CLIENT AGREEMENT
PEAK INVESTMENTS
Page 96 of 258 Pages
XX XXXXXX & PARTNERS LIMITED
----------------------------
Regulated by IMRO in the conduct of Investment Business
THIS INVESTMENT MANAGEMENT AGREEMENT is made the 23rd day of January, 1996
BETWEEN:
(1) XX XXXXXX & PARTNERS LIMITED ("JOHP") a member of the Investment Management
Regulatory Organization Limited ("IMRO") and regulated in the conduct of
investment business by it, whose registered office is at 00 Xxxx Xxxxx,
Xxxxxx XX0X 0XX; and
(2) Peak Investments (portfolio name)
-------------------------------------------------------
(hereafter known as the "Client")
of 0 Xxxxxxx Xxxxxx, Xxxxxx XXXX 0XX
----------------------------------------------------
(address)
-------------------------------------------------------
NOW IT IS HEREBY AGREED as follows:
APPOINTMENT AND STATUS OF CLIENT
1. The Client, a Private Customer as defined in the Rules of IMRO, hereby
appoints JOHP to act as discretionary 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 JOHP (the
"Portfolio") and JOHP hereby agrees to manage and administer the Portfolio.
The appointment will commence on the date on which this Agreement is
delivered to JOHP by the Client having been signed first by the Client then
by JOHP. The assets comprising the Portfolio and their opening value are
set out in Schedule 1.
MANAGEMENT OF INVESTMENTS
2. JOHP shall 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 JOHP and the Client and set out in Part 1 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 from time to time by the Client or by the Client's
duly authorized agent (written notice of whose authority shall have been
received by JOHP). The Client's attention is specifically drawn to the
warnings set out in Part III of Schedule II.
Page 97 of 258 Pages
3. JOHP shall not be obliged to undertake the management of investments the
management of which would in its opinion be onerous to it.
DEALING TERMS
4. Subject as set out in paragraph 9, in effecting transactions for the
Portfolio JOHP shall seek best execution at all times and may (subject to
the investment policy set out in Part I of Schedule II) deal on such
markets or exchanges and with such counterparties as it thinks fit. The
Client agrees that all such transactions will be effected in accordance
with the rules and regulations of the relevant market or exchange and that
JOHP may take all such steps as may be required or permitted by such rules
and regulations and/or by good market practice.
5. 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 JOHP to a third party except as otherwise agreed between the
Client and JOHP in writing.
6. JOHP 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 JOHP's duties hereunder to an extent which is not
material in the context of the Portfolio taken as a whole. JOHP will not
borrow money on the Client's behalf against the security of any of the
Client's investments, documents of title or property.
7. JOHP may commit the Client to underwrite any issue or offer for sale of
securities without the Client's prior written consent.
8. JOHP may act as principal in any transaction for the Client provided that
JOHP shall secure for the Client best execution of such transaction.
9. Subject to the IMRO Rules, JOHP may, without prior reference to the Client,
enter into a transaction on behalf of more than one client collectively.
10. JOHP has the right under this Agreement to effect transactions on the
Client's behalf in investments the price of which may be being stabilized.
The attention of the Client is referred to the statement contained in
Schedule II relating to stabilization. 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.
CONFLICTS OF INTEREST
11. Subject to paragraphs 12 and 13, JOHP shall not undertake any transactions
on the Client's behalf in which JOHP has directly or indirectly a material
interest or have any relationship with another party which may involve a
conflict with JOHP's duty to the Client unless that interest or
relationship is disclosed in writing to the Client.
12. The Client's Portfolio may contain securities of which the issue or offer
for sale is underwritten, managed or arranged by an Associate (as defined
in the Rules of IMRO) of JOHP during the preceding twelve months.
Page 98 of 258 Pages
13. The Client understands that JOHP's directors or staff may from time to time
hold shares or securities including holdings that may be in the Portfolio,
and that JOHP's directors or staff may from time to time be directors of
companies whose shares are held in the Portfolio.
14. The Client acknowledges that JOHP 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 JOHP's management (or in a
fund, company, trust or Collective Investment Scheme connected with JOHP)
if JOHP considers such an investment to be appropriate for inclusion in or
exclusion from the Portfolio.
CUSTODIAL SERVICES
15. (a) Save where the Client has notified JOHP in accordance with paragraph
15(b), in those cases where the Client is situated in the United
Kingdom registerable investments will be registered in the name of an
Eligible Custodian (as defined in the Rules of IMRO) situated in the
United Kingdom and nominated by JOHP.
(b) In those cases where the Client is situated overseas or where the
Client so requests by notice in writing to JOHP, registerable
investments will be registered in the name of an Eligible Custodian
situated outside the United Kingdom and nominated by JOHP.
(c) All documents of title (including those in bearer form) will be
retained in the custody of an Eligible Custodian nominated by JOHP and
situated in the United Kingdom or overseas as applicable.
(d) None of the Eligible Custodians as aforesaid shall be Associates of
JOHP. However, the Client's registerable investments may at any time
be registered in the name of a nominee company which is an Associate
of JOHP and Client's documents of title may be held by that Associate
at any time after JOHP 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.
ACCOUNTS, INTEREST AND DIVIDENDS
16. The following Client accounts, together with such others that may be
required, will be maintained by JOHP.
(a) INVESTMENT ACCOUNT
The Client's investments will be held in this account. Subject to
paragraphs 5 and 6, JOHP 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.
(b) CAPITAL ACCOUNT
Page 99 of 258 Pages
All uninvested cash will be held in this account by a bank chosen by
JOHP. 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 JOHP
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 at the
prevailing market rate. The interest will be paid quarterly and will
be credited to the Income Account on the Client's behalf.
(c) 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.
(d) 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 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.
(d) OFF-SHORE FUNDS
In those cases where the Client is situated overseas or if the Client
notifies JOHP in writing that the Client wishes cash in the Portfolio
to be held outside the United Kingdom, JOHP will be (subject to
applicable laws and regulations) hold such cash in a bank account
outside the United Kingdom.
17. The Client may at any time instruct JOHP 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.
18. JOHP 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.
COMMUNICATIONS
Page 100 of 258 Pages
19. In the interests of proper administration of the Portfolio and for related
investment purposes JOHP, its representatives or employees, may call upon
the Client by telephone, visit or otherwise communicate orally with the
Client without express invitation. The Client's attention is drawn to the
fact that the Client will forfeit any right conferred by 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 a call.
ADMINISTRATION
20. 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.
21. JOHP 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.
22. 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 JOHP or to which JOHP has access relating to the transactions
effected by JOHP on the Client's behalf and those records will be
maintained by JOHP or JOHP will ensure that they are maintained for not
less than seven years from the date of the relevant transaction.
23. All documents will be sent to the Client at the address given above unless
and until otherwise directed in writing. The Client agrees that it will
immediately notify JOHP in writing of any changes of address, and that JOHP
will not be responsible for any consequences which may arise from failure
to do so.
REVIEWS AND VALUATIONS
24. JOHP will prepare reviews 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 on a six monthly basis or at such other
frequency as may be agreed between JOHP and the Client. Such reviews shall
be prepared as at such half yearly or other dates as shall be agreed
between JOHP and the Client from time to time (each such date being
referred to as a "Valuation Date"), and JOHP will send such reviews to the
Client within twenty-five business days of each Valuation Date.
25. 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" or any other
suitable information service chosen by JOHP (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 other than sterling, the valuation and
middle market exchange rates supplied by "Exshare" or any other suitable
information service chosen by JOHP 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
Page 101 of 258 Pages
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 JOHP or
such other person selected by JOHP) as shall in JOHP's opinion be fair.
26. JOHP accepts no liability for any period longer than 25 business days
between any Valuation Date and the despatch of a review to the Client of
his Portfolio which has elapsed as a result of any act or omission of any
third party.
VOTING AND OTHER RIGHTS
27. JOHP will be entitled at its discretion and without notice to the Client to
procure or to refrain from procuring the exercise of 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. JOHP will
not forward to the Client any circulars, notices or proxy cards received in
respect of investments comprised in the Portfolio.
FEES, COMMISSIONS AND EXPENSES
28. (a) The Client will pay a management fee to JOHP in respect of the period
beginning with first receipt by JOHP of any investments or money from
the Client and ending with a Valuation Date (as defined in paragraph
24) 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 39 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 not later than 14 days after
despatch 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 JOHP on the 14th day after despatch of
such invoice.
(d) In addition the Client shall reimburse JOHP for any expenses or
liabilities which it may incur in properly carrying out its duties
hereunder.
29. 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 in paragraph 24), the amount of the fee shall be
duly apportioned.
30. 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 JOHP may gain a commission benefit from dealing in a
bulk purchase or sale on behalf of JOHP's
Page 102 of 258 Pages
clients, one of whom may be the Client, or from return commissions which
benefit JOHP shall be entitled to retain. JOHP 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 JOHP in connection with transactions effected by JOHP 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 JOHP undertakes to secure for the Client best execution of
all transactions effected with or through a party from whom JOHP receives
such benefits and commissions, disregarding any benefit which the Client
might obtain directly or indirectly as a result of such arrangements.
31. JOHP 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 (including with prejudice to the
generality of the foregoing its scale rates and charges) by giving one
month's prior notice in writing to the Client.
RESPONSIBILITY AND INSURANCE
32. JOHP will indemnify the Client in respect of any loss incurred as a result
of negligence, wilful default or fraud by JOHP or any of its employees.
Subject to the above, JOHP will not be responsible or liable for any claim,
loss, damage, expense or costs arising by reason of any of the following:
(a) any investment decision taken and acted upon in accordance with the
terms of this Agreement; or
(b) 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 JOHP; or
(c) 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 15 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
(d) any consequential loss suffered in consequence of any act or omission
of JOHP or any breach of JOHP of any term of this Agreement.
33. The Client agrees to indemnify and keep indemnified JOHP from and against
all demands, claims, liabilities, losses, damages, costs and expenses
whatsoever incurred by JOHP arising out of the breach by the Client of any
warranty or by reason of any failure by the Client to comply with and/or
perform any of the terms and conditions contained in this Agreement.
Page 103 of 258 Pages
34. Where the Client is a joint account (whether or not a trust account) JOHP
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 whatsoever be liable to the others for doing
so.
35. JOHP has effected insurance to provide for the protection of the Client
against losses arising from any negligence of JOHP or any dishonesty of
employees of JOHP.
36. Under Section 54 of the Financial Services Xxx 0000 The Securities and
Investments Board has established a scheme for compensating investors by
which the Client may be entitled to compensation in the event of JOHP's
inability to meet any liabilities to the Client. JOHP will make available
to the Client upon request a statement describing the Client's rights to
compensation under the scheme.
DELEGATION AND USE OF AGENTS
37. JOHP may delegate any of its functions under this Agreement to an Associate
and may provide information about the Client and the Portfolio to any such
Associate but JOHP's liability to the Client for all matters so delegated
shall not be affected thereby. JOHP shall give to the Client written
notice of any delegation of a function which involves the exercise of its
discretionary investment management powers.
38. JOHP may employ agents (including Associates) to perform any
administrative, dealing, custodial and ancillary services required to
enable JOHP to perform its services under this Agreement. JOHP undertakes
to act in good faith and with due diligence in the choice and use of such
agents.
TERMINATION OF AGREEMENT
39. This Agreement may be terminated by either party by giving written notice
of termination to the other at any time. Termination 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 JOHP shall be given to every person named in the
joint account and 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.
40. Upon the Termination Date, JOHP will complete expeditiously all
transactions in progress at termination but will not execute any further
transactions for the Client. 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 JOHP, JOHP will ensure
that all investments and cash balances held on the Client's behalf will,
after any outstanding security registration, 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.
Page 104 of 258 Pages
41. Termination will not affect accrued rights, existing commitments or any
contractual provision intended to survive termination and will be without
penalty or other additional payment except that JOHP may charge the Client
an amount equal to:
(a) 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;
(b) any additional expenses which JOHP necessarily incurs in terminating
this Agreement; and
(c) any losses necessarily realised in settling or concluding outstanding
obligations.
42. 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 JOHP's appointment;
but JOHP 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.
43. If the Client is a joint account the Client's obligations under this
Agreement shall be joint and several. On the death of any of the persons
constituting the Client (being survived by any such other person), the
Agreement shall not terminate and, except in the case of trustees, the
interest of the deceased in the Portfolio shall automatically enure to the
benefit of the survivor(s) unless otherwise specified by notice in writing
to JOHP.
CLIENT WARRANTIES
44. The Client warrants that the Client is the beneficial owner (or the duly
authorised agent of the beneficial owner) of the whole of the Portfolio
free from all liens, charges, encumbrances and restrictions on transfer
except insofar as advised by the Client to JOHP, and will so remain during
the currency of this Agreement.
45. 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.
GENERAL
46. 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.
47. The Clause headings in this Agreement are included for ease of reference
only and shall not affect its interpretation.
48. The Schedules to this Agreement are an integral part of it.
Page 105 of 258 Pages
49. If the Client is an individual this Agreement shall be binding on his legal
personal representatives.
50. This Agreement is personal to the parties hereto and shall not be capable
of assignment.
51. Subject to clause 31, no change, alteration or modification to this
Agreement or the Schedules hereto shall be made unless in writing and
signed by the parties hereto.
52. 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
at 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 at an address within the United Kingdom the notice shall be
sufficiently served if served by pre-paid letter.
53. If the Client makes a complaint to JOHP verbally or in writing about any
service JOHP has rendered to the Client under this Agreement the complaint
shall immediately be referred to JOHP'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 which
is the subject of the complaint. The Client has the right 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 or the Investment Ombudsman
without prior reference to JOHP.
54. 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, or where requested by regulatory
authorities, or to their professional advisors where reasonably necessary
for the performance of their professional services.
55. This Agreement is subject to English law and the parties hereto hereby
submit to the jurisdiction of the English Courts in respect of it.
Page 106 of 258 Pages
SCHEDULE I
THE PORTFOLIO
Valuation and composition of Portfolio
(see attached letter/opening valuation - where applicable)
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 the F.T. All Share Index, any other
appropriate Index or measure of performance agreed upon by JOHP and the Client.
PART II - Guidelines and Restrictions
1. 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 JOHP will not include advising on or effecting
Contingent Liability Transactions, nor will they, without the express prior
authority of the Client, relate to options, futures or contracts for
differences (or to any right or interest in such investments).
2. 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 6 of this Agreement, under no circumstances will
JOHP 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 JOHP on behalf
of the Client in the accounts referred to in paragraph 16 of this
Agreement.
PART III - Risk Warnings and Risk Disclosure Statement
Page 107 of 258 Pages
Investments Denominated in Foreign Currencies
If a liability of the Client in one currency is to be matched by an asset in a
different currency, or if JOHP provides services under this Agreement relating
to an investment denominated in a foreign currency, a movement in exchange rates
may have an effect which may be either favourable or unfavourable 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 comprised 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.
Warrants
A warrant is a right to subscribe for shares, debentures, loan stock or
government securities, and is exercisable against the original issuer of the
securities. Warrants often involve a high degree of gearing so that a
relatively small movement in the price of the underlying security results in a
disproportionately large movement, unfavourable as well as favourable, in the
price of the warrant. The prices of warrants can therefore be volatile.
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 effect on your behalf or
recommend to you transactions in securities which are the subject of a recent
new issue where the price of those 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
Page 108 of 258 Pages
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.
The 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 109 of 258 Pages
SCHEDULE III
Scale Rates and Charges
MANAGEMENT FEES
To be levied six monthly
DISCRETIONARY PORTFOLIO SERVICE
1% per annum on portfolios of up to (Pounds)2,500,000
Large Portfolios (Over (Pounds)2,500,000) - by negotiation
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 commissions (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)
VALUE ADDED TAX
This will be charged on the fees shown above at
the appropriate rate where applicable
Page 110 of 258 Pages
FOR XX XXXXXX & PARTNERS LIMITED
23rd Jan. 1996 /s/ X.X. Xxxxxx
---------------------------
FOR THE CLIENT*
25 Jan. 1996 Date
------------------------------------------ ---------------------------
/s/Xxxxxxx Xxxxxx
------------------------------------------
/s/Xxxxx Xxxxxx
------------------------------------------
*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
sign.
A Company.
The Company's duly authorised signatory should sign and insert the date. Please
let JOHP have a certified true copy of a Board resolution confirming the
appointment of JOHP as investment manager and authorising the signature of the
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 of Pension Fund.
All the trustees should sign and insert the date. Please let JOHP have a copy
of the Trust Deed.
A Partnership.
All the partners should sign and insert the date.
Page 111 of 258 Pages
