Exhibit 10.19


 


INVESTMENT ADVISORY SERVICES AGREEMENT


 


THIS
AGREEMENT is executed as of 3 July 2001 and made effective as of the 1st day of
January 2001, by and among ACE Capital Re International Ltd, a Bermuda
domiciled insurance company (“Client”), and ACE Asset Management Inc., a
Delaware company (collectively “ServiceCo”).


 


W I T N E S S E T H


 


WHEREAS,
the Client and ServiceCo (collectively the “Parties” and each a “Party”) are
affiliated corporations wholly-owned indirectly by ACE Limited, a Cayman Islands
limited liability company; and


 


WHEREAS,
each Party acknowledges that it may be desirable for certain investment
advisory services to be provided by ServiceCo to the Client, and


 


WHEREAS, the Client wishes to provide fair consideration for the services
rendered to it by ServiceCo;


 


NOW
THEREFORE, in consideration of the premises and mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties hereby agree as
follows:


 


ARTICLE
1

SCOPE OF SERVICES


 


1.1                                 (i) The Parties hereby agree that ServiceCo
shall assist with the evaluation and selection of Client’s investment advisors
and monitor the performance, compliance and risk profile of the Client’s
portfolio.


 


(ii)
At any time and from time to time, the Client may request from ServiceCo, and
ServiceCo, may elect to provide to the Client, certain additional investment
advisory services, on a consulting and/or administrative support basis.


 


All
services provided hereunder shall be subject to such guidelines, procedures and
limitations as may be established and approved from time to time between Client
and ScrviceCo;


 


1.2                                 The Services may be changed from time to time
by an amendment, that has been approved, in writing, by the parties to this
Agreement.


 


1.3                                 The Client and ServiceCo hereby acknowledge
that all employees rendering Services pursuant to this Agreement (‘‘Employee”)
shall remain at all times an employee of


 


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ServiceCo.  In the performance of Services, the Employee
shall report to and be under the sole control of ServiceCo, which shall have
full authority to direct his or her services. Client shall exercise no control
over the Employee in the performance of Services. ServiceCo will retain final
decision-making authority in all matters in respect of which ServiceCo provides
Services under this Agreement.


 


1.4                                 ServiceCo shall perform Services as an
independent contractor.  Nothing
contained herein shall be construed to create the relation of partner, employer
and employee or principal and agent between the Client and ServiceCo. ServiceCo
shall have no authority to negotiate or transact business on behalf of Client
without the express written consent of Client.


 


1.5                                 ServiceCo represents that it possesses and
will maintain the appropriate licenses and authority to perform any Services
that the Client elects to purchase under this Agreement.  However, notwithstanding this representation,
nothing in this Agreement shall require ServiceCo to obtain any licenses,
systems, personnel, or operations to provide or comply with the obligations set
forth in this Agreement or to retain any specific personnel to perform the
Services.


 


ARTICLE
II

COMPENSATION FOR SERVICES


 


2.1                                 For the services rendered by ServiceCo to
Client pursuant to Section 1.l(i) of this Agreement, Client shall pay to
ServiceCo a management fee of 2.5bps (0,025%) based on the average of the
market value of the assets under advisement as reported in the quarterly report
to the Investment Committee of the Client. For the services rendered by
ServiceCo to Client pursuant to Section 1.l(ii) of this Agreement, the parties
shall agree a service fee prior to the provision of such services. ServiceCo
will provide client with a bill for services within thirty (30) days after the
end of each three-month period. Client will pay ServiceCo within fifteen (15)
days of receipt of the bill.


 


2.2                                 ServiceCo and Client acknowledge and agree
that Client shall have the right to offset any amounts due and owing to
ServiceCo from Client under this Agreement against other amounts due and owing
by Client to ServiceCo.


 


ARTICLE
III

BOOKS AND RECORDS


 


3.1                                 The ownership of all books, supplies, records
or other materials furnished by or on behalf of the Client relating to any of
the services provided to the Client shall be vested in, and remain the property
of the Client, and all shall be delivered to the Client immediately upon the
termination or cancellation of this Agreement or at any time upon the request
of the Client.


 


3.2                                 The Client shall have the right, from time to
time, to conduct reviews, inspections and/or audits of any or all of the
records and documents related to its business under this


 


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Agreement, during ordinary business hours
upon reasonable notice, and ServiceCo shall cooperate and cause its employees,
agents or advisors to cooperate with the Client conducting such reviews,
inspections and audits.


 


ARTICLE
IV

TERM AND TERMINATION


 


4.1                                 This Agreement is effective as of the date
first set forth above, and shall remain in effect up to and including December
31, 2002 (the “Initial Term”), unless earlier terminated pursuant to Clauses
4.2 and 4.3. At the end of the Initial Term, or any subsequent term thereof,
this Agreement shall automatically be renewed each year for a period of one
year.


 


4.2                                 Either party may elect to terminate this
Agreement at any time and for any reason on sixty (60) days’ prior written
notice to the other Party.


 


4.3                                 Notwithstanding any other provision of this
Agreement, either Party may terminate this Agreement immediately upon written
notice to the other Party in the event that the other Party (i) becomes
insolvent or bankrupt, or admits in writing its inability to pay its debts as
they become due, or makes an assignment for the benefit of creditors, or
applies for or consents to the appointment of a trustee or receiver for the
major part of its property, (ii) becomes the subject of bankruptcy, reorganization,
rearrangement, insolvency or liquidation proceedings, or other proceedings for
relief of creditors and such proceedings are not stayed or discharged within
ninety (90) days after being commenced; (iii) is acquired by another entity,
unless such acquiring entity is wholly owned, directly or indirectly, by ACE
Limited; (iv) fails to obtain or maintain any licenses, permits or other
qualifications that are required by law to fulfill its obligations under this
Agreement and such failure remains uncured after fifteen (15) days, or (v)
commits abandonment, fraud or willful misconduct with the provision of services
under this Agreement.


 


4.4                                 Termination of this Agreement shall not
relieve either Party of its obligations under this Agreement up to the effective
date of termination.  Following any
termination, the Parties will cooperate with each other to provide a smooth
transition of services and to satisfy reasonable requests for information
concerning actions taken during the term.


 


ARTICLE
V

INDEMNIFICATION


 


5.1                                 Client agrees to hold harmless and indemnify
ServiceCo and each of its officers, directors, employees, shareholders,
independent contractors and agents (collectively the “ServiceCo Indemnitiees”)
from and against any and all claims, suits, causes of action, demands, losses,
damages, fines, penalties, punitive damages, costs or expenses, including
attorneys’ fees, or other liabilities of any nature (“Damages”) based on,
related to or in connection with (i) any action taken or omitted by any of the
ServiceCo Indemnitees solely at the direction of Client; (ii) Damages incurred
by the ServiceCo Indemnitees as a result solely of any negligent, willful or
intentional acts, errors or omissions of Client or its officers, directors,
employees or agents in the


 


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performance or breach of this
Agreement, and/or (iii)  any
litigation, arbitration or other proceeding related to this Agreement and
involving any of the ServiceCo Indemnities in which the plaintiff, petitioner
or other claimant does not allege any fault or wrongdoing on the part of the
ServiceCo Indemnities or any of them.


 


5.2                                 ServiceCo
agrees to hold harmless and indemnify Client and Client’s officers, directors,
employees, shareholders, independent contractors and agents (collectively the
“Client Indemnitees”) from and against any and all Damages based on, related to
or in connection with (i) any action taken or omitted by any of the Client
Indemnitees solely at the direction of ServiceCo, (ii) damages incurred by the
Client Indemnities as a result solely of any negligent, willful or intentional
acts, errors or omissions of ServiceCo or its directors, employees or agents in
the performance or breach of this Agreement; and/or (iii) any litigation, arbitration
or other proceeding relating to this Agreement and involving any of the Client
Indemnitees in which the plaintiff, petitioner or other claimant does not
allege any fault or wrongdoing on the part of the Client Indemnities or any of
them; and/or (iv) based on or related to or in connection with any obligation
to withhold and pay over any taxes based on wages, salary or other compensation
of employees of ServiceCo.


 


5.3                                 The
terms of this Article shall survive the termination of this Agreement.


 


ARTICLE VI

ARBITRATION


 


6.1                                 All
disputes between the Parties relating to or in connection with this Agreement,
including but not limited to its interpretation, performance or breach, shall
be submitted to binding arbitration as described in this Article.


 


6.2                                 The
Party initiating arbitration shall provide notice of its demand for
arbitration, which shall include appointment of an arbitrator.  The other Party shall have thirty (30) days
from receipt of such demand for arbitration in which to appoint its arbitrator.
If the responding Party fails to appoint its arbitrator within such thirty (30)
days, the initiating Party shall be entitled to choose the second arbitrator.
Together the two arbitrators shall agree upon a neutral umpire. If no such
agreement is reached within thirty (30) days of the appointment of the second
arbitrator, the umpire shall be chosen by drawing lots.  The arbitrators and the umpire (collectively
the Panel”) shall be active or retired insurance professionals of disinterested
insurance-related companies not under the control of either Party or their
respective parent companies.


 


6.3                                 Each
Party shall submit its case to the Panel within one (1) month from the date of
the appointment of the umpire, but this period of time may be extended by unanimous
written consent of the Panel.


 


6.4                                 The
Panel shall make its decision with regard to the custom and usage of the
insurance business. The Panel shall be relieved of all judicial formalities and
the strict rules of law.  The written
decision of a majority of the Panel shall be rendered within sixty (60) days


 


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following the termination of the Panel’s
hearings, unless the Parties consent to an extension.  Such majority decision of the Panel shall be final and binding
upon the Parties both as to law and fact, and may not be appealed to any court
of any jurisdiction. Judgment may be entered upon the final decision of the
Panel in any court of proper jurisdiction.


 


6.5                                 Each Party shall bear the fees and expenses
of the arbitrator selected by or on its behalf, and the costs of arbitration,
including the fees of the umpire, shall be divided equally between the two
Parties. The Panel shall have the authority to award to the prevailing Party
its costs and attorneys’ fees.


 


6.6                                 Any arbitration proceeding shall take place
in Bermuda or such other location as may be mutually agreed upon by the
Parties.


 


ARTICLE
VII

CONFIDENTIALITY


 


7.1                                 ServiceCo agrees that, except with the
consent of the relevant Client, it will not disclose or use for any purpose
outside the scope of this Agreement proprietary or confidential information
provided to it by that Client unless and until such information (i) becomes
public knowledge other than through disclosure by ServiceCo or (ii) is
subpoenaed or otherwise required by an authorized governmental authority. In
the event that ServiceCo, upon the advice of counsel, determines that it is
required to provide any such information, it shall promptly provide notice to
the Client.


 


7.2                                 ServiceCo’s obligations under this Article
shall survive the termination of this Agreement.


 


ARTICLE
VIII

NOTICES


 


8.1                              Any notice required or permitted under this
Agreement shall be in writing and shall be deemed to have been given (i) when
received if given in person or by courier or a courier service, (ii) on the
date of transmission if sent by telex, facsimile or other wire transmission
(receipt confirmed) or (iii) five (5) business days after being posted by
certified or registered mail, postage prepaid.


 


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8.2                              If to ServiceCo, addressed as follows:


 


ACE
Asset Management Inc.

Attention: General Counsel

1325 Avenue of the Americas

8th Floor

New York, New York 10019

Fax: 212-581-3268


 


8.3                              If to Client, addressed as follows:


 


ACE
Capital Re International Ltd.

Attention: Legal Counsel

Victoria Hall, 4th Floor

11 Victoria Street

Hamilton HM 11, Bermuda

Fax: 441-296-3379


 


ARTICLE
IX

MISCELLANEOUS PROVISIONS


 


9.1                              The Parties agree that this Agreement
constitutes the entire understanding and agreement among them and supersedes
any prior or contemporaneous written or oral agreements, undertakings,
communications or representations among them concerning the subject matter of
this Agreement.


 


9.2                              If any separable provision hereof shall be
held to be invalid or unenforceable, such invalidity or unenforceability shall
not affect any other provision hereof.


 


9.3                              No terms, conditions, or other provisions of
this Agreement may be waived, modified, amended, or otherwise changed except in
a writing signed by the Parties which expressly states that it is an amendment
or waiver of terms of this Agreement. Any such writing must also specify with
particularity which term or terms of this Agreement are so amended or waived.
Any such writing shall not be construed as a general waiver, abandonment,
modification or amendment of any terms, conditions or provisions of this
Agreement, but rather strictly construed as an amendment or waiver of only
those terms or conditions stated therein.


 


9.4                              No Party may assign its rights or obligations
under this Agreement without the prior written consent of the other Party.


 


9.5                              The rights, duties and obligations under this
Agreement shall be binding upon inure to the benefit of the Parties’ respective
successors and assigns.


 


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9.6                              This Agreement shall be
governed and construed in accordance with the laws of New York without giving
effect to the principles of conflicts of laws thereof.


 


9.7                              This Agreement may be
executed in counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.


 


9.8                              The headings in this
Agreement are for reference purposes only, and shall not affect in any way the
meaning or interpretation of this Agreement.


 


IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed and delivered as of the date first above written.


 


 


	
   

  	
  ACE CAPITAL
  RE INTERNATIONAL

  LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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