ADMINISTRATION, MANAGEMENT
AND CUSTODY AGREEMENT
BETWEEN
AMERICAN OPPORTUNITY TRUST
AND X X XXXXXX & PARTNERS
Page 34 of 50 Pages
Dated 7th January 1993
----------------------
LEVERAGED OPPORTUNITY TRUST PLC
and
X X XXXXXX & PARTNERS LIMITED
ADMINISTRATION, MANAGEMENT AND CUSTODY AGREEMENT
Xxxxx & Xxxxx
London
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THIS AGREEMENT is made on 7th January 1993 BETWEEN:
(1) LEVERAGED OPPORTUNITY TRUST PLC of 00 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX
(the "Company"); and
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(2) X X XXXXXX & PARTNERS LIMITED of 00 Xxxxx Xxxx'x Xxxx, Xxxxxx XX0X 0XX (the
"Manager").
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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;
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"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:
(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
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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 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
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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:
(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.
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(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;
(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
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(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);
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(c) the surrender of securities at maturity or when called for redemption
against payment therefor.
(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.
(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
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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
(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
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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 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.
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14. Notices
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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.
(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.
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16. Assignment
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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: )
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