Exhibit 10.32


 


 




	
  DATED MAY 24, 2004

  	
   

  






 


 


INVESTMENT MANAGEMENT AGREEMENT


 


 


 


Between


 


FINANCIAL ASSURANCE COMPANY LIMITED


 


 


-and-


 


GE ASSET MANAGEMENT LIMITED


 


 


 


CONFIDENTIAL TREATMENT REQUESTED


 


CONFIDENTIAL
TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED IS OMITTED AND IS NOTED WITH “**”.
AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.


 

















 


This INVESTMENT MANAGEMENT AGREEMENT (this
“Agreement”), made the 24th day of May, 2004.


 


 


BETWEEN:


 


(1)           FINANCIAL ASSURANCE COMPANY LIMITED (Registered Number
1044679) whose registered office is at Vantage West, Great West Road,
Brentford, Middlesex TW8 9AG (the “Customer”); and


 


 


(2)           GE ASSET MANAGEMENT
LIMITED (Registered Number 3084561) whose registered office is at 6 Agar
Street, London, WC2N 4HR (the “Investment Manager”).


 


 


WHEREAS:


 


(A)                              The
Customer wishes the Investment Manager to provide it with investment management
services and the Investment Manager has agreed to do so on the terms and
subject to the conditions contained in this Agreement.


 


(B)                                The
Investment Manager is authorised and regulated by the FSA (as defined below)
and has the appropriate Part IV permission under the FSMA (as defined below) to
provide the Services (as defined below) and nothing in this Agreement shall
exclude any liability of the Investment Manager to the Customer arising under
the FSMA or the FSA Rules (as defined below) as modified or re-enacted or both
from time to time.


 


(C)                                The
Investment Manager is registered as an investment adviser under the Investment
Advisers Act (as defined below).


 


(D)                               The
Investment Manager is treating the Customer as a Market Counterparty as defined
in the FSA Rules.


 


IT IS AGREED:


 


ARTICLE
I


DEFINITIONS
AND USAGE


 


1.             Interpretation.


 


1.1                                 In
this Agreement the following expressions shall have the following meanings:


 


 “Account” shall have the
meaning ascribed to it in clause 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 ascribed to it in clause 4(b).


 


“Applicable
Requirements” means all applicable laws and regulations (including
with respect to the Customer, the FSMA to the extent applicable to an insurance
company and, with respect to the Investment Manager, the Investment Advisers
Act and the FSMA to the extent applicable to an investment manager) and, if
applicable, the prevailing rules, regulations, requirements, determinations,
practice and guidelines of the Board of Inland Revenue of the United Kingdom,
or any other governmental, market or regulatory authority (including with
respect to the Customer, the FSA and with respect to the Investment Manager,
the SEC (as long as the 


 


1

















 


Investment Manager is registered as an investment adviser with the SEC)
and the FSA), in each case for the time being in force.


 


“Associate”
in this Agreement has the meaning ascribed to it in the FSA Rules.


 


“Board”
means the board of directors from time to time of the Customer.


 


“Brokers”
means dealers, brokers, agents or other similar persons selected by the
Investment Manager in its discretion through whom dealings for the Account
shall be effected.


 


“Budgeted
Costs” shall have the meaning ascribed to it in clause 4(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 Associate immediately prior to the occurrence of such event to a
Person that is not an Associate; (b) the sale or transfer of substantially all
of a party’s assets to a Person that is not an Associate; or (c) the merger or
consolidation of a party with or into another Person and the surviving Person
is not an Associate.


 


“CPR”
shall have the meaning set forth in Section 9.3.


 


“CPR
Arbitration Rules” shall have the meaning set forth in Section 9.4.


 


“Custodian”
shall have the meaning ascribed to it in clause 2.5.


 


“Custody
Agreement” shall have the meaning ascribed to it in clause 2.5.


 


“Directed
Brokers” shall have the meaning ascribed to it in clause 2.4(c).


 


“Directed
Trades” shall have the meaning ascribed to it in clause 2.4(c).


 


“Dispute”
shall have the meaning set forth in Section 9.1(a).


 


“Effective
Date” means the date of this Agreement.


 


“First
Extension” shall have the meaning ascribed to it in clause 3(a). 


 


“FSA”
means the Financial Services Authority.


 


“FSA
Rules” means the designated rules made, from time to time, by the
FSA under and in accordance with the FSMA, including under the FSA Handbook of
Rules and Guidance.


 


“FSA
Termination” shall have the meaning ascribed to it in clause
3(e)(i).


 


“FSMA”
means the Financial Services and Markets Act 2000, as amended.


 


“GAAP”
means generally accepted accounting principles in effect, from time to time, in
the United States and/or in the United Kingdom as applicable, including all
applicable SEC requirements.


 


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


 


“GE
Change” shall have the meaning ascribed to it in clause 3(e)(iii).


 


2

















 


“Initial
Notice” shall have the meaning set forth in Section 9.2.


 


“Initial
Termination Date” shall have the meaning ascribed to it in clause
3(a).


 


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


 


“Investment
Committee” means a committee appointed by the Board to oversee the
Customer’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 and which shall in all respects and at all times be
compliant with all Applicable Requirements, a copy of which will be delivered
to Investment Manager upon execution of this Agreement and from time to time
thereafter as the same may be modified or amended by the Board or the
Investment Committee; provided that any such modification shall be provided by
the Customer to the Investment 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
the Customer to the Investment 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.


 


“Losses”
shall have the meaning ascribed to it in clause 8.2(c).


 


“Management
Percentage” shall have the meaning ascribed to it in clause 4(a).


 


“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 ascribed to it in clause 4(c).


 


“Records”
shall have the meaning ascribed to it in clause 2.7(a).


 


“Regulatory
Change” shall have the meaning ascribed to it in clause 3(e)(ii).


 


“Remaining
Term” shall have the meaning ascribed to in clause 3(d).


 


“Representatives”
means, as applicable, the Customer’s or the Investment Manager’s directors,
officers, employees, agents, auditors, delegates, sub-contractors and legal and
financial advisors.


 


“Response”
shall have the meaning set forth in Section 9.2.


 


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


 


                “SEC”  means
the United States Securities and Exchange Commission.


 


“Second
Extension” shall have the meaning ascribed to it in clause 3(b).


 


“Securities
Valuation Date”  shall have the meaning ascribed to it in
clause 2.9(b).


 


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“Services”  shall
have the meaning as described in clause 2.1.


 


“True-up”
shall have the meaning ascribed to it in clause 4(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.


 


1.3                                 Exhibits.  The Exhibits to this Agreement shall be
regarded as incorporated into, and forming part of, this Agreement.


 


 


ARTICLE II


SERVICES


 


2.1                 Appointment
as Investment Manager.


 


The Customer appoints the Investment Manager and the Investment Manager
accepts appointment by the Customer 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 the Customer under this Agreement,
the ultimate control of the Customer’s accounts shall remain with the Board,
and nothing contained in this Agreement shall be deemed to transfer or delegate
such control to the Investment Manager. 
The Investment Manager, acting in good faith and with due diligence will
provide continuous discretionary investment management services (“Services”) to
the Customer, which services may include (but not 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 the Customer and execute for the Customer, 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 Requirements, subject to any
restrictions or limitations imposed by the Investment Guidelines, the Board or
the Investment Committee, in each case, as communicated to the Investment
Manager in writing;


 


(d)                                 Exercise, on behalf of
the Customer or direct the exercise by the Custodian where appropriate, all
rights and remedies conferred by any investment including, without limitation,
voting rights (as set out in clause 2.6 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 the Customer shall have sole responsibility for approving and
adopting any such strategy;


 


(g)                                 As requested by the
Customer, 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 the Customer, as
its agent and attorney-in-fact, such documentation;


 


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(i)                                     Keep the Account
under review and confer at regular intervals with the Customer 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 Customer Representatives as
the Customer may request from time to time;


 


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


 


(n)                                 Provide the Customer
with such additional investment management services relating to the Account as
the Customer 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 the Customer and its Associates, reinsurance transactions and
capital markets structures; provided, however, such support and analysis shall
be similar in scope to that which Financial Insurance Group Services Limited
had previously provided to the Customer and shall be consistent with the range
of Services provided in the normal course by the Investment Manager under this
Agreement.


 


2.2                                 Non-Exclusivity. The
Investment Manager shall perform the Services on a nonexclusive basis. The
Customer 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. The Investment
Manager may give advice and take action with respect to other customers that
differs from advice given or action taken with respect to the Account, so long
as the Investment Manager attempts in good faith to allocate investment
opportunities to the Customer and the Account over a period of time on a fair
and equitable basis compared to investment opportunities extended to other
customers.  The Investment Manager is
not obligated to initiate the purchase or sale of any security for the Customer
or the Account that the Investment Manager, its Associates 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 the customer if, in the reasonable
opinion of the Investment Manager, such transaction or investment appears
unsuitable or undesirable for the Customer or the Account.


 


2.3                                 Covenants
of the Investment Manager.


 


                During the
term of this Agreement:


 


(a)                                  The Investment
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, the Investment 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 


 


5

















 


responsibility. The Investment Manager shall at all times comply with
its applicable duties under the FSA Rules.


 


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


 


(c)                                  The Investment
Manager shall notify the Customer in writing within seven (7) business days of
the Investment Manager becoming aware of: 
(i) the Investment Manager’s failure or inability to comply with any
material term or provision of this Agreement; (ii) any change in the Investment
Manager’s senior officers who exercise investment discretion in respect of the
Account; (iii) any change in the Investment Manager’s condition, financial or
otherwise or in its business or any other change which is reasonably likely to
be materially adverse to the Investment 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 the Investment Manager in Article VI 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) its inability to comply with
any part of the Investment Guidelines including any change resulting from an
amendment to such Investment Guidelines or any instruction or direction given
by the Customer pursuant to this Agreement; (vii) an instruction, direction or
guideline given by the Customer that is: 
(A) in the Investment Manager’s opinion, inconsistent with the
Investment Guidelines; or (B) in the Investment Manager’s opinion, ambiguous or
unclear in any respect, and the instruction, direction or guideline must be
clarified by the Customer; (viii) a breach of any FSA Rule, which breach will
or is expected to have a material adverse effect on the Investment Manager’s
ability to provide the Services; or (ix) actual or potential non-routine
investigation by the FSA or any other regulator into the Investment Manager’s
condition, financial or otherwise or in its business or any actual or
threatened withdrawal or suspension of any of the Investment Manager’s
authorisations, permission or licences necessary to provide the Services.


 


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


 


(e)                                  The Investment
Manager shall at all times maintain sufficient and knowledgeable personnel to
perform the Services.


 


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


 


(g)                                 The Investment Manager
shall account to the Customer for any monetary benefits, fees or commissions
received by the Investment Manager or any Associate of the Investment Manager
in relation to the investment of the 


 


6

















 


Account other than such monetary benefits or amounts permitted to be
received in accordance with Article IV.


 


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


 


(i)                                     Except as
otherwise disclosed in this Agreement, the Investment 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.


 


 


2.4           Transactions Involving
Brokers.


 


(a)                                  In performing the Services, the Investment Manager shall have full
power, right, and authority to issue orders for the purchase or sale of
securities for the Account, directly to Brokers, as well as to exercise or
abstain from exercising any option, privilege or right held in the
Account.  In selecting a Broker with
respect to effecting any securities transaction on behalf of the Customer, the
Investment Manager 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 securities transactions, particularly with
regard to such aspects as timing, size and execution of orders, and (iv) the
research services provided by such Broker to the Investment Manager (either
directly or by arrangement with third parties) which may enhance the Investment
Manager’s general investment decision-making process, notwithstanding that the
Customer may not be the direct or exclusive beneficiary of such services.  Specifically, the Investment Manager may pay
a Broker a commission in excess of the amount another broker would have charged
for effecting such transaction, so long as, subject to the overriding
principles of suitability and in the good faith judgment of the Investment
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 the Investment Manager’s overall investment
management business.  The Investment
Manager will make periodic disclosure to the Customer regarding transactions
subject to soft dollar arrangements as required.


 


(b)                                 Subject
to FSA Rules, the Investment Manager may enter into arrangements with Brokers
to open “average price” accounts wherein orders during a trading day are placed
on behalf of the Customer and other customers of the Investment Manager and its
Associates and of its employees without prior reference to the Customer and
will allocate such transactions (along with an equivalent portion of the
expense related thereto) on a fair and reasonable basis using an average price.


 


(c)                                  The
Customer may direct the Investment Manager to effect securities transactions
for the Account (“Directed Trades”) through broker-dealer(s) identified by the
Customer in writing (“Directed Brokers”) in a separate agreement acceptable to
the Investment Manager.  The Customer
acknowledges that: (i) Directed Trades may not enable the Customer to obtain
the cost and execution benefits, if any, of participating in aggregated trades
with other customers; and (ii) Directed Trades may be executed before or after
the Investment Manager effects the execution of transactions for other accounts
with the result that the Customer may pay or receive, as the case may be, a
different price for securities which were also the subject of trades by the Investment
Manager for its other customers.  The
Customer 


 


7

















 


represents that Directed Trades are not
prohibited by Applicable Requirements or the Customer’s governing documents.


 


(d)                                 The
Investment Manager may provide typical investment representations and
warranties on behalf of the Customer, including but not limited to those
representations and warranties contained in clause 6.2 hereof, in connection
with the purchase or sale of securities by the Customer.


 


2.5                                 Custody
Arrangements.  The Customer has
established an agreement with JPMorgan Chase Bank (the “Custodian” and such
agreement, the “Custody Agreement”). 
The Custodian shall be responsible for arranging custody and safekeeping
of the Account Assets, the collection of income and other entitlements, the
carrying out of any foreign exchange transaction and all other administrative
functions in relation to such Account Assets. 
All Account Assets will be held by the Custodian in accordance with the
provisions of the Custody Agreement. 
The Customer, during the term of this Agreement, shall promptly provide
to the Investment Manager copies of any amendments to the Custody Agreement
that may affect the Investment Manager in providing the Service and shall give to
the Investment Manager notice of any termination of the Custody Agreement.  The Customer shall be responsible for the
payment of all custodial fees to the Custodian.  The Investment Manager shall have no responsibility including
supervisory responsibility or liability with respect to the acts, omissions or
other conduct of the Custodian.


 


2.6                                 Exercise
of Rights.  Subject to the
Investment Guidelines and any other written instructions of the Board, the
Investment Committee or Representatives of the Customer provided to the
Investment Manager, the Investment Manager shall use its best judgment to
exercise or instruct the Custodian to exercise, in a manner that the Investment
Manager deems to be in the best interests of the Customer, all voting rights,
consent rights, subscription rights, conversion rights or any other rights
arising in connection with any investment in the Account.  The Investment 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 the Customer, the Investment Manager need not
forward any proxy material, consent solicitations or similar material to the
Customer.


 


2.7           Record Keeping and
Inspection.


 


(a)                                  The Investment
Manager shall maintain all books, accounts, vouchers, records, memoranda,
instructions or authorizations (collectively, “Records”) relating to the
acquisition or disposition of securities or other investments in the Account in
accordance with FSA Rules.  Such Records
will at all times be the property of the Customer.  On a timely basis, the Investment Manager shall make available to
the Customer, at its administrative offices or such other location as may be
designated by the Customer, 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
the Investment Manager, will clearly specify the ownership interest of the
Customer in the Account Assets.


 


(c)                                  Records relating
solely to the Account and/or the Account Assets that are not maintained
physically on the Customer’s premises or in the Customer’s care, custody and
control shall be subject to review and audit at any time by the Customer, its
Representatives, the FSA and any other governmental or regulatory authority, or
any other entity designated by the Customer, and the Investment Manager shall
cooperate with and provide reasonable assistance to any such Person, including
any Representative appointed by the Customer to conduct an audit of the
Account.  The Investment Manager shall
notify the Customer prior to destruction of such Records (in order that the
Customer 


 


8

















 


may request transfer of such Records to the Customer as an alternative
to destruction).


 


(d)                                 The Investment Manager shall provide to the
Customer such other documents and information pertaining to this Agreement, the
Account and/or Account Assets at such times as the Customer may reasonably
request including, but not limited to, information required to prepare reports
to the FSA or any other entity designated by the Customer or as may be required
in order for the Customer to comply with GAAP, SAP or Applicable Requirements.


 


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


 


(f)                                    The Investment
Manager shall permit representatives of the FSA to have access, with or without
notice, during reasonable business hours to:


 


(i)                                     any of the
Investment Manager’s business premises;


(ii)                                  any records, files,
tapes, computer systems, computer data or other material within the Investment
Manager’s possession or control related to the provision of the Services; and


(iii)                               any facilities which the
FSA representatives may reasonably request, and at the Investment Manager’s
reasonable expense to make and remove copies of any such Records are referred
to in (ii) above.


 


(g)                                 The Investment Manager
shall make itself readily available for meetings with FSA representatives as
reasonably requested and shall answer truthfully, fully and promptly all
questions that are reasonably put to them by FSA representatives.


 


(h)                                  The Investment
Manager shall give the Customer’s duly appointed auditors entitlement to such
information and explanations from its officers as they reasonably consider
necessary for the performance of their duties.


 


2.8           Information Furnished to the
Investment Manager.


 


(a)                                  The Customer shall furnish
to the Investment Manager in a timely manner any information that the
Investment Manager may reasonably request with respect to the Services.  In determining the requirements of
Applicable Requirements, the Investment Manager may rely on an interpretation
of law by legal counsel to the Customer.


 


(b)                                 The Customer shall furnish
to the Investment Manager in a timely manner details of inflows of cash to the
Account in the first instance by e-mail followed by post in accordance with
clause 8.3.   


 


(c)                                  The Investment Guidelines may be modified or amended by the Board or the
Investment Committee from time to time, provided that any such modification or
amendment shall be provided by the Customer to the Investment Manager in
writing in advance. The Investment Manager shall have a reasonable amount of
time to bring the Account into compliance with any modification and amendment. 


 


 


2.9           Reporting and
valuation 


 


(a)                                  The Investment Manager shall meet the Customer at such frequency as the
Customer may reasonably require to review the performance of the Account and to
discuss the Investment Guidelines.  The
Investment Manager shall 


 


9

















 


(provided it receives no less than two weeks’ notice of the meeting)
provide the Customer not less than one week before each such meeting a written
submission reviewing developments since the last meeting and outlining the
major topics on which it proposes to comment at the forthcoming meeting.


 


(b)                                 The Investment Manager shall promptly deliver to the Chief Financial
Officer of the Customer monthly statements showing all investments in each
Account as of the close of business on the last business day of each month (the
“Securities Valuation Date”).  Said
statements shall be sent to the Customer promptly following the end of each
month and shall include:


 


(i)                                     a
statement summarizing the transactions subsequent to the immediately prior
Securities Valuation Date; and


 


(ii)                                  a
report, if any, assessing the negative performance of the Custodian with
respect to the custody of the Account Assets, to the extent known by the
Investment Manager.


 


(c)                                  The Investment
Manager shall agree with the Customer on any other statements to be provided
and in the absence of such agreement, shall have no obligation to provide any
statements other than as expressly provided herein.


 


(d)                                 For the purposes of
these statements and any other statements or reports requested by the Customer,
unless otherwise agreed upon in writing by the Customer and the Investment
Manager, the basis for valuing Account Assets shall be determined in good faith
by the Investment Manager.


 


(e)                                  The Customer shall provide the Investment Manager with a certificate
(substantially in the form set out in Exhibit A) setting forth the names and
specimen signatures of the individuals who are authorized to act on behalf of
the Customer.  The Customer may from
time to time amend or vary such certificate by written notice to the Investment
Manager.


 


 


ARTICLE
III


TERM AND TERMINATION


 


3.                                      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, the Customer shall notify the
Investment 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”).


 


(b)                                 If the Customer
exercises the First Extension, the Customer shall, no later than the Initial
Termination Date, notify the Investment 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”).  


 


(c)           This Agreement may
only be terminated by the Customer:


 


(i)                                     for
any reason (including, without any limitation, if the GE Life Group decides to
engage other investment managers to provide substantially all advisory services
to its fixed income assets) with six (6) months prior notice (which notice
shall specify the effective date 


 


10

















 


of termination) to the Investment Manager,
provided, that the Customer may provide less than six (6) months notice subject
to clause 3(d) below; or


 


(ii)                                  immediately
(A) for cause  (“cause” being understood
as any fraud or wilful misconduct by the Investment Manager in managing the
Account, the Investment Manager’s material breach of this Agreement, materially
deficient investment performance with respect to the Account or the Investment
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 wilful misconduct, the
Investment Manager shall have thirty (30) days from notice of such
non-compliance or material breach to cure such non-compliance or material
breach to the reasonable satisfaction of the Customer in which case cause shall
not be deemed to have arisen); (B) upon a Control Event with respect to the
Customer or the Investment Manager; or (C) following the occurrence of a FSA
Termination or Regulatory Change (each as defined in clause 3(e) below) or the
occurrence of an event described in clause 3(e)(iii)(A) below.


    


(d)                                 If the Customer
terminates this Agreement with less than six (6) months prior notice and if
such termination is not due to the occurrence of any event set forth in clause
3(c)(ii) above, the Customer will pay to the Investment Manager, in addition to
all fees applicable for the period from notice to termination, the lesser of
(1) the unpaid balance of the Budgeted Costs that have been applicable for
providing the Services during the period from the termination date through the
date that is six (6) months from the date that notice was received (the
“Remaining Term”) or (2) the Actual Costs incurred by the Investment Manager
for providing the Services for the Remaining Term (in each case as adjusted to
reflect the pro-rata portion of the True-up for the following year, or portion
thereof, if applicable).  The Investment
Manager shall use reasonable efforts to mitigate the incurrence of such costs
and expenses.


 


(e)                                  This Agreement may be
terminated by the Investment Manager: 


 


(i)                                     if
the FSA suspends or withdraws the Investment Manager’s investment adviser
registration or permission to carry on investment management activities  (“FSA Termination”);


(ii)                                  if
a change in Applicable Requirements occurs that would materially and adversely
affect the Investment Manager’s ability to provide the Services  (“Regulatory Change”); or


(iii)                               if
(A) GE or an Associate thereof, as the case may be, decides to dissolve the
Investment Manager and commences dissolution or other winding up proceedings;
(B) a Control Event with respect to the Investment Manager occurs; or (C) the
GE Life Group decides to engage other investment managers to provide
substantially all advisory services to its fixed income assets (each such event
in (A), (B) or (C), a “GE Change”); provided that the Investment Manager shall
give prompt written notice of a GE Change to the Customer and the date of
termination shall occur on the later of the Initial Termination Date or six (6)
months from the giving of notice of the GE Change to the Customer.


 


(f)                                    The Investment
Manager shall provide prompt written notice of a FSA Termination or Regulatory
Change to the Customer and the Investment Manager shall use best efforts to
extend the termination date of this Agreement to the maximum date consistent
with the requirements of the FSA 


 


11

















 


or the date of implementation of the Regulatory Change, as applicable,
and in a manner consistent with regard to clause 3(k).


 


(g)                                 This Agreement also
shall automatically terminate in the event of its unauthorized assignment by
either party.


 


(h)                                 Termination in any
manner shall not affect the rights of either party that accrued prior to
termination.


 


(i)                                     The Customer
acknowledges that the Investment Manager has and will continue to expend
substantial fixed costs in providing the Services to the Customer and such
costs would not have been incurred but for the Investment Manager providing the
Services.  Furthermore, the Customer
acknowledges that the Investment Manager has agreed to provide the Services for
the fees payable pursuant to Article IV in part because the Customer has
expressed a good faith intention to engage the Investment Manager for not less
than three (3) years following the Effective Date.  Therefore, the Customer acknowledges that the management fees
still to be paid to the Investment Manager following a termination by the
Customer of this Agreement for reasons other than pursuant to clause 3(c)(ii)
above and with less than six (6) months prior notice should not be construed as
a penalty but as a reasonable approximation of the additional costs incurred by
the Investment Manager due to the failure of the Customer to meet the parties’
expectations.


 


(j)                                     Within sixty (60)
days of the termination of this Agreement, the Investment Manager shall
transfer all Records to the Customer or its designee provided that Investment
Manager shall be entitled to maintain a copy of such Records.  All reasonable costs (but not any copying
costs) to transfer such Records shall be paid by the Customer.


 


(k)                                  In the event of any
termination of this Agreement, the Customer may request that the Investment
Manager continue to serve as an investment manager hereunder (at the
then-existing compensation level) in order to assist the Customer in effecting
a smooth and orderly transfer of services and all Records to any successor
Investment Manager (which may be Customer); provided that such transition
period shall not exceed 3 months unless otherwise agreed to by the parties. The
Investment Manager shall consent to such request provided termination is not
the result of a FSA Termination or Regulatory Change.


 


 


ARTICLE
IV


COMPENSATION


 


4.                                      Compensation.


 


(a)                                Subject to the provisions of
this Article IV, the Customer agrees to pay the Investment Manager a management
fee on a quarterly basis in arrears for the Services.    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 Customer agrees to pay an estimate
(determined in good faith by the Investment Manager) of this amount in monthly
installments in advance with any difference between the amount paid and the
amount due being set against the actual quarterly fee. The parties acknowledge
that the initial Management Percentage has been, and the Management Percentage
applicable for each calendar year thereafter, will be equal to 105% of the
percentage resulting from dividing the 


 


12

















 


Investment Manager’s budgeted direct and indirect costs and expenses
for providing the Services for such period (the “Budgeted Costs”) as adjusted
by any True-up for the prior year by the Customer’s estimated average Account
Assets for the next calendar year.  


 


 


(b)                                 The parties will reestablish
the Management Percentage for each calendar year in accordance with the
following process.  By each September
15, the Customer shall provide the Investment Manager with a provisional
forecast of the Customer’s Account Assets for the following calendar year
together with an outline of any significant changes that the Customer proposes
to implement to its investment strategy during the following calendar
year.  By each October 1, the Investment
Manager shall provide the Customer with a detailed budget setting forth the
expected Budgeted Costs to be incurred by the Investment Manager in order to
provide the Services for the following calendar year along with reasonable
documentation in support of such budget (collectively, the “Proposal”). The
Customer shall promptly review the Proposal and shall accept or reject the
Proposal, in the Customer’s reasonable discretion, by no later than November 1;
provided, however, if the Customer rejects the Proposal it shall provide the
Investment Manager with a written explanation for such rejection.  If the Customer rejects the Proposal, the
Customer and the Investment 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, the Customer shall provide
the Investment Manager its final forecast of Account Assets for the calendar
year and any significant changes to the Customer’s investment strategy that the
Customer proposes to implement during such calendar year.  Within five (5) business days following
receipt of such information, the Investment Manager shall calculate the
difference between the management fees paid or payable by the Customer to the
Investment Manager for the prior year under this Agreement and the Investment
Manager’s actual direct and indirect costs and expenses of providing services
(“Actual Costs”) during such period (such difference is referred to as the
“True-up”) and shall provide the True-up and proposed Management Percentage to
the Customer.  The calculation of any
True-up shall not give effect to fees received by the Investment Manager or
reductions in fees otherwise owed to the Investment 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 the Investment 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 the Customer
in consultation with the Investment Manager during such year shall not be
included when applying the 10% cap.  The
Investment Manager shall provide the Customer with reasonable back-up
documentation supporting the Investment Manager’s calculation of the
True-up.  The Customer shall approve or
reject the True-Up and the Management Percentage not later than five (5)
business days after receipt thereof from the Investment 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 


 


13

















 


Article IX of this Agreement. 
In accordance with the foregoing procedure, if the GE Life Group decides
to engage other investment managers to provide substantially all advisory
services to its fixed income assets, the Manager agrees that Budgeted Costs
(without giving effect to any True-up) for the calendar year immediately
following such change shall not increase by more than 5% unless mutually agreed
by the parties. Both parties understand that time is of the essence with
respect to this clause 4(b).  For
purposes of all dates set forth in this clause, 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)                                  The Customer agrees to pay an estimate (determined in good faith by the
Investment Manager) of the quarterly charge contemplated in clause 4(a) above
in monthly installments in advance with any difference between the amount paid
and the amount due being set against the actual quarterly fee.  The Investment Manager shall submit to the
Customer at the beginning of each month, a written statement of the amount owed
by the Customer for that month. The Customer shall pay the Investment Manager
undisputed amounts within twenty eight (28) days following receipt of such
statement. Fees to be paid in GBP.  VAT
will be added and paid, where applicable, by the Customer.  The Customer will inform the Investment
Manager as soon as possible when it is no longer within the GE Capital Bank
Limited VAT Group.


 


 


ARTICLE V


CONFIDENTIALITY


 


Subject to the duty of the Investment Manager or
the Customer to comply with Applicable Requirements, 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.


 


The Investment Manager shall establish and maintain reasonable
procedures to keep Investment Reports, the information supplied by the Customer
to the Investment 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 the Customer’s Representatives or the
Investment Manager’s Representatives or their service providers who have a
reasonable need to know or have access to such information in connection with
providing the Services; provided that the Investment Manager may include information
from such Investment Reports when presenting the Investment Manager’s
performance as long as the Customer is not identified as the source of such
information.  The Investment Manager
will be responsible for compliance with the terms of this clause by its
Representatives.


 


Investment Reports provided by the Investment
Manager to the Customer 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 the Customer in testing the Account Assets for
regulatory compliance and similar purposes. The Customer shall establish and
maintain reasonable procedures to keep Investment Reports confidential and to
prevent disclosure or distribution to any Person other than to the Customer’s
Representatives who have a reasonable need to know or have access to such
Investment Reports in connection with the receipt of the Services.  The Customer will be responsible for
compliance with the terms of this clause by its Representatives.


 


Each party hereto will, to the extent legally possible, obtain the other
party’s approval before sending or making available any Investment Report to
third parties.  If a party is required
by Applicable Requirements 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
to the extent legally possible promptly notify the other party so that the
other party may to the extent legally and practically possible seek an
appropriate protective order or waive compliance with this confidentiality
covenant.


 


14

















 


ARTICLE VI


REPRESENTATIONS AND WARRANTIES


 


6.1.         Representations and Warranties of
the Investment Manager.


 


The Investment Manager represents, warrants and covenants that:


 


(a)        It is duly incorporated under the laws
of England and Wales.


 


(b)                        It has and
will maintain throughout the term of this Agreement, all of the powers, rights
and authorities to carry on the business of an investment manager under
Applicable Requirements (including, without limitation, the appropriate
permissions from the FSA, but excluding solely for this purpose any
registrations with the SEC).


 


(c)                         Neither
the execution and delivery nor the performance of this Agreement will violate
any Applicable Requirements or applicable court order, 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 and assuming the
accuracy of sub-clause 6.2(b) below, all required regulatory filings and
notices, if any, have been made and, if necessary, approvals received  (or applicable waiting or notice periods
lapsed) in connection with this Agreement.


 


(d)                        It has the
power, right and authority to execute, deliver and perform this Agreement and
any transaction contemplated by the terms of this Agreement.


 


(e)                         It has,
at least 48 hours prior to entering into this Agreement furnished to the
Customer 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 the
Investment 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 the Investment Manager.


 


(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 licenses 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 the Investment Manager’s obligations under this
Agreement; and the intellectual property used by the Investment Manager does
not to the Investment Manager’s knowledge infringe the rights of any third
party.


 


6.2          Representations and Warranties of
the Customer.


 


The Customer hereby represents and warrants that:


 


(a)                         It has
the power to enter into and perform its obligations under this Agreement, and
has duly executed this Agreement so as to constitute a valid and binding
obligation of the Customer.


 


(b)                        Neither
the execution and delivery nor the performance of this Agreement (including the
payment of fees to the Investment Manager) will violate any Applicable
Requirements or applicable court order, nor will the same constitute a breach
of, or default under, provisions of any agreement or 


 


15

















 


contract to which it is a party or by which it is bound and, assuming
the accuracy of sub-clause 6.1(c) above, all required regulatory filings and
notices, if any, have been made, and if necessary, approvals received  (or applicable waiting or notice periods
lapsed) in connection with this Agreement.


 


ARTICLE VII


NATURE OF
RELATIONSHIP


 


 


7.             Nature of Relationship;
Conflicts of Interest.


 


 


(a)                                  The Investment Manager acts as the agent of the Customer, who will
therefore be bound by the Investment Manager’s acts under this Agreement
providing the Investment Manager acts within the authority granted to it by the
Customer.  Nevertheless, none of the
Services nor any other matter shall give rise to any fiduciary or equitable
duties which would prevent or hinder the Investment Manager from providing
similar services to other customers or otherwise from acting as provided in
this Agreement.


 


(b)                                 The Investment Manager
may effect transactions in which the Investment Manager or an Associate has or
may have, directly or indirectly, a material interest or relationship of any
description with another party which may involve a potential conflict with the
Investment Manager’s duty to the Customer, without reference to the Customer,
provided that such transactions are at arm’s length.  Neither the Investment Manager nor any Associate shall be liable
to account to the Customer for any profit, commission or remuneration made or
received from or by reason of such transactions or any connected transactions
and the Investment Manager’s fees shall not, unless otherwise provided, be
abated thereby.


 


(c)                                  The Investment
Manager will ensure that such transactions are effected on terms that are no
less favourable to the Customer than if the potential conflict had not existed.


 


(d)                                 The Investment Manager
shall (subject to receiving instructions from the Customer to the contrary)
take all necessary steps (acting always in the best interests of the Account)
to ensure that the Investment Guidelines are fully complied with, and to
rectify any breach of such Investment Guidelines which may occur through
movements in the market as soon as reasonably practicable after such breach
occurs.


 


(e)                                  In accordance with the FSA Rules, the Investment Manager notifies the
Customer that the potential conflicting interest or duties referred to in
clause (b) above may arise because:


 


(i)                                   any of the Investment
Manager’s directors or employees (or those of an Associate) is a director of,
holds or deals in securities of, or is otherwise interested in any company
whose securities are held or dealt in on behalf of the Customer;


 


(ii)                                  the transaction is in
relation to an investment in respect of which the Investment Manager or an
Associate benefits from a commission, fee, mark-up or mark-down payable
otherwise than by the Customer, and/or the Investment Manager or an Associate
is also remunerated by the counterparty to any such transaction;


 


(iii)                               the Investment Manager
acts as agent for the Customer in relation to a transaction in which it is also
acting as an agent for the account of other Customers and/or Associate;


 


16

















 


(iv)                              the Investment Manager or
an Associate deals in investments as principal with the Customer, or acting as
principal, sells to or purchases from the Customer currency other than
sterling;


 


(v)                                 a transaction is
effected in securities issued by an Associate or the Customer of an Associate;


 


(vi)                              the Investment Manager
deals on behalf of the Customer with or in securities of an Associate;


 


(vii)                           the transaction is in units
or shares of a collective investment scheme (e.g. a unit trust) or of any
company of which in either case the Investment Manager or an Associate is the
investment manager, operator, banker, adviser or trustee;


 


(viii)                        the transaction is in the securities
of a company for which the Investment Manager or an Associate has underwritten,
managed or arranged an issue within the period of 12 months before the date of
the transaction;


 


(ix)                                the Investment Manager
may effect transactions involving placings and or new issues with an Associate
who may be acting as principal or receiving agents commission;


 


(x)                                   the Investment
Manager or an Associate receives remuneration or other benefits by reason of
acting in corporate finance or similar transactions involving companies whose
securities are held by the Customer; and


 


(xi)                                the transaction is in
securities in respect of which the Investment Manager or an Associate or a
director or employee of either is contemporaneously trading or has traded on
its own account has either a long or short position.


 


ARTICLE VIII


MISCELLANEOUS


 


8.1           Other Charges.


 


The Investment Manager shall direct the Custodian to pay out of the
relevant Account Assets the total transaction costs including all reasonable
Broker’s commissions with respect to transactions of the Account and all taxes
or governmental fees, domestic or foreign, attributable to such transactions.


 


8.2           Investment Manager’s
Conduct.


 


(a)                                  In furnishing the
Customer with the Services, neither the Investment Manager nor any officer,
director or agent thereof shall be held liable to the Customer, its creditors
or the holders of its securities for good faith errors of judgment or for
anything except wilful 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 the Investment Manager may rely upon
information furnished to it by the Customer that the Investment Manager
reasonably believes to be accurate and reliable.  


 


(b)                                 No warranty is given
by the Investment Manager as to the performance or profitability of the Account
any part thereof and there is no guarantee that the Investment Objectives will
be achieved, including without limitation any risk control, risk management or
return objectives.  The Account may
suffer loss 


 


17

















 


of principal, and income, if any, may fluctuate.  The value of investments may be affected by
a variety of factors, including, but not limited to, economic and political
developments, interest rates and issuer-specific events, market conditions,
sector positioning, or other reasons.


 


(c)                  Notwithstanding any limitation of liability contained in
sub-clause (a) above, the Investment Manager shall indemnify and hold the
Customer harmless from and against any losses, damages, expenses (including
reasonable attorneys’ fees), liabilities, penalties, demands and claims of any
nature whatsoever (collectively, “Losses”) with respect to or arising out of
the Investment Manager’s breach or violation of this Agreement or any
Applicable Requirement or the wilful misfeasance, bad faith or gross negligence
by the Investment Manager in the performance of its duties, or reckless
disregard of its obligations and duties under the terms of this Agreement.


 


(d)                                 The Customer shall
indemnify and hold the Investment Manager harmless from and against all Losses
with respect to or arising out of the Customer’s breach or violation of this Agreement
or any Applicable Requirement or with respect to or arising out of the
Investment Manager’s actions or inactions in providing the Services as long as
such Losses did not result from the Investment Manager’s breach of this
Agreement or any Applicable Requirements, wilful 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.


 


(e)                                  The Investment
Manager shall be entitled to rely upon any notice, designation, instruction,
direction, request or other communication given it hereunder (whether given in
writing by letter, fax, email teletype, order or other document, or orally by
telephone or in person) by or on behalf of any person notified by the Customer
from time to time as being authorised to instruct the Investment Manager in
respect of the Account Assets without being required to determine the
authenticity or correctness thereof, provided the Investment Manager believes
such notice, designation, instruction, direction, request or other
communication to be genuine or given by a person duly authorized and unless the
Investment Manager shall have received written notice to the contrary that the
authority of any such person shall have been terminated.  The Investment Manger shall be entitled to
rely upon advice of counsel selected by it concerning all matters pertaining to
this Agreement and the Investment Manager’s duties hereunder.


 


8.3          Notices.


 


Notices hereunder shall be by confirmed fax, telecopy or other written
form of electronic communication (including e-mail) or by letter which shall be
mailed by certified mail, postage paid, addressed (except as the same may by
like notice be changed) as follows:


 


To the Customer:


 


	
  Financial Assurance Company Limited

  	
   

  	
   

  
	
  Vantage West

  	
   

  	
   

  
	
  Great West Road

  	
   

  	
   

  
	
  Brentford Middlesex TW8 9AG

  	
   

  	
   

  
	
  Attn:         Chief
  Finance Officer

  	
  Telephone No:

  	
   

  
	
   

  	
  Fax No:

  	
   

  



 


18

















 


	
  To the Investment Manager:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GE Asset Management Limited

  	
   

  	
   

  
	
  6 Agar Street

  	
   

  	
   

  
	
  London

  	
   

  	
   

  
	
  WC2N 4HR

  	
   

  	
   

  
	
  Attn: Chief Executive Officer

  	
  Telephone No: 44 207 599 5200

  	
   

  
	
   

  	
  Fax No: 44 207 599 5233

  	
   

  



 


8.4           Assignment; Governing
Law and Jurisdiction.


 


This Agreement shall not be assignable in
whole or in part by either party without the prior consent of the other party
(such consent not to be unreasonably withheld), provided that this Agreement
shall automatically be assigned to any Person to which the business of the
Customer is transferred by virtue of any order made by the Court under Part VII
of FSMA . For purposes of this clause, the term “assignment” with respect to
the Investment Manager as assignor shall have the same meaning as defined in
Section 202 of the Investment Advisors Act. Any successor or permitted assignee
of the Customer to whom the rights and/or the obligations of the Customer under
this Agreement are in any way transferred may require that the Investment
Manager (and if it does so require, the Investment Manager shall) provide all
or certain of the Services to the Customer after that transfer, for such period
as that successor or permitted assignee may require, and in addition to the
Services which the Investment Manager shall provide to that successor or
permitted assignee pursuant to the terms of this Agreement.  This Agreement shall be governed by the laws
of England..


 


8.5           Force Majeure.


 


The Investment Manager shall not be liable to the Customer for any
failure to carry out or delay in carrying out any of its obligations hereunder
attributable to any cause of whatever nature outside its reasonable control
provided that the Investment Manager shall (1) use its best efforts to remedy
any such failure or delay or malfunction, event or circumstance as soon as
practicable and (2) maintain throughout the term of this Agreement effective
disaster recovery systems, details of which will be provided to the Customer
upon reasonable request.


 


8.6                                 Independent Contractor.


 


The Investment 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 the Customer.
The Customer shall always retain the ultimate authority to make investment
decisions on its own behalf.


 


8.7                                 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. The
Investment Manager shall however be entitled to disclose the Customer’s name
and the size of the Account Assets in the client listings and other similar
material.


 


8.8                                 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 


 


19

















 


prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.


 


8.9           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.


 


8.10                           Counterparts.


 


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


 


8.11         Complaints.


 


If the Customer has any complaint about the Investment Manager, it
should be directed to the Compliance Officer at the Investment Manager’s
address at the head of this Agreement. 
The Customer acknowledges that it is not an eligible complainant as
defined by the FSA Rules and as such does not have a right to refer a complaint
to the Financial Ombudsman Service.


 


8.12         Contracts (Rights of Third Parties)
Act of 1999.


 


Other than as specifically provided for, the parties to this Agreement
do not intend that any term of this Agreement should be enforceable by virtue
of the Contracts (Right of Third Parties) Act of 1999, by any person who is not
a party to this Agreement.


 


8.13         Entire Agreement.


 


This Agreement (including the Exhibits to this Agreement which shall be
regarded as incorporated into, and forming part of, this Agreement) embodies
the entire understanding of the parties hereto with respect to its subject
matter, supersedes any prior or contemporaneous agreements or understandings
between the parties with respect to such subject matter and cannot be altered,
waived, amended, supplemented or abridged except by the written agreement of
the parties.


 


8.14         Exclusion or Termination
of Liability.


 


Nothing in this Agreement shall exclude any liability of the Investment
Manager to the Customer arising under Applicable Requirements (including,
without limitation, the FSMA or the FSA Rules).


 


ARTICLE
IX


DISPUTE
RESOLUTION


 


9.1          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 IX,
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 9.2 set forth below, all communications
between the parties or their representatives in connection with the attempted
resolution of any Dispute, including any mediator’s evaluation referred to in Section
9.3 set forth below, shall be deemed to be without prejudice communications
and to have been delivered in furtherance 


 


20

















 


of a Dispute settlement and shall be exempt from inspection, 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)                                  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)                                  The running of time
shall be suspended in respect of any Dispute for the purposes of any defences
based upon the passage of time (whether under the Limitation Act 1980 (in its
present form or as subsequently amended or replaced or otherwise) while the
procedures specified in this Article IX are pending. The parties will take such
action, if any, required to effectuate this suspension.


 


 


9.2                               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.


 


9.3                               Mediation.  If a Dispute is not resolved by negotiation
as provided in Section 9.2 within forty-five (45) days from the delivery
of the Initial Notice, then either party may submit 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.


 


9.4          Arbitration


 


(a)                                  If a Dispute is not
resolved by mediation as provided in Section 9.3 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 London, England.  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 


 


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the law of England, 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.


 


(c)                                  The parties agree to
be bound by any award or order resulting from any arbitration conducted in
accordance with this Section 9.4 and further agree that judgment on any
award or order resulting from an arbitration conducted under this Section
9.4 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 9.4(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 England.


 


(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 9.4(d) above, each party acknowledges
that in the event of any actual or threatened breach of Article V, the damages
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 IX


 


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IN WITNESS
WHEREOF, the parties have duly executed this Agreement as of the day and year
first above written.


 


 


	
   

  	
  FINANCIAL
  ASSURANCE COMPANY LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William
  Goings

  	
   

  
	
   

  	
  Name: William
  Goings

  
	
   

  	
  Title:
  Director

  
	
   

  	
   

  
	
   

  	
  GE ASSET
  MANAGEMENT LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gavin
  Hill

  	
   

  
	
   

  	
  Name: Gavin Hill

  
	
   

  	
  Title: Chief
  Executive

  
					



 


23

















 


Financial Assurance Company Limited


Duly Authorised Representatives


Exhibit
A


 


The following persons are duly authorized to act on
behalf of the above captioned for accounts managed by GE Asset Management
Limited.


 


 




	
  Signature:

  	
   

  	
   

  	
  Type of
  Authorisation

  
	
  Name:

  	
   

  	
  Bind Firm
  (sign/amend contracts)

  
	
  Title:

  	
   

  	
  Authorise
  Contributions/Withdrawals

  
	
  Firm Name:

  	
   

  	
  Comments:

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
  Type of
  Authorisation

  
	
  Name:

  	
   

  	
  Bind Firm
  (sign/amend contracts)

  
	
  Title:

  	
   

  	
  Authorise
  Contributions/Withdrawals

  
	
  Firm Name:

  	
   

  	
  Comments:

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
  Type of
  Authorisation

  
	
  Name:

  	
   

  	
  Bind Firm
  (sign/amend contracts)

  
	
  Title:

  	
   

  	
  Authorise
  Contributions/Withdrawals

  
	
  Firm Name:

  	
   

  	
  Comments:

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
  Type of
  Authorisation

  
	
  Name:

  	
   

  	
  Bind Firm
  (sign/amend contracts)

  
	
  Title:

  	
   

  	
  Authorise
  Contributions/Withdrawals

  
	
  Firm Name:

  	
   

  	
  Comments:

  






 


24

















 


 


Schedule


 


                The following agreement is substantially
identical in all material respects to the Investment Management Agreement
between Financial Assurance Company Limited and GE Asset Management
Limited.  Differences between the
agreements are noted below.


 


	
  Agreement

  	
   

  	
  Differences

  
	
  Investment
  Management Agreement between Financial Insurance Company Limited and GE Asset
  Management Limited

  	
   

  	
  Parties to
  the Agreements differ.  (See Agreement
  titles.)

  



 


 


 


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