EXHIBIT 10.8
INVESTMENT ADMINISTRATION AGREEMENT
THIS INVESTMENT ADMINISTRATION AGREEMENT (this "Agreement"), dated as of
August 13, 1998, is made by and between FAIRFAX FINANCIAL HOLDINGS LIMITED and
XXXX & XXXXXXX UNDERWRITERS CO. OF OHIO. As used in this Agreement, "we", "us",
and "our" shall refer to XXXX & XXXXXXX UNDERWRITERS CO. OF OHIO, and "you" and
"your" shall refer to FAIRFAX FINANCIAL HOLDINGS LIMITED.
In consideration of the mutual promises contained herein, the parties agree
as follows:
1. We authorize you to provide, and by signing below you agree to
provide, the investment administration services set forth in Schedule
A attached hereto, on our behalf and on the terms and conditions set
out in this Agreement, subject to such guidelines, procedures and
limitations as may be duly established and approved by our Board of
Directors or a duly authorized committee of said Board.
2. You shall be entitled to such fees, payable quarterly in arrears, for
the service provided hereunder, as you may specify from time to time.
Attached hereto as Schedule B is a copy of your current fee schedule
and you agree to give us thirty (30) days prior written notice of any
change in such schedule, which change shall require the approval of
the Department of Insurance ("Department"). Such fees shall be the
exclusive fees and charges payable (excluding third party
disbursements reasonably incurred) for the services provided
hereunder. As regards third party services, you will charge us only
the amount of your actual disbursements paid to third parties for
such services. We will remit payment to you not later than 15 days
following delivery to us of a report showing the amount due
hereunder.
3. Either party hereto may terminate this Agreement without penalty by
giving the other party at least thirty (30) days advance written
notice of its desire to terminate the same.
4. This Agreement shall enure to the benefit of and shall be binding
upon the parties hereto and their respective successors. This
Agreement may not be assigned by either party.
5. You and we each acknowledge that the terms of this Agreement are the
exclusive and conclusive terms of our mutual agreement with regard to
the subject matter hereof.
6. Any dispute or difference arising with reference to the applicable
interpretation or effect of this Agreement, or any part thereof,
shall be referred to a Board of Arbitration (the "Board") of two (2)
arbitrators and an umpire.
The members of the Board shall be active or retired disinterested
officers of insurance or reinsurance companies.
One arbitrator shall be chosen by the party initiating the arbitration
and designated in the letter requesting arbitration. The other party
shall respond, within fifteen (15) days, advising of its arbitrator. The
umpire shall thereafter be chosen by two (2) arbitrators. In the event
either party fails to designate its arbitrator as indicated above, the
other party is hereby authorized and empowered to name the second
arbitrator, and the party which failed to designate its arbitrator shall
be deemed to have waived its rights to designate an arbitrator and shall
not be aggrieved thereby. The two (2) arbitrators shall then have thirty
(30) days within which to choose an umpire. If they are unable to do so
within thirty (30) days following their appointment, each arbitrator
shall nominate three candidates within ten (10) days thereafter, two of
whom the other shall decline, and the decision shall be made by drawing
lots. In the event of the death, disability or incapacity of an
arbitrator or the umpire, a replacement shall be named pursuant to the
process which resulted in the selection of the arbitrator or umpire to
be replaced.
Each party shall submit its case to the Board 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 to the Board.
The sittings of the Board shall take place in Ohio. The Board shall make
its decision with regards to the custom and usage of the insurance and
reinsurance business. The Board is released from all judicial
formalities and may abstain from the strict rules of law. The written
decision of a majority of the Board shall be rendered within sixty (60)
days following the termination of the Board's hearings, unless the
parties consent to an extension. Such majority decision of the Board
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 Board in any court of proper
jurisdiction.
7. The provisions in Schedule A and Schedule B attached hereto are
hereby incorporated into, and form part of, this Agreement.
8. This Agreement, including the schedules attached hereto and made a
part hereof, may only be amended by written agreement signed by the
parties and approved by the Department.
9. Unless otherwise specified herein, all notices, instructions, advices
or other matters covered or contemplated by this Agreement, shall be
deemed duly given when received in writing (including by fax or other
similar form of transmission) by you or us, as applicable, at the
address or fax number first above written or such other address or
fax number as shall be specified in a notice similarly given:
If to us:
Chief Financial Officer
Xxxx & Xxxxxxx Underwriters Co. of Ohio
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Telecopy Number 973/490-6612
If to you:
FAIRFAX FINANCIAL HOLDINGS LIMITED
00 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Fax No.: (000) 000-0000
Any such notice or communication shall be deemed to have been received
by any such party if delivered, on the date of delivery, or if sent by
prepaid registered mail on the fourth business day following mailing
thereof to the party to whom addressed. For such purpose, no day during
which there shall be a strike or other occurrence interfering with
normal mail service shall be considered a business day.
10. This Agreement shall be governed and construed in accordance with the
laws of the State of Ohio, our state of domicile. Each of the parties
hereto submits to the jurisdiction of the state and federal courts of
the State of New Jersey, in any action or proceeding arising out of
or relating to this Agreement and all claims in respect of any such
action or proceeding may be heard or determined in any such court;
and service of process, notices and demands of such courts may be
made upon you by personal service to LeBoeuf, Lamb, Xxxxxx & XxxXxx,
L.L.P., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or by mailing
copies of such process, notices and demands by certified or
registered mail to such address (such address being automatically
changed to the principal office from time to time of XxXxxxx, Lamb
Xxxxxx & XxxXxx, L.L.P. in New York, New York).
11. You and we and the duly authorized representatives of each of us
shall, at all reasonable times, each be permitted access to all
relevant books and records of the other pertaining to this Agreement.
You and your duly authorized representatives shall provide to the
Department, within fifteen (15) days of any request from the
Department therefor, copies of all your books and records as they
pertain to us (or any portion thereof as may be specifically
requested).
IN WITNESS WHEREOF, this Agreement is hereby executed by duly authorized
officers of the parties hereto as of the date first written above.
XXXX & XXXXXXX UNDERWRITERS CO. OF OHIO
By: /s/ XXXXXXX X. XXXXXXXX By: /s/ XXXXXX X. XXXX
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Xxxxxxx X. Xxxxxxxx Xxxxxx X. Xxxx
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Name of Authorized Signatory Name of Authorized Signatory
FAIRFAX FINANCIAL HOLDINGS LIMITED
By: /s/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx
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Name of Authorized Signatory
SCHEDULE A
SERVICES
Tasks underlying the fees to be performed by Fairfax Financial Holdings
Limited are:
MONTHLY
-- computation of all regulatory figures
-- analysis and reconciliation of portfolios
-- yield review
-- computation of market decline tests
-- computation of liquidity analysis
-- analysis of bookvalues, e.g. bond amortizations and investment provisions
-- analysis of gross gain and loss positions
-- cash flow obligations
-- investment review meeting
PERIODIC
-- review and analysis of foreign exchange position
-- placement of foreign exchange contracts, where appropriate
-- discussions with regulators regarding portfolio (positions)
-- reporting to the investment committee
-- reporting to the audit committee
-- general assistance with accounting issues
-- maintaining contact with external auditors
-- such other administrative services as the parties shall mutually agree from
time to time
SCHEDULE B
FEE SCHEDULE
Fees will be calculated at the end of each calendar quarter based upon the
average of the market value of the funds held in the investment account (the
"Account") governed by the terms of the Investment Management Agreement between
Xxxx & Xxxxxxx Underwriters Co. of
Ohio and Xxxxxxx Wasta Investment Counsel,
Ltd., dated as of August 13, 1998 at the close of business for the three (3)
preceding months. Charges are stated on a calendar year basis.
MARKET VALUE CHARGE
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On Total Market Value....................................... .10%
In the event that the day upon which this Agreement is terminated is a day
other than the first day of a calendar quarter, the fees payable for such
quarter shall be pro-rated and shall be determined having regard to the market
value of the Account based upon the most recent financial report which has been
delivered to Xxxx & Xxxxxxx Underwriters Co. of
Ohio by the Custodian for the
Account.
