CLIENT AGREEMENT
XXXX XXXXXXX (FORMERLY VISCOUNT ALTHORP)
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Note to the file
Viscount Althorp became
Xxxx Xxxxxxx in March 1992
X X XXXXXX INVESTMENT
---------------------
THIS INVESTMENT MANAGEMENT AGREEMENT is made the 18th day of November 1991
BETWEEN:
(1) X X XXXXXX INVESTMENT MANAGEMENT LIMITED ("JOHIM") a member of the
Investment Management Regulatory Organisation Limited ("IMRO") whose
registered office is at 00 Xxxxx Xxxx'x Xxxx Xxxxxx XX0X0XX; and
(2) Viscount Althorp ("the Client") of The Falconry, Althorp, Northampton
NOW IT IS HEREBY AGREED as follows:
68. APPOINTMENT
The Client hereby appoints JOHIM to act as investment manager, subject to
the terms and conditions hereof in relation to the Client's investments and
cash which are from time to time placed under the management of JOHIM (the
"Portfolio") and JOHIM hereby agrees to manage and administer the Portfolio
and to render advice to the Client from time to time in connection with the
Portfolio. The Portfolio as at the date of this Agreement is comprised of
the investments and cash as set out and valued in Schedule I.
69. AUTHORISED BUSINESS
The business which JOHIM is authorised by IMRO to conduct is the giving of
investment advice in relation to, and the management of, the portfolios of
private and business customers and the arranging of transactions relating
to investments of any kind for all types of customers.
70. MANAGEMENT OF INVESTMENTS
(a) JOHIM shall, subject to paragraph 3.2, have complete discretion, power
and authority to manage the Portfolio and to make investments and
changes in investments on the Client's behalf and as the Client's
agent within the investment policy agreed between JOHIM and the Client
and set out in Part I of Schedule II. Such policy shall be subject to
the guidelines and restrictions set out in Part II of Schedule II and
to any guidelines, restrictions and instructions specified in writing
by the Client or by the Client's duly authorised agent (written notice
of whose authority shall have been received by JOHIM). The Client's
attention is specifically drawn to the warning set out in Part III of
Schedule II.
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(b) JOHIM may, at its discretion, by telephone or by letter and upon
either JOHIM's or the Client's instigation give advice and receive and
act upon instructions given by the Client from time to time, upon the
investment policy relating to the portfolio and in relation to
specific investments whether or not comprised in the Portfolio, which
advice the Client shall not be obliged to follow. JOHIM may refuse to
carry out any such instructions which appear to it to be unreasonable
or the carrying out of which would, in JOHIM's opinion, adversely
affect the Portfolio. JOHIM may, but shall not be obliged to, inform
the Client of the basis on which the judgment leading to such advice
is founded. (c) If in accordance with paragraph 3.2 JOHIM gives advice
or receives and acts upon instructions in relation to specific
investments, then JOHIM shall confirm such advice and/or action taken
pursuant to such instructions in writing.
(d) JOHIM, its representatives and employees may, without the Client's
express invitation, at any reasonable time call upon the Client either
in person or by telephone whenever it considers it in the Client's
interests to do so. The Client hereby forfeits its right under Section
56 of the Financial Services Xxx 0000 to treat as unenforceable any
investment agreement entered into in the course of or in consequence
of such communication.
(e) JOHIM shall not be obliged to undertake the management of investments
the management of which would in its opinion be onerous to it.
(f) (a) Pursuant to the directions of the Client and save where the
Client has notified JOHIM in accordance with paragraph 5.1(e), in
those cases where the Client is situated in the United Kingdom
registerable investments will be registered in the name of an
eligible custodian situated in the United Kingdom and nominated
by JOHIM.
(b) Pursuant to the directions of the Client, in those cases where the
Client is situated overseas registerable investments will be
registered in the name of an eligible custodian situated outside the
United Kingdom and nominated by JOHIM.
(c) All documents of title (including those in bearer form) will be
retained in the custody of an eligible custodian nominated by JOHIM
and situated in the United Kingdom or overseas as applicable.
(d) None of the eligible custodians as aforesaid shall be Associates of
JOHIM. However, the Client's registerable investments may at any time
be registered in the name of an Associate of JOHIM and Client's
documents of title may be held by an Associate of JOHIM, at any time
after JOHIM shall have given the Client written notice of its
intention to do so. Such notice shall specify the nature of its
association with such Associate.
(e) JOHIM accepts no liability for any default by any eligible custodian
as referred to in this paragraph.
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(g) The Client's investments or documents of title or certificates
evidencing title to investments or any other property belonging to the
Client will not be lent by JOHIM to a third party except as otherwise
agreed between the Client and JOHIM. JOHIM will not borrow money on
the Client's behalf against the security of such investments,
documents or property.
(h) Contract Notes in respect of every purchase and sale on the Client's
behalf will be sent to the Client before the close of business on the
day next following the day on which the transaction was effected.
(i) JOHIM will on the Client's request forward details of all transactions
on the Client's behalf to the Client's tax advisor without additional
charge.
(j) The Client understands that JOHIM's directors or staff may from time
to time hold shares or securities including holdings that may be in
the Portfolio.
(k) The Client acknowledges that JOHIM may acquire or dispose of on the
Client's behalf shares or units in any fund, company, trust or
Collective Investment Scheme (as defined by the Rules of IMRO) under
JOHIM's management (or in a fund, company, trust or Collective
Investment Scheme connected with JOHIM) if JOHIM considers such an
investment to be appropriate for inclusion in the Portfolio.
(l) The Client may (upon giving reasonable notice) inspect all copy
contract notes, vouchers and copies of entries in books or electronic
recording media kept by JOHIM or to which JOHIM has access relating to
the transactions effected by JOHIM on the Client's behalf and those
records will be maintained by JOHIM or JOHIM will procure that they be
maintained for not less than seven years from the date of the relevant
transaction.
(m) JOHIM may, without prior reference to the Client, enter into a
transaction on behalf of more than one client collectively.
(n) JOHIM has the right under this Agreement to effect transactions on the
Client's behalf in investments the prices of which may be being
stabilised. The attention of the Client is referred to the statement
contained in Schedule II relating to stabilisation. Signature of this
Agreement by or on behalf of the Client shall act as acknowledgment by
the Client of receipt of such statement prior to entry into this
Agreement.
71. RESTRICTIONS AND PERMISSIONS
(a) Subject to paragraph 4.2, JOHIM shall not undertake any transactions
on the Client's behalf in which JOHIM has directly or indirectly a
material interest or have any relationship with another party which
may involve a conflict with JOHIM's duty to the Client unless that
interest or relationship has previously been disclosed in writing to
the Client.
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(b) The Client's Portfolio may contain securities of which the issue or
offer for sale is underwritten, managed or arranged by an Associate of
JOHIM during the preceding twelve months.
(c) JOHIM may supplement the funds in the Portfolio by borrowing on the
Client's behalf but only for the purpose of funding short-term
deficiencies arising in the normal course of JOHIM's duties hereunder
to an extent which is not material in the context of the Portfolio
taken as a whole.
(d) JOHIM may commit the Client to any obligation to underwrite any issue
or offer for sale of securities with the Client's prior written
consent.
72. ACCOUNTS, INTEREST AND DIVIDENDS
(a) The following Client accounts, together with such others that may be
required, will be maintained by JOHIM. Such Client accounts will cover
all Clients of JOHIM.
i. INVESTMENT ACCOUNT
The Client's investments will be held in this account. Subject to
paragraphs 3.7 and 4.3, JOHIM shall not lend the Client's investments
to any third party and shall not borrow money on the Client's behalf
against the security of the Client's investments.
ii. CAPITAL ACCOUNT
All uninvested cash will be held in this account by the Bank. The
account will be debited with the cost of purchases on the Client's
behalf and with sums due and payable by the Client to JOHIM and will
be credited with the net proceeds of sales on the Client's behalf.
Money drawn on behalf of the Client from the account shall not exceed
the total of money held in the account on behalf of the Client at that
time. Interest will be paid on sums standing to the credit of the
account and held on the Client's behalf (as set out in Schedule III).
The interest will be paid quarterly and will be credited to the Income
Account on the Client's behalf.
iii. SETTLEMENT ACCOUNT
Money debited to the Capital Account in respect of the cost of
purchases made on the Client's behalf and money received and
receivable upon settlement of each sale made on the Client's behalf
will be credited to this account and held there until the relevant
settlement date.
iv. INCOME ACCOUNT
Dividends and interest received on investments within the Portfolio
will be credited to this account. Balances on the account will be
paid away quarterly in accordance with the Client's instructions or,
in the absence of such instructions, will be transferred quarterly to
the Capital Account as soon as reasonably practicable after
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the last day of each such quarter being 5th April, 30th June, 5th
October and 31st December in each year. Money drawn on behalf of the
Client from the account shall not exceed the total of money held in
the account on behalf of the Client at that time. Interest will not be
paid on monies held in this account.
v. OFF-SHORE FUNDS
If the Client notifies JOHIM in writing that the Client wishes the
investments and cash in the Portfolio to be registered or held outside
the Untied Kingdom, JOHIM will (subject to applicable laws and
regulations) hold such investments and cash in a bank account outside
the United Kingdom.
(b) The Client may at any time instruct JOHIM to realise any or all of the
investments in the Portfolio and may withdraw any sum standing to the
credit of the Capital Account and held on the Client's behalf.
(c) JOHIM shall maintain separate ledger accounts on the Client's behalf.
All debits from and credits to the Investment Account and/or Capital
Account and/or Income Account on the Client's behalf shall be recorded
in the ledger accounts, and statements of account showing all
transactions, payments and receipts up to and including 5th April of
each year will be sent to the Client as soon as reasonably practicable
after that date.
73. FEES, COMMISSIONS AND EXPENSES
(a) (a) The Client will pay a management fee to JOHIM in respect of the
period beginning with first receipt by JOHIM of any investments
or money from the Client and ending with a Valuation Date (as
defined in paragraph 7.2) and each period thereafter starting
with the day after any Valuation Date and ending on the next
Valuation Date (or the Termination Date [as defined in paragraph
9.1] if sooner).
(b) The management fee shall be calculated in accordance with the "Scale
Rates and Charges" set out in Schedule III.
(c) The management fee shall be payable within 14 days of dispatch to the
Client of an invoice which shall be sent to the Client as soon as is
reasonably practicable after each Valuation Date. Unless otherwise
instructed the Client's Capital Account will be debited with the
amounts due to JOHIM on the 14th day after dispatch of such invoice.
(d) In addition the Client shall reimburse JOHIM for any expenses or
liabilities which it may incur in properly carrying out its duties
hereunder.
(b) The management fee shall be deemed to have accrued on a day-to-day
basis, so that, if this Agreement commences or terminates other than
on a Valuation Date (as defined below), the amount of the fee shall be
duly apportioned.
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(c) Commissions (as set out in Schedule III) will be payable by the Client
on purchases and sales of investments together with all expenses
including stamp duties, stamp duty reserve tax and VAT thereon (if
applicable). The Client recognises that JOHIM may gain a commission
benefit from dealing in a bulk purchase or sale on behalf of JOHIM's
clients, one of whom may be the Client, or from return commissions
which benefit JOHIM shall be entitled to retain. JOHIM will be free to
accept and retain as an addition to its fees and commissions any other
commissions which it receives in the course of its dealing on the
Client's behalf: all such benefits and receipts shall supplement any
other remuneration receivable by JOHIM in connection with transactions
effected by JOHIM with or for the Client under this or any other
agreement with the Client and the Client consents to all such benefits
and receipts as are referred to above without prior disclosure of the
same to the Client on a case-by-case basis provided that JOHIM
undertakes to secure for the Client best execution of all transactions
effected with or through a party from whom JOHIM receives such
benefits and commissions, disregarding any benefit which the Client
might obtain directly or indirectly as a result of such arrangements.
(d) JOHIM shall be entitled to alter the manner of computing or charging
its fees, commissions and expenses or of paying interest on the money
held on the Client's behalf in the Capital Account on the Client's
behalf (including without prejudice to the generality of the foregoing
its scale rates and charges) by giving one month's prior notice in
writing to the Client.
(e) All sums due and payable by the Client to JOHIM will be transferred as
soon as practicable from the money held on the Client's behalf in the
Capital Account (and corresponding entities shall be made in the
relevant ledger account maintained on the Client's behalf).
74. REVIEW AND VALUATIONS
(a) JOHIM will prepare six monthly statements of the Portfolio
incorporating an up-to-date valuation of each investment comprised in
the Portfolio and a statement of the basis on which it was valued.
(b) Such reviews shall be prepared as at such half yearly dates as shall
be agreed between JOHIM and the Client from time to time (each such
date being referred to as a "Valuation Date").
(c) JOHIM will send such six monthly reviews to the Client within twenty-
five business days of each Valuation Date.
(d) On each Valuation Date cash will be valued at its face value and each
investment will be valued at its middle market price on the relevant
stock exchange at the close of business on such day or (if not a
business day) on the nearest prior business day as is supplied by
"Exshare" (which figures shall be binding save for manifest error).
For the purpose of valuing in sterling any foreign currency or any
security listed on a foreign stock exchange the price of which is
quoted in currency
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other than sterling, the valuation and middle market exchange rates
supplied by "Exshare" shall be applied. In the absence of that
valuation or exchange rate, the middle market price as determined by
the Daily Official List of The Stock Exchange or the equivalent list
for any relevant stock exchange will be applied. if none of the
foregoing methods of valuation are available, the investments in
question will be valued in such other manner (by JOHIM or such other
person selected by JOHIM) as shall in JOHIM's opinion be fair.
(e) JOHIM accepts no liability for any period longer than 25 business days
between any Valuation Date and receipt by the Client of a review of
his Portfolio which has elapsed as a result of any act or omission of
any third party.
75. VOTING AND OTHER RIGHTS
JOHIM will be entitled at its discretion and without notice to the Client
to exercise or to refrain from exercising voting and other rights and
privileges attaching to the investments comprised in the Portfolio and to
accede or refrain from acceding to any compromise or arrangement in
relation to any scheme of arrangement or scheme for reconstruction or
amalgamation involving any such investment. JOHIM will not forward to the
Client any circulars, notices or proxy cards received in respect of
investments comprised in the Portfolio.
76. TERMINATION OF AGREEMENT
(a) This Agreement is terminable by the Client without penalty and without
prejudice to the completion of transactions already initiated and will
continue until terminated by written notice of termination given at
any time and in any circumstances by either party to the other. Notice
of termination given by either party shall take effect on the day upon
which the other party actually receives the notice (the "Termination
Date") provided that, where the Client is a joint account, notice of
termination by JOHIM shall be given to every person named in the joint
account. In such circumstances the Termination Date shall be deemed to
be the day after the date of posting by first class recorded delivery
or other appropriate means to all persons named in the joint account.
(b) Upon the Termination Date, JOHIM's responsibility for the management
of the Portfolio will terminate forthwith and JOHIM will not execute
any further transactions for the Client (except for transactions
initiated, but not completed, upon the Termination Date). Upon all
fees, commissions, expenses and other sums due to it and any other
liabilities for which it may be or become liable in connection with
the management of the Portfolio being settled or adequately secured to
the satisfaction of JOHIM, JOHIM will ensure that all investments and
cash balances held on the Client's behalf will, after any outstanding
security registrations, stock exchange settlements and other
administrative matters have been completed and as soon as reasonably
practicable, be transferred to the Client or dealt with in accordance
with the Client's instructions, in all cases at the cost of the
Client.
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(c) No additional payment will be required to be made to JOHIM by the
Client in respect of the termination of this Agreement, except that
JOHIM may charge the Client an amount equal to:
i. the relevant proportion of the management fee, corresponding to
that part of the period ending on a Valuation Date by reference
to which fees are payable, which has expired when this Agreement
is terminated;
ii. any additional expenses which JOHIM necessarily incurs in
terminating this Agreement; and
iii any losses necessarily realised in settling or concluding
outstanding obligations.
(d) The death, bankruptcy or other incapacity or, in the case of a body
corporate, the cessation of business of the Client or a petition being
presented or a meeting being convened to consider a resolution for the
liquidation of the Client shall not of itself terminate JOHIM's
appointment, but JOHIM may at its discretion treat its receipt of
actual notice of any such events as if it were a written notice of
termination from the Client.
77. RESPONSIBILITY AND INSURANCE
(a) JOHIM will indemnify the Client in respect of any loss incurred as a
result of gross negligence, wilful default or fraud by JOHIM or any of
its employees. Subject to the above, JOHIM will not be responsible or
liable fro any claim, loss, damage, expense or costs arising by reason
of any of the following:
i. any investment decision taken and acted upon in accordance with
the terms of this Agreement; or
ii. any delay or default in the performance of its obligations under
this Agreement arising in consequence of any event or
circumstance beyond the reasonable control of JOHIM; or
iii any act or omission on the part of any of the banks or nominee
companies controlled by them or other eligible custodians as
referred to in paragraph 3.6 or any other person to which any of
them shall have delegated its function or on the part of any
other third party whatsoever; or
iv. any consequential loss suffered in consequence of any act or
omission of JOHIM or any breach by JOHIM of any term of this
Agreement.
(b) The Client agrees to indemnify and keep indemnified JOHIM from and
against all demands, claims, liabilities, losses, damages, costs and
expenses whatsoever incurred by JOHIM arising out of the breach by the
Client of any warranty, by reason of any failure by the Client to
comply with and/or perform any of the terms and conditions contained
in this Agreement.
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(c) Where the Client is a joint account (whether or not a trust account)
JOHIM shall, unless and until otherwise directed in writing by all the
persons named in the joint account, be entitled to act on the
instructions of any of them and shall not in any way whatsoever be
liable to the others for doing so.
(d) JOHIM has effected insurance to provide the protection of the Client
against losses arising from any negligence of JOHIM, any dishonesty of
employees of JOHIM or the dealing by JOHIM in any securities the
documents of title to which have been stolen or forged.
(e) By Section 54 of the Financial Services Xxx 0000 The Securities and
Investments Board may establish a scheme for compensating investors by
which the Client may be entitled to compensation in the event of
JOHIM's inability to meet any liabilities to the Client. Upon the
establishment of such a scheme JOHIM will make available to the Client
upon request a statement describing the Client's rights to
compensation under the scheme.
78. ACTING AS PRINCIPAL
JOHIM may act as principal in any transaction for the Client provided that
JOHIM shall secure for the Client best execution of such transaction and
provided that, in each instance, the Client's written consent is first
obtained.
79. GENERAL
(a) The Client warrants that the Client is the beneficial owner of the
whole of the Portfolio free from all liens and encumbrances, except
insofar as instructed by the Client to JOHIM, and will so remain
during the currency of this Agreement.
(b) No part of the Portfolio or of the income therefrom shall be or become
a beneficial asset of JOHIM except to the extent that the Capital
Account is debited on the Client's behalf with the amount of fees,
commissions, costs, expenses or other sums owed to JOHIM.
(c) The Client warrants that the Client is empowered to enter into this
Agreement without the consent or authority of any other party and in
the case of a Client being a body corporate the Client warrants that
by entering into this Agreement it is not nor will it be in breach of
its Memorandum or Articles of Association or any other relevant
document.
(d) Documents will be sent to the Client at the address given above unless
and until otherwise directed in writing. Copies of contract notes and
statements may also be sent to other interested parties upon the
Client's written request. The Client will immediately notify JOHIM in
writing of any changes of address, and JOHIM cannot be held
responsible for any consequences which may arise from failure to do
so.
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(e) Notice required or authorised to be served hereunder must be addressed
to the address of the recipient stated above or to such other address
as may have been notified in writing by either party hereto to the
other as its address for the service of notices. In the case of notice
served by the Client from outside the United Kingdom and of notice
served upon the Client to an address outside the United Kingdom, the
notice shall be sufficiently served if served by pre-paid letter,
cable or telex. In the case of notice served by the Client from within
the United Kingdom and of notice served upon the Client to an address
within the United Kingdom the notice shall be sufficiently served if
served by pre-paid letter.
(f) This Agreement is subject to English law and the parties hereto hereby
submit to the jurisdiction of the English Courts in respect of it.
(g) Each party to this Agreement shall respect and protect the
confidentiality of information acquired in consequence of it and shall
not disclose such information to any third party save in the course of
giving effect to this Agreement or as may be required by law.
(h) If the Client makes a complaint to JOHIM verbally or in writing about
any service JOHIM has rendered to the Client under this Agreement the
complaint shall immediately be referred to JOHIM's Chief Executive or
to a Senior Investment Manager who was not involved in the
circumstances relating to the complaint and who will investigate such
circumstances. Upon the conclusion of his investigation he shall make
a written report to the Client and take any action he deems necessary
to rectify the matter complained of. The Client has the fight to refer
any complaint to IMRO if the Client is not satisfied with the action
taken by the Chief Executive or Senior Investment Manager, and in any
event has the right to make the complaint direct to IMRO without prior
reference to JOHIM.
(i) If the Client is an individual this Agreement shall be binding on his
legal personal representatives.
(j) This Agreement is personal to the parties hereto and shall not be
capable of assignment.
(k) No subsequent change, alteration or modification to this Agreement or
the Schedules hereto shall be made unless in writing and signed by the
parties hereto.
(l) JOHIM is a member of IMRO and as such is regulated by IMRO in the
conduct of Investment Business (as defined in Section 1(2) of the
Financial Services Act 1986).
(m) Terms and expressions defined in the rules of IMRO for the time being
in force shall where the context so admits bear the same meaning in
this Agreement.
(n) The Clause headings in this Agreement are included for ease of
reference only and shall not affect its interpretation.
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(o) The Schedules to this Agreement are an integral part of it.
(p) This Agreement will come into force on the date and at the time on
which it is delivered to JOHIM by the Client having been signed first
by JOHIM and then by the Client.
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SCHEDULE I
THE PORTFOLIO
Valuation and composition of Portfolio as at the date of this Agreement
(See attached sheet - where applicable)
(Pounds)250,000 Received on 13-9-94
SCHEDULE II
INVESTMENT POLICY, GUIDELINES AND RESTRICTIONS
PART I - Investment Policy including basis
of measurement of performance
The investment objectives are to maintain a maximum total return commensurate
with safety and the protection of the underlying value of the capital of the
fund.
The performance will be measured against F.T. All Share Index or F.T.S.E. 100
Index or any other relevant World Market Index.
Part II - Guidelines and Restrictions
There will be no restrictions placed on the types of investment in which
the money comprised in the Portfolio will be invested provided that the
services to be provided by JOHIM will not include advising on or effecting
Margined Transactions, nor will they relate to futures or contracts for
differences (or to any right or interest in such investments) save that we
may in certain circumstances buy options on your behalf. We may also close
out an options contract at any time before its maturity, leave any such
contract open until its maturity, exercise any option purchased through any
options contract up to its expiry or allow any such option to expire
unexercised.
The contents of the Portfolio may be invested in any market save for the
following:
There shall be no restriction on the amount of monies or proportion of the
Portfolio invested in any one investment or type of investment permitted
hereunder provided that, subject to the provisions relating to overdraft
contained in paragraph 4.3 of this Agreement, under no circumstances will
JOHIM make investments on behalf of the Client to a value in excess of the
aggregate of the value of the funds and securities held by JOHIM on behalf
of the Client in the accounts referred to in paragraph 5.1 of this
Agreement.
PART II - Risk Warnings and Risk Disclosure Statement
Investment Denominated in Foreign Currencies
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If a liability of the Client in one currency is to be matched by an asset in a
different currency, or if JOHIM provides services under this Agreement relating
to an investment denominated in a foreign currency, an investment in exchange
rates may have an effect which may be either unfavorable or favorable on the
investment, which effect may be separate from the gain or loss otherwise
experienced on such investment.
Investments not readily realisable
Certain categories of investments compromised in the Portfolio may not be
readily realisable. You should be aware that there can be no certainty that
market makers or brokers will be prepared to deal in such investments, and that
proper information for determining their current value may not be available.
Options
The markets upon which options are traded can be highly volatile and such
investments carry a high risk of loss. If we buy an option for the portfolio we
may, in our absolute discretion, and without prior reference to you, make
contractual or other arrangements or settle or close out outstanding
obligations.
Stabilisation
This statement is made in compliance with Rule 14 of Chapter IV of the rules of
IMRO.
We or our representatives may from time to time recommend to you or effect on
your behalf transactions in securities the subject of a recent new issue the
price of which transactions may have been influenced by bids made or
transactions effected for the purpose of stabilising the price of those
securities. You should read the explanation below carefully. Its purpose is to
enable you to judge whether you wish your funds to be invested at all in such
securities or, if so, whether you wish to authorise us generally to effect
transactions in such securities on your behalf without further reference to you
or whether you wish to be consulted before any particular transaction is
effected on your behalf.
Stabilisation is a process whereby the market price of a security is pegged or
fixed during the period in which a new issue of securities is sold to the
public. Stabilisation may take place in the new issue or in other securities
related to the new issue in such a way that the price of the other securities
may affect the price of the new issue or vice versa.
The reason stabilisation is permitted is that when a new issue is brought to
market the sudden glut will sometimes force the price lower for a period of time
before buyers are found for the securities on offer.
As long as he obeys a strict set of rules the "stabilising manager", normally
the issuing house chiefly responsible for bringing a new issue to market, is
entitled to buy securities in the market that he has previously sold to
investors or allotted to institutions who were included in the new issue but who
have decided not to continue participating. The effect of this may be to keep
the price at a higher level than would otherwise be the case during the period
of stabilising.
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These rules limit the period in which he may stabilise, fix the price at which
he may stabilise (in the case of shares and warrants but not bonds), and require
him to disclose that he may be (but not that he is) stabilising.
The fact that a new issue or a related security is being stabilised does not in
itself mean that investors are not interested in the issue, but neither should
the existence of transactions in an issue where stabilising may take place be
relied upon as an indication that investors are interested in the new issue or
interested in purchasing at the price at which transactions are taking place.
Page 218 of 258 Pages
SCHEDULE III
Scale Rates and Charges
MANAGEMENT FEES
To be levied six monthly
DISCRETIONARY PORTFOLIO SERVICE
1.0% per annum on portfolios of up to (Pounds)500,000
0.6% per annum on the next (Pounds)500,000
0.3% per annum on the next (Pounds)1,500,000
(Equivalent to 0.5% on the first (Pounds)2,500,000)
0.5% per annum on the next (Pounds)2,500,000
0.3% thereafter
(Subject to a minimum of (Pounds)1000 per annum)
COMMISSION RATES
EQUITIES GILTS/FIXED INTEREST
1.25% on transactions up to (Pounds)10,000 0.5% on transactions up to (Pounds)10,000
0.50% thereafter 0.25% on the next (Pounds)40,000
0.125% thereafter
(Minimum commission (Pounds)30 per contract)
All transactions are subject to a handling charge of (Pounds)12.50 per
transaction
in the case of UK registered securities
((Pounds)20 for non-UK registered securities)
INTEREST ON CAPITAL ACCOUNT
1.5% below Bank of Scotland base rate
VALUE ADDED TAX
There will be charged on the fees shown above at
the appropriate rate where applicable
Page 219 of 258 Pages
FOR X X XXXXXX INVESTMENT MANAGEMENT LIMITED
/s/ [signature appears here] Date 13/11/91
------------------------------------------- ----------------------
For the Client*
/s/ [signature appears here] Date 18/11/91
------------------------------------------- ----------------------
--------------------------
--------------------------
*The Client should sign here as follows.
An Individual or Individuals.
The individual should sign his/her usual signature and insert the date. Where
the Client is a joint account all persons named in the joint account should
sing.
A Company.
The Company's duly authorized signatory should sign and insert the date. Please
let JOHIM have a certified true copy of a Board resolution confirming the
appointment of JOHIM as investment manager and authorizing the signature of this
Agreement. Please provide an up-to-date copy of the Memorandum and Articles of
Association and the Certificate of Incorporation which will be returned.
A Trust or Pension Fund.
All the trustees should sign and insert the date. Please let JOHIM have a copy
of the Trust Deed.
A Partnership.
All the partners should sign and insert the date.
Page 220 of 258 Pages
