Common use of Scope of Authorization Clause in Contracts

Scope of Authorization. 5.1 Except as provided in Section 5.2 and subject to the supervision of and oversight by Client, Investment Manager will (a) provide Client with investment advice and investment supervision and will furnish Client with discretionary investment management services with respect to each class of investments and type of investment activity set forth in the Guidelines and described in this Agreement (collectively, the “Investment Management Services”) and (b) be responsible for decisions regarding, without limitation, the investment, reinvestment, hedging and disposition of the Assets, all in accordance with the Guidelines. In addition, Investment Manager shall also provide certain administrative services required to support the provision of Investment Management Services hereunder as set forth in Schedule 7 (the “Middle Office Services”). 5.2 Notwithstanding the foregoing, where the consent of Client is required under Section 206(3) of the Advisers Act or any other applicable law to effect principal transactions in which Investment Manager, on behalf of Client, purchases investments from, or sells investments to, Investment Manager or any of its Affiliated Companies and/or enters into agreements in connection therewith, Investment Manager shall request such consent from Client (in accordance with its Principal and Cross Transactions Policy as in effect from time to time) and shall not complete such transaction until such consent has been obtained. For the avoidance of doubt, each of the following shall constitute a principal transaction: (a) the purchase by Client of a loan participation issued by an Affiliated Company and the amount of any such participation or (b) the investment by Investment Manager, on behalf of Client, in any commingled fund managed by an Affiliated Company and the amount of any such capital commitment. After Client has authorized a principal transaction, subject to Section 5.6, Investment Manager shall have discretionary authority in accordance with this Agreement to take all actions and to exercise all rights and privileges in connection with any such investments, transactions or agreements. Except to the extent required by applicable law, neither Investment Manager nor any Affiliated Company with whom such transactions are placed shall have any obligation to account to Client for brokerage or other fees or profits arising from such investments, transactions or agreements. 5.3 Investment Manager shall also provide to Client certain additional portfolio management services (collectively, the “Portfolio Management Services”) in accordance with the Guidelines, including without limitation: 5.3.1 General account portfolio management, including without limitation, constructing any asset class portfolio and analysis, supervision and optimization of such portfolio; providing ALM governance (including providing such consulting services as agreed between the parties from time to time in respect of the management by Client of its assets and liabilities, which may relate to, among other things, liquidity considerations, derivative strategies and investment risk assessment, analysis and modeling); selecting lending agents; developing strategies for any asset class and identifying new asset classes; and assisting in the development of new products (collectively, “PMU Activities”); 5.3.2 General account derivatives management, including without limitation, the structuring of derivatives programs, selection of derivative instruments and executing, settling and closing-out derivatives transactions (collectively, “GA Derivatives Activities”); 5.3.3 Variable annuity derivatives management, including without limitation, the structuring of derivatives programs, selection of derivative instruments and executing, settling and closing-out derivatives transactions (collectively, “VA Derivatives Activities” and together with GA Derivatives Activities, “Hedging Activities”); 5.3.4 Capital markets activities, including without limitation, assisting Client in raising funds through regulated insurance products and funding agreements (including commercial paper, global guaranteed investment contracts and federal agency secured borrowings) and reinvesting the proceeds thereof and managing the collateral borrowing arrangements involving such transactions, including, without limitation, with respect to any arrangements existing on the Effective Date (collectively, “Capital Markets Activities”); and 5.3.5 Securities lending and repurchase transactions, including without limitation, acting as lending agent and managing and reinvesting cash collateral received in respect of such transactions in accordance with the terms of the relevant agreements (collectively, “Securities Lending Activities”). 5.4 Subject to the Guidelines and in furtherance of providing the Services, Client hereby grants Investment Manager the authority to act as agent and attorney-in-fact to (a) issue instructions to a broker-dealer or a Custodian to effect sales, purchases and securities lending and settle trades for and on behalf of Client solely in connection with the provision of Services to Client, (b) effect sales, purchases and securities lending and settle trades for and on behalf of Client solely in connection with the provision of Services to Client, (c) select counterparties to derivatives transactions and hedging instruments for such transactions, (d) open accounts with such counterparties as Investment Manager reasonably considers appropriate (including, where permissible in accordance with applicable law and regulation and only with the prior written consent of Client, Affiliated Companies) to facilitate the purchase, holding and sale of the Assets on behalf of Client and (e) execute all documentation necessary to effectuate sales, purchases and lending and settle trades in connection with the provision of Services to Client, in each case with the same right and authority as though Investment Manager were Client. As such, in accordance with the Guidelines, Investment Manager shall have full power to supervise, direct and/or effectuate the investment and disposition of the Assets as Investment Manager may reasonably deem appropriate. (a) Certain securities and Client funds included in the Assets (“Custodial Assets”) shall be held by such Custodian(s) as notified by Client to Investment Manager from time to time. The “Custodian” means the person(s) appointed by Client and notified to Investment Manager, who will act as custodian(s) of the investments comprising the Custodial Assets from time to time and who is a “qualified custodian” as defined in Rule 206(4)-2 under the Advisers Act. Client understands and acknowledges that (i) in accordance with the applicable custodial agreement, Investment Manager may give instructions to the Custodian(s), in writing, by electronic means, by recorded telephone or recorded oral conversation or by such other means as Investment Manager may agree with the Custodian(s) from time to time, (ii) Client shall procure and shall be solely responsible for ensuring that Custodian complies with such instructions and (iii) Client shall instruct the Custodian to provide Investment Manager with such periodic reports concerning the status of the Custodial Assets as Investment Manager may reasonably request from time to time. In the event that Client intends to change the institution(s) that will serve as the Custodian(s), Client will provide Investment Manager reasonable prior notice of its intention to do so, together with the name and other relevant information with respect to the new Custodian(s). The Custodian bears the sole responsibility for (x) safekeeping of the Custodial Assets, and (y) the consummation of all purchases, sales, deliveries and investments made pursuant to Investment Manager’s directions. Investment Manager shall not be liable to Client for (A) the acts, defaults or costs of any Custodian or any of its nominees, (B) any failure of a Custodian to perform its responsibilities with respect to the Custodial Assets, including, but not limited to, (i) any Losses that arise from the failure of a Custodian to notify Investment Manager of any notices affecting called investments, deadline expirations, dates and capital reorganization events affecting any investments that are included in the Custodial Assets or (ii) any Losses with respect to the transmittal or safekeeping of cash, securities or other assets.