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INVESTMENT MANAGEMENT I I INVESTMENT MANAGEMENT AGREEMENT This Agreement is entered into by and between 3Bridge Capital, 650 California Street, 30th Floor, San Francisco, California 94108 ("Adviser"), and the City of Clearwater, Post Office Box 4748, Clearwater, Florida 33758-4748 ("Client"), effective as of ~ $ , ;;1.0(/0 In consideration of the mutual covenants herein, Client and Adviser agree as follows: 1. Services. Client retains Adviser to render investment advisory services as defined by client's investment objectives and parameters (AKA Exhibit A to be provided by Client). 2. Limited Power of Attornev. To enable Adviser to exercise fully its discretion and authority to carry out the activities as provided in Exhibit A, Client hereby constitutes and appoints Adviser as Client's agent and attorney-in-fact with full power and authority to act for Client for that purpose. 3. Client Information. The objectives of the Client are specified in Exhibit A attached hereto. Client shall promptly advise Adviser of any changes or modifications to those objectives. Client shall promptly notify Adviser in writing if Client considers any recommendations inappropriate or not in accordance to the objectives. Client and Adviser shall consult on a periodic basis regarding Client's objectives. 4. Representations and Warranties. (a) Client represents and warrants to Adviser and agrees with Adviser as follows: (i) Client has the requisite legal capacity and authority to execute, deliver and perform its obligations under this Agreement. This Agreement has been duly authorized, executed and delivered by Client and is the legal, valid and binding agreement of Client, enforceable against Client in accordance with its terms. Client's execution of this Agreement and the performance of its obligations hereunder do not conflict with or violate any provisions of the governing documents of Client or any obligations by which Client is bound, whether arising by contract, operation of law or otherwise. Client will deliver to Adviser evidence of Client's authority and compliance with its governing documents on Adviser's request. (ii) Client will notify Adviser, in writing, of (1) any termination, substantial contraction, merger or consolidation of Client, or transfer of its assets to any other employee benefit plan, (2) any amendment to the organizing documents of Client or any related instrument that materially affects the activities of Adviser contemplated hereunder or the authority of any named fiduciary or investment Adviser to authorize Client investments or - 1 - SF/75273 Q() r/) /J /; . C./" ../ .// ,.r" ,~_ If,' , ) I I retention of investment advisers, and (3) any alteration in the identity of any named fiduciary or investment Adviser, including itself, who has the authority to approve Client investments. (iii) Client has aggregate assets of at least $50,000,000. (iv) No more than ten percent of Client's assets are invested under the management of Adviser. (b) Adviser represents and warrants to Client and agrees with Client as follows: (i) Adviser is registered as an investment adviser under the Investment Advisers Act of 1940, as amended. 5. Confidentiality. Except as required by law, (a) Adviser agrees to maintain in strict confidence all personal and financial information regarding Client that is furnished to Adviser by Client (except that Client consents to disclosure of Client's identity as a client of Adviser). 6. Fees. Client shall pay a fee of .0025 first $3million, .00125 for next $15 million and .0075 for any additional amounts, payable quarterly in arrears to Adviser for the services to be rendered by Adviser under this Agreement. 7. Termination. This Agreement may be terminated by either party with or without cause by written notice to the other party, effective 30 days after receipt by the addressee or such later date as may be specified in such notice 8. Risk Acknowledgment. Adviser will exercise good faith and diligence in the execution of its duties to Client under this Agreement. However, there may be loss or depreciation of the value of any investment due to the fluctuation of market values. Adviser shall not be responsible for any loss or damage incurred by reason of any act or omission of any custodian, broker-dealer or other investment adviser not under Adviser's supervision, whether appointed by Client or chosen in good faith by Adviser. Except for gross negligence, malfeasance or violation of applicable law, Adviser shall not be liable hereunder for any action performed or omitted to be performed as well as any error in judgment and/or for any investment losses in managing Client's account. Federal and certain state securities laws impose liability under certain circumstances on people who act in good faith, and therefore nothing herein shall in any way constitute a waiver or limitation of any rights which Client may have under federal or state securities laws. - 2 - SF/75273 ptJ 1 I 9. Custodian. Client hereby notifies Adviser that Client has appointed as Custodian for Client's account, Sun Trust Bank. Under no circumstances shall Adviser or any sub-advisors act as custodian of Client's account, although Adviser or a sub-advisor may issue instructions to the Custodian as required in settling transactions on behalf of Client. Client also agrees to direct the Custodian to send copies of the account statements to Adviser or the appropriate sub-advisor, along with an indication that the statements have also been sent to Client. 10. Adviser's Other Clients. It is understood that Adviser acts as investment adviser for other clients and will continue to do so. Since Adviser is engaged primarily in the business of providing investment advice, Adviser may give advice and take action in other client accounts which may differ from the advice given to Client or the action taken on behalf of Client. 11. Independent Contractor. Adviser is and will hereafter act as an independent contractor and not as an employee of Client, and nothing in this Agreement may be interpreted or construed to create any employment, partnership, joint venture or other relationship between Adviser and Client. 12. Assilmment. Adviser may not assign this Agreement without the prior consent of Client. The term "assignment" shall be interpreted in accordance with the provisions of the Securities and Exchange Commission under the Investment Advisers Act of 1940. This Agreement shall bind and inure to the benefit of and be enforceable by the parties and their respective successors and assigns. 13. Delivery of Information. Client acknowledges that Client has received Adviser's brochure required to be delivered under the Investment Advisers Act of 1940 (including the information in Part II of Adviser's Form ADV). If Client received such information less than forty-eight hours prior to signing this Agreement, this Agreement may be terminated by Client without penalty within five business days from the effective date. Adviser agrees to offer to deliver annually, without charge, Adviser's brochure as required by the Investment Advisers Act of 1940. 14. Reserved. 15. Effective Date of Agreement. The effective date of this Agreement will be the date set out above. 16. Governing Law. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Florida. 17. Notices. All other communications under this Agreement must be in writing and will be deemed duly given and received when delivered personally, when sent by - 3 - SF/75273 ,to ~ ~ facsimile transmission, three days after being sent by first class mail, or one business day after being deposited for next-day delivery with Federal Express or another nationally recognized overnight delivery service, all charges or postage prepaid, properly addressed to the party to receive such notice at the address indicated below that party's signature on this Agreement, or at any other address that either party may designate by notice to the other. 18. Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any and all other provisions hereof. 19. Entire Al!reement. This Agreement (including Exhibit A, which is incorporated by reference herein) is the entire agreement of the parties and supersedes all prior or contemporaneous written or oral negotiations, correspondence, agreements and understandings regarding the subject matter hereof. 20. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 21. No Third-Party Beneficiaries. Neither party intends for this Agreement to benefit any third party not expressly named in this Agreement. IN WITNESS WHEREOF, this Agreement has been duly signed by or on behalf of the parties hereto on the dates set forth below their respective signatures. By Nam : David E. Post Title: CEO & Managing Director "CLIENT" Countersigned: CI OF CLEARWATER, FLORIDA ./~ IL ,Y-- Bnan Aungst Mayor-Commissioner By: Michael J. Roberto City Manager Approved as to form: ~~ Carassas - Assistant City Attorney Attest: ~~ -4- SF/75273 , /P I I Exhibit A Section 2.399 of the City of Clearwater Code of Ordinances provides for the following investments in the Employee's Pension Plan. h. Common stocks, preferred stocks and bonds and other evidence of indebtedness issued or guaranteed by a corporation organized under the laws of the United States, any state, or organized territory of the United States or the District of Columbia or any non-U.S. corporation, provided: 1. The corporation is listed on anyone or more of the recognized national or international stock exchanges and/or in the case of bonds and mortgage backed securities, traded among dealers and investors in a recognized and agreed upon conventional format; 2.AII corporate bonds shall carry an investment grade rating as established either by Standard & Poor's, Moody's, Fitch or other recognized rating agencies; and 3.Not more than five percent of the assets of the pension fund shall be invested in the common stock or capital stock of anyone issuing company nor shall the aggregate investment anyone issuing company exceed five percent of the outstanding capital stock of that company; nor shall the non-U.S. investments exceed ten percent of the pension fund's assets at cost; nor shall the aggregate of the investments under this subparagraph at cost exceed sixty-five percent of the pension fund's assets at cost. 3 Bridge capital LLC will invest in stocks traded on one or more of the recognized national exchanges and no more than 5% of the assets of the pension plan will be in the common stock or capital stock of anyone issuing company nor shall the aggregate investment anyone issuing company exceed five percent of the outstanding capital stock of that company.