Exhibit
10.31


 


AMENDED AND RESTATED


INVESTMENT MANAGEMENT AND SERVICES AGREEMENT


 


 


BETWEEN


 


 


[Subsidiary]


 


 


AND


 


 


GE ASSET MANAGEMENT INCORPORATED


 


 


 


DATED AS OF
             
   , 2004


 


 


 


CONFIDENTIAL
TREATMENT REQUESTED


 


CONFIDENTIAL TREATMENT
REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATEMENT HAS BEEN REQUESTED IS
OMITTEED AND IS NOTED WITH “**”.


AN UNREDACTED VERSION OF
THIS DOCUMENT HAS BEEN FILED


SEPARATELY WITH THE
SECURITIES AND


EXCHANGE COMMISSION.


 

















 


THIS AMENDED AND RESTATED INVESTMENT MANAGEMENT AND SERVICES
AGREEMENT (the “Agreement”) is made and entered into as of
the      day of
              ,
2004 (the “Effective Date”), by and between [Subsidiary], an insurance company
domiciled in the State of [      ]
(“Client”), and GE ASSET MANAGEMENT INCORPORATED, a Delaware corporation
(“Manager”).


 


RECITALS


 


WHEREAS, Client and Manager previously entered into an
investment management and services agreement (the “Original Agreement”) dated
as of May 1, 2002 pursuant to which Client retained Manager to provide
investment management and other services for Client’s investment portfolio and
Manager agreed to provide those services on the terms and conditions contained
in the Original Agreement; and


 


WHEREAS, Client and Manager now desire to amend and
restate the Original Agreement in its entirety as more specifically provided
below. 


 


NOW,
THEREFORE, in consideration of the promises and mutual
covenants contained herein, Client and Manager agree as follows:


 


ARTICLE
I


DEFINITIONS
AND USAGE


 


1.1                               Definitions.  The following capitalized terms, as used in
this Agreement, have the following meanings:


 


“Account” shall have the
meaning set forth in Section 2.1.


 


“Account Assets” means
the assets and any unrealized income, profit or gain (or loss) from, those
assets in the Account from time to time. 
Unless specifically described otherwise, Account Assets shall be valued
at market.


 


“Actual Costs” shall have
the meaning set forth in Article IV(b).


 


“Affiliate” of a Person
means a Person who, directly or indirectly through one or more intermediaries,
Controls or is Controlled by, or is under common Control with, such Person.


 


“Applicable Law” means,
as applicable to each of the parties hereto, any domestic or foreign federal,
state or local statute, law, ordinance or code (including, with respect to
Client, the Delaware insurance code and, with respect to Manager, the
Investment Advisers Act), any rules, regulations, administrative
interpretations or orders issued by any Governmental Authority (including with
respect to Client, the Insurance Authority and, with respect to Manager, the
SEC) pursuant to any of the foregoing, and any order,


 

















 


writ, injunction, directive, judgment or decree of a
court of competent jurisdiction applicable to the parties hereto. 


 


“Board” means the Board
of Directors of Client as the same may be elected from time to time by the
shareholders of Client.


 


“Budgeted Costs” shall
have the meaning set forth in Article IV(a).


 


“Control” means, as to any Person, the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.  The terms “Controlled”, “under common
Control with” and “Controlling” shall have correlative meanings.


 


“Control Event” means,
with respect to either party, the occurrence of: (a) any event which results in
the Control of the party transferring from a Person that was an Affiliate
immediately prior to the occurrence of such event to a Person that is not an
Affiliate; (b) the sale or transfer of substantially all of a party’s assets to
a Person that is not an Affiliate; or (c) the merger or consolidation of a
party with or into another Person and the surviving Person is not an Affiliate.


 


“CPR” shall have the
meaning set forth in Section 8.3.


 


“CPR Arbitration Rules”
shall have the meaning set forth in Section 8.4(a). 


 


“Custodian” shall have
the meaning set forth in Section 2.6.


 


“Directed Brokers” shall
have the meaning set forth in Section 2.7(b)


 


“Directed Trades” shall have
the meaning set forth in Section 2.7(b).


 


“Dispute” shall have the
meaning set forth in Section 8.1(a).


 


“Effective Date” shall
have the meaning set forth in the introductory paragraph.


 


“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended.


 


“First Extension” shall
have the meaning set forth in Article III(a).


 


“GAAP” means generally
accepted accounting principles in effect, from time to time, in the United
States.


 


“GE” means General
Electric Company, a New York corporation.


 


“GE Change” shall have
the meaning set forth in Article III(a).


 


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“Governmental Authority”
means the SEC, the Insurance Authority or any court, tribunal, arbitrator,
authority, agency, commission, official or other instrumentality of the United
States or any federal, national, state, municipal, county, city or other
political subdivision.


 


“Initial Notice” shall
have the meaning set forth in Section 8.2.


 


“Initial Termination
Date” shall have the meaning set forth in Article III(a).


 


“Insurance Authority”
means the Delaware Department of Insurance.


 


“Investment Advisers Act”
means the Investment Advisers Act of 1940, as amended.


 


“Investment Committee”
means a committee directed by the Board to oversee Client’s investment
activities.


 


“Investment Guidelines”
shall mean certain guidelines and procedures concerning the investment and
management of the Account Assets (and which may be specific as to any
particular Account) as may be adopted from time to time by the Board or the
Investment Committee all of which shall be compliant in all respects and at all
times with all Applicable Law, and as may from time to time be modified or
amended by the Board or the Investment Committee; provided that any such modification
or amendment shall be provided by Client to Manager in writing in advance.


 


“Investment Objectives”
shall mean any investment objectives set forth in the Investment Guidelines or
otherwise communicated in writing from time to time by Client to Manager. 


 


“Investment Reports”
means statements, reports, analyses, data, summaries, calculations, formulas
and the like concerning Account Assets, investment strategy, security selection
and performance results, whether in written, oral or electronic form. 


 


“Management Percentage”
shall have the meaning set forth in Article IV(a).


 


“Original Agreement”
shall have the meaning set forth in the Recitals.


 


“Person” means an
individual, corporation, partnership, limited liability company, association,
trust or any other entity or organization, including governmental or political
subdivision or an agency or instrumentality thereof.


 


“Proposal” shall have the
meaning set forth in Article IV(c).


 


“Records” shall have the
meaning set forth in Section 2.9.


 


“Regulatory Change” shall
have the meaning set forth in Article III(a).


 


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“Remaining Term” shall
have the meaning set forth in Article III(a).


 


“Representatives” means,
as applicable, Client’s or Manager’s directors, officers, employees,
accountants and legal and financial advisors.


 


“Response” shall have the
meaning set forth in Section 8.2.


 


“SAP” means statutory
accounting procedures and principles prescribed or permitted by Applicable Law.


 


“Second Extension” shall
have the meaning set forth in Article III(a).


 


“SEC” means the U.S.
Securities and Exchange Commission.


 


“SEC Termination” shall
have the meaning set forth in Article III(a).


 


“Taxes” shall have the
meaning set forth in Section 7.18(b).


 


“True-up” shall have the
meaning set forth in Article IV(b).


 


1.2                               Headings.  The headings contained in this Agreement are
for reference purposes only and shall not affect the meaning or interpretation
of this Agreement.


 


ARTICLE II


SERVICES


 


2.1                               Investment
Management.  With respect to
accounts and/or investment portfolios designated by Client from time to time in
writing and which may include, without limitation, an account established to
hold assets of Client placed into a trust or other special purpose vehicle
utilized to secure performance of Client’s obligations (collectively, the
“Account”), Manager will provide continuous, discretionary investment
management services to Client, which services may include (but not be limited
to) the following:


 


(a)                                  Research
and identify investment opportunities;


 


(b)                                 Open
(or direct the Custodian to open) and maintain brokerage accounts for
securities and other property for and in the name of Client and execute for
Client, as its agent and attorney-in-fact, standard customer agreements;


 


(c)                                  Invest
Account Assets in income earning investments, such as bonds and cash
equivalents, and such other investments as are permitted by Applicable Law,
subject to any restrictions or limitations imposed by the Investment
Guidelines, the Board or the Investment Committee, in each case, as
communicated to Manager in writing;


 


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(d)                                 Exercise,
on behalf of Client or direct the exercise by the Custodian where appropriate,
all rights and remedies conferred by any investment including, without
limitation, voting rights (as discussed more fully in Section 2.8 below) with
respect to the Account Assets;


 


(e)                                  Sell
or dispose of investments as appropriate, subject to any restrictions or
limitations imposed by the Investment Guidelines, the Board or the Investment
Committee; provided, however, that the proceeds from any such sales will be
deposited in the relevant Account on the date of receipt;


 


(f)                                    Assist
in developing an overall investment strategy for the Account Assets; provided
that in all cases Client shall have sole responsibility for approving and
adopting any such strategy;


 


(g)                                 Conduct
inspections, valuations, projections or other due diligence activities with
respect to investments;


 


(h)                                 Negotiate
the terms and conditions of investments and review and participate in the
preparation of any documentation relating to such investments and execute for
Client, as its agent and attorney-in-fact, such documentation;


 


(i)                                     Keep
the Account under review and confer at regular intervals with Client regarding
the investment and management of the Account;




(j)                                     Prepare
a summary of all purchases and sales of investments with respect to the Account
for approval and ratification by the Board or the Investment Committee not less
than quarterly and more frequently if the Board or the Investment Committee so
requests;


 


(k)                                  Assist
with cash management and cash flow forecasting;


 


(l)                                     Participate
in meetings of the Board, the Investment Committee and such other meetings with
Client Representatives as Client may request from time to time;


 


(m)                               Provide
Client, in a timely manner, with such reports, documentation and information as
Client may reasonably request in connection with monthly, quarterly and annual
closing activities; 


 


(n)                                 Provide
Client with such additional investment management services relating to the
Account as Client may reasonably request from time to time; and


 


(o)                                 Provide other support and analysis
concerning investments, which, by way of example, may include due diligence in
connection with potential business acquisitions or dispositions by Client and
its Affiliates, reinsurance transactions and capital markets structures;
provided, however, such support and analysis shall 


 


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be similar in
scope to that which Manager has previously provided to Client and shall be
consistent with the range of services provided in the normal course by Manager
under this Agreement.


 


2.2                               [Reserved]


 


2.3                               Appointment
of Manager.  Client appoints
Manager and Manager accepts appointment by Client as investment adviser for the
Account with full discretion subject to the terms of this Agreement; provided
that, and without limitation to any right or remedy of Client under this
Agreement, the ultimate control of Client’s accounts and/or investment
portfolios shall remain with the Board, and nothing contained in this Agreement
shall be deemed to transfer or delegate such control to Manager.


 


2.4                               Non-Exclusivity.  Manager shall perform its services described
in this Agreement on a nonexclusive basis.  Client shall be
free to retain at any time one or more additional investment advisers to
perform similar services in connection with any of its assets.  Manager may give advice and take action with
respect to other clients that differs from advice given or action taken with
respect to the Account, so long as Manager attempts in good faith to allocate
investment opportunities to Client and the Account over a period of time on a
fair and equitable basis compared to investment opportunities extended to other
clients.  Manager is not obligated to
initiate the purchase or sale of any security for Client or the Account that
Manager, or its Affiliates or the respective Representatives of either of them,
may purchase or sell for its or their own accounts or for the account of any
other client if, in the reasonable opinion of Manager, such transaction or
investment appears unsuitable or undesirable for Client or the Account.


 


2.5                               Covenants
of Manager.


 


(a)                                  Manager
shall discharge its duties with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person, acting in a like
capacity and familiar with such matters should use in the conduct of an
enterprise of a like character and with like aims.   Further, Manager shall use the same skill and care in the
management of the Account and other duties hereunder as it uses in the
administration of other similar accounts for which it has investment responsibility.


 


(b)                                 Manager
shall use its commercially reasonable efforts to achieve the Investment
Objectives.  Notwithstanding the
foregoing, Client understands that Manager makes no representation regarding
its ability to achieve any Investment Objective and Manager shall have no
liability hereunder for such failure provided it has otherwise complied with
the terms of this Agreement.


 


(c)                                  Manager
shall notify Client in writing within seven (7) business days of:  (i) Manager’s failure or inability to comply
with any material term or provision of this Agreement; (ii) any change in
Manager’s senior officers who exercise investment discretion in respect of the
Account; (iii) any change in Manager’s


 


6

















 


condition, financial or otherwise, or in its business
or any other change which is reasonably likely to be materially adverse to
Manager, the Account or the Account Assets; (iv) the occurrence of any
happening or event which is reasonably likely to cause or has caused any breach
of any representation or warranty made by Manager below and the nature and
scope of the breach; (v) any threatened or actual material adverse change in
the Account or nature of the Account Assets of which it is aware; (vi) if it is
unable to comply with the Investment Guidelines including any change resulting
from an amendment to such Investment Guidelines or any instruction or direction
given by Client pursuant to this Agreement; or (vii) if an instruction,
direction or guideline given by Client is: 
(A) in Manager’s opinion, inconsistent with the Investment Guidelines;
or (B) in Manager’s opinion, ambiguous or unclear in any respect, and the
instruction, direction or guideline must be clarified by Client.


 


(d)                                 In
the performance of its duties and obligations under this Agreement, Manager
shall act in conformity with the Investment Guidelines or other written
instructions of the Board, the Investment Committee or Representatives of
Client, in each case as supplied to Manager by Client, and all Applicable Law. 
At Client’s request, Manager shall provide to Client certificates or
other evidence of compliance relating to any Applicable Law or other legal
requirements, in each case in form and substance satisfactory to Client.


 


(e)                                  Manager
shall at all times maintain sufficient and knowledgeable personnel to perform
the services under this Agreement.


 


(f)                                    Manager
shall inform Client of, and comply with, Manager’s policy regarding the receipt
by Manager of all services received in connection with soft dollar commissions
in relation to the investment or management of the Account.


 


(g)                                 Manager
shall account to Client for any monetary benefits, fees or commissions received
by Manager or any Affiliate of Manager in relation to the investment of the
Account other than benefits or amounts permitted to be received in accordance
with Section 2.7 and Article IV.


 


(h)                                 Manager
shall exercise due care in selecting, appointing and reviewing the performance
of any agent of Manager in connection with the Account or any broker engaged by
Manager.


 


(i)                                     Except
as otherwise disclosed in this Agreement, Manager does not have and will not
have any interest, direct or indirect, which would conflict in any manner with
its obligations under this Agreement.


 


2.6                               Custodial
Matters.  All transactions authorized by this
Agreement with respect to the Account will be consummated through a custodian
designated in writing by Client (the “Custodian”).  Manager (who shall not act as Custodian) may issue such
instructions to the Custodian as may be appropriate in connection with the
settlement of transactions


 


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initiated by Manager under this Agreement, either in
writing or sent electronically or orally and confirmed in writing or
electronically as soon as practical thereafter.  Manager shall instruct all brokers, dealers or other persons
executing orders on behalf of the Account to forward to the Custodian copies of
all brokerage or dealer confirmations promptly after execution of all transactions.  Manager shall not be authorized to take
custody or possession of any Account Assets. 
Manager shall not be responsible for the fees of the Custodian or for
any loss incurred by reason of any act or omission of the Custodian. Client
may, at any time in its sole discretion, appoint one or more additional or
substitute custodians to hold the Account Assets.  Manager will be advised of the appointment of any substitute
custodians in writing by Client.  


 


2.7               
Brokerage Matters.  


 


(a)                                  Manager
may place orders directly with brokers or dealers for executing transactions
for the Account.  In selecting brokers
or dealers, Manager is authorized to use its discretion and may take into
account such relevant factors as (i) total transaction price (including commissions,
as a component of price); (ii) the broker’s facilities, reliability and
financial responsibility; (iii) the ability of the broker to effect the
securities transaction, particularly with regard to such aspects as timing,
size and execution of orders; and (iv) the research services provided by such
broker to Manager (either directly or by arrangement with third parties) which
may enhance Manager’s general investment decision-making process,
notwithstanding that the Account may not be the direct or exclusive beneficiary
of such services.  Specifically, Manager
may pay a broker a commission in excess of the amount another broker would have
charged for effecting such transac­tion, so long as, in the good faith judgment
of Manager, the amount of the commission is reasonable in relation to the value
of the brokerage and research services provided by such broker, viewed in terms
of that particular transaction or Manager’s overall investment management
business.  Client shall be responsible
for the total transaction costs, including all reasonable broker’s commissions
with respect to transactions of the Account and all taxes or government fees,
domestic or foreign, attributable to such transactions.  Manager may enter into arrangements with
brokers to open “average price” accounts wherein orders during a trading day
are placed on behalf of Client and other clients and are allocated (along with
an equivalent portion of the expenses related thereto) among the Account and
the accounts of the other clients using an average price.  Manager may execute any and all transactions
for the Account with or through brokers or dealers that are Affiliates of
Manager so long as such transactions are executed on terms no less favorable
than those available from an unaffiliated broker or dealer.


 


(b)                                 Client
may direct Manager to effect securities transactions for the Account (“Directed
Trades”) through broker-dealer(s) identified by Client in writing (“Directed
Brokers”) in a separate agreement acceptable to Manager.   Client acknowledges that: (i) Directed
Trades may not enable Client to obtain the cost and execution benefits, if any,
of participating in aggregated trades with other clients; and (ii) Directed
Trades may be executed before or after Manager effects


 


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the execution of transactions for other accounts with
the result that Client may pay or receive, as the case may be, a different
price for securities which were also the subject of trades by Manager for its
other clients.  Client represents that
Directed Trades are not prohibited by Applicable Law or Client’s governing
documents.


 


2.8                               Exercise
of Rights.  Subject to the
Investment Guidelines and any other written instructions of the Board, the
Investment Committee or Representatives of the Client provided to Manager,
Manager shall use its best judgment to exercise or instruct the Custodian to
exercise, in a manner that Manager deems to be in the best interests of Client,
all voting rights, consent rights, subscription rights, conversion rights or
any other rights arising in connection with any investment in the Account.  Manager shall determine whether to consent
to modifications of any documents governing securities held in the
Account.  Unless provided herein or
requested in writing by Client, Manager need not forward any proxy material,
consent solicitations or similar material to Client. 


 


2.9                               Recordkeeping
and Reports; Review and Inspection.


 


(a)                                  Manager
shall maintain all records, memoranda, instructions or authorizations
(collectively, “Records”) relating to the acquisition or disposition of
securities or other investments in the Account as required by the Investment
Advisers Act.  Such Records will be the
property of Client.  On a timely basis,
Manager shall make available to Client, at its administrative offices or such
other location as may be designated by Client, copies or originals of such
Records upon reasonable request.  


 


(b)                                 All
Records, both internal and external with third parties, to the extent within
the control of Manager, will clearly specify the ownership interest of Client
in the Account Assets.




(c)                                  Records
relating solely to the Account and/or the Account Assets that are not
maintained physically on Client’s premises or in Client’s care, custody and
control shall be subject to review and audit at any time by Client, its
Representatives, the Insurance Authority and any other Governmental Authority,
or any other entity designated by Client, and Manager shall cooperate with and
provide reasonable assistance to any such Person, including any auditor
appointed by Client to conduct an audit of the Account.  Such Records shall be maintained for the
time periods and in a format required by the Investment Advisers Act.  Manager shall notify Client prior to
destruction of such Records (in order that Client may request transfer of such
Records to Client as an alternative to destruction).


 


(d)                                 Manager
shall provide to Client such other documents and information pertaining to this
Agreement, the Account and/or Account Assets at such times as Client may reasonably
request including, but not limited to, information required to prepare reports
to the Insurance Authority or any other entity designated by Client


 


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or as may be required in order for Client to comply
with GAAP, SAP or Applicable Law.


 


(e)                                  Manager
will cooperate fully with Client with respect to unsettled or unreconciled
transactions and daily transmission of trading activity.


 


2.10                        Information
Furnished to Manager.  Client
shall furnish to Manager in a timely manner any information that Manager may
reasonably request with respect to the services performed under this
Agreement.  In determining the
requirements of Applicable Law, Manager may rely on an interpretation of law by
legal counsel to Client.  


 


ARTICLE III


TERM AND TERMINATION


 


(a)                                  This Agreement shall continue in effect
for a term beginning on the Effective Date and ending on the third anniversary
of the Effective Date (the “Initial Termination Date”).  Not less than one (1) year prior to the Initial
Termination Date, Client shall notify Manager in writing of its intent to
terminate this Agreement on the Initial Termination Date or to extend this
Agreement for an additional one (1) year term (the “First Extension”).  If Client exercises the First Extension,
Client shall, no later than the Initial Termination Date, notify Manager in
writing of its intent to terminate this Agreement at the end of the First
Extension or to further extend this Agreement for an additional one (1) year
term (the “Second Extension”).  This
Agreement may only be terminated by Client (i) for any reason with one (1) year
prior written notice (which notice shall specify the effective date of
termination) to the Manager or (ii) immediately (A) for cause  (“cause” being understood as any fraud or
willful misconduct by Manager in managing the Account, Manager’s material
breach of this Agreement, materially deficient investment performance with
respect to the Account or Manager’s material or repeated non-compliance in
managing the Account in accordance with the Investment Guidelines or Investment
Objectives; provided that, except with respect to Manager’s fraud or willful
misconduct, Manager shall have thirty (30) days from notice of such material
breach or non-compliance to cure the material breach or non-compliance to the
reasonable satisfaction of Client in which case “cause” shall not be deemed to
have occurred) or (B) upon a Control Event with respect to Client.  If Client terminates this Agreement with
less than one (1) year prior notice and if such termination is not for cause or
due to a Control Event with respect to Client, Client will then continue to pay
to Manager the lesser of (1) the unpaid balance of the Budgeted Costs (as
defined in Article IV(a)) for the remaining portion of the calendar year plus
the pro-rata portion of the Budgeted Costs for the following calendar year but
only for the number of days which when added to the time elapsed since the
giving of such notice would equal one (1) year (such remaining period, the
“Remaining Term”) or (2) the Actual Costs incurred by Manager for providing
services under this Agreement for the Remaining Term (in each case as adjusted
to reflect the pro-rata portion of the True-up (as defined below) from the
prior year and entire True-up for the following year, or portion


 


10

















 


thereof, if
applicable).  Manager shall use
reasonable efforts to mitigate the incurrence of such costs and expenses.  This Agreement may be terminated by Manager
if the SEC suspends or withdraws Manager’s investment adviser registration  (“SEC Termination”) or a change in
Applicable Law occurs that would materially and adversely affect Manager’s
ability to provide services hereunder (“Regulatory Change”).  Manager shall provide prompt written notice
of a SEC Termination or Regulatory Change to Client and Manager shall use best
efforts to extend the termination date for this Agreement to the maximum date
consistent with the requirements of the SEC or the date of implementation of
the Regulatory Change, as applicable, and in a manner consistent with
subsection (d) of this Article III. 
This Agreement may be terminated by Manager (i) upon a Control Event
with respect to Manager; (ii) if GE decides to dissolve Manager and commences
dissolution proceedings; or (iii) if GE decides to engage other investment
managers to provide substantially all advisory services to the fixed income
allocation of the General Electric Pension Trust (each event a “GE Change”);
provided that Manager shall give prompt written notice of a GE Change to Client
and the date of termination shall occur on the later of the Initial Termination
Date or one (1) year from the giving of notice of the GE Change to Client.  This Agreement also shall automatically
terminate in the event of its unauthorized assignment by either party.  Termination in any manner shall not affect
the rights of either party that accrued prior to termination. 


 


(b)                                 Client
acknowledges that Manager has and will continue to expend substantial fixed
costs in providing services to Client and such costs would not have been
incurred but for Manager providing services to Client.  Furthermore, Client acknowledges that
Manager has agreed to provide services hereunder for the fees noted in Article
IV in part because Client has expressed a good faith intention to engage
Manager for not less than three (3) years following the Effective Date.  Therefore, Client acknowledges that the
management fees still to be paid to Manager following a termination by Client
of this Agreement for reasons other than cause or upon a Control Event with
respect to Client and with less than one (1) year prior notice should not be
construed as a penalty but as a reasonable approximation of the additional
costs incurred by Manager due to the failure of Client to meet the parties’
expectations. 


 


(c)                                  Within
sixty (60) days of the termination of this Agreement, Manager shall transfer
all Records to Client or its designee provided that Manager shall be entitled
to maintain a copy of such Records.  All
reasonable costs to transfer such Records shall be paid by Client.  


 


(d)                                 In
the event of any termination of this Agreement, Client may request that Manager
continue to serve as a manager hereunder (at the then-existing compensation
level) in order to assist Client in effecting a smooth and orderly transfer of
services and all Records to any successor manager (which may be Client);
provided that such transition period shall not exceed 3 months unless otherwise
agreed to by the parties.  Manager shall
consent to such request 


 


11

















 


provided termination is not the result of a SEC
Termination or Regulatory Change.


 


ARTICLE IV


COMPENSATION


 


(a)                                  Subject to the provisions of this Article
IV, Client agrees to pay Manager a management fee on a quarterly basis in
arrears for services provided by Manager to Client pursuant to this
Agreement.  The management fee shall be
equal to ** basis points (**%) (the “Management Percentage”) multiplied by the
value of the Account Assets as of the end of the relevant calendar quarter, as
determined by the Custodian’s records, divided by four (4).  The parties acknowledge that the initial
Management Percentage has been, and the Management Percentage applicable for
each calendar year thereafter will be, equal to the percentage resulting from
dividing Manager’s budgeted direct and indirect costs and expenses for such
period (the “Budgeted Costs”) as adjusted by any True-up (as defined below) for
the prior year by Client’s estimated aggregate Account Assets for the next
calendar year, all as determined in good faith.


 


(b)                                 The parties will reestablish the
Management Percentage for each calendar year in accordance with the following
process; provided, however, that if the Management Percentage for such period
exceeds by more than ten percent (10%) the Management Percentage applicable
during the prior calendar year or portion thereof, such increase shall be
submitted to the Insurance Authority for prior approval.  By each September 15, Client shall provide
Manager with a provisional forecast of Client’s Account Assets for the
following calendar year together with an outline of any significant changes
that Client proposes to implement to its investment strategy during the
following calendar year.  By each
October 1, Manager shall provide Client with a detailed budget setting forth
the expected Budgeted Costs to be incurred by Manager in order to provide
services to Client for the following calendar year along with reasonable
documentation in support of such budget (collectively, the “Proposal”).  Client shall promptly review the Proposal
and shall accept or reject the Proposal, in Client’s reasonable discretion, by
no later than November 1; provided, however, if Client rejects the Proposal it
shall provide Manager with a written explanation for such rejection.  If Client rejects the Proposal, Client and
Manager will work in good faith to resolve all issues so that the Proposal is
acceptable to both parties no later than December 1.  As promptly as possible, but in no event later than January 15 of
each year, Client shall provide Manager its final forecast of Account Assets
for the calendar year and any significant changes to Client’s investment
strategy that Client proposes to implement during the calendar year.  Within five (5) business days following
receipt of such information, Manager shall calculate the difference between the
management fees paid or payable by Client to Manager for the prior year under
this Agreement (and under the Original Agreement for the portion of 2004 that
such agreement remained in effect) and Manager’s actual direct and indirect
costs and expenses of providing services (“Actual Costs”) during such period
(such


 


12

















 


difference is
referred to as the “True-up”) and shall provide the True-up and proposed
Management Percentage to Client.  The
calculation of any True-up shall not give effect to fees received by Manager or
reductions in fees otherwise owed to Manager as a result of a prior
True-up.  The True-up shall be added to
or subtracted from, as applicable, the Budgeted Costs set forth in the approved
Proposal and shall be reflected in the Management Percentage established for
the following calendar year.  If Manager
is entitled to the benefit of the True-up because Actual Costs exceeded
Budgeted Costs, the True-up added to Budgeted Costs for the following calendar
year shall be the lesser of the actual True-up or an amount equal to 10% of
Budgeted Costs for the prior calendar year; provided however, that any Actual
Costs that were not included in the approved Proposal for the year but were
previously approved in writing by Client in consultation with Manager during
such year shall not be included when applying the 10% cap.  The Manager shall provide Client with
reasonable back-up documentation supporting Manager’s calculation of the
True-up.  Client shall approve or reject
the True-Up and the Management Percentage not later than five (5) business days
after receipt thereof from Manager.  The
Management Percentage shall be implemented as if it were effective as of the
prior January 1.  If the parties are
unable to agree on a revised Proposal, 
the True-up or the Management Percentage, the then existing Management
Percentage shall remain in effect until the parties agree on a revised Proposal
and True-up.  If the parties are unable
to agree on the Proposal, the Management Percentage and the True-up by February
15, the Budgeted Costs and Management Percentage (which shall reflect the
True-up) shall be established pursuant to the Arbitration process described in
Article VIII of this Agreement.  Both
parties understand that time is of the essence with respect to this
subsection.  For purposes of all dates
set forth in this subsection, if such date is not a business day, then such
date shall be deemed to be the next calendar day that is a business day. 


 


(c)                                  Manager
shall submit to Client within thirty (30) days following each calendar quarter,
a written statement of the amount owed by Client for the previous quarter.  Client shall pay Manager undisputed amounts
within thirty (30) days following receipt of such statement.


 


ARTICLE V


CONFIDENTIALITY


 


Subject to the duty of Manager or Client to comply with Applicable Law,
each party hereto shall treat as confidential all information with respect to
the other party received pursuant to this Agreement.  No party shall use or disclose the other party’s confidential
information except as contemplated by this Agreement.


 


Manager shall establish and maintain reasonable procedures to keep
Investment Reports, the information supplied by Client to Manager for the
Investment Reports and other non-public information provided hereunder
confidential and to prevent disclosure or distribution to any Person other than
to Client’s Representatives or to Manager’s Representatives or Manager’s


 


13

















 


service providers who have a reasonable need to know or have access to
such information in connection with providing services hereunder; provided that
Manager may include information from such Investment Reports when presenting
Manager’s performance as long as Client is not identified as the source of such
information.  Manager will be responsible
for compliance with the terms of this Article V by its Representatives.


 


Investment Reports provided by Manager to Client are privileged and may
include proprietary information. 
Investment Reports will be used solely for the purpose of monitoring and
evaluating the performance of the Account and for use by Client in testing the
Account Assets for regulatory compliance and similar purposes.  Client shall establish and maintain
reasonable procedures to keep Investment Reports confidential and to prevent
disclosure or distribution to any
Person other than to Client’s Representatives who have a reasonable need
to know or have access to such Investment Reports in connection with the
receipt of services hereunder.  Client
will be responsible for compliance with the terms of this Article V by its
Representatives. 


 


Each party hereto will obtain the other party’s approval before sending
or making available any Investment Report to third parties.  If a party is required by Applicable Law or
requested (by legal process, civil investigative demand or similar process) to
disclose any confidential information of the other party, the party being
required or requested to make such disclosure will promptly notify the other
party so that the other party may seek an appropriate protective order or waive
compliance with this confidentiality covenant.


 


ARTICLE
VI


REPRESENTATIONS
AND WARRANTIES


 


6.1          By Client.  Client represents and warrants that:


 


(a)                                  It
is an insurance company duly organized, validly existing and in good standing
under the laws of Delaware and has the power and authority (including approval
from the Insurance Authority, if required) to execute, deliver and perform this
Agreement;


 


(b)                                 This
Agreement is the valid and binding obligation of the Client enforceable against
it in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting creditors’
rights generally or by the principles governing the availability of equitable
remedies; and


 


(c)                                  Except
as set forth on Schedule 6.1 attached hereto, none of the Account Assets are
“plan assets” within the meaning of ERISA and if any Account Assets ever become
“plan assets” within the meaning of ERISA, Client will immediately so notify
Manager.


 


6.2          By Manager.  Manager represents and warrants that:


 


14

















 


(a)                                  It
is a corporation duly organized, validly existing and in good standing under
the laws of Delaware, has the power and authority to carry on the business of
an investment adviser, and has the power and authority to execute, deliver and
perform this Agreement;


 


(b)                                 This
Agreement is the valid and binding obligation of Manager enforceable against it
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting creditors’
rights generally or by the principles governing the availability of equitable
remedies;


 


(c)                                  Other
than approval from the Insurance Authority, if any, it has made, obtained and
performed all other registrations, filings, approvals, authorizations,
consents, licenses or examinations required by any government or governmental
or quasi-governmental authority, domestic or foreign, or required by any other person,
corporation or other entity in order to execute, deliver and perform this
Agreement and to be an investment adviser;


 


(d)                                 Neither
the execution and delivery nor the performance of this Agreement by Manager
will violate any law, statute, order, rule or regulation or judgment, order or
decree by any federal, state, local or foreign court or governmental authority,
domestic or foreign, to which Manager is subject nor will the same constitute a
breach of, or default under, provisions of any agreement or contract to which
it is a party or by which it is bound;


 


(e)                                  It
is registered as an investment adviser under the Investment Advisers Act and
has at least 48 hours prior to entering into this Agreement furnished to Client
a true and complete copy of Part II of its most recent Form ADV; and since the
date of such Form ADV, there has not been, occurred or arisen any material
adverse change in the financial condition or in the business of Manager or any
event, condition, or state of facts which materially and adversely affects, or
to its knowledge threatens to materially affect, the business or financial
condition of Manager; and


 


(f)                                    In
terms of intellectual property, it is the sole owner of all right, title and
interest in and to the intellectual property used by it to perform its
obligations hereunder or, to its knowledge, possesses all appropriate rights to
use the intellectual property; has not sold, granted, conveyed, licensed or
assigned to any third party, or in any way encumbered, the intellectual property
in a manner that interferes with Manager’s obligations under this Agreement;
and the intellectual property used by Manager does not to Manager’s knowledge
infringe the rights of any third party.


 


15

















 


ARTICLE VII


MISCELLANEOUS


 


7.1                               Limitation
of Liability.  In furnishing
Client with services as provided herein, neither Manager nor any officer,
director or agent thereof shall be held liable to Client, its creditors or the
holders of its securities for good faith errors of judgment or for anything
except willful misfeasance, bad faith or gross negligence in the performance of
its duties, or reckless disregard of its obligations and duties under the terms
of this Agreement.  It is further
understood and agreed that Manager may rely upon information furnished to it by
Client that Manager reasonably believes to be accurate and reliable.  Certain federal laws, including federal
securities laws, impose liabilities under certain circumstances on persons who
act in good faith and therefore nothing contained herein shall in any way
constitute a waiver or limitation of any rights that Client may have under any
such federal laws.  


 


7.2                               Indemnification.  


 


(a)                                  Notwithstanding
any limitation of liability contained in Section 7.1, Manager shall indemnify
and hold Client harmless from and against any losses, damages, expenses
(including reasonable attorneys’ fees), liabilities, penalties, demands and
claims of any nature whatsoever with respect to or arising out of Manager’s
breach or violation of any agreement, covenant, representation or warranty made
by Manager herein.


 


(b)                                 Client
shall indemnify and hold Manager harmless from and against any losses, damages,
expenses (including reasonable attorneys’ fees), liabilities, penalties,
demands and claims of any nature whatsoever with respect to or arising out
Client’s breach or violation of any agreement, covenant, representation or
warranty made by Client herein.


 


7.3                               Assignment.  No assignment (by operation of law or
otherwise) of this Agreement, in whole or in part, nor any of the rights,
interests or obligations under this Agreement by either party shall be
effective without the prior written consent of the other party and the
Insurance Authority.  For purposes of
this section, the term “assignment” with respect to Manager as assignor shall
have the same meaning as defined in Section 202 of the Investment Advisers
Act.  Subject to the provisions of this
Section 7.3, this Agreement shall be binding upon, inure to the benefit of, and
be enforceable by the parties and their respective successors and permitted
assigns.


 


7.4                               Independent
Contractor.  Manager shall be
deemed to be an independent contractor and, except as expressly provided or
authorized in this Agreement, shall have no authority to act for or represent
Client.  Client shall always retain the
ultimate authority to make investment decisions on its own behalf.


 


7.5                               [Reserved]


 


7.6                               Specimen
Signatures.  From time to time,
Client shall provide Manager with a certificate setting forth the names and
specimen signatures of the Representatives who are authorized to act on behalf
of Client (including, but not limited to, the Investment


 


16

















 


Committee). 
From time to time, Manager will provide Client with a certificate
setting forth the names and specimen signatures of the Representatives who are
authorized to act on behalf of Manager. 
The parties hereto shall be fully protected in relying upon any written
notice, instruction, direction or other communication (based upon the most
recent certificate that has been received by the party) which is reasonably
believed to have been executed by an individual who is authorized to act on
behalf of the other party.


 


7.7                               [Reserved]


 


7.8                               [Reserved]


 


7.9                               Advertising
and Promotion.  A party shall
not engage in any advertising or promotional activity that refers to the other
party without receiving the written consent of the other party prior to
publication or announcement.  Manager
shall however be entitled to disclose Client’s name and the size of the Account
Assets in client listings and other similar material.


 


7.10                        Governing
Law.   This Agreement shall be
governed by the laws of the State of Delaware, without giving effect to its
conflict of laws principles.


 


7.11                        Notices.  Any notice under this Agreement shall be
given in writing, addressed, and delivered, or mailed postpaid, to the party to
this Agreement entitled to receive such, at such party’s principal place of
business as set out here: 


 


17

















 


Manager:


 


General Counsel


GE Asset Management Incorporated


3003 Summer Street


Stamford, CT  
06905


 


Client:


 


General Counsel


[Subsidiary]


[Address]


 


or to such other address as either party may designate
in writing mailed to the other. 
Whenever any notice is required to be given hereunder, such notice shall
be deemed given and such requirement satisfied only when such notice is
delivered, or, if mailed, when received unless otherwise permitted by the terms
hereof.


 


7.12                        Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.


 


7.13                        Amendments.  No term or provision of this Agreement may
be amended, waived, discharged or terminated orally, but only by an instrument
in writing signed by both parties.


 


7.14                        Electronic Notices, Waivers and
Amendments.  For purposes
of providing notices required or permitted by this Agreement, waiving any right
under this Agreement, or amending any term of this Agreement and
notwithstanding any law recognizing electronic signatures or records, “a
writing signed,” “in writing” and words of similar meaning, shall mean only a
writing in a tangible form bearing an actual “wet” signature in ink manually
applied by the person authorized by the respective party, unless both parties
agree otherwise by making a specific reference to this section.


 


7.15                        Entire
Agreement.  This Agreement
supersedes any and all oral or written agreements or understandings heretofore
made, and contains the entire agreement of the parties, with respect to the
subject matter hereof.


 


7.16                        Counterparts.  This Agreement may be executed in one or
more counterparts, and such counterparts together shall constitute one and the
same agreement. 


 


7.17                        Additional
Parties.   Insurance company
Affiliates of Genworth Financial, Inc. may become party to and bound by the
provisions of this Agreement subject only to executing the Adoption Agreement
attached hereto as Exhibit 1 and obtaining any necessary


 


18

















 


regulatory approvals.   Each such additional insurance company becoming a party to this
Agreement shall be deemed a “Client” hereunder.   If and when the Agreement involves two or more Clients, any one
Client may terminate this Agreement, but only with respect to such Client’s
participation in the Agreement, in accordance with Article III.


 


7.18                        Taxes.


 


(a)                                  Each
party shall be responsible for any personal property taxes on property it owns
or leases, for franchise and privilege taxes on its business, and for taxes
based on its net income or gross receipts. 



 


(b)                                 Client
may report and (as appropriate) pay any sales, use, excise, value-added,
services, consumption, and other taxes and duties (“Taxes”) directly if Client
provides Manager with a direct pay or exemption certificate.


 


(c)                                  The
parties agree to cooperate with each other to enable each to more accurately
determine its own tax liability and to minimize such liability to the extent
legally permissible.  Manager’s invoices
shall separately state the amounts of any Taxes Manager is proposing to collect
from Client.  


 


(d)                                 Manager
shall promptly notify Client of any claim for Taxes asserted by applicable
taxing authorities for which Client is alleged to be financially responsible
hereunder.  Manager shall coordinate
with Client the response to and settlement of, any such claim.  Notwithstanding the above, Client’s
liability for such Taxes is conditioned upon Manager providing Client
notification within twenty (20) business days of receiving any proposed
assessment of any additional Taxes, interest or penalty due by Manager.


 


(e)                                  Client
shall be entitled to receive and to retain any refund of Taxes paid to Manager
pursuant to this Agreement.  In the
event Manager shall be entitled to receive a refund of any Taxes paid by Client
to Manager, Manager shall promptly pay, or cause the payment of, such refund to
Client.


 


ARTICLE VIII


DISPUTE
RESOLUTION


 


8.1          General
Provisions.


 


(a)                                  Any
dispute, controversy or claim arising out of or relating to this Agreement or
the validity, interpretation, breach or termination thereof (a “Dispute”),
shall be resolved in accordance with the procedures set forth in this Article
VIII, which shall be the sole and exclusive procedures for the resolution
of any such Dispute unless otherwise specified below. 


 


(b)                                 Commencing
with a request contemplated by Section 8.2 set forth below, all
communications between the parties or their representatives in connection with


 


19

















 


the attempted resolution of any Dispute, including any
mediator’s evaluation referred to in Section 8.3 set forth below, shall
be deemed to  have been delivered in
furtherance of a Dispute settlement and shall be exempt from discovery and
production, and shall not be admissible in evidence for any reason (whether as
an admission or otherwise), in any arbitral or other proceeding for the
resolution of the Dispute. 


 


(c)                                  Except
as provided in Section 8.1(f) in connection with any Dispute, the
parties expressly waive and forego any right to (i) punitive, exemplary,
statutorily-enhanced or similar damages in excess of compensatory damages, and
(ii) trial by jury. 


 


(d)                                 The
specific procedures set forth below, including but not limited to the time
limits referenced therein, may be modified by agreement of the parties in
writing. 


 


(e)                                  All
applicable statutes of limitations and defenses based upon the passage of time
shall be tolled while the procedures specified in this Article VIII are
pending.  The parties will take such
action, if any, required to effectuate such tolling. 


 


(f)                                    The
parties hereto hereby irrevocably submit to the exclusive jurisdiction of any
federal or state court located within the State of Delaware over any such
Dispute and each party hereby irrevocably agrees that all claims in respect of
any such Dispute or any suit, action proceeding related thereto may be heard
and determined in such courts.  The
parties hereby irrevocably waive, to the fullest extent permitted by Applicable
Law any objection which they may now or hereafter have to the laying of venue
of any such Dispute brought in such court or any defense of inconvenient forum
for the maintenance of such dispute. 
Each of the parties hereto agrees that a judgment in any such Dispute
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by Applicable Law.


 


8.2                               Consideration
by Senior Executives.  If a
Dispute is not resolved in the normal course of business at the operational
level, the parties shall attempt in good faith to resolve such Dispute by
negotiation between executives who hold, at a minimum, the office of President
and CEO of the respective business entities involved in such Dispute.  Either party may initiate the executive
negotiation process by providing a written notice to the other (the “Initial
Notice”).  Fifteen (15) days after
delivery of the Initial Notice, the receiving party shall submit to the other a
written response (the “Response”).  The
Initial Notice and the Response shall include (i) a statement of the Dispute
and of each party’s position, and (ii) the name and title of the executive who
will represent that party and of any other person who will accompany the
executive.  Such executives will meet in
person or by telephone within thirty (30) days of the date of the Initial
Notice to seek a resolution of the Dispute. 


 


8.3                               Mediation.  If a Dispute is not resolved by negotiation
as provided in Section 8.2 within forty-five (45) days from the delivery
of the Initial Notice, then either party may submit


 


20

















 


the Dispute for resolution by mediation pursuant to
the CPR Institute for Dispute Resolution (the “CPR”) Model Mediation Procedure
as then in effect.  The parties will
select a mediator from the CPR Panels of Distinguished Neutrals.  Either party at commencement of the
mediation may ask the mediator to provide an evaluation of the Dispute and the
parties’ relative positions. 


 


8.4          Arbitration


 


(a)                                  If
a Dispute is not resolved by mediation as provided in Section 8.3 within
thirty (30) days of the selection of a mediator (unless the mediator chooses to
withdraw sooner), either party may submit the Dispute to be finally resolved by
arbitration pursuant to the CPR Rules for Non-Administered Arbitration as then
in effect (the “CPR Arbitration Rules”). 
The parties consent to a single, consolidated arbitration for all known
Disputes existing at the time of the arbitration and for which arbitration is
permitted.


 


(b)                                 The
neutral organization for purposes of the CPR Arbitration Rules will be the
CPR.  The arbitral tribunal shall be
composed of three arbitrators, of whom each party shall appoint one in
accordance with the “screened” appointment procedure provided in Rule 5.4 of
the CPR Arbitration Rules.  The
arbitration shall be conducted in New York City.  Each party shall be permitted to present its case, witnesses and
evidence, if any, in the presence of the other party.  A written transcript of the proceedings shall be made and
furnished to the parties.  The
arbitrators shall determine the Dispute in accordance with the law of State of
Delaware, without giving effect to any conflict of law rules or other rules
that might render law inapplicable or unavailable, and shall apply this
Agreement according to its terms, provided that the provisions relating to
arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C.
§ § 1 et seq.


 


(c)                                  The
parties agree to be bound by any award or order resulting from any arbitration
conducted in accordance with this Section 8.4 and further agree that
judgment on any award or order resulting from an arbitration conducted under
this Section 8.4 may be entered and enforced in any court having jurisdiction
thereof.


 


(d)                                 Except
as expressly permitted by this Agreement, no party will commence or voluntarily
participate in any court action or proceeding concerning a Dispute, except (i)
for enforcement as contemplated by Section 8.4(c) above, (ii) to restrict
or vacate an arbitral decision based on the grounds specified under Applicable
Law, or (iii) for interim relief as provided in paragraph (e) below.  For purposes of the foregoing, the parties
hereto submit to the non-exclusive jurisdiction of the courts of State of
Delaware.


 


(e)                                  In
addition to the authority otherwise conferred on the arbitral tribunal, the
tribunal shall have the authority to make such orders for interim relief,
including injunctive relief, as it may deem just and equitable.  Notwithstanding Section 8.4(d) above,
each party acknowledges that in the event of any actual or


 


21

















 


threatened breach of Article V, the remedy at law
would not be adequate, and therefore injunctive or other interim relief may be
sought immediately to restrain such breach. 
If the tribunal shall not have been appointed, either party may seek
interim relief from a court having jurisdiction if the award to which the
applicant may be entitled may be rendered ineffectual without such interim
relief.  Upon appointment of the
tribunal following any grant of interim relief by a court, the tribunal may
affirm or disaffirm such relief, and the parties will seek modification or
rescission of the court action as necessary to accord with the tribunal’s
decision. 


 


(f)                                    Each
party will bear its own attorneys’ fees and costs incurred in connection with
the resolution of any Dispute in accordance with this Article VIII.


 


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INTENTIONALLY LEFT BLANK]


 


22

















 


IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written. 


 


 


	
   

  	
  GE ASSET MANAGEMENT INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [SUBSIDIARY]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


23

















 


SCHEDULE
6.1


 


PLAN
ASSETS


 


24

















 


EXHIBIT 1


 


ADOPTION AGREEMENT


 


(AMENDED AND RESTATED INVESTMENT MANAGEMENT AND SERVICES
AGREEMENT)


 


By executing this Adoption Agreement, the undersigned
corporation, an insurance company Affiliate of [Subsidiary], hereby adopts and
agrees to be bound by the terms and provisions of the Amended and Restated
Investment Management and Services Agreement between GE Asset Management
Incorporated and [Subsidiary] dated as of
          , 2004 (the
“Agreement”), as provided in Section 7.17 of the Agreement.


 


This Adoption Agreement shall become effective on the
date executed unless otherwise noted.


 


 


 


 


[Name and Address of Corporation]


By:


Name:


Title:


Date:


 


25