<PAGE>
Exhibit 10.5
INVESTMENT MANAGER AGREEMENT
by and between
CENTURY BANK AND TRUST COMPANY
and
BLACKROCK FINANCIAL MANAGEMENT, INC.
October 28, 2004
<PAGE>
INVESTMENT MANAGER AGREEMENT
THIS
AGREEMENT, made as of the 28th day of October 2004, by and
between
Century Bank and Trust Company, a
Massachusetts trust company, and its
wholly-owned subsidiaries from time to time
(hereinafter collectively called the
"Company") and BlackRock Financial
Management, Inc. (hereinafter called the
"Manager").
WITNESSETH:
WHEREAS,
the Company has all requisite authority to appoint one or more
investment managers to supervise and direct
the investment and reinvestment of a
portion of all of the assets of the
Company;
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." 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. The Manager represents and
warrants that it will not under any
circumstances take any action under this
Agreement in which the Company will
transact with any entity that the Office of
Foreign Assets Control, U.S. Department of
the Treasury ("OFAC") has found to
be, or is for the benefit of, or contains
assets issued by, owned, possessed by
or in which there is an interest of, any
person whose name appears on the list
of Specially Designated Nationals and
Blocked Persons published by OFAC (each,
an "SDN") or is a department, agency or
instrumentality of, or otherwise
controlled by or acting on behalf of, the
government of any of country that is
the target of any of the several economic
sanctions programs administered by
OFAC (31 C.F.R. Parts 500 through 598) (the
"SDN List").
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 this Agreement do not conflict with any
obligation by which the Company is
bound, whether arising by contract,
operation of law or otherwise, and (c) this
Agreement has been duly authorized by
appropriate corporate action.
3. Management
Services.
(a) Securities. The Manager shall be
responsible for the investment and
reinvestment of those assets 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" and sometimes
referred to by the designation described in
the next sentence). Currently, the
Account is designated by the Company as the
Available for Sale (AFS) portfolio,
with an approximate book value of $470
million as of the date hereof. The
Account may include all securities and
instruments
1
<PAGE>
described in Exhibit A or appropriate 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, subject to such
limitations as are set forth in
Exhibit A, as the same shall be amended
from time to time. 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
comply with the following (as communicated
in writing to the Manager by the
Company from time to time): a) the
investment purposes of the Company, b) the
Company's financial needs such as
liquidity, c) applicable laws, d) the
Company'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,
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 by reason of any exercise
of, or failure to exercise, any such
discretion in the absence of gross
negligence or bad faith.
(b) Financing. As part of the asset
management services provided, the Manager
will, at the direction of the Company,
arrange for financing for certain
securities in the Portfolio. In addition,
the Manager may be called upon to
arrange for financing for securities held
outside the Portfolio. The Manager
will utilize various financing instruments
as identified by the Company in the
Investment Guidelines. The Company
understands that (i) the use of financing
will significantly increase the sensitivity
of the market value of the Portfolio
to changes in interest rates, (ii) the
extent to which the income, gains and
losses of the Portfolio from financed
investments are increased, will depend on
the degree and cost of financing employed,
(iii) maintaining compliance with the
Investment Guidelines as they pertain to
financing activities in the Portfolio
and other accounts may, under some
circumstances, require the Manager to dispose
of some or all of the Portfolio investments
under unfavorable market conditions,
thus causing the Company to recognize a
loss it might not have otherwise
recognized and (iv) the degree of financing
employed could limit the Manager's
ability to respond to changing market
conditions.
4. Investment
Limitations; Compliance with Applicable Laws. The Manager shall
not acquire for the account of the Company
any asset or obligation from, or
issued by, a company that is a Century
Bancorp affiliate ("Century Bancorp
Affiliate") as defined by Section 23A of
the Federal Reserve Act ("Section 23A")
and as identified in writing by the Company
to the Manager, except with prior
written approval by the Company. The
Manager shall not acquire from any person
for the account of the Company any
obligation during the existence of an
underwriting syndicate if, to the Manager's
knowledge, after due inquiry, a
Century Bancorp Affiliate is a member of
the syndicate (or is otherwise acting
as a "principal underwriter" as defined by
Section 23B of the Federal Reserve
Act ("Section 23B")), unless (1) the
underwriting commitment of the Century
Bancorp Affiliate (or affiliates) is 50% or
less of the total and (2) the
Manager obtains the advance approval of the
Company's chief financial officer.
The Manager may not engage in any
transaction with any party if, to the
Manager's knowledge, the proceeds of
2
<PAGE>
such purchase are to be transferred to a
Century Bancorp Affiliate (such as the
purchase of a debt security where the
proceeds will be used to repay a loan made
by a Century Bancorp Affiliate).
The
Company agrees that it will be responsible for complying with
all
applicable requirements resulting from the
Manager's acquisition of any
obligation subject to Section 23A pursuant
to the Company's approval.
The Manager agrees
that it will take no action that would (a) cause
Century Subsidiary Investments, Inc. II,
and any other security corporation
subsidiary, either now existing or formed
hereafter and the assets of which may
be made subject to investment by the
Manager pursuant to this Agreement
(collectively, the "Security Corporations")
to fail to qualify for taxation as a
security corporation pursuant to Mass. G.L.
Ch. 63 Section 38B, (b) cause
investments to be made with respect to the
Account that would be unlawful
investments for the Company or its
subsidiaries under the Massachusetts General
Laws or the Federal Deposit Insurance Act,
(c) cause the amount of securities
held by any of the Security Corporations to
exceed the amount authorized for
such subsidiary by the Massachusetts
Commissioner of Banks, provided that the
Company advises the Manager of any such
authorized amount, (d) cause any of the
Security Corporations to violate the terms
of any Advances Agreement with the
Federal Home Loan Bank of Boston, provided
each such Advances Agreement is
provided to the Manager or (e) cause the
Company to trigger an adverse
classification under Financial Accounting
Standards Board Staff Position EITF
Issue 03-1.
5. Transactions with
Affiliates.
The
Manager will not affect purchases or sales on behalf of the
Company
with a Century Bancorp Affiliate.
6. Accounting and
Reports. The Manager shall furnish the Company with
appraisals of the Account, performance
tabulations, a summary of purchases and
sales and such other reports as specified
in Exhibit A, as the same may be
amended from time to time upon the mutual
agreement of the parties. The Manager
shall also reconcile accounting,
transaction and asset-summary data with
custodian reports at times that are
mutually agreeable to the Manager and the
Company. In addition, the Manager shall
communicate and resolve any significant
discrepancies with the custodian. The
Manager shall cause all trade invoices to
be transferred electronically to the
Company immediately following execution of
each trade and shall cause any investment
analyses to be made readily available
to the Company. The Manager, upon
reasonable prior written notice, shall make
all books and records, ledgers and reports
relating to the Account and the
performance of the services hereunder
available for audit during the Manager's
normal business hours by the Company,
independent auditors or any federal or
state regulatory agency having jurisdiction
over the Company or any Security
Corporation.
7. 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.
8. 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 the Company
3
<PAGE>
managed by the Manager and by other
parties. The Additional Investment Services
may include, but are not limited
