Exhibit 10.1
INVESTMENT MANAGER AGREEMENT
by and between
RENAISSANCE UNDERWRITING MANAGERS, LTD.
and
BLACKROCK FINANCIAL MANAGEMENT, INC.
July 1, 2005
INVESTMENT MANAGER AGREEMENT
THIS AGREEMENT, made as of the 1st day of July, 2005, by and between
Renaissance Underwriting Managers Ltd., a Bermudian company (hereinafter called
the "Company"), and BlackRock Financial Management, Inc., a Delaware corporation
(hereinafter called the "Manager").
WITNESSETH:
WHEREAS, the Company has all requisite authority to appoint one or more
sub-investment managers to supervise and direct the investment and reinvestment
of a portion of all of the assets of Renaissance Investment Holdings Ltd., a
Bermudian company ("RIHL");
THEREFORE, for and in consideration of the premises and of the mutual
covenants herein contained, the parties hereby agree as follows:
1. Appointment and Status as Investment Manager. The Company hereby appoints the
Manager as an "Investment Manager" with respect to the assets of RIHL. The
Manager does hereby accept said appointment and by its execution of this
Agreement the Manager represents and warrants that it is registered as an
investment adviser under the Investment Advisers Act of 1940 (the "Advisers
Act"). The Manager does also acknowledge that it is a fiduciary with respect to
the assets under management and assumes the duties, responsibilities and
obligations of a fiduciary with respect to the services described in Sections 3
through 5 below.
2. Representations by Company. The Company represents and warrants that (a) it
has all requisite authority to appoint the Manager hereunder, (b) the terms of
the Agreement do not conflict with any obligation by which the Company or RIHL
is bound, whether arising by contract, operation of law or otherwise and (c)
this Agreement has been duly authorized by appropriate limited liability company
action.
3. Management Services. The Manager shall be responsible for the investment and
reinvestment of those assets of RIHL designated by the Company as subject to the
Manager's management (which assets, together with all additions, substitutions
and alterations thereto are hereinafter called the "Account"). The Account may
include all securities and instruments described in Exhibit A to effect the
strategies described therein. The Company does hereby delegate to the Manager
all of its powers, duties and responsibilities with regard to such investment
and reinvestment and hereby appoints the Manager as its agent in fact with full
authority to buy, sell or otherwise effect investment transactions involving the
assets in its name and for the Account. Said powers, duties and responsibilities
shall be exercised exclusively by the Manager pursuant to and in accordance with
its fiduciary responsibilities and the provisions of this Agreement. In deciding
on a proper investment of the Account, the Manager shall consider the following
factors as communicated in writing to the Manager by the Company from time to
time: a) the investment purposes of RIHL, b) RIHL's financial needs such as
liquidity, c) applicable laws, d) RIHL's investment policies and guidelines, and
e) the Account's Investment Guidelines attached as Exhibit A. In addition, in
accordance with the Manager's guidelines in effect from time to time, the
Manager or its agent is authorized, but shall not be required, to vote, tender
or convert any securities in the Account; to execute waivers, consents and other
instruments with respect to such
securities; to endorse, transfer or deliver such securities or to consent to any
class action, plan of reorganization, merger, combination, consolidation,
liquidation or similar plan with reference to such securities; and the Manager
shall not incur any liability to the Company or RIHL or any shareholder of RIHL
by reason of any exercise of, or failure to exercise, any such discretion in the
absence of gross negligence or bad faith; provided that, if the Manager does not
take any such action, the Manager shall promptly inform the Company of same and
forward to the Company materials related to any of the foregoing at least three
(3) business days prior to the time limit, if any, with respect to the taking of
such action.
4. Accounting and Reports. At such intervals as shall be mutually agreed upon
between the parties (but no less frequently than monthly), the Manager shall
furnish the Company with appraisals of the Account, performance tabulations, a
summary of purchases and sales and such other reports as shall be agreed upon
from time to time. The Manager shall also reconcile transaction and
asset-summary data with custodian reports at times that are mutually agreeable
to the Manager and the Company (but no less frequently than monthly). The asset
and price reconciliations shall, with BlackRock's best efforts, occur on the 1st
business day following the last day of the calendar month. In addition, the
Manager shall communicate and coordinate the resolution of any significant
discrepancies with the custodian and the Company and forward a copy of the
reconciliation reflecting the Manager's final Net Asset Value to the Company
within 3rd business day following the last day of the calendar month.
The parties recognize that successful delivery of the reports will
require mutual cooperation, communication, feedback, and interaction, as well as
the assumed proper workings and performance of markets, exchanges,
counterparties, data feeds, communication and utility systems, computer hardware
and software and the like, and including action required hereunder or reasonably
requested by the other party to enable it to accomplish its obligations and
responsibilities hereunder. Both parties agree to perform the foregoing
responsibilities in good faith and in a professional manner.
5. Other Services. The Manager shall, on invitation, attend meetings with
representatives of the Company to discuss the position of the Account and the
immediate investment outlook, or shall submit its views in writing as the
Company shall suggest from time to time.
6. Additional Investment Services; Considerations and Acknowledgments. As agreed
between the parties from time to time, the Manager may provide certain
operating, analytical, and reporting support ("Additional Investment Services")
for those portfolios of RIHL and of the Company managed by the Manager and by
other parties. The Additional Investment Services may include, but are not
limited to the following: (i) establishing appropriate investment mandates and
strategies, (ii) drafting investment policies and guidelines, (iii) supporting
the Company's operations, including custodial assistance, (iv) creating a
consolidated risk reporting platform for the Company, (v) providing
asset-liability reporting, (vi) providing income projections, and (vii) broad
and general consulting on accounting, operational, regulatory, and other
strategic issues.
The Company understands and acknowledges that (a) all Additional
Investment Services require the Manager to exercise good-faith judgments that
may ultimately prove to be erroneous,
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(b) in connection with providing the Additional Investment Services, the Manager
will make certain assumptions about the movements of interest rates, volatility
of interest rates, movements of spreads, and the relationship of mortgage
prepayments to interest rates, (c) the Manager's assumptions will not
necessarily capture all the characteristics and risks inherent in the Company's
portfolios, and (d) the Manager's assumptions are based upon information
provided to the Manager by the Company or RIHL or certain of their respective
third-party vendors that is assumed to be reliable and accurate, but the Manager
does not represent or warrant that it is accurate or complete, and will not be
responsible for verifying the accuracy of any such information.
7. Compensation. For its investment management services rendered hereunder, the
Manager shall be compensated by the Company and not RIHL in accordance with
Exhibit B, attached hereto. If the management of the Account commences or ends
at any time other than the beginning or end of a calendar quarter, the quarterly
fee shall be prorated based on the portion of such calendar quarter during which
this Agreement was in force.
8. Custodian. The securities in the Account shall be held by a custodian duly
appointed by the RIHL and the Manager is authorized to give instructions to the
custodian with respect to all investment decisions regarding the Account.
Nothing contained herein shall be deemed to authorize the Manager to take or
receive physical possession of any of the assets for the Account, it being
intended that sole responsibility for safekeeping thereof (in such investments
as the Manager may direct) and the consummation of all purchases, sales,
deliveries and investments made pursuant to the Manager's direction shall rest
upon the custodian.
9. Brokerage. The Company hereby delegates to the Manager sole and exclusive
authority to designate the brokers or dealers through whom all purchases and
sales on behalf of the Account will be made. The Manager will determine the rate
or rates, if any, to be paid for brokerage services provided to the Account. The
Manager agrees that securities are to be purchased through such brokers as, in
the Manager's best judgment, shall offer the best combination of price and
execution. The Manager, in seeking to obtain best execution of portfolio
transactions for the Account, may consider the quality and reliability of
brokerage services, as well as research and investment information and other
services provided by brokers or dealers. Accordingly, the Manager's selection of
a broker or dealer for transactions for the Account may take into account such
relevant factors as (i) price, (ii) the broker's or dealer's facilities,
reliability and financial responsibility, (iii) when relevant, the ability of
the broker to effect securities transactions, particularly with regard to such
aspects as timing, order size and execution of the order, (iv) the broker's or
dealer's recordkeeping capabilities and (v) the research and other services
provided by such broker or dealer to the Manager which are expected to enhance
its general portfolio management capabilities (collectively, "Research"),
notwithstanding that the Account may not be the exclusive beneficiary of such
Research.
10. Confidential Information. All information regarding operations and
investments of the Company and RIHL shall be regarded as confidential by the
Manager.
11. Directions to the Manager. All directions by or on behalf of the Company to
the Manager shall be in writing signed by:
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NAME TITLE
Xxxx Xxxxxx Treasurer
Xxxx Xxxxxx Chief Financial Officer
Xxxxxx X. Xxxxxxx Senior Vice President
Xxxx Xxxxx Vice President
The Manager shall be fully protected in relying upon any direction in
accordance with the previous paragraph with respect to any instruction,
direction or approval of the Company, and shall be so protected also in relying
upon a certification duly executed on behalf of the Company as to the names of
persons authorized to act for it and in continuing to rely upon such
certification until notified by the Company to the contrary.
The Manager shall be fully protected in acting upon any instrument,
certificate or paper believed by it to be genuine and to be signed or presented
by the proper persons or to any statement contained in any such writing and may
accept the same as conclusive evidence of the truth and accuracy of the
statements therein contained.
12. Liabilities of the Manager and the Company. The Company acting in good faith
shall not be liable for any act or omission of the Manager in connection with
the Manager's discharge of its duties; provided, however, this limitation shall
not act to relieve the Company from any responsibility or liability for any
fiduciary responsibility, obligation or duty. The Manager shall exercise its
best judgment in rendering services under this Agreement. The Manager, its
officers, directors and employees, acting in good faith shall not be liable, and
shall be indemnified by the Company against any and all losses, damages, costs,
expenses (including reasonable attorneys' fees), liabilities, claims and demands
(collectively, "Losses"), for any action, omission, information or
recommendation in connection with this Agreement, except in the case of the
Manager's or such officer's, director's or employee's actual misconduct, gross
negligence, willful violation of any applicable statute or reckless disregard
for its duties and except as further limited in the paragraph immediately below;
provided, however, this limitation shall not act to relieve the Manager, its
officers, directors and employees from any responsibility or liability for any
responsibility, obligation or duty which the Manager or such officer, director
or employee may have under any federal securities act; and provided, further,
however, that to the extent any limitations or restrictions contained in the
Investment Guidelines are not adhered to as a result of changes in market value,
additions to or withdrawals from the Account, portfolio rebalancing or other
non-volitional acts of the Manager, the Manager shall not be liable to the
Company or RIHL or any shareholder of RIHL.
The Company understands that in connection with the Additional
Investment Services provided by the Manager that (i) the Manager is not serving
in an investment advisory capacity, or making any recommendations or soliciting
any action based upon its analyses with respect to those portfolios of RIHL and
of the Company not managed by the Manager and (ii) the Company will be solely
responsible for any judgments as to valuation and the purchase and sale of its
portfolio securities (other than in the case of the Account). Accordingly, the
Manager will not be
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responsible, and have no liability, for any conclusions drawn by the Company
with respect to its or RIHL's portfolio securities, notwithstanding that such
conclusions may, in part, be based upon information provided by the Manager in
connection with the Additional Investment Services.
13. Non-Exclusive Management. The Company understands that the Manager will
continue to furnish investment management and advisory services to others, and
that the Manager shall be at all times free, in its discretion, to make
recommendations to others which may be the same as, or may be different from
those made to the Account. The Company further understands that the Manager, its
affiliates, and any officer, director, stockholder, employee or any member of
their families may or may not have an interest in the securities whose purchase
and sale the Manager may recommend. Actions with respect to securities of the
same kind may be the same as or different from the action which the Manager, or
any of its affiliates, or any officer, director, stockholder, employee or any
member of their families, or other investors may take with respect thereto.
14. Aggregation and Allocation of Orders. The Company acknowledges that
circumstances may arise under which the Manager determines that, while it would
be both desirable and suitable that a particular security or other investment be
purchased or sold for the account of more than one of the Manager's clients'
accounts, there is a limited supply or demand for the security or other
investment. Under such circumstances, the Company acknowledges that, while the
Manager will seek to allocate the opportunity to purchase or sell that security
or other investment among those accounts on an equitable basis, the Manager
shall not be required to assure equality of treatment among all of its clients
(including that the opportunity to purchase or sell that security or other
investment will be proportionally allocated among those clients according to any
particular or predetermined standards or criteria). Where, because of prevailing
market conditions, it is not possible to obtain the same price or time of
execution for all of the securities or other investments purchased or sold for
the Account, the Manager may average the various prices and charge or credit the
Account with the average price.
15. Conflict of Interest. The Company agrees that the Manager may refrain from
rendering any advice or services concerning securities of companies of which any
of the Manager's, or affiliates of the Manager's officers, directors, or
employees are directors or officers, or companies as to which the Manager or any
of the Manager's affiliates or the officers, directors and employees of any of
them has any substantial economic interest or possesses material non-public
information, unless the Manager either determines in good faith that it may
appropriately do so without disclosing such conflict to the Company or discloses
such conflict to the Company prior to rendering such advice or services with
respect to the Account.
From time to time, when determined by the Manager in its capacity of a
fiduciary to be in the best interest of the Company, the Account may purchase
securities from or sell securities to another account managed by the Manager at
prevailing market levels in accordance with the procedures under Rule 17a-7(b)
of the Investment Company Act of 1940 and other applicable law, provided that
the Company is promptly given notice of any such cross trade following execution
thereof.
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16. Effective Period of Agreement and Amendments. This Agreement shall become
effective on the date hereof. Any amendment to this Agreement shall be written
and signed by both parties to the Agreement. No such amendment shall be
effective to permit the use of the Account or any part thereof for any purpose
not authorized by RIHL's charter.
17. Resignation or Removal of the Manager. The Manager may be removed by the
Company or may resign upon 30 days' notice in writing. Upon the receipt by the
Manager of a notice of termination from the Company, the Manager, if requested
by the Company, shall cease to invest and reinvest assets in the Account except
that any trade executed before receipt of the notice may be completed. On the
effective date of the removal or resignation of the Manager or as close to such
date as is reasonably possible, the Manager shall provide the Company with a
final report containing the same information as paragraph 4 above.
18. Assignment. No assignment (as that term is defined in the Advisers Act) of
this Agreement by the Manager may be made without the consent of the Company,
and any such assignment made without such consent shall be null and void for all
purposes. Subject to the foregoing, this Agreement shall inure to the benefit of
and be binding upon the parties hereto, their successors and permitted assigns.
19. Severable. Any term or provision of this Agreement which is invalid or
unenforceable in any applicable jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of the
Agreement in any jurisdiction.
20. Applicable Law. To the extent not inconsistent with applicable federal law,
this Agreement shall be construed pursuant to, and shall be governed by, the
laws of the state of New York without regard to its principles of conflicts of
law. Any dispute arising out of or in connection with this Agreement that is not
resolved by mutual agreement shall be settled by binding arbitration, which
shall be conducted on an expedited basis in New York, New York pursuant to the
applicable rules of the American Arbitration Association relating to commercial
disputes. Each party shall promptly appoint one arbitrator. The party-appointed
arbitrators shall appoint a third arbitrator. If such third arbitrator shall not
have been selected within thirty (30) days after the selection of the latter of
the party-appointed arbitrators, the third arbitrator shall be appointed
pursuant to the rules of the American Arbitration Association relating to
commercial disputes. The arbitration shall be conducted in the English language.
21. Investment Manager Brochure. The Company hereby acknowledges that it has
received from the Manager a copy of the Manager's Form ADV, Part II, at least
forty-eight hours prior to entering into this Agreement.
22. Web-site. The Manager, at the Company's request, will provide access to its
account information electronically, via the world wide web, based upon the
Company's use of a BlackRock issued user id and password. The Company
acknowledges and agrees the world wide web is a continually growing medium and
the Manager does not make any warranty regarding the security related to the
world wide web. The Company must be aware there is no absolute guaranteed system
or technique to fully secure information made available over the web. The
Company agrees that it
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will not share its user id, password and access to information provided
electronically with any third party except its affiliates and authorized agents.
23. Notices. All notices required or permitted to be sent under this Agreement
shall be sent, if to the Manager:
BlackRock Financial Management, Inc.
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx, General Counsel
or by facsimile to (000) 000-0000
if to the Company: Renaissance Underwriting Managers Ltd.
Xxxxxxxxxxx Xxxxx
0-00 Xxxx Xxxxxxxx
Xxxxxxxx XX 00, Xxxxxxx
PO Box HM 2527
Xxxxxxxx XX GX, Bermuda
Attention: Xxxx Xxxxxx, Treasurer
or by facsimile to: (000) 000-0000
or such other name or address as may be given in writing to the other party. All
notices hereunder shall be sufficient if delivered by facsimile or overnight
mail. Any notices shall be deemed given only upon actual receipt.
24. Counterparts. This Agreement may be executed in counterparts, each of which
shall be an original but all of which together shall constitute one agreement.
25. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties and supercedes all prior agreements and
understandings relating to the subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
RENAISSANCE UNDERWRITING MANAGERS LTD.
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
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Title: Vice President, Treasurer and Assistant Secretary
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BLACKROCK FINANCIAL MANAGEMENT, INC.
By: /s/ Xxxxx Xxxxxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxxxxx
-------------------------------
Title: President
-------------------------------
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