ADMINISTRATION, MANAGEMENT
AND CUSTODY AGREEMENT
BETWEEN
AMERICAN OPPORTUNITY TRUST
AND X X XXXXXX & PARTNERS
Page 66 of 258 Pages
Dated 7th January 1993
----------------------
LEVERAGED OPPORTUNITY TRUST PLC
and
X X XXXXXX & PARTNERS LIMITED
ADMINISTRATION, MANAGEMENT AND CUSTODY AGREEMENT
Xxxxx & Xxxxx
London
Page 67 of 258 Pages
THIS AGREEMENT is made on 7th January 1993 BETWEEN:
(1) LEVERAGED OPPORTUNITY TRUST PLC of 00 Xxxxxxxxxx
Xxxxxx, Xxxxxx XX0X 0XX (the "Company"); and
-------
(2) X X XXXXXX & PARTNERS LIMITED of 00 Xxxxx Xxxx'x Xxxx,
Xxxxxx XX0X 0XX (the "Manager").
-------
NOW IT IS HEREBY AGREED as follows:
1. Interpretation
--------------
(1) In this Agreement:
"Board"
-----
means the Board of Directors of the Company, or a
committee thereof or (where the context so admits) a
Director of the Company, duly authorized;
"IMRO"
----
means the Investment Management Regulatory Organization
Limited or its successors from time to time;
"IMRO Rules"
----------
means the rules of IMRO from time to time applicable;
"Investments"
-----------
includes any asset, right or interest falling within
any paragraph in Part I of Schedule I to the Financial
Services Xxx 0000 and any other asset, right or
interest in respect of property of any kind and,
without prejudice to the foregoing, wherever situate
and whether or not producing income;
"Portfolio"
---------
means the Investments from time to time owned by the
Company;
"Stock Exchange"
--------------
means The International Stock Exchange of the United
Kingdom and the Republic of Ireland Limited;
Page 68 of 258 Pages
"subsidiary"
----------
shall have the meaning ascribed thereto by Section 736
of the Companies Xxx 0000.
(2) References to persons include bodies corporate and
unincorporated associations and references to companies
include any bodies corporate.
(3) Any reference to a statutory provision includes any
statutory modification or re-enactment of it for the
time being in force.
(4) Subclauses (1) to (3) above apply unless the contrary
intention appears.
(5) The headings in this Agreement do not affect its
construction.
(6) References to amounts payable by the Company shall be
exclusive of value added tax thereon so that value
added tax shall be payable in addition if and to the
extent chargeable.
2. Appointment
-----------
The Company hereby appoints the Manager to be the
investment manager and administrator of the Company to
provide the services and facilities mentioned below
with effect from the date of execution of this
Agreement, such appointment to continue (unless
previously terminated under Clause 11 below) until
terminated by either party upon the expiry of not less
than two years' written notice given to the other.
3. Investment Management
---------------------
(1) The Manager shall undertake with regard to such
Investments as may from time to time be notified to and
agreed with the Manager (the "Relevant Investments"),
the duties normally performed by investment managers,
subject to the policy directions and overall guidelines
from time to time notified to the Manager by the Board,
and in particular but without in any way prejudicing
the generality of the foregoing shall on behalf of the
Company:
Page 69 of 258 Pages
(a) keep under constant review the Relevant Investments
from time to time held by the Company;
(b) be entitled (at its absolute discretion and without
obtaining the prior written permission of the
Company) to withdraw deposits, to effect purchases
and sales and other transactions in respect of
Relevant Investments and subscriptions to issues of
Relevant Investments, to enter into underwriting
commitments in relation to Relevant Investments on
behalf of the Company and otherwise to invest,
realise and re-invest the Portfolio in relation to
Relevant Instruments and exercise all rights
attaching to Relevant Investments comprised therein
and in each such case to charge the amounts payable
to the Portfolio;
(c) search out and evaluate investment opportunities in
Relevant Investments for the Company;
(d) analyse the progress of companies in which the
Company has made Relevant Investments;
(e) submit to the Board such reports and information
regarding Relevant Investments as the Board shall
reasonably require; and
(f) recommend to the Board any future developments or
changes to the investment policy of the Company
which the Manager may consider to be advisable.
(2) The Board shall procure that Xxxxxxxxxxx Xxxxx consults
with the Manager prior to making investment decisions
on behalf of the Company relating to unlisted
investments. If the Manager objects to any such
investment decisions proposed by Xxxxxxxxxxx Xxxxx it
may notify the Board and the Board shall use reasonable
endeavours to convene a Board meeting to consider the
matter prior to the proposed investment decision being
implemented.
4. Administration and other facilities
-----------------------------------
The Manager shall provide the Company with the
following services and facilities:
(a) office facilities at 00 Xxxxx Xxxx'x Xxxx, Xxxxxx
XX0X 0XX or such other office as may be agreed by
the Company with the Manager and such office
Page 70 of 258 Pages
shall be used as the registered and principal
office of the Company and there shall be available
there a suitable room (upon the giving of not less
than five days' prior notice or such shorter notice
as may be agreed from time to time) for the holding
of meetings of the Board but nothing in this
Agreement shall be construed or have effect as
constituting the relationship of landlord and
tenant between the Manger and the Company and the
Company shall be a bare licensee of the Manager;
(b) all financial, accountancy, secretarial, clerical
and other administrative services of any kind
necessary for the conduct of the affairs of the
Company;
(c) keeping on behalf of the Company such books,
records and statements to give a complete record of
all transactions carried out by the Company in
relation to the investment, realisation and re-
investment of the Portfolio and such other books,
records and statements as may be required to give a
complete record of all other transactions carried
out by the Company and as will enable the Company
to publish yearly and half-yearly the report and
accounts of the Company as required by the
regulations of The Stock Exchange;
(d) acting as Secretary to the Company, attending all
meetings of the Board and performing all the duties
reasonably expected of a Company Secretary
including liaison with The Stock Exchange,
preparation and delivery of returns of The
Registrar of Companies and the maintenance of all
statutory books other than the register of members;
(e) all necessary equipment and personnel with a proper
and adequate standard of proficiency and experience
to enable the Manger to carry out its functions
under this Agreement; and
(f) the Manager shall permit such of its employees (if
any) as the Company may reasonably request to be
Directors of the Company.
5. Ancillary Powers of Manager
---------------------------
The Manager may on behalf of the Company in respect of
Relevant Investments:
Page 71 of 258 Pages
(a) issue orders and instructions to the Company's
bankers and custodians with respect to the
disposition of securities and moneys of the Company
provided always that any such disposition shall at
all times be subject to and effected in accordance
with the arrangements for the time being in force
between the Company and its bankers and custodians;
(b) exercise any voting rights attached to the
securities included in the Investments in pursuance
of the policy agreed and established by the Board
from time to time; and
(c) issue instructions to and consult the auditors and
legal advisers of the Company regarding any matter
or thing relating to Investments including (where
the Board thinks fit) institution of legal
proceedings.
6. Further obligations of the Manager
----------------------------------
(1) The Manager shall, and shall procure that its
representatives, employees and delegates shall, obey
and comply with all lawful orders and directions in
relation to the Manager's obligations under this
Agreement given to it or them from time to time by the
Board and shall observe and comply with the Memorandum
and Articles of Association of the Company as from time
to time amended and with all resolutions of the Board
or the Company of which they are informed.
(2) In particular, all activities engaged in by the Manager
or any representative, employee or delegate of the
Manager on behalf of the Company shall at all times be
subject to the overall control of and review by the
Board and without limiting the generality of the
foregoing the Board shall set out the investment policy
of the Company specifying the manner in which it wishes
the Manger to give effect to such policies.
(3) The Board shall instruct the Manager as to the exercise
of the voting rights attached to the securities in the
Portfolio and may:
(a) prohibit the Manager from investing for the account
of the Company in any particular security or class
of securities;
Page 72 of 258 Pages
(b) require the Manager to sell any security or class
of securities or (subject to the availability of
funds) to purchase any security or class of
securities; and
(c) withdraw any part of the assets of the Company from
the management of the Manager (but without thereby
reducing the fee payable to the Manager under this
Agreement) for any reason whatsoever.
7. Custody
-------
(1) Unless it receives contrary instructions from the
Company, the Manager shall make arrangements for the
safekeeping of all cash, securities or other assets in
the Portfolio for the account of the Company in
accordance with this Clause 7 provided that the
obligations of the Manager under this Clause 7 shall
not apply in relation to any cash or other assets of
the Company until the cash or assets concerned have
been made available to the Manager following execution
of this Agreement. Insofar as the Manager holds assets
comprised in the Portfolio (or documents of title
relating to such assets), it shall do so separately
from its own assets and on trust for the Company.
(2) The Manager shall arrange for (i) any uninvested cash
to be held in the Company's name in one or more
accounts with Bank of Scotland or other first class
banks approved by the Company and (ii) all securities
to be held in custody accounts in the Company's name at
Bank of Scotland or other reputable custodians approved
by the Company.
(3) The Manager shall make arrangements for:
(a) the collection of all income and principal with
respect to the Portfolio and credit cash receipts
to the bank accounts referred to above;
(b) the exchange of securities where the exchange is
purely ministerial (including the exchange of
temporary securities for those in definitive form
and the exchange of warrants for, or other
documents of entitlement to securities for, the
securities themselves);
(c) the surrender of securities at maturity or when
called for redemption against payment therefor.
Page 73 of 258 Pages
(4) The Manager shall notify any bank or custodian holding
property comprised in the Portfolio that it is not the
Manager's property.
(5) The Manager shall have no right of lien or set-off or
any right of retention with respect to any Investments
held in the Portfolio.
(6) All proxies or similar requests for consent and all
notices (other than of a routine or immaterial nature)
received by the Manager relating to securities held in
the Portfolio are to be forwarded to the Company or are
to be dealt with in accordance with instructions given
by the Company from time to time.
8. Management charge and expenses
------------------------------
(1) The Company shall pay to the Manager as remuneration
for the provision of its services hereunder a fee
payable annually in arrears on 31st December in each
year and calculated at the rate of 0.25 per cent per
annum (plus value added tax) by reference to the Net
Asset Value (calculated on a gross assets basis) as at
30th September, the first such payment, being a pro
rata part of the annual fee, to be made on 31st
December 1993 in respect of the period from the date of
this Agreement to 30th September, 1993. On termination
of this Agreement a pro rata fee shall be payable for
any part of the year to 30th September for which this
Agreement is in force, payable on the 31st December
next following termination.
(2) The Company shall bear the expenses of any kind
incurred by or on behalf of the Manager in the carrying
out of its duties and the provision of services and
facilities hereunder, save for telex, telephone and
other routine communication charges and the costs of
providing normal office accommodation and secretarial
and clerical staff for the normal performance of those
duties.
(3) The Manager shall also be entitled to additional fees,
calculated on a time basis, for services provided in
connection with any transactions involving the Company
and/or any of its subsidiaries outside the ordinary
course of business including in particular any issue of
shares, debentures or other securities or any
reorganization, redemption, consolidation, sub-division
or other alteration of capital or any takeover,
acquisition or disposal of or by the Company and/or any
of its subsidiaries.
Page 74 of 258 Pages
(4) An amount equal to any amount payable to the Manager
pursuant to this Clause shall be paid by the Company to
the Manager promptly after delivery to the Company by
the Manager of an invoice giving reasonable details in
respect thereof. Notwithstanding the foregoing, the
Manager shall be entitled, without delivery of an
invoice as aforesaid, to charge any such amount to the
Portfolio subject to notifying the Company in writing
of the amount promptly thereafter.
(5) For the purpose of this Clause 8 "Net Asset Value"
shall mean the amount of the fixed and current tangible
assets of the Company (other than shares in its
subsidiaries) and its subsidiaries after deducting
therefrom an amount equal to the current liabilities
and the borrowings or other indebtedness in the nature
of borrowings (except for borrowings repayable after an
initial term of more than three years) of the Company
and its subsidiaries as reasonably determined by the
Manager.
9. Subsidiaries
------------
If the Company has at any time one or more subsidiaries
then, unless otherwise directed by the Board, the
Manager shall in addition provide the same services to
such subsidiaries as it provides hereunder to the
Company.
10. Freedom to act
--------------
The services of the Manager to the Company under this
Agreement shall not be exclusive and the Manager shall
be free to render similar services to others and
nothing in this Agreement shall preclude the Manager
from having dealings with or on behalf of the Company
either on its own account or on account of its clients
or others or make it accountable to the Company in
respect of any profit or commission from any such
dealings.
11. Termination
-----------
(1) If:
(a) either party shall commit any substantial or
continuing material breach of this Agreement and
(where such breach is capable of remedy) fail to
remedy such a breach within thirty days of being
given written notice of it by the other party; or
Page 75 of 258 Pages
(b) either party shall have a receiver or administrator
appointed over the whole or any part of their
assets or a resolution is passed or an order made
for the winding-up of such party other than as
mentioned in sub-clause (2) below,
the other party shall be entitled to terminate the
appointment under this Agreement forthwith by giving
written notice of termination to such party.
(2) On termination of the appointment of the Manager, the
Manager shall be entitled to receive all fees and other
money accrued due up to the date of such termination
but shall not be entitled to compensation in respect of
termination (except where such appointment is
terminated by the Manager in accordance with sub-clause
(1)(a) of this Clause or by the Company in breach of
Clause 2) and the Manager shall deliver to the Company
or as it shall direct, all books of account, records,
registers, correspondence, documents and assets
belonging to the Company or any subsidiary in
possession of or under the control of the Manager and
take all necessary steps to vest in the Company any
assets previously held in the name of or to the order
of the Manager on behalf of the Company or any
subsidiary.
(3) The Manager shall also be entitled to terminate its
appointment on giving four months' notice to the
Company if either the Board fails to procure that
Xxxxxxxxxxx Xxxxx consults with the Manager in
accordance with Clause 3(2) or if the Manager has
objected to an investment proposed by Xxxxxxxxxxx Xxxxx
and has given notice to the Board under Clause 3(2),
but the Board has approved the proposal.
12. Confidentiality and records
---------------------------
(1) Neither party shall during the continuance of this
Agreement or after its termination disclose to any
person, firm or company whatsoever (except with the
authority of the other party or unless ordered to do so
by The Stock Exchange, the Panel on Takeovers and
Mergers or by a regulatory body or court of competent
jurisdiction) any information relating to the business,
Portfolio, finances or other matters of a confidential
nature of the other party of which it may in the course
of its duties under this Agreement or otherwise become
possessed and each party
Page 76 of 258 Pages
shall use all reasonable endeavors to prevent any such
disclosure.
(2) All books, statistical records, accounts, contract
notes, correspondence and other documents relating to
the business and affairs of the Company shall be the
exclusive property of the Company and the Manager shall
when reasonably requested produce the same to the
Company or its employees, agents or auditors together
with any information within the knowledge of the
Manager in relation thereto.
13. Reports and valuations
----------------------
(1) The Manager shall provide the Company with regular
monthly statements and valuations in respect of the
Portfolio as at dates selected by the Company provided
that the Company shall supply valuations to the Manager
in respect of unlisted investments (not being Relevant
Investments). The valuations provided by the Manager
shall be in accordance with procedures and on a basis
reviewed by the Company's auditors and as required by
law or the regulations of The Stock Exchange. The
reference currency will be pounds sterling for such
documents.
(2) Statements of the contents for the Portfolio prepared
in accordance with the IMRO Rules will be provided on a
quarterly basis in respect of quarterly periods of
account.
14. Notices
-------
Any notice to be given under this Agreement may be
served personally or by post at the registered office
of the party to be served and in the case of service of
first class post shall be deemed duly served twenty-
four hours after posting and proof of posting shall be
proof of delivery.
15. Liability and Indemnity
-----------------------
(1) Subject to the terms of this Agreement, the Manager
shall be under no liability to the Company for any
loss, costs or damages which may arise in connection
with the conduct of its duties hereunder or the custody
of the Investments or for any depreciation in the value
of any Investments or their safe custody unless due to
wilful default or negligence on its part.
Page 77 of 258 Pages
(2) The Company shall indemnify the Manager and keep it
indemnified against any costs, claims, demands or
proceedings made by any person and in any way arising
from its appointment hereunder unless due to wilful
default or negligence on its part. The Manager agrees
promptly to inform the Company in writing of any event
which comes to its notice as a result of which the
Company might become liable to indemnify the Manager
under this Clause.
Page 78 of 258 Pages
16. Assignment
----------
Neither party hereto shall be entitled to assign or
otherwise part with any interest in this Agreement
unless the prior written consent of the other has been
obtained except that, if either party transfers the
whole or a substantial part of its undertaking and
property to another company as part of a reconstruction
or amalgamation, that party may by written notice to
the other transfer all its rights and obligations under
this Agreement to that other company.
17. Governing law
-------------
This Agreement is governed by and shall be construed in
accordance with the laws of England to the jurisdiction
of whose Courts the parties irrevocably submit.
IN WITNESS of which each of the parties has executed this Agreement on the date
first mentioned on page 1.
SIGNED by X.X. Xxxxxx )
) /s/ Xxxxx X. Xxxxxx
on behalf of )
LEVERAGED OPPORTUNITY TRUST PLC )
in the presence of: )
SIGNED by R.C.O. Xxxxxxx )
) /s/ R.C.O. Xxxxxxx
on behalf of )
X X XXXXXX & PARTNERS LIMITED )
in the presence of: )
Page 79 of 258 Pages
