased to
have effect. The Investment Manager will not be liable for any toss, damage or
costs incurred by the Client (or any person claiming through the Client) or any
third party as a result of such reliance.

 

23.4 The Investment Manager may decline to accept or act upon any instruction or
other communication which is reasonably believed not to have been issued in
accordance with the provisions of this Agreement, or if it reasonably considers
that compliance with such instruction would be impracticable or would give rise
to a breach of any applicable law or regulation, and in any such circumstances
the Investment Manager will notify the Client accordingly.

 

23.5 The Investment Manager may provide Reports electronically, either (i) by
making them available on a Website and, if required by the FSA, confirming the
provision of the Reports by e-mail to the Specified Address; or (ii) by sending
them by e-mail, personal delivery, post or facsimile transmission to the
Specified Address.

 

23.6 Where the Reports are made available on the Website or by e-mail in
accordance with clause 23.5, the parties agree that the “Terms and Conditions of
Use” from time to time displayed on the Website will apply.

 

23.7 Any Report provided by the Investment Manager electronically in accordance
with clause 23.5 shall be deemed to have been duly given:

 

  (i) if sent by e-mail, twenty four hours after being sent by the Investment
Manager to the Specified Address;

 

  (ii) if made available on the Website, at the time and date when first
displayed on the Website;

 

  (iii) if made available on the Website and confirmed by e-mail, twenty four
hours after the confirmation e-mail is sent by the investment Manager to the
Specified Address.

 

23.8 The Investment Manager is authorised to record and monitor every telephone
conversation held between the Client and the Investment Manager regarding the
Portfolio. The Client agrees to the recording and its storage for a limited
period of time. The Client will inform its employees involved in related
functions accordingly and obtain their agreement with such recording. The Client
shall procure that its employees do not provide any third party with the
telephone numbers of the Investment Manager.

 

23.9 In the interests of proper management and administration of the Portfolio,
the Investment Manager, its representatives or employees, may wish to call upon
the Client by telephone, or otherwise communicate with the Client without
express invitation. The Client consents to such communications.

 

23.10 The Client may send certain instructions to the Investment Manager by
email, subject to and in accordance with the procedures outlined in Appendix I,
as amended in writing from time to time by the Investment Manager. The Client
acknowledges that the internet is not a completely secure method of
communication and its use includes additional risks such as the possibility of
virus contamination and disruptions in service. The Client shall hold the
Investment Manager harmless in using the internet for this purpose, and the
Investment Manager shall have no liability for any loss, expense, damage,
liability or claim (including legal fees) incurred of sustained by the Client or
any person claiming through the Client.

 

23.11 All written communications by the Investment Manager to the Client shall
be sent so the last address notified to the Investment Manager by the Client.

 

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24. CLASSIFICATION

The Client is classified as a Professional Client for the purposes of the FSA
Rules. The Client may have a right to request an alternative classification, but
this may affect the service the Investment Manager is able to offer to the
Client.

 

25. AMENDMENTS

 

25.1 Subject to Clauses 6.4, 22.2, 23.10, 25.2 and 25.3 of this Agreement, this
Agreement may be amended at any time by written agreement between the Investment
Manager and the Client.

 

25.2 The Investment Manager may amend the Agreement in order to comply with, or
to make the Agreement consistent with, any legal or regulatory requirements or
changes to which the Investment Manager may be subject, by providing a written
notice to the Client of such amendment.

 

25.3 Any party to the Agreement may amend its address for correspondence (or any
address for correspondence with its advisers) detailed in Appendix I by
providing written notice of any change to the other party. Any amendment under
this Clause 25 shall take effect on the date specified in the written notice
(which shall not be less than ten business days after the issue of the notice)
unless a party receiving written notice of a proposed amendment in the meantime
give notice to the contrary or requests an extension of time.

 

26. ENTIRE AGREEMENT

This Agreement, including the Appendices, will constitute the entire agreement
between the parties hereto, superseding all prior representations, proposals,
agreements or understandings (whether written or oral) made by any party
relating to the subject matter of this Agreement. No party shall have any
liability in respect of any such representations, proposals, agreements or
understandings (unless fraudulently made) which are not expressly set out or
referred to in this Agreement.

 

27. VAT

 

27.1 All payments made and or due under this Agreement are considered to be
exclusive of VAT, unless otherwise indicated, which shall be payable in
addition, if applicable under the relevant laws or regulations.

 

27.2 The Investment Manager shall issue valid VAT invoices, where applicable,
for the amounts due under this agreement.

 

27.3 Where by reason of any change in applicable legislation or regulation, or a
change in practice by HM Revenue and Customs (collectively referred to as a
“Change of VAT Event”), and the Investment Manager is required to treat the
services rendered under this Agreement as exempt from VAT, and where such
services were previously treated as taxable, the Investment Manager will only
refund VAT to the Client to the extent that it is recoverable from HM Revenue
and Customs by the Investment Manager, using all reasonable endeavours to obtain
such recovery. The Client agrees to provide all necessary assistance to the
Investment Manager to recover such VAT amounts.

 

27.4 Should the Investment Manager suffer any loss whatsoever as a result of any
Change of VAT Event, the Investment Manager may deduct the amount of such loss
from any VAT refund payable to the Client.

 

27.5 To the extent that the Investment Manager will have or will bear
irrecoverable VAT due to the Change of VAT Law event, notwithstanding clause
27.1, the Investment Manager reserves the right to amend unilaterally the
charges to the Client to reflect this additional cost, which will take effect
immediately upon prior written notice to the Client.

 

27.6 The parties shall in good faith cooperate throughout the term of this
Agreement to ensure that the services are being charged for in the most VAT
efficient manner and that the correct VAT liabilities are being applied. If as a
result of any discussions between the parties, and the parties agree that
certain services should be treated as VAT exempt and this VAT exempt treatment
is successfully implemented, the Supplier shall be entitled to recover any
irrecoverable VAT resulting from the new treatment by adjusting the charges to
the Client.

 

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27.7 The parties are responsible for their own tax affairs and the Investment
Manager shall not be liable to the Client for any tax matters, nor will the
Investment Manager be deemed under any circumstances to be providing tax advice.

 

28. CONTRACT RIGHTS

A person who is not a party to this Agreement shall have no right under the
Contract (Rights of Third Parties) Act 1999, to enforce any of its terms. In
particular the underwriting members of Syndicate 1400 shall have no direct
rights under this Agreement, but shall act through the Client to enforce any
terms or entitlements under this Agreement.

 

29. CHEQUE PAYMENTS

The Investment Manager requests that any payments made by the Client under this
Agreement (including, without limitation, further funding for the Portfolio or
payments for fee invoices, if applicable) shall be made by electronic bank
transfer in the required format to the appropriate recipient and not by cheque.
The Client acknowledges that cheques can be misplaced resulting in payment
delays and, subject to Clause 19, the Investment Manager accepts no
responsibility for the same.

 

30. GOVERNING LAW

This Agreement and any non-contractual obligations arising out of it or in
connection with it will be governed by and construed in accordance with English
law. The English courts will have exclusive jurisdiction to settle any disputes
or claims, including any such relating to non-contractual obligations, which may
arise out of or in connection with the Agreement for which purpose all parties
agree to submit to such jurisdiction.

 

Signed  

/s/ Lance Gibbins

    by   Lance Gibbins         Director and  

/s/ Iain Bremner

      Iain Bremner         Director

for and on behalf of

MAX AT LLOYD’S LTD

      Signed by  

/s/ Kevin Jones

      Kevin Jones         Authorised Signatory and  

/s/ Mark Bolton

      Mark Bolton         Authorised Signatory

for and on behalf of

DEUTSCHE ASSET MANAGEMENT (UK) LIMITED

     

 

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