<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
MAXICARE HEALTH PLANS, INC.
________________________________________________________________
(Name of issuer)
Common Stock, par value $.01 per share
________________________________________________________________
(Title of class of securities)
577904204
_____________________________
(CUSIP number)
R.C.O. Hellyer
J O Hambro & Company Limited
10 Park Place
London SW1A 1LP England
011-44-171-222-2020
_______________________________________________________________________________
(Name, address and telephone number of person authorized to
receive notices and communications)
April 2, 1998
_______________________________________________________
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box.
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 (the "Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 258 Pages
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 577904204 PAGE 2 OF 258 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
J O Hambro & Company Limited
No S.S. or IRS Identification Number
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
England
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
559,050
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
559,050
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
559,050
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
3.1%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
HC, CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 577904204 PAGE 3 OF 258 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Growth Financial Services Limited
No S.S. or IRS Identification Number
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
England
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 305,000
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
305,000
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
305,000
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
1.7%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 577904204 PAGE 4 OF 258 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
North Atlantic Smaller Companies Investment Trust plc
No S.S. or IRS Identification Number
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
England
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
305,000
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
305,000
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
305,000
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
1.7%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IV, CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 577904204 PAGE 5 OF 258 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Christopher Harwood Bernard Mills
No S.S. or IRS Identification Number
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
England
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 480,200
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
480,200
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
480,200
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
2.7%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 577904204 PAGE 6 OF 258 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
J O Hambro Capital Management Limited
No S.S. or IRS Identification Number
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
England
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 480,200
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
480,200
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
480,200
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
2.7%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IA, CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 577904204 PAGE 7 OF 258 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
J O Hambro Asset Management Limited
No S.S. or IRS Identification Number
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
England
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 559,050
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
559,050
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
559,050
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
3.1%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
HC, CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 577904204 PAGE 8 OF 258 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
J O Hambro Investment Management Limited
No S.S. or IRS Identification Number
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6 England
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 78,850
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
78,850
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 78,850
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0.4%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IA, CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 577904204 PAGE 9 OF 258 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
American Opportunity Trust plc
No S.S. or IRS Identification Number
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
England
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
90,000
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
90,000
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
90,000
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0.5%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IV, CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
STATEMENT ON SCHEDULE 13D
-------------------------
Item 1. Security and Issuer
-------------------
This Statement on Schedule 13D relates to the Common Stock, par value $0.01
per share (the "Common Stock"), of Maxicare Health Plans, Inc., a Delaware
corporation (the "Company"), which has its principal executive offices at 1149
South Broadway Street, Suite 910, Los Angeles, California 90015.
Item 2. Identity and Background.
-----------------------
2 (a-c, f).
I. Filing Parties:
--------------
This Statement is filed on behalf of the following eight persons, who are
collectively referred to as the "Filing Parties":
1. J O Hambro & Company Limited ("J O Hambro & Company") is a corporation
organized under the laws of England with its principal office and business
at 10 Park Place, London SW1A 1LP England. J O Hambro & Company functions
as the ultimate holding company for J O Hambro Capital Management and J O
Hambro Investment Management.
2. J O Hambro Asset Management Limited ("J O Hambro Asset Management") is a
corporation organized under the laws of England with its principal office
and business at 10 Park Place, London SW1A 1LP England. J O Hambro Asset
Management functions as an intermediate holding company for J O Hambro
Capital Management and J O Hambro Investment Management.
3. J O Hambro Capital Management Limited ("J O Hambro Capital Management") is
a corporation organized under the laws of England with its principal office
and business at 10 Park Place, London SW1A 1LP England. J O Hambro Capital
Management is principally engaged in the business of investment management
and advising. It serves as co-investment adviser to NASCIT and American
Opportunity Trust and as investment adviser to private clients.
4. Christopher Harwood Bernard Mills is a British citizen whose business
address is 10 Park Place, London SW1A 1LP England. His principal employment
is service as executive director of NASCIT and American Opportunity Trust,
as a director of J O Hambro Capital Management, and as co-investment
adviser to NASCIT and American Opportunity Trust.
5. Growth Financial Services Limited ("GFS"), formerly named Growth Investment
Management Limited, is a corporation organized under the laws of England
with its principal office at 77 Middle Street, Brockham, Surrey RH3 7HL
England and with its principal business at 10 Park Place, London SW1A 1LP
England. GFS has undertaken to provide the services of Christopher Mills to
NASCIT.
Page 10 of 258 Pages
<PAGE>
6. North Atlantic Smaller Companies Investment Trust plc ("NASCIT"), formerly
named Consolidated Venture Trust plc, is a corporation organized under the
laws of England with its principal office and business at 10 Park Place,
London SW1A 1LP England. NASCIT is a publicly-held investment trust
company. Christopher Harwood Bernard Mills and J O Hambro Capital
Management serve as co-investment advisers to NASCIT.
7. American Opportunity Trust plc ("American Opportunity Trust"), formerly
named Leveraged Opportunity Trust plc, is a corporation organized under the
laws of England with its principal office and business at 10 Park Place,
London SW1A 1LP England. American Opportunity Trust is a publicly-held
investment trust company. Christopher Harwood Bernard Mills and J O Hambro
Capital Management serve as co-investment advisers to American Opportunity
Trust.
8. J O Hambro Investment Management Limited ("J O Hambro Investment
Management") is a corporation organized under the laws of England with its
principal office and business at 10 Park Place, London SW1A 1LP England.
J O Hambro Investment Management is principally engaged in the business of
discretionary investment management of private client portfolios.
II. Control Relationships:
---------------------
J O Hambro Capital Management is a majority-owned subsidiary of J O Hambro
Asset Management, which is a wholly-owned subsidiary of J O Hambro & Company.
J O Hambro Investment Management is a majority-owned subsidiary of J O
Hambro Asset Management, which is a wholly-owned subsidiary of J O Hambro &
Company.
Christopher Mills owns 99% of the equity of GFS, and serves as a director
of J O Hambro Capital Management and as executive director of NASCIT and
American Opportunity Trust.
III. Executive Officers and Directors:
--------------------------------
In accordance with the provisions of General Instruction C to Schedule 13D,
information concerning the executive officers and directors of the Filing
Parties is included in Schedule A hereto and is incorporated by reference
herein.
(d) Criminal Proceedings
--------------------
During the last five years, neither the Filing Parties (or a controlling
entity thereof) nor any executive officer or director of any of the Filing
Parties (or a controlling entity thereof) has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
(e) Civil Securities Law Proceedings
--------------------------------
During the last five years, neither the Filing Parties (or a controlling
entity thereof) nor any executive officer or director of any of the Filing
Parties (or a controlling entity thereof) has been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining
Page 11 of 258 Pages
<PAGE>
future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
The Filing Parties used their working capital funds to purchase the shares
of Common Stock of the Company (the "Shares") to which this statement relates.
The amount of funds used to date to acquire the Shares is approximately
$1,858,100 (exclusive of brokerage fees and commissions).
Item 4. Purpose of Transaction.
----------------------
The Filing Parties acquired their holdings of the Common Stock because they
believed that the Common Stock represented a favorable investment opportunity.
The Filing Parties believe that the current market valuation of the Common Stock
does not fully reflect the inherent value of the Company's business. The Filing
Parties have come to believe that the policies followed by the Board of
Directors (the "Board") in recent years have failed to maximize shareholder
value and that current management of the Company has failed to capitalize on, or
consider thoroughly, potential opportunities to enhance shareholder value
through, among other options, a business combination or sale of the Company or
its assets.
Therefore, to seek to enhance shareholder value, the Filing Parties intend
to support Mr. Paul R. Dupee, Jr. (the "Soliciting Shareholder") in connection
with his commencement of a formal solicitation of consents in accordance with
applicable proxy regulations (the "Consent Solicitation"). The Consent
Solicitation seeks to enact certain proposals that would elect a majority of the
Company's Board who are committed, subject to their fiduciary duties, to
pursuing strategic alternatives to enhance shareholder value, including a
business combination or a sale of the Company or its assets.
J O Hambro & Company, J O Hambro Asset Management, J O Hambro Investment
Management and GFS are not participants in the Consent Solicitation but may be
deemed to be members of a group with the other Filing Parties, the Soliciting
Shareholder and the other participants in the Consent Solicitation (the "Group")
by virtue of their beneficial ownership of the Common Stock and their
relationship to certain participants in the Consent Solicitation.
The Filing Parties believe that the Company could increase shareholder
value by engaging in a business combination with, or sale to, another company in
the managed health care business because the memberships in the Company's HMOs
are likely to be given a higher market value in such a transaction than is
reflected in the current market price for the Company's Common Stock. In
addition, the Filing Parties believe that such a transaction would improve the
utilization of the Company's net operating loss carryforward, which is presently
providing little value to the Company because of the Company's low level of
profitability.
On April 8, 1998, the Soliciting Shareholder filed a revised preliminary
consent solicitation statement (the "Preliminary Statement") with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the applicable rules thereunder. The
Preliminary Statement described the proposals of the Soliciting Shareholder,
which would, in part, add ten new directors to the Board, thereby increasing the
authorized number of directors to seventeen and fill the resulting new
directorships with the Soliciting Shareholder Nominees (as defined below), who
would constitute a majority of the Board. The Soliciting Shareholder has also
proposed repealing any bylaw amendments adopted by the Board since February 1,
1998.
Page 12 of 258 Pages
<PAGE>
According the Preliminary Statement, the Soliciting Shareholder has
proposed for election ten people (the "Soliciting Shareholder Nominees") to fill
the newly-created directorships including Christopher H. B. Mills, Enrique F.
Gittes and Claudia M. Perkins (collectively, the "J O Hambro Nominees"). Mr.
Mills is a Filing Party. Mr. Gittes has served as Director of NASCIT, a Filing
Party, since 1993, and Ms. Perkins has served as a Director of J O Hambro
Capital Management, a Filing Party, since 1995.
Mr. Mills, along with the Soliciting Shareholder and another Soliciting
Shareholder Nominee, will solicit individuals, brokers, banks, bank nominees and
other institutional holders in connection with the Consent Solicitation and will
not receive additional compensation for such solicitation.
The J O Hambro Nominees have no present intention to change the existing
senior management of the Company and intend to support the appointment of a
committee to oversee the implementation of the plan to pursue strategic
alternatives.
The Soliciting Shareholder, J O Hambro Capital Management, NASCIT and
American Opportunity Trust have entered into an oral agreement under which the
costs of the Consent Solicitation will be shared 40% by the Soliciting
Shareholder, 40% by NASCIT and 20% by American Opportunity Trust. The J O Hambro
Nominees expect to join the other Soliciting Shareholder Nominees in supporting
the Soliciting Shareholder's request for reimbursement of costs and expenses in
connection with the Consent Solicitation. None of the Filing Parties will
receive any fee in connection with the Consent Solicitation.
Although certain of the Filing Parties have agreed to share the costs
associated with the Consent Solicitation, the Filing Parties have not agreed,
and are not contractually obligated, to vote the shares of Common Stock
beneficially owned by such Filing Parties in any manner in connection with the
Consent Solicitation or with respect to any other vote of the shareholders of
the Company. The Filing Parties reserve the right to participate in or initiate,
alone or with others, any other plans, proposals or transactions of a similar or
different nature with respect to the Company or its securities.
The Filing Parties intend to review their investment in the Company on a
continuing basis and, depending on various factors, including the Company's
business, affairs and financial position, other developments concerning the
Company, the price level of the Common Stock, conditions in the securities
markets and general economic and industry conditions, as well as other
investment opportunities available to the Filing Parties, may in the future take
such actions with respect to their investment in the Company as they deem
appropriate in light of the circumstances existing from time to time. Such
actions may include the purchase of additional Common Stock in the open market,
in privately negotiated transactions or otherwise, or the sale at any time of
all or a portion of the Common Stock now owned or hereafter acquired by the
Filing Parties to one or more purchasers. The Filing Parties may revise the
proposals or submit additional proposals for action by shareholders by written
consent or for adoption by shareholders at any meeting of shareholders.
Except as described in this Item 4, as of the date of this statement none
of the Filing Parties has formulated any plans or proposals that relate to or
would result in: (a) the acquisition by any person of additional securities of
the Company, or the disposition of securities of the
Page 13 of 258 Pages
<PAGE>
Company; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation of the Company or its subsidiaries, if any; (c) a
sale or transfer of a material amount of assets of the Company or its
subsidiaries, if any; (d) any change in the present board of directors or
management of the Company, including any change in the number or term of
directors or the filling of any existing vacancies on the board; (e) any
material change in the present capitalization or dividend policy of the Company;
(f) any other material change in the Company's business or corporate structure;
(g) changes in the Company's charter or bylaws or other actions that may impede
the acquisition of control of the Company by any person; (h) causing a class of
securities of the Company to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an interdealer quotation system of a
registered national securities association; (i) causing a class of equity
securities of the Company to become eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act; or (j) any action similar to
those enumerated above.
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a) - (b) The aggregate number and percentage of the outstanding Common
Stock of the Company beneficially owned (i) by each of the Filing Parties, and
(ii) to the knowledge of the Filing Parties, by each other person who may be
deemed to be a member of the Group, is as follows:
<TABLE>
<CAPTION>
Number of Number of
Number of Shares: Shares: Sole
Aggregate Shares: Sole Shared or Shared
Filing Number of Power to Power to Power to Approximate
Party Shares: Vote Vote Dispose Percentage*
- ------ --------- ------------ --------- ------------ -----------
<S> <C> <C> <C> <C> <C>
J O Hambro 559,050 0 559,050 559,050 3.1%
& Company(1)
J O Hambro Asset 559,050 0 559,050 559,050 3.1%
Management(1)
J O Hambro 480,200 0 480,200 480,200 2.7%
Capital Management
J O Hambro 78,850 0 78,850 78,850 0.4%
Investment
Management(1)
Christopher H.B. 480,200 0 480,200 480,200 2.7%
Mills
GFS(1) 305,000 0 305,000 305,000 1.7%
NASCIT 305,000 0 305,000 305,000 1.7%
</TABLE>
Page 14 of 258 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
American 90,000 0 90,000 90,000 0.5%
Opportunity Trust
George H. Bigelow(2) 1,000 1,000 0 1,000 **
Lawrence Sosnow(2) 9,000 9,000 0 9,000 0.1%
Paul R. Dupee, Jr.(2) 333,100 333,100 0 333,100 1.9%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
* Based on 17,925,381 shares of Common Stock, par value $.01 per share
outstanding as of March 25, 1998, which is based on information reported in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997.
** Less than one tenth of one percent.
(1) J O Hambro & Company, J O Hambro Asset Management, J O Hambro
Investment Management and GFS are not participants in the Consent Solicitation
but may be deemed to be members of the Group by virture of their beneficial
ownership of the Common Stock and their relationship to certain participants in
the Consent Solicitation.
(2) Mr. Bigelow, Mr. Sosnow and Mr. Dupee are participants in the Consent
Solicitation and, therefore, may be deemed to be part of the Group. The
beneficial ownership information relating to such persons is based upon the
publicly available information contained in the Preliminary Statement filed with
the Securities and Exchange Commission.
(c) In the 60 days prior to the date of the filing of this Statement, the
Filing Parties effected no transactions in the Common Stock other than those set
forth in the following table:
<TABLE>
<CAPTION>
No. of Price
Date Filing Party Shares (US$) Broker
- ---- ------------ ------ ----- ------
<S> <C> <C> <C> <C>
2/5/98 J O Hambro Investment Management 1,200 $ 8.375 William Blair
(on behalf of Mrs. S. E. Z. Morrison)
2/12/98 J O Hambro Capital Management 1,200 $ 9.625 Kelton International Ltd.
(on behalf of City of Joy Ltd.)
2/12/98 J O Hambro Capital Management 1,300 $ 9.625 Kelton International Ltd.
(on behalf of Jan Gilbert Charitable
Remainder Trust)
2/12/98 J O Hambro Capital Management 1,000 $ 9.625 Kelton International Ltd.
(on behalf of Lord Stevens of
Ludgate Pension Fund)
2/12/98 J O Hambro Capital Management 1,500 $ 9.625 Kelton International Ltd.
(on behalf of Peak Investments)
3/20/98 NASCIT 85,000 $ 12.50 N/A - Exercise of Options
3/20/98 NASCIT 20,000 $ 17.50 N/A - Exercise of Options
</TABLE>
Page 15 of 258 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
4/1/98 J O Hambro Investment Management 800 $ 11.50 Kelton International Ltd.
(on behalf of James Norton)
4/2/98 J O Hambro Capital Management 500 $11.625 Kelton International Ltd.
(on behalf of City of Joy Ltd.)
4/2/98 J O Hambro Investment Management 1,200 $11.375 Kelton International Ltd.
(on behalf of Earl Spencer)
4/2/98 J O Hambro Capital Management 1,000 $11.625 Kelton International Ltd.
(on behalf of Labrador Trust)
4/2/98 J O Hambro Capital Management 5,000 $11.625 Kelton International Ltd.
(on behalf of Lord Stevens of
Ludgate Pension Fund)
4/2/98 J O Hambro Capital Management 5,000 $11.625 Kelton International Ltd.
(on behalf of Sannafi Ltd.)
4/2/98 J O Hambro Capital Management 22,000 $11.625 Kelton International Ltd.
(on behalf of Seaway Ltd.)
4/2/98 J O Hambro Capital Management 1,500 $11.625 Kelton International Ltd.
(on behalf of The Superannuation
Fund of Wigan Richardson
International Limited)
4/5/98 J O Hambro Investment Management 2,000 $ 11.75 Kelton International Ltd.
(on behalf of R. C. Bonsor Will Trust)
</TABLE>
All of the above transactions were effected in the open market and were
purchases except for (i) the transactions on February 5, 1998, April 1, 1998,
and April 2, 1998 (for 1,200 shares), which were sales, and (ii) the
transactions on March 20, 1998, which were purchases that were effected through
the exercise of options.
(d) The private clients of J O Hambro Capital Management and J O Hambro
Investment Management have an economic interest in the dividends from, and the
proceeds of sales of, Common Stock beneficially owned by J O Hambro Capital
Management and J O Hambro Investment Management, respectively. The shareholders
of NASCIT and American Opportunity Trust have an economic interest in the
dividends from, and the proceeds of sales of, Common Stock beneficially owned by
NASCIT and American Opportunity Trust, respectively.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
---------------------------------------------------------------------
to Securities of the Issuer.
---------------------------
Page 16 of 258 Pages
<PAGE>
As co-investment advisers to NASCIT, Christopher Harwood Bernard Mills and
J O Hambro Capital Management share the right to transfer and vote the shares of
Common Stock of the Company pursuant to an agreement entered into among NASCIT,
GFS and Christopher Mills and an agreement entered into between NASCIT and J O
Hambro Capital Management, each dated as of January 7, 1993, respectively.
As co-investment advisers to American Opportunity Trust, Christopher
Harwood Bernard Mills and J O Hambro Capital Management share the right to
transfer and vote the shares of Common Stock of the Company pursuant to an
agreement dated as of January 7, 1993 between American Opportunity Trust and J O
Hambro Capital Management.
As investment manager for private clients Sannafi Limited, Seaway Limited,
Peak Investments, Lord Stevens of Ludgate Pension Fund, The Jan Gilbert
Charitable Remainder Trust, The Superannuation Fund of Wigan Richardson
International Limited, City of Joy Ltd., and Labrador Trust, J O Hambro Capital
Management has the right to transfer and vote the shares of Common Stock of the
Company pursuant to either agreements or arrangements entered into with such
private clients.
As investment manager for private clients R.C. Bonsor Will Trust, Earl
Spencer, James Norton, and Mrs. S. E. Z. Morrison, J O Hambro Investment
Management has the right to transfer and vote the shares of Common Stock of the
Company pursuant to either agreements or arrangements entered into with such
private clients.
Item 7. Material to be Filed as Exhibits.
--------------------------------
The following documents are filed herewith:
(a) Secondment Services Agreement dated as of January 7, 1993 among
NASCIT, GFS and Christopher Harwood Bernard Mills.
(b) Administration, Management and Custody Agreement dated as of January
7, 1993 between NASCIT and J O Hambro Capital Management (formerly
named J O Hambro & Partners Limited).
(c) Administration, Management and Custody Management Agreement dated as
of January 7, 1993 between J O Hambro Capital Management (formerly
named J O Hambro & Partners Limited) and American Opportunity Trust.
(d) Investment Management Agreement dated as of February 29, 1996 between
J O Hambro Capital Management (formerly named J O Hambro & Partners
Limited) and Seaway Limited.
(e) Investment Management Agreement dated as of January 23, 1996 between
J O Hambro Capital Management (formerly named J O Hambro & Partners
Limited) and Peak Investments.
Page 17 of 258 Pages
<PAGE>
(f) Investment Management Agreement dated as of February 9, 1996 between
J O Hambro Capital Management (formerly named J O Hambro & Partners
Limited) and Lord Stevens of Ludgate Pension Fund.
(g) Investment Management Agreement dated as of September 18, 1996 between
J O Hambro Capital Management (formerly named J O Hambro & Partners
Limited) and The Jan Gilbert Charitable Remainder Trust.
(h) Investment Management Agreement dated as of February 26, 1997 between
J O Hambro Capital Management (formerly named J O Hambro & Partners
Limited) and The Superannuation Fund of Wigan Richardson International
Limited.
(i) Investment Management Agreement dated as of February 25, 1998 between
J O Hambro Capital Management (formerly named J O Hambro & Partners
Limited) and City of Joy Ltd.
(j) Investment Management Agreement dated as of December 19, 1997 between
J O Hambro Capital Management (formerly named J O Hambro & Partners
Limited) and Labrador Trust.
(k) Investment Management Agreement dated as of March 8, 1989 between J O
Hambro Investment Management and R C. Bonsor Will Trust.
(l) Investment Management Agreement dated as of November 18, 1991 between
J O Hambro Investment Management and Earl Spencer (formerly Viscount
Althorp).
(m) Investment Management Agreement dated as of October 11, 1994 between
J O Hambro Investment Management and James Norton.
(n) Investment Management Agreement dated as of February 26, 1996 between
J O Hambro Investment Management and Mrs. S. E. Z. Morrison.
(o) Power of Attorney of Christopher Harwood Bernard Mills dated July 9,
1997.
(p) Joint Filing Agreement dated as of April 13, 1998 among NASCIT, GFS,
J O Hambro Capital Management, J O Hambro Asset Management, J O Hambro
& Company, J O Hambro Investment Management, American Opportunity
Trust and Christopher Harwood Bernard Mills.
Page 18 of 258 Pages
<PAGE>
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.
Dated: 13 April 1998 J O HAMBRO CAPITAL MANAGEMENT LIMITED
By: /s/ Claudia Perkins
------------------------------------------
Name: Claudia Perkins
Title: Director
Executed on behalf of the parties hereto pursuant
to the Joint Filing Agreement filed herewith.
Page 19 of 258 Pages
<PAGE>
Schedule A
----------
The following table sets forth certain information concerning each of the
directors and executive officers of J O Hambro & Company Limited ("J O Hambro &
Company") as of the date hereof.
<TABLE>
<CAPTION>
<S> <C>
Name: Rupert Nicholas Hambro
(Chairman)
Citizenship: British
Business Address: J O Hambro & Company Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Chairman, J O Hambro & Company
Name: Richard Alexander Hambro
(Director)
Citizenship: British
Business Address: J O Hambro & Company Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Chairman, J O Hambro Investment Management
Limited/1/
Director, J O Hambro & Company
Name: James Daryl Hambro
(Managing Director)
Citizenship: British
Business Address: J O Hambro & Company Limited
</TABLE>
- -------------------
/1/ J O Hambro Investment Management Limited is principally engaged
in the investment advisory business and has its principal business and office at
10 Park Place, London SW1A 1LP England.
Page 20 of 258 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
10 Park Place
London SW1A 1LP
England
Principal Occupation: Managing Director, J O Hambro & Company
Managing Director, J O Hambro Capital Management
Director, J O Hambro Asset Management
Name: Richard David Christopher Brooke
(Director)
Citizenship: British
Business Address: J O Hambro & Company Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Director, J O Hambro & Company
Chairman, NASCIT
Name: Robert Charles Orlando Hellyer
(Executive Director)
Citizenship: British
Business Address: J O Hambro & Company Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Executive Director, J O Hambro & Company
Executive Director, J O Hambro Capital Management
Executive Director, J O Hambro Investment
Management Limited
Executive Director, J O Hambro Asset Management
Name: David Frank Chaplin
(Director)
</TABLE>
Page 21 of 258 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Citizenship: British
Business Address: J O Hambro Investment Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Managing Director, J O Hambro Investment
Management Limited
</TABLE>
Page 22 of 258 Pages
<PAGE>
The following table sets forth certain information concerning each of the
directors and executive officers of J O Hambro Asset Management Limited ("J O
Hambro Asset Management") as of the date hereof.
Name: Richard Alexander Hambro
(Managing Director)
Citizenship: British
Business Address: J O Hambro Asset Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Managing Director, J O Hambro Asset Management
Chairman, J O Hambro Investment Management Limited
Director, J O Hambro & Company
Name: Robert Charles Orlando Hellyer
(Executive Director)
Citizenship: British
Business Address: J O Hambro Asset Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Executive Director, J O Hambro Asset Management
Executive Director, J O Hambro & Company
Executive Director, J O Hambro Investment
Management Limited
Executive Director, J O Hambro Capital Management
Name: James Daryl Hambro
(Director)
Citizenship: British
Business Address: J O Hambro Capital Management Limited
10 Park Place
London SW1A 1LP
Page 23 of 258 Pages
<PAGE>
England
Principal Occupation: Managing Director, J O Hambro Capital Management
Managing Director, J O Hambro & Company
Director, J O Hambro Asset Management Limited
Page 24 of 258 Pages
<PAGE>
The following table sets forth certain information concerning each of the
directors and executive officers of J O Hambro Capital Management Limited ("J O
Hambro Capital Management") as of the date hereof.
Name: James Daryl Hambro
(Managing Director)
Citizenship: British
Business Address: J O Hambro Capital Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Managing Director, J O Hambro Capital Management
Managing Director, J O Hambro & Company
Director, J O Hambro Asset Management
Name: Robert Charles Orlando Hellyer
(Executive Director)
Citizenship: British
Business Address: J O Hambro Capital Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Executive Director, J O Hambro Capital Management
Executive Director, J O Hambro Asset Management
Executive Director, J O Hambro Investment
Management Limited
Executive Director, J O Hambro & Company
Name: Christopher Harwood Bernard Mills
(Director)
Citizenship: British
Business Address: 10 Park Place
London SW1A 1LP
England
Page 25 of 258 Pages
<PAGE>
Principal Occupation: Executive Director, NASCIT
Executive Director, American Opportunity Trust
Director, J O Hambro Capital Management
Name: Claudia Margaret Cecil Perkins
(Director)
Citizenship: British
Business Address: J O Hambro Capital Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Director, J O Hambro Capital Management
Name: Malcolm Robert King
(Director)
Citizenship: British
Business Address: J O Hambro Capital Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Director, J O Hambro Capital Management
Name: Paul Gavint
(Director)
Citizenship: British
Business Address: J O Hambro Capital Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Consultant
Non-executive director, J O Hambro Capital
Management
Page 26 of 258 Pages
<PAGE>
The following table sets forth certain information concerning each of the
directors and executive officers of J O Hambro Investment Management Limited
("J O Hambro Investment Management") as of the date hereof.
Name: Richard Alexander Hambro
(Chairman)
Citizenship: British
Business Address: J O Hambro Investment Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Chairman, J O Hambro Investment Management
Director, J O Hambro & Company
Director, J O Hambro Asset Management
Name: David Frank Chaplin
(Managing Director)
Citizenship: British
Business Address: J O Hambro Investment Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Managing Director, J O Hambro Investment Management
Name: John Alexander Anderson
(Executive Director)
Citizenship: British
Business Address: J O Hambro Investment Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Executive Director, J O Hambro Investment
Management
Page 27 of 258 Pages
<PAGE>
Name: Lord Balniel
(Executive Director)
Citizenship: British
Business Address: J O Hambro Investment Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Executive Director, J O Hambro Investment
Management
Name: Geoffrey Leo Alexander Galitzine
(Executive Director)
Citizenship: British
Business Address: J O Hambro Investment Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Executive Director, J O Hambro Investment
Management
Name: Robert Charles Orlando Hellyer
(Executive Director)
Citizenship: British
Business Address: J O Hambro Investment Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Executive Director, J O Hambro Investment
Management
Executive Director, J O Hambro & Company
Executive Director, J O Hambro Asset Management
Executive Director, J O Hambro Capital
Management
Page 28 of 258 Pages
<PAGE>
Name: Christopher Mark Rose
(Executive Director)
Citizenship: British
Business Address: J O Hambro Investment Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Executive Director, J O Hambro Investment
Management
Name: William van Straubenzee
(Executive Director)
Citizenship: British
Business Address: J O Hambro Investment Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Executive Director, J O Hambro Investment
Management
Name: William Alexander Mavourn Francklin
(Executive Director)
Citizenship: British
Business Address: J O Hambro Investment Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Executive Director, J O Hambro Investment
Management
Name: Ian Colguhoun Marris
(Executive Director)
Citizenship: British
Business Address: J O Hambro Investment Management Limited
Page 29 of 258 Pages
<PAGE>
10 Park Place
London SW1A 1LP
England
Principal Occupation: Executive Director, J O Hambro Investment
Management
Name: Angus Richard Bonson
(Executive Director)
Citizenship: British
Business Address: J O Hambro Investment Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Executive Director, J O Hambro Investment
Management
Name: Andrew James Steel
(Executive Director)
Citizenship: British
Business Address: J O Hambro Investment Management Limited
10 Park Place
London SW1A 1LP
England
Principal Occupation: Executive Director, J O Hambro Investment
Management
Page 30 of 258 Pages
<PAGE>
The following table sets forth certain information concerning each of the
directors and executive officers of North Atlantic Smaller Companies Investment
Trust plc ("NASCIT") as of the date hereof.
Name: Richard David Christopher Brooke
(Chairman)
Citizenship: British
Business address: North Atlantic Smaller Companies Investment
Trust plc
10 Park Place
London SW1A 1LP
England
Principal Occupation: Chairman, NASCIT
Director, J O Hambro & Company
Name: Christopher Harwood Bernard Mills
(Executive Director)
Citizenship: British
Business Address: North Atlantic Smaller Companies Investment
Trust plc
10 Park Place
London SW1A 1LP
England
Principal Occupation: Executive Director, NASCIT
Executive Director, American Opportunity
Trust plc
Director, J O Hambro Capital Management
Name: Enrique Foster Gittes
(Director)
Citizenship: USA
Residence: 4 East 82nd Street
New York, New York 10028
USA
Principal Occupation: Director, NASCIT
Page 31 of 258 Pages
<PAGE>
Name: Robert D. le P. Power
(Director)
Citizenship: British
Business Address: SouthCoast Capital Corporation/2/
575 Lexington Avenue
7th Floor
New York, New York 10022
USA
Principal Occupation: Director, SouthCoast Capital Corporation
Name: Douglas P C Nation
(Director)
Citizenship: British
Business Address: Bear Stearns Co. Inc./3/
245 Park Avenue
New York, NY 10167
Principal Occupation: Managing Director, Bear Stearns Co. Inc.
Name: The Hon. Peregrine D E M Moncreiffe
(Director)
Citizenship: British
Business Address: Buchanan Partners Limited/4/
Buchanan House
3 St. James's Square
London SW1Y 4JU
England
Principal Occupation: Director, Buchanan Partners Limited
- ----------------------
/2/ Southcost Capital Corporation principally engages in the brokerage
business.
/3/ Bear Stearns Co. Inc. principally engages in the brokerage business.
/4/ Buchanan Partners Limited principally engages in the investment
management business.
Page 32 of 258 Pages
<PAGE>
The following table sets forth certain information concerning each of the
directors and executive officers of Growth Financial Services Limited ("GFS") as
of the date hereof.
Name: Christopher Harwood Bernard Mills
(Director)
Citizenship: British
Business Address: 10 Park Place
London SW1A 1LP
England
Principal Occupation: Executive Director, NASCIT
Executive Director, American Opportunity Trust
Director, J O Hambro Capital Management
Name: Ivan Alexander Shenkman
(Director)
Citizenship: British
Residence: 34 Royal Crescent, London W11
England
Principal Occupation: Consultant
GFS is controlled by Christopher Mills who owns 99% of the share capital.
Page 33 of 258 Pages
<PAGE>
The following table sets forth certain information concerning each of the
directors and executive officers of American Opportunity Trust plc ("American
Opportunity Trust") as of the date hereof.
Name: R. Alexander Hammond-Chambers
(Chairman)
Citizenship: British
Business Address: Covey Advertising Limited
1 Fountainhall Road
Edinburgh EH9 2NL
Principal Occupation: Director, Covey Advertising Limited/5/
Name: Christopher Harwood Bernard Mills
(Executive Director)
Citizenship: British
Business Address: 10 Park Place
London SW1A 1LP
England
Principal Occupation: Executive Director, American Opportunity Trust
Executive Director, NASCIT
Director, J O Hambro Capital Management
Name: John Gildea
(Director)
Citizenship: USA
Business Address: Gildea Management Company/6/
90 Ferris Hill Road
New Canaan, Connecticut 06840
USA
Principal Occupation: President, Gildea Management Company
- --------------------------
/5/ Covey Advertising Limited is principally engaged in the advertising
business.
/6/ Gildea Management Company is principally engaged in the investment
management business.
Page 34 of 258 Pages
<PAGE>
Name The Hon. James J. Nelson
(Director)
Citizenship: British
Business Address: Foreign & Colonial Ventures/7/
4th Floor
Berkeley Square House
Berkeley Square
London W1X 5PA
England
Principal Occupation: Director, Foreign & Colonial Ventures
Name: Iain Tulloch
(Director)
Citizenship: British
Business Address: Murray Johnstone Ltd./8/
7 West Nile Street
Glasgow G2 2PX
Scotland
Principal Occupation: Director, Murray Johnstone Ltd.
Name: Philip Ehrmann
(Director)
Citizenship: British
Business Address: Gartmore Investment Management Ltd./9/
Gartmore House
16 - 18 Monument Street
London EC3R 8AJ
England
- -------------------------
/7/ Foreign & Colonial Ventures is principally engaged in the investment
management business.
/8/ Murray Johnstone Ltd. is principally engaged in the investment
management business.
/9/ Gartmore Investment Management Limited is principally engaged in the
investment management business.
Page 35 of 258 Pages
<PAGE>
Principal Occupation: Investment Manager, Gartmore
Investment Management Ltd.
Page 36 of 258 Pages
<PAGE>
Exhibit Index
-------------
Document Page
- -------- ----
The following documents are filed herewith:
(a) Secondment Services Agreement dated as of January 7, 1993 among
NASCIT, GFS and Christopher Harwood Bernard Mills.
(b) Administration, Management and Custody Agreement dated as of January
7, 1993 between NASCIT and J O Hambro Capital Management (formerly
named J O Hambro & Partners Limited).
(c) Administration, Management and Custody Management Agreement dated as
of January 7, 1993 between J O Hambro Capital Management (formerly
named J O Hambro & Partners Limited) and American Opportunity Trust.
(d) Investment Management Agreement dated as of February 29, 1996 between
J O Hambro Capital Management (formerly named J O Hambro & Partners
Limited) and Seaway Limited.
(e) Investment Management Agreement dated as of January 23, 1996 between J
O Hambro Capital Management (formerly named J O Hambro & Partners
Limited) and Peak Investments.
(f) Investment Management Agreement dated as of February 9, 1996 between J
O Hambro Capital Management (formerly named J O Hambro & Partners
Limited) and Lord Stevens of Ludgate Pension Fund.
(g) Investment Management Agreement dated as of September 18, 1996 between
J O Hambro Capital Management (formerly named J O Hambro & Partners
Limited) and The Jan Gilbert Charitable Remainder Trust.
(h) Investment Management Agreement dated as of February 26, 1997 between
J O Hambro Capital Management (formerly named J O Hambro & Partners
Limited) and The Superannuation Fund of Wigan Richardson International
Limited.
(i) Investment Management Agreement dated as of February 25, 1998 between
J O Hambro Capital Management (formerly named J O Hambro & Partners
Limited) and City of Joy Ltd.
(j) Investment Management Agreement dated as of December 19, 1997 between
J O Hambro Capital Management (formerly named J O Hambro & Partners
Limited) and Labrador Trust.
(k) Investment Management Agreement dated as of March 8, 1989 between J O
Hambro Investment Management and R C. Bonsor Will Trust.
Page 37 of 258 Pages
<PAGE>
(l) Investment Management Agreement dated as of November 18, 1991 between
J O Hambro Investment Management and Earl Spencer (formerly Viscount
Althorp).
(m) Investment Management Agreement dated as of October 11, 1994 between J
O Hambro Investment Management and James Norton.
(n) Investment Management Agreement dated as of February 26, 1996 between
J O Hambro Investment Management and Mrs. S. E. Z. Morrison.
(o) Power of Attorney of Christopher Harwood Bernard Mills dated July 9,
1997.
(p) Joint Filing Agreement dated as of April 13, 1998 among NASCIT, GFS, J
O Hambro Capital Management, J O Hambro Asset Management, J O Hambro &
Company, J O Hambro Investment Management, American Opportunity Trust
and Christopher Harwood Bernard Mills.
Page 38 of 258 Pages
<PAGE>
SECONDMENT SERVICES AGREEMENT
AMONG
NASCIT, GFS AND
CHRISTOPHER MILLS
Page 39 of 258 Pages
<PAGE>
DATED 7th January, 1993
-----------------------
CONSOLIDATED VENTURE TRUST PLC
and
GROWTH INVESTMENT MANAGEMENT LIMITED
and
CHRISTOPHER HARWOOD BERNARD MILLS
---------------------------------
SECONDMENT SERVICES AGREEMENT
---------------------------------
Allen & Overy
London
THIS AGREEMENT is made on 7th January, 1993.
Page 40 of 258 Pages
<PAGE>
(1) CONSOLIDATED VENTURE TRUST PLC of 11 Devonshire Square, London EC2M 4YR
(the "Company");
-------
(2) GROWTH INVESTMENT MANAGEMENT LIMITED of 10 Clivedon Place, London SW1W 6LA
("GIM"); and
---
(3) CHRISTOPHER HARWOOD BERNARD MILLS of 10 Clivedon Place, London SW1W 6LA
(the "Executive").
-----------
NOW IT IS HEREBY AGREED as follows:
1. Interpretation
--------------
(a) In this Agreement:
"Administration, Management and Custody Agreement"
--------------------------------------------------
means an administration, management and custody agreement made on or about
the same date as this Agreement between the Company and JO Hambro &
Partners Limited;
"Associated Company" means:
--------------------
(i) a company which is not a subsidiary of the Company but
whose issued equity share capital (as defined in
section 744 of the Companies Act 1985) is owned as to
at least 20 per cent. by the Company or one of its
Subsidiary Companies; and
(ii) a Subsidiary Company of a company within (a) above;
"Board of Directors"
--------------------
means the board of directors of the Company or a committee of the board of
directors of the Company;
"the Company"
-------------
includes each of its branches if any;
"Group"
-------
means the Company, and its Subsidiary Companies and Associated Companies
for the time being and "Group Company" means any one of them;
Page 41 of 258 Pages
<PAGE>
"Investments"
-------------
includes any asset, right or interest falling within Part I of Schedule 1
of the Financial Services Act 1986 and any other asset, right or interest
in respect of property of any kind wherever situate whether or not
producing income;
"Shareholders' Funds"
---------------------
means the amount of the nominal capital of the Company for the time being
issued and paid up or credited as paid up, the amount repayable by the
Company in respect of any borrowings repayable more than three years after
initially made (but excluding convertible debt) and the amounts standing to
the credit of the consolidated capital and revenue reserves (including
without limitation share premium account, capital redemption reserve and
profit and loss account) of the Company and its Subsidiary Companies
properly reflected in an audited balance sheet of the Company prepared in
accordance with recognised accounting principles but after making such
adjustments as may be necessary to reflect:
(a) the Board of Directors' valuation of all unquoted investments in
accordance with a statement of value prepared for and approved by the
Board of Directors in accordance with procedures and on a basis
reviewed by the Company's auditors; and
(b) the payment of any dividend or the making of any other distribution to
shareholders of the Company.
"Subsidiary Company" means a subsidiary as defined by section 736 of the
Companies Act 1985; and
"Working Day" means a day other than a Saturday, Sunday or bank holiday or
other public holiday in England.
(b) References to persons include bodies corporate and unincorporated
associations and references to companies include any bodies corporate.
(c) Any reference to a statutory provision includes any statutory
modification or re-enactment of it for the time being in force.
(d) Subclauses (1) to (3) above apply unless the contrary intention
appears.
(e) The headings in this Agreement do not affect its construction.
(f) References to amounts payable 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. Services
--------
Page 42 of 258 Pages
<PAGE>
(a) GIM shall provide the services of the Executive to the Company as
described and on the terms set out in this Agreement ("the Services").
The parties intend the Services to be provided by secondment of the
Executive from GIM to the Company.
(b) GIM shall employ the Executive for the purposes of enabling it to
provide the Services.
(c) The provision of the Services by GIM shall be deemed to take effect
from the date of execution of this Agreement ("the Commencement
Date").
(d) GIM and the Executive warrant to the Company that by entering into
this Agreement and performing the Services they will not be in breach
of any contract or other obligation binding on them.
3. Services of the Executive
-------------------------
(a) GIM shall, and shall procure that the Executive shall, use their best
endeavours to protect and further the interests of the Company giving
the full benefit of the Executive's knowledge and expertise.
(b) GIM shall procure that the Executive shall serve as chief executive
and director of the Company, subject to the Company appointing the
Executive as such.
(c) The Executive shall perform the functions from time to time assigned
to or vested in him by the Board of Directors and in particular he
shall be responsible (subject to such authorisation procedures as the
Board of Directors may specify and except to the extent that the Board
shall not require the services of the Executive in respect of all or
part of the Investments of the Company) for:
i. keeping under review the investments from time to time held
by the Company;
ii. deciding upon purchases and sales and other transactions in
respect of investments and subscriptions to issues of
investments, including underwriting commitments on behalf
of the Company and otherwise determining when the Company
should invest, realise and re-invest its assets and
exercise all rights attaching to its assets;
iii. searching out and evaluating investment opportunities for
the Company;
iv. analysing the progress of companies in which the Company
has invested;
Page 43 of 258 Pages
<PAGE>
v. submitting to the Board of Directors such reports and
information regarding investments as the Board of Directors
shall reasonably require; and
vi. recommending to the Board of Directors any future
developments or changes to the investment policy of the
Company.
(d) The Executive shall faithfully serve the Company, and GIM shall
procure that the Executive shall devote 50 per cent. of his time
during normal business hours to the provision of the services and at
such additional times as are necessary for the proper fulfilment of
those services, but the Executive shall not be required to provide
such services at such times as he is on holiday (as provided for in
Clause 7), nor at such times (being not more than 90 Working Days in
any period of 12 consecutive months) when the Executive is
incapacitated by reason of illness or injury.
(e) GIM shall, and shall procure that the Executive shall, accept
appointments to such offices and enter into such agreements as the
Company shall deem reasonably necessary for the proper provision of
the Services.
(f) GIM shall, and shall procure that the Executive shall, disclose
forthwith to the Board of Directors any conflict of interest which may
arise in connection with the performance of the Services as a result
of any other present or future appointment, employment or interest of
GIM or the Executive (other than that which concerns a Group Company).
(g) The Executive shall provide the Services at such place or places as
the Board of Directors may reasonably require.
5. Fee
---
(1) The Company shall pay to GIM a fee to be agreed from time to time ("the
Fee") but so that the maximum fee payable under this sub-clause (exclusive
of Value Added Tax) when aggregated with the Management Fee (exclusive of
Value Added Tax) payable under the Administration, Management and Custody
Agreement (or any administration, management and custody agreement with
whomsoever made superseding that agreement) shall not in any financial
period of the Company exceed one per cent. of Shareholders' Funds of the
Company and its Subsidiary Companies on the last day of the preceding
financial period of the Company.
(2) For the avoidance of doubt, the Company shall not be obliged to provide the
Executive with, or reimburse GIM for the cost of providing the Executive
with medical insurance, life assurance, pension benefits, accident
insurance, permanent health assurance or other benefits except as expressly
provided for in this Agreement.
(3) The Fee shall accrue from day to day and be payable quarterly in advance on
31st January, 30th April, 31st July and 31st October in each year. The
first payment shall
Page 44 of 258 Pages
<PAGE>
be a pro rata part of the quarterly fee for the period from the date of
this Agreement to the next quarter date. GIM shall reimburse the Company
for a pro rata part of any quarterly fee paid in advance in respect of any
period after termination of this Agreement.
(4) The Fee shall be exclusive of any fees receivable by the Executive as a
director of any Group Company.
(5) In addition to the Fee the Company shall pay to GIM a performance fee in
the amount and payable in the manner set out in the Schedule to this
Agreement ("the Performance Fee").
(6) The Company shall pay to the Executive (pounds)1 per annum (if demanded) as
consideration for his obligations under this Agreement.
6. Expenses
--------
(1) In addition to the Fee and Performance Fee the Company shall reimburse GIM
(on production of such vouchers or other evidence as the Company may
require) the amount of all travelling and other expenses properly and
reasonably incurred by the Executive in the provision of the Services.
(2) The Company shall provide the Executive with reasonably suitable office
accommodation and secretarial assistance at the offices of the Company or
such Group Company as may be appropriate so as to enable the Executive
properly to provide the Services but nothing in this Agreement shall be
construed or have effect as constituting any relationship of landlord or
tenant between the Company and GIM or the Executive and any use of such
office accommodation by GIM or the Executive shall be as bare licensee of
the Company.
7. Holidays
--------
(a) The Company acknowledges that the Executive is entitled to a maximum
of 30 Working Days' holiday in every calendar year under his service
agreement with GIM.
(b) GIM and the Executive agree that the Executive will take his holidays
at such times as are convenient to the Company.
8. Confidential Information
------------------------
(a) GIM and the Executive acknowledge that to enable them to provide the
Services and to discharge their responsibilities under this Agreement
the Company, and the Group, will provide them with information
relating to the Group of a highly confidential nature (any and all
information relating to the Company, the Group, and each Group
Company, their respective businesses, activities or customers,
including but without limitation all and any analyses, compilations,
Page 45 of 258 Pages
<PAGE>
forecasts, studies or other documents, is referred to in this
Agreement as "Information").
(b) GIM and the Executive agree that they will adopt all such procedures
as the Company may require and that they will keep confidential all
Information and shall not, without the prior written consent of the
Board of Directors (save as required by law) disclose the Information
in whole or in part other than to the Board of Directors and to the
Company's professional advisers. GIM and the Executive shall not use
the Information other than in connection with the provision of the
Services. Notwithstanding the foregoing, GIM and the Executive agree
not to disclose the Information (save as required by law) to any
person except to the extent necessary to discharge their
responsibilities under this Agreement.
(c) Any document, including without limitation notes, memoranda, diaries,
correspondence, computer disks or copies thereof created by GIM or the
Executive in providing the Services shall be and remain the property
of the Company or such Group Company as appropriate and the Company or
such Group Company shall be the absolute beneficial owner of the
copyright in any such document.
(d) GIM and the Executive shall at any time during the continuance of this
Agreement if so required by the Company or any Group Company and in
the event of the termination of this Agreement (whether lawfully or
otherwise) surrender to the Company or such Group Company all original
and copy documents in their possession custody or control belonging to
the Company or Group Company or relating to the business of the
Company or any Group Company together with any other property
belonging to the Company or any Group Company.
(e) The obligations of GIM and the Executive under this Agreement apply to
all and any Information whether the Information was in or comes into
their possession prior to or following this Agreement and such
obligations shall be continuing obligations throughout the continuance
of this Agreement and at all times following its termination.
(f) GIM and the Executive agree to observe the laws and regulations which
may apply in the jurisdictions where the Company and the Group
Companies are located.
(g) GIM and the Executive understand and agree that any breach of their
obligations under this Clause 8 will cause the Company irreparable
injury and that monetary damages will not be an adequate remedy for
any such breach. In the event of any breach or threatened breach by
GIM or the Executive, the Company shall be entitled to injunctive
relief in any court of competent jurisdiction restraining GIM or the
Executive from such breach.
9. Gratuities and Codes of Conduct
-------------------------------
Page 46 of 258 Pages
<PAGE>
(a) GIM and the Executive shall not directly or indirectly accept any
commission, rebate or other financial benefit from any person who has
or is likely to have a business relationship with any Group Company
without the consent of the Board of Directors.
(b) GIM and the Executive shall comply with all codes of conduct from time
to time adopted by the Company, and with all applicable rules and
regulations of the London Stock Exchange and any other relevant
regulatory authority including (without limitation) the Model Code for
Securities Transactions by Directors of Listed Companies.
10. Termination of Appointment
--------------------------
(a) This Agreement shall be for a period of 12 months from the
Commencement Date and shall continue for successive periods of 12
months provided that GIM or the Company may terminate this Agreement
at any time by giving to the other of them at least 12 months' notice
in writing expiring at any time (whether or not on the anniversary of
this Agreement).
(b) If:
i. the Executive ceases for any reason to be an employee of
GIM;
ii. the Executive becomes of unsound mind or is, or may be,
suffering from mental disorder and either:
(i) he is admitted to hospital for treatment under the Mental Health
Act 1983; or
(ii) an order is made by any competent court for his detention or for
the appointment of a receiver, curator bonis or other person to
exercise powers with respect to his property or affairs;
iii. the Executive is unable properly to perform his duties
under his service agreement with GIM by reason of ill-
health, accident or otherwise for a period or periods
aggregating at least 180 Working Days in any period of 12
consecutive months;
iv. GIM or the Executive fails or neglects efficiently and
diligently to discharge its duties, or GIM or the Executive
is guilty of any breach of their obligations under this
Agreement or any other agreement with a Group Company
(including any consent granted under any of them);
Page 47 of 258 Pages
<PAGE>
v. GIM or the Executive is guilty of misconduct or suffers any
matter which (by reason of its effect on the Executive=s
reputation or otherwise) affects or is likely to affect
prejudicially the interests of the Company or the Group, or
the Executive is convicted of an arrestable offence (other
than a road traffic offence for which a non-custodial
penalty is imposed);
vi. the Executive becomes bankrupt or makes any arrangement or
composition with his creditors (other than as a result of
losses relating to his underwriting affairs in the Lloyds
insurance market);
vii. GIM becomes unable to pay its debts as they fall due or
makes any arrangement or composition with its creditors or
an order is made or any effective resolution is passed for
winding-up GIM; or
viii. the Executive is disqualified from being a director of any
company by reason of an order made by any competent court
the Company may by written notice to GIM terminate this Agreement with
immediate effect but:
(i) any such termination shall be without prejudice to any other rights
of the Company; and
(ii) a notice under sub-clause (c) may be given by the Company to GIM
only within 90 days after the end of any period or periods of
disability referred to in that sub-clause.
(c) On the termination of this Agreement in any way (whether lawfully or
otherwise) the Executive shall immediately resign all offices held
by him in any Group Company (without prejudice to the rights of any
party arising out of this Agreement or the termination of this
Agreement) and if he fails to do so the Company is irrevocably
authorised to appoint some person in his name and on his behalf to
do all such things and execute all such documents as may be
necessary, or incidental to, to give effect to his resignation.
11. Executive not an employee of the Company nor carrying on separate
-----------------------------------------------------------------
investment business
-------------------
(a) Nothing contained in this Agreement shall be construed or have
effect as constituting any relationship of employer and employee
between the Company
Page 48 of 258 Pages
<PAGE>
and the Executive save that, for the purposes of Clause 8 only, the
Executive agrees to be subject to the same status as the employees
of the Company.
(b) The Executive shall at all times be an employee of GIM.
(c) GIM shall be responsible for the payment of any wages, Employers'
National Insurance and any other contributions required by law to be
paid by it as employer in relation to the Executive and shall make
all appropriate deductions from the Executive's wages in respect of
Income Tax (PAYE) and Employers' National Insurance contributions
and shall indemnify the Company in respect thereof.
(d) Nothing contained in this Agreement shall be construed or have
effect as either the Executive or GIM carrying on investment
business within the meaning of the Financial Services Act 1986, in
particular in relation to the functions described in Clause 3(3) of
this Agreement. The intent of the parties is that GIM will provide
the services of the Executive but neither GIM nor the Executive
shall be treated as providing independent investment management or
advisory services to the Company.
12. Guarantee
---------
(a) The Executive hereby unconditionally guarantees and undertakes to
the Company that GIM shall duly and punctually observe and perform
all the undertakings, covenants and obligations whatsoever of GIM
under this Agreement to the intent that if GIM shall fail for
whatever reason so to observe and perform any of such undertakings,
covenants and obligations the Executive shall be liable to perform
the same in all respects as if the Executive were principally bound
thereby.
(b) No time or other indulgence given by the Company to GIM nor any
neglect failure or forbearance on the part of the Company to enforce
the performance or observance of any of GIM=s undertakings,
covenants and obligations under this Agreement shall in any way
release or affect the liability of the Executive hereunder.
13. Indemnity
---------
The Company shall, insofar as it is permitted by any applicable law,
indemnify GIM and the Executive against any costs, claims or liabilities
incurred as a result of the Executive being a director or an officer of any
Group Company or his being held out to any person as a director or officer
of any such company.
14. General
-------
(a) Neither GIM nor the Executive shall assign or otherwise transfer any
of its or his rights nor sub-contract or otherwise transfer any of
its or his obligations under this Agreement. If the Company
transfers the whole or a substantial part
Page 49 of 258 Pages
<PAGE>
of its undertaking and property to another company as part of a
reconstruction or amalgamation, the Company may by written notice to
GIM transfer all its rights and obligations under this Agreement to
that other company.
(b) This Agreement shall be governed by and construed in accordance with
English law. The parties irrevocably submit to the jurisdiction of
the English courts.
15. Notices
-------
Any notice to be served under this Agreement may, in the case of the
Company be delivered or sent by first class post to the Company at its
registered office for the time being and, and in the case of GIM or the
Executive, may be delivered to the Executive or sent by first class post to
the Executive's usual or last known place of residence. Notices served by
first class post shall be deemed duly served twenty-four hours after
posting and proof of posting shall be proof of delivery.
IN WITNESS of which each of the parties has executed this Agreement on the date
first mentioned on page 1.
Page 50 of 258 Pages
<PAGE>
SCHEDULE
--------
The Performance Fee
-------------------
The Performance Fee referred to in Clause 5(5) of the Agreement shall be
calculated and payable as follows:
1. As further consideration for the performance of the Services, GIM shall be
entitled to receive on 1st July in each year a Performance Fee which shall
be calculated as the amount equivalent to a percentum of Funds (as
calculated below) of the Company as at 31st March each year (an in respect
of any period, to which this Agreement applies, of less or more than twelve
months the Performance Fee shall be decreased or (as the case may be)
increased in proportion to the amount by which the period in question is
less than 365 days or exceeds 365 days, as the case may be).
2. In the event of any change in the financial year end of the Company from
31st January in any year, the period covered by this Schedule shall be
altered so that any current period the subject of this Schedule shall
expire on the date falling two calendar months after the date of the new
financial year end of the Company and so that:
(a) any such new period covered by this Schedule shall always commence on
the date falling two calendar months and one day after the expiry of
the financial period of the Company;
(b) payment pursuant to paragraph 1 above shall be made on the date
falling six calendar months and one day after the new financial year
end date of the Company;
(c) all references to 31st March in this Schedule shall then be deemed to
apply to the date falling two months after the new financial year end
of the Company; and
(d) in the event of any further change in the financial year end of the
Company the provisions of this sentence shall apply "mutatis
mutandis".
3. In addition, if the appointment of GIM under this Agreement terminates
otherwise than on 31st March (or such date on which the relevant twelve
month period ends) GIM shall be entitled to a proportionate part of the fee
which would have been payable to it if the appointment had been effective
during the whole of the twelve month period in question.
4. Such percentum will be calculated from the fraction arising in accordance
with the following formula:
(A - 1) x 0.1
- --
Page 51 of 258 Pages
<PAGE>
(B )
Where
A - Funds at 31st March in any calendar year ("Relevant Year Date")
___________________________________________________________________
Funds at 31st March in the immediately preceding calendar year ("Preceding
Year Date")
the Standard & Poors' rate of exchange of
Composite Index at US$ per (Pounds)1 at the
B - the Relevant Year End Preceding Year Date
--------------------- -------------------
x
the Standard & Poors' rate of exchange of
Composite Index at US$ per (Pounds)1 at the
the Preceding Year Date Relevant Year Date
Provided always that the percentum shall not be less than nil and not
greater than 0.5 per cent.
5. In the event of the issue of new shares, debentures or other loan capital
by the Company for value or in the event of any shares, debentures or other
loan capital of the Company being repaid during the relevant period, item A
shall be adjusted as the Board of Directors may determine and the Company's
auditors shall confirm as fair and reasonable.
6. In the event of any dispute between GIM and the Board of Directors as to
the value to be attributed to the Investments or any of them pursuant to
these provisions the value shall be determined by the auditors of the
Company acting as experts and not as arbitrators and their valuation shall
be final and binding upon the parties and the provisions of paragraph 7
below shall apply to the calculation of the Performance Fee.
7. For the purposes of this Schedule the expression "Funds" shall mean the
amount of the nominal capital of the Company for the time being issued and
paid up or credited as paid up and the amounts standing to the credit of
the consolidated capital and revenue reserves (including without limitation
share premium account, capital redemption reserve fund and profit and loss
account) of the Company and its subsidiaries at the date on which the
calculation is required to be made based on the last audited balance sheet
of the Company but after making such adjustments as may be necessary to
reflect:
(a) realised profits or losses arising in respect of the period from the
date of the last audited balance sheet to the date of the calculation;
Pages 52 of 258 Pages
<PAGE>
(b) the Board of Directors' valuation of all unquoted investments on such
date of calculation in accordance with a statement of value prepared
for and approved by the Board of Directors in accordance with
procedures and on a basis reviewed by the Company's auditors;
(c) the payment of any dividend or the making of any other distribution to
shareholders of the Company.
8. Subject to the provisions of this Schedule the Performance Fee shall be
paid on 1st July in respect of the twelve month period commencing on 1st
April in the preceding calendar year and ending on 31st March in the
current calendar year.
Page 53 of 258 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C><C>
SIGNED by H. Gittes ) /s/ H. Gittes
on behalf of CONSOLIDATED )
VENTURE TRUST PLC )
in the presence of: )
SIGNED by C.H.B. Mills ) /s/ Christopher Mills
on behalf of GROWTH INVESTMENT )
MANAGEMENT LIMITED )
in the presence of: )
SIGNED by CHRISTOPHER HARWOOD ) /s/ Christopher Mills
BERNARD MILLS )
in the presence of: )
</TABLE>
(E13971013)
<PAGE>
ADMINISTRATION, MANAGEMENT
AND CUSTODY AGREEMENT
BETWEEN
NASCIT AND J O HAMBRO & PARTNERS
Page 5 of 258 Pages
<PAGE>
DATED 7th January 1993
----------------------
CONSOLIDATED VENTURE TRUST PLC
and
J O HAMBRO & PARTNERS LIMITED
______________________________________________________________
ADMINISTRATION, MANAGEMENT AND CUSTODY AGREEMENT
______________________________________________________________
Allen & Overy
London
<PAGE>
THIS AGREEMENT is made on 7th January 1993 BETWEEN:
(1) CONSOLIDATED VENTURE TRUST PLC of 11 Devonshire Square, London EC2M 4YR
(the "Company"); and
-------
(2) J O HAMBRO & PARTNERS LIMITED of 30 Queen Anne's Gate, London SW1H 9AL (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 authorised;
"IMRO"
----
means the Investment Management Regulatory Organisation 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 Act 1986 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;
"Secondment Services Agreement"
-----------------------------
means an Agreement made on or about the same date as this agreement between
the Company, Growth Investment Management Limited ("GIM") and Christopher
Harwood Bernard Mills;
"Stock Exchange"
--------------
Page 57 of 258 Pages
<PAGE>
means The International Stock Exchange of the United Kingdom and the
Republic of Ireland Limited;
"subsidiary"
----------
shall have the meaning ascribed thereto by Section 736 of the Companies Act
1985.
(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 12
months' 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
Investments and
Page 58 of 258 Pages
<PAGE>
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 Christopher Mills 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
decision by Christopher Mills 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 30 Queen Anne's Gate, London SW1H 9AL 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
Manager 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;
Page 59 of 258 Pages
<PAGE>
(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 Manager 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.
(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 Manager 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:
Page 60 of 258 Pages
<PAGE>
(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
-------
(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.
(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.
Page 61 of 258 Pages
<PAGE>
(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 in respect of each financial period of
the Company a fee for its services the amount of which shall be equal to
the difference between (a) 1% of Shareholders Funds (as defined in the
Secondment Services Agreement in its original form) of the Company and its
subsidiaries on the last day of the preceding financial period of the
Company and (b) the amount of the Fee payable to GIM pursuant to Clause
5(1) of the Secondment Services Agreement in respect of that financial
period provided that the amount of the fee payable to the Manager pursuant
to this sub-clause in respect of any financial period of the Company shall
not be less than (Pounds) 75,000.
(2) In addition, the Company shall pay to the Manager a transaction fee of
(Pounds) 200 per transaction effected for the Portfolio by the Manager, as
evidenced by a contract note.
(3) 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.
(4) The fee payable pursuant to sub-clause (1) of this Clause 8 shall be paid
to the Manager by the Company (unless otherwise agreed) in quarterly
instalments in arrears on 30th April, 31st July, 31st October and 31st
January in each year (in this sub-clause referred to as "Payment Dates")
but if the amount of the fee in respect of any financial period is not
ascertained by 30th April in that financial period, the Company shall pay
to the Manager (Pounds) 18,750 on each of the Payment Dates and upon the
amount of the fee being ascertained the Company shall pay any further
amount due to the Manager in equal instalments on the Payment Dates
provided that any instalment in respect of a Payment Date that has already
passed shall be immediately payable to the Manager (and a pro rata fee
shall be payable for any part of a quarter for which this Agreement is in
force).
(5) 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 reorganisation, 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.
(6) 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
Page 62 of 258 Pages
<PAGE>
aforesaid, to charge any such amount to the Portfolio subject to notifying
the Company in writing of the amount thereof promptly thereafter.
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 product 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 party 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 Christopher Mills consults with the Manager in accordance with Clause
3(2) or if the Manager has
Page 63 of 258 Pages
<PAGE>
objected to an investment proposed by Christopher Mills 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
endeavours 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 of 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 64 of 258 Pages
<PAGE>
(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.
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 H. Gittes )
) /s/ H. Gittes
on behalf of CONSOLIDATED )
VENTURE TRUST PLC in the )
presence of: )
SINGED by R.C.O. Hellyer )
) /s/ R.C.O. Hellyer
on behalf of J O HAMBRO & )
PARTNERS LIMITED )
in the presence of: )
Page 65 of 258 Pages
<PAGE>
ADMINISTRATION, MANAGEMENT
AND CUSTODY AGREEMENT
BETWEEN
AMERICAN OPPORTUNITY TRUST
AND J O HAMBRO & PARTNERS
Page 66 of 258 Pages
<PAGE>
Dated 7th January 1993
----------------------
LEVERAGED OPPORTUNITY TRUST PLC
and
J O HAMBRO & PARTNERS LIMITED
ADMINISTRATION, MANAGEMENT AND CUSTODY AGREEMENT
Allen & Overy
London
Page 67 of 258 Pages
<PAGE>
THIS AGREEMENT is made on 7th January 1993 BETWEEN:
<TABLE>
<CAPTION>
<C> <S>
(1) LEVERAGED OPPORTUNITY TRUST PLC of 11 Devonshire
Square, London EC2M 4YR (the "Company"); and
-------
(2) J O HAMBRO & PARTNERS LIMITED of 30 Queen Anne's Gate,
London SW1H 9AL (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 Act 1986 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;
</TABLE>
Page 68 of 258 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
"subsidiary"
----------
shall have the meaning ascribed thereto by Section 736
of the Companies Act 1985.
(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:
</TABLE>
Page 69 of 258 Pages
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
(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 Christopher Mills 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 Christopher Mills 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 30 Queen Anne's Gate, London
SW1H 9AL or such other office as may be agreed by
the Company with the Manager and such office
</TABLE>
Page 70 of 258 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
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:
</TABLE>
Page 71 of 258 Pages
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
(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;
</TABLE>
Page 72 of 258 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
(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.
</TABLE>
Page 73 of 258 Pages
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
(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.
</TABLE>
Page 74 of 258 Pages
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
(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
</TABLE>
Page 75 of 258 Pages
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
(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
Christopher Mills consults with the Manager in
accordance with Clause 3(2) or if the Manager has
objected to an investment proposed by Christopher Mills
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
</TABLE>
Page 76 of 258 Pages
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
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.
</TABLE>
Page 77 of 258 Pages
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
(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.
</TABLE>
Page 78 of 258 Pages
<PAGE>
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 J.J. Nelson )
) /s/ James J. Nelson
on behalf of )
LEVERAGED OPPORTUNITY TRUST PLC )
in the presence of: )
SIGNED by R.C.O. Hellyer )
) /s/ R.C.O. Hellyer
on behalf of )
J O HAMBRO & PARTNERS LIMITED )
in the presence of: )
Page 79 of 258 Pages
<PAGE>
CLIENT AGREEMENT
SEAWAY LIMITED
Page 80 of 258 Pages
<PAGE>
J O HAMBRO & PARTNERS LIMITED
-----------------------------
Regulated by IMRO in the conduct of Investment Business
THIS INVESTMENT MANAGEMENT AGREEMENT is made the 29th day of Feb., 1996.
BETWEEN:
(1) J O HAMBRO & 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 10 Park
Place, London SW1A 1LP; and
(2) SEAWAY LIMITED (portfolio name)
(hereafter known as the "Client")
of
ORBIS HOUSE, PO BOX 20, 20 NEW STREET,
---------------------------------------------------------------------
ST PETER PORT, GUERNSEY, CHANNEL ISLANDS
----------------------------------------
(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 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 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 81 of 258 Pages
<PAGE>
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 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.
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.
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<PAGE>
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.
(1) 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.
(2) CAPITAL ACCOUNT
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<PAGE>
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.
(3) 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.
(4) 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.
(e) 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 realize 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
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<PAGE>
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
Act 1986 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 change 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 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
Page 85 of 258 Pages
<PAGE>
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 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 l4th 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
recognizes that JOHP may gain a commission benefit from dealing in a bulk
purchase or sale on behalf of JOHP's 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
Page 86 of 258 Pages
<PAGE>
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
affected 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:
(1) any investment decision taken and acted upon in accordance with the terms
of this Agreement; or
(2) 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
(3) 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
(4) 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.
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.
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<PAGE>
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 Act 1986 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.
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:
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<PAGE>
(1) 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;
(2) any additional expenses which JOHP necessarily incurs in terminating this
Agreement; and
(3) any losses necessarily realized 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
authorized 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.
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.
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<PAGE>
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 authorized 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 service 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 this
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.
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<PAGE>
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
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.
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PART III - Risk Warnings and Risk Disclosure Statement
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 favorable or unfavorable 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, unfavorable as well as favorable, 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 authorize 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.
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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.
The rules limit the period in which he may stabilise, fix the price at which he
may stabilize (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 stabilized 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".
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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
<TABLE>
<CAPTION>
EQUITIES GILTS/FIXED INTEREST
<S> <C>
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
</TABLE>
(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 rates where applicable
Page 94 of 258 Pages
<PAGE>
FOR J O HAMBRO & PARTNERS LIMITED
20/1/96 Date /s/ Christopher Mills
- ----------------------------------------- -------------------------------
FOR THE CLIENT* For and on behalf of
SEAWAY LIMITED
29th Feb., 1996 Date /s/ A.J. Kanoo
- ----------------------------------------- -------------------------------
Director
/s/
- ----------------------------------------- -------------------------------
Regulus Limited
Secretary
- -----------------------------------------
*The Client should sign here as follows. [Seal of SEAWAY LIMITED]
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 authorized signature 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 authorizing 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 or 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 95 of 258 Pages
<PAGE>
CLIENT AGREEMENT
PEAK INVESTMENTS
Page 96 of 258 Pages
<PAGE>
JO HAMBRO & 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) JO HAMBRO & 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 10 Park Place,
London SW1A 1LP; and
(2) Peak Investments (portfolio name)
-------------------------------------------------------
(hereafter known as the "Client")
of 3 Chester Street, London SWIX 7BB
----------------------------------------------------
(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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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 Act 1986 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
<PAGE>
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
<PAGE>
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
<PAGE>
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 Act 1986 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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<TABLE>
<CAPTION>
EQUITIES GILTS/FIXED INTEREST
<S> <C>
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
</TABLE>
(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
<PAGE>
FOR JO HAMBRO & PARTNERS LIMITED
23rd Jan. 1996 /s/ J.D. Hambro
---------------------------
FOR THE CLIENT*
25 Jan. 1996 Date
- ------------------------------------------ ---------------------------
/s/Barbara Thomas
- ------------------------------------------
/s/Allen Thomas
- ------------------------------------------
*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
<PAGE>
CLIENT AGREEMENT
LORD STEVENS OF LUDGATE
PENSION FUND
Page 112 of 258 Pages
<PAGE>
J O HAMBRO & PARTNERS LIMITED
-----------------------------
Regulated by IMRO in the conduct of Investment Business
THIS INVESTMENT MANAGEMENT AGREEMENT is made the day of
19
BETWEEN:
(1) J O HAMBRO & PARTNERS LIMITED ("JOHP") a member of the Investment
Management Regulatory Organisation Limited ("IMRO") and regulated in the
conduct of investment business by it, whose registered office is at 10 Park
Place, London SW1A, 1LP; and
(2) Lord Stevens of Ludgate Pension Scheme
--------------------------------------------------------- (portfolio name)
(hereafter known as the "Client")
of
c/o Provident Life Association Ltd., Provident Way,
--------------------------------------------------------
Basingstoke, Hamps RG21 2SZ
-------------------------------------------------------------- (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 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 from time to time by the Client or by the Client's
duly authorised 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 113 of 258 Pages
<PAGE>
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 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.
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 114 of 258 Pages
<PAGE>
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 115 of 258 Pages
<PAGE>
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 realize 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 116 of 258 Pages
<PAGE>
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 Act 1986 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 117 of 258 Pages
<PAGE>
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 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 to 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 will all expenses including
stamp duties, stamp duty reserve tax and VAT thereon (if applicable). The
Client recognizes that JOHP may gain a commission benefit from dealing in a
bulk purchase or sale on behalf of JOHP's
Page 118 of 258 Pages
<PAGE>
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 in this Agreement.
Page 119 of 258 Pages
<PAGE>
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 Act 1986 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 my 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 120 of 258 Pages
<PAGE>
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 realized 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
authorized 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 121 of 258 Pages
<PAGE>
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 122 of 258 Pages
<PAGE>
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 investment 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
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 any investment denominated in a foreign currency, a movement in exchange
rates may have an effect which may be either favorable or unfavorable on the
investment, which effect may be separate from the gain or loss otherwise
experienced on such investment.
Page 123 of 258 Pages
<PAGE>
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, unfavorable as well as favorable, 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 authorize us generally to effect
transaction in such securities on your behalf without further reference to you
or whether you wish to be consulted before any particular transaction in
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", normal 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.
The rules limit the period in which he may stabilise, fix the price at which he
may stabilize (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.
Page 124 of 258 Pages
<PAGE>
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 interest in the new issue or
interested in purchasing at the price at which transactions are taking place".
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
<TABLE>
<CAPTION>
EQUITIES GILTS/FIXED INTEREST
<S> <C>
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
</TABLE>
(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 125 of 258 Pages
<PAGE>
FOR J O HAMBRO & PARTNERS LIMITED
23rd Jan. 1996 Date /s/ J.D. Hambro
- ------------------------------------- -------------------------------------
FOR THE CLIENT*
9/2/96 Date
- ------------------------------------- -------------------------------------
/s/
- -------------------------------------
/s/
- -------------------------------------
*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 authorizing the signature of the
Agreement. Pleas 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 JOHP have a copy
of the Trust Deed.
A Partnership.
All the partners should sign and insert the date.
Page 126 of 258 Pages
<PAGE>
[ILB]
Page 127 of 258 Pages
<PAGE>
CLIENT AGREEMENT
JAN GILBERT CHARITABLE REMAINDER TRUST
Page 128 of 258 Pages
<PAGE>
JO HAMBRO & PARTNERS LIMITED
----------------------------
Regulated by IMRO in the conduct of Investment Business
THIS INVESTMENT MANAGEMENT AGREEMENT is made the 18th day of September 1996
BETWEEN:
(1) JO HAMBRO & 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 10 Park Place,
London SW1A 1LP; and
(2) Jan Gilbert Charitable Remainder Trust (portfolio name)
----------------------------------------------------------
(hereafter known as the "Client")
of c/o Dave Webster, 57 Shadow Mountain Drive
------------------------------------------------------------------------
Sedona, Arizona 86336 USA
---------------------------------------------------------------------------
(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 129 of 258 Pages
<PAGE>
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 130 of 258 Pages
<PAGE>
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 131 of 258 Pages
<PAGE>
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 132 of 258 Pages
<PAGE>
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 Act 1986 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 133 of 258 Pages
<PAGE>
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 134 of 258 Pages
<PAGE>
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 135 of 258 Pages
<PAGE>
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 Act 1986 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 136 of 258 Pages
<PAGE>
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 137 of 258 Pages
<PAGE>
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 138 of 258 Pages
<PAGE>
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 139 of 258 Pages
<PAGE>
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
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<PAGE>
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".
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<PAGE>
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
(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
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<PAGE>
FOR JO HAMBRO & PARTNERS LIMITED
/s/ Christopher Mills 9/9/96
- ---------------------------------------- -----------------------------
FOR THE CLIENT*
/s/ [signature appears here] 18/9/96
- ---------------------------------------- -----------------------------
Trustee for the Jan G. Gilbert
Charitable Remainder Trust
- ----------------------------------------
- ----------------------------------------
*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 143 of 258 Pages
<PAGE>
CLIENT AGREEMENT
THE SUPERANNUATION FUND OF WIGAN
RICHARDSON INTERNATIONAL LIMITED
Page 144 of 258 Pages
<PAGE>
JO HAMBRO & PARTNERS LIMITED
----------------------------
Regulated by IMRO in the conduct of Investment Business
THIS INVESTMENT MANAGEMENT AGREEMENT is made the day of
19
BETWEEN:
(1) JO HAMBRO & 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 10 Park Place,
London SW1A 1LP; and
(2) The Superannuation Fund of Wigan Richardson International Limited
-----------------------------------------------------------(portfolio name)
(hereafter known as the "Client")
of National Westminster Bank Chambers, Church Road
--------------------------------------------------------------------
Paddock Wood, Tonbridge, Kent, TN12 6EP
-----------------------------------------------------------------------
(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.
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<PAGE>
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.
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<PAGE>
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
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<PAGE>
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
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<PAGE>
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 Act 1986 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
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<PAGE>
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 150 of 258 Pages
<PAGE>
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.
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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 Act 1986 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.
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<PAGE>
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.
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<PAGE>
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.
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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 155 of 258 Pages
<PAGE>
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 156 of 258 Pages
<PAGE>
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 157 of 258 Pages
<PAGE>
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
<TABLE>
<CAPTION>
EQUITIES GILTS/FIXED INTEREST
<S> <C>
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
</TABLE>
(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 158 of 258 Pages
<PAGE>
FOR JO HAMBRO & PARTNERS LIMITED
26th Feb. 1997 Date /s/ James Hambro
- ------------------------------------- -------------------------------------
FOR THE CLIENT*
18 Feb. 1997 /s/ M. Wigan
- ------------------------------------- -------------------------------------
/s/ L.G. Kapellar /s/ K.K. Watkiss
- ------------------------------------- -------------------------------------
/s/ C.J. Barker
- -------------------------------------
*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 159 of 258 Pages
<PAGE>
CLIENT AGREEMENT
CITY OF JOY LIMITED
Page 160 of 258 Pages
<PAGE>
JO HAMBRO CAPITAL MANAGEMENT LIMITED
------------------------------------
Regulated by IMRO in the conduct of Investment Business
DISCRETIONARY CLIENT AGREEMENT
THIS INVESTMENT MANAGEMENT AGREEMENT is made the 25th day of February 1998
BETWEEN:
(1) JO HAMBRO CAPITAL MANAGEMENT LIMITED ("JOHCMP") 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 10 Park
Place, London SW1A 1LP; and
(2) City of Joy Ltd. (portfolio name)
(hereafter known as the "Client")
of Merrill Lynch Bank and Trust Company (Cayman) Ltd.
P.O. Box 1164 British American Building, Phase III, 5th Floor, Dr. Roy's
Drive, George Town, Grand Cayman, British West Indies (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 JOHCM 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 JOHCM (the
"Portfolio") and JOHCM hereby agrees to manage and administer the
Portfolio. The appointment will commence on the date on which this
Agreement is delivered to JOHCM by the Client having been signed first by
the Client then by JOHCM. The assets comprising the Portfolio and their
opening value are set out in Schedule 1.
MANAGEMENT OF INVESTMENTS
2. JOHCM 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 JOHCM 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
Page 161 of 258 Pages
<PAGE>
JOHCM). The Client's attention is specifically drawn to the
warnings set out in Part III of Schedule II.
3. JOHCM 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 JOHCM 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
JOHCM 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 JOHCM to a third party except as otherwise agreed between the
Client and JOHCM in writing.
6. JOHCM 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 JOHCM's duties hereunder to an extent which
is not material in the context of the Portfolio taken as a whole. JOHCM
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. JOHCM may commit the Client to underwrite any issue or offer for sale of
securities without the Client's prior written consent.
8. JOHCM may act as principal in any transaction for the Client provided that
JOHCM shall secure for the Client best execution of such transaction.
9. Subject to the IMRO Rules, JOHCM may, without prior reference to the
Client, enter into a transaction on behalf of more than one client
collectively.
10. JOHCM 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, JOHCM shall not undertake any transactions
on the Client's behalf in which JOHCM has directly or indirectly a material
interest or have any relationship with another party which may involve a
conflict with JOHCM's duty to the Client unless that interest or
relationship is disclosed in writing to the Client.
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<PAGE>
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 JOHCM during the preceding twelve months.
13. The Client understands that JOHCM's directors or staff may from time to
time hold shares or securities including holdings that may be in the
Portfolio, and that JOHCM'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 JOHCM 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 JOHCM's
management (or in a fund, company, trust or Collective Investment Scheme
connected with JOHCM) if JOHCM 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 JOHCM 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 JOHCM.
(b) In those cases where the Client is situated overseas or where the
Client so requests by notice in writing to JOHCM, registerable
investments will be registered in the name of an Eligible Custodian
situated outside the United Kingdom and nominated by JOHCM.
(c) All documents of title (including those in bearer form) will be
retained in the custody of an Eligible Custodian nominated by JOHCM
and situated in the United Kingdom or overseas as applicable.
(d) None of the Eligible Custodians as aforesaid shall be Associates of
JOHCM. However, the Client's registerable investments may at any time
be registered in the name of a nominee company which is an Associate
of JOHCM and Client's documents of title may be held by that Associate
at any time after JOHCM 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 JOHCM.
(a) INVESTMENT ACCOUNT
The Client's investments will be held in this account. Subject to
paragraphs 5 and 6, JOHCM shall not lend the Client's investments to
any third party and shall
Page 163 of 258 Pages
<PAGE>
not borrow money on the Client's behalf against the security of the
Client's investments.
(b) CAPITAL ACCOUNT
All uninvested cash will be held in this account by a bank chosen by
JOHCM. 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 JOHCM
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 JOHCM in writing that the Client wishes cash in the Portfolio
to be held outside the United Kingdom, JOHCM 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 JOHCM 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. JOHCM 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
Page 164 of 258 Pages
<PAGE>
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
19. In the interests of proper administration of the Portfolio and for related
investment purposes JOHCM, 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 Act 1986 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. JOHCM 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 JOHCM or to which JOHCM has access relating to the
transactions effected by JOHCM on the Client's behalf and those records
will be maintained by JOHCM or JOHCM 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 JOHCM in writing of any changes of address, and that
JOHCM will not be responsible for any consequences which may arise from
failure to do so.
REVIEWS AND VALUATIONS
24. JOHCM 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 JOHCM and the Client. Such reviews
shall be prepared as at such half yearly or other dates as shall be agreed
between JOHCM and the Client from time to time (each such date being
referred to as a "Valuation Date"), and JOHCM 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 JOHCM
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<PAGE>
(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 JOHCM 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 JOHCM or such other
person selected by JOHCM) as shall in JOHCM's opinion be fair.
26. JOHCM 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. JOHCM 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. JOHCM 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 JOHCM in respect of the period
beginning with first receipt by JOHCM 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 JOHCM on the 14th day after despatch
of such invoice.
(d) In addition the Client shall reimburse JOHCM for any expenses or
liabilities which it may incur in properly carrying out its duties
hereunder.
Pages 166 of 258 Pages
<PAGE>
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 JOHCM may gain a commission benefit from dealing in
a bulk purchase or sale on behalf of JOHCM's clients, one of whom may be
the Client, or from return commissions which benefit JOHCM shall be
entitled to retain. JOHCM 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 JOHCM in
connection with transactions effected by JOHCM 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
JOHCM undertakes to secure for the Client best execution of all
transactions effected with or through a party from whom JOHCM receives such
benefits and commissions, disregarding any benefit which the Client might
obtain directly or indirectly as a result of such arrangements.
31. JOHCM 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. JOHCM will indemnify the Client in respect of any loss incurred as a result
of negligence, wilful default or fraud by JOHCM or any of its employees.
Subject to the above, JOHCM 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 JOHCM; 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 JOHCM or any breach of JOHCM of any term of this Agreement.
Page 167 of 258 Pages
<PAGE>
33. The Client agrees to indemnify and keep indemnified JOHCM from and against
all demands, claims, liabilities, losses, damages, costs and expenses
whatsoever incurred by JOHCM 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.
34. Where the Client is a joint account (whether or not a trust account) JOHCM
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. JOHCM has effected insurance to provide for the protection of the Client
against losses arising from any negligence of JOHCM or any dishonesty of
employees of JOHCM.
36. Under Section 54 of the Financial Services Act 1986 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 JOHCM's
inability to meet any liabilities to the Client. JOHCM 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. JOHCM 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 JOHCM's liability to the Client for all matters so
delegated shall not be affected thereby. JOHCM shall give to the Client
written notice of any delegation of a function which involves the exercise
of its discretionary investment management powers.
38. JOHCM may employ agents (including Associates) to perform any
administrative, dealing, custodial and ancillary services required to
enable JOHCM to perform its services under this Agreement. JOHCM 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 JOHCM 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, JOHCM 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 JOHCM, JOHCM
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<PAGE>
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.
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 JOHCM 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 JOHCM 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 JOHCM's
appointment; but JOHCM 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 JOHCM.
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 JOHCM, 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
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<PAGE>
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.
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 JOHCM verbally or in writing about any
service JOHCM has rendered to the Client under this Agreement the complaint
shall immediately be referred to JOHCM'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 JOHCM.
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 170 of 258 Pages
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SCHEDULE I
THE PORTFOLIO
Valuation and composition of Portfolio
(see attached letter/opening valuation - where applicable)
SCHEDULE II
PART I - Investment Policy, Benchmarks, Guidelines and Restrictions
Investment Policy, Benchmarks, Guidelines and Restrictions are to be recorded on
the accompanying Investment Strategy Schedule which forms a part of the Client
Questionnaire. JOHCM may from time to time require this form to be updated in
order that the Client's requirements are accurately recorded.
PART II - Risk Warnings, Risk Disclosure Statement and
Soft Commission Disclosure Statement
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 JOHCM 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.
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<PAGE>
"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 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".
Soft Commission
JOHCM has entered into agreements with each of Southcoast Capital Corporation
and Wheat First Butcher Singer (US brokers), whereby they have agreed to pay the
costs of JOHCM's on-line Reuters and First Call computerised analysis services.
These arrangements are known as soft commission agreements.
It is JOHCM's policy to enter into soft commission agreements where it believes
that such arrangements will benefit its clients. The existence of these soft
commission agreements does not deflect from JOHCM's obligation to provide best
execution in respect of any transaction JOHCM executes on behalf of it Clients.
PART III - Application of Client Money Regulations to Offshore Accounts
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Any uninvested cash in the Client's Portfolio not invested in US Treasury Bills
will be held in designated client bank accounts with Bank of Scotland (Isle of
Man) Ltd. The Bank of Scotland (Isle of Man) Ltd. has acknowledged in writing
that (i) all money held to the credit of such accounts is held by JOHCM as
trustee, and that it is not entitled to combine the accounts with any other
account or to exercise any right of set-off or counterclaim against money in
those accounts in respect of any sum owed on any of JOHCM's other accounts, (ii)
that interest earned on these accounts shall be accredited to such accounts or
to accounts of that type, and (iii) that the title of these accounts
sufficiently distinguishes those accounts from any accounts containing money
belonging to JOHCM, and are in the form requested by JOHCM.
By signing and returning this contract the Client agrees that it is happy for
its uninvested cash to be held in accounts with the Bank of Scotland (Isle of
Man) Ltd. on the terms set out in this agreement.
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SCHEDULE III
Scale Rates and Charges
MANAGEMENT FEES
To be levied six monthly
DISCRETIONARY PORTFOLIO SERVICE
0.3%
COMMISSION RATES
EQUITIES GILTS/FIXED INTEREST
0.50% 0.5% on transactions up to $20,000
0.25% on the next $80,000
0.125% thereafter
(Minimum commissions (Pounds)30 per contract)
All transactions are subject to a handling charge of $20 per transaction
in the case of UK registered securities
($30 for non-UK registered securities)
VALUE ADDED TAX
This will be charged on the fees shown above at
the appropriate rate where applicable
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<PAGE>
FOR JO HAMBRO CAPITAL MANAGEMENT
25/2/98 /s/ R. C. O. Hellyer
- --------------------------------- ------------------------------------
(Date)
FOR THE CLIENT*
Authorised Signatories for and on
behalf of Fiduciary Services Limited
as sole director of
City of Joy Ltd.
3/2/98 /s/ signature appears here
- --------------------------------- ------------------------------------
(Date)
*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 JOHCM have a certified true copy of a Board resolution confirming the
appointment of JOHCM 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 JOHCM have a copy
of the Trust Deed.
A Partnership.
All the partners should sign and insert the date.
Page 175 of 258 Pages
<PAGE>
CLIENT AGREEMENT
LABRADOR TRUST
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<PAGE>
JO HAMBRO CAPITAL MANAGEMENT LIMITED
------------------------------------
Regulated by IMRO in the conduct of Investment Business
DISCRETIONARY CLIENT AGREEMENT
THIS INVESTMENT MANAGEMENT AGREEMENT is made the 19th day of December 1997
BETWEEN:
(1) JO HAMBRO CAPITAL MANAGEMENT LIMITED ("JOHCMP") 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 10 Park
Place, London SW1A 1LP; and
(2) Labrador
------------------------------------------------------(portfolio name)
(hereafter known as the "Client")
of
----------------------------------------------------------------------
----------------------------------------------------------------------
(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 JOHCM 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 JOHCM (the
"Portfolio") and JOHCM hereby agrees to manage and administer the
Portfolio. The appointment will commence on the date on which this
Agreement is delivered to JOHCM by the Client having been signed first by
the Client then by JOHCM. The assets comprising the Portfolio and their
opening value are set out in Schedule 1.
MANAGEMENT OF INVESTMENTS
2. JOHCM 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 JOHCM 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 JOHCM). The Client's attention is specifically drawn to the
warnings set out in Part III of Schedule II.
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<PAGE>
3. JOHCM 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 JOHCM 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
JOHCM 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 JOHCM to a third party except as otherwise agreed between the
Client and JOHCM in writing.
6. JOHCM 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 JOHCM's duties hereunder to an extent which
is not material in the context of the Portfolio taken as a whole. JOHCM
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. JOHCM may commit the Client to underwrite any issue or offer for sale of
securities without the Client's prior written consent.
8. JOHCM may act as principal in any transaction for the Client provided that
JOHCM shall secure for the Client best execution of such transaction.
9. Subject to the IMRO Rules, JOHCM may, without prior reference to the
Client, enter into a transaction on behalf of more than one client
collectively.
10. JOHCM 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, JOHCM shall not undertake any transactions
on the Client's behalf in which JOHCM has directly or indirectly a material
interest or have any relationship with another party which may involve a
conflict with JOHCM's duty to the Client unless that interest or
relationship is disclosed in writing to the Client.
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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 JOHCM during the preceding twelve months.
13. The Client understands that JOHCM's directors or staff may from time to
time hold shares or securities including holdings that may be in the
Portfolio, and that JOHCM'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 JOHCM 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 JOHCM's
management (or in a fund, company, trust or Collective Investment Scheme
connected with JOHCM) if JOHCM 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 JOHCM 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 JOHCM.
(b) In those cases where the Client is situated overseas or where the
Client so requests by notice in writing to JOHCM, registerable
investments will be registered in the name of an Eligible Custodian
situated outside the United Kingdom and nominated by JOHCM.
(c) All documents of title (including those in bearer form) will be
retained in the custody of an Eligible Custodian nominated by JOHCM
and situated in the United Kingdom or overseas as applicable.
(d) None of the Eligible Custodians as aforesaid shall be Associates of
JOHCM. However, the Client's registerable investments may at any time
be registered in the name of a nominee company which is an Associate
of JOHCM and Client's documents of title may be held by that Associate
at any time after JOHCM 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 JOHCM.
(a) INVESTMENT ACCOUNT
The Client's investments will be held in this account. Subject to
paragraphs 5 and 6, JOHCM shall not lend the Client's investments to
any third party and
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<PAGE>
shall not borrow money on the Client's behalf against the security of
the Client's investments.
(b) CAPITAL ACCOUNT
All uninvested cash will be held in this account by a bank chosen by
JOHCM. 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 JOHCM
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 JOHCM in writing that the Client wishes cash in the Portfolio
to be held outside the United Kingdom, JOHCM 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 JOHCM 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. JOHCM 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
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<PAGE>
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
19. In the interests of proper administration of the Portfolio and for related
investment purposes JOHCM, 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 Act 1986 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. JOHCM 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 JOHCM or to which JOHCM has access relating to the
transactions effected by JOHCM on the Client's behalf and those records
will be maintained by JOHCM or JOHCM 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 JOHCM in writing of any changes of address, and that
JOHCM will not be responsible for any consequences which may arise from
failure to do so.
REVIEWS AND VALUATIONS
24. JOHCM 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 JOHCM and the Client. Such reviews
shall be prepared as at such half yearly or other dates as shall be agreed
between JOHCM and the Client from time to time (each such date being
referred to as a "Valuation Date"), and JOHCM 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 JOHCM
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<PAGE>
(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 JOHCM 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 JOHCM or such other
person selected by JOHCM) as shall in JOHCM's opinion be fair.
26. JOHCM 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. JOHCM 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. JOHCM 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 JOHCM in respect of the period
beginning with first receipt by JOHCM 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 JOHCM on the 14th day after despatch
of such invoice.
(d) In addition the Client shall reimburse JOHCM for any expenses or
liabilities which it may incur in properly carrying out its duties
hereunder.
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<PAGE>
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 JOHCM may gain a commission benefit from dealing in
a bulk purchase or sale on behalf of JOHCM's clients, one of whom may be
the Client, or from return commissions which benefit JOHCM shall be
entitled to retain. JOHCM 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 JOHCM in
connection with transactions effected by JOHCM 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
JOHCM undertakes to secure for the Client best execution of all
transactions effected with or through a party from whom JOHCM receives such
benefits and commissions, disregarding any benefit which the Client might
obtain directly or indirectly as a result of such arrangements.
31. JOHCM 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. JOHCM will indemnify the Client in respect of any loss incurred as a result
of negligence, wilful default or fraud by JOHCM or any of its employees.
Subject to the above, JOHCM 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 JOHCM; 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 JOHCM or any breach of JOHCM of any term of this Agreement.
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<PAGE>
33. The Client agrees to indemnify and keep indemnified JOHCM from and against
all demands, claims, liabilities, losses, damages, costs and expenses
whatsoever incurred by JOHCM 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.
34. Where the Client is a joint account (whether or not a trust account) JOHCM
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. JOHCM has effected insurance to provide for the protection of the Client
against losses arising from any negligence of JOHCM or any dishonesty of
employees of JOHCM.
36. Under Section 54 of the Financial Services Act 1986 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 JOHCM's
inability to meet any liabilities to the Client. JOHCM 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. JOHCM 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 JOHCM's liability to the Client for all matters so
delegated shall not be affected thereby. JOHCM shall give to the Client
written notice of any delegation of a function which involves the exercise
of its discretionary investment management powers.
38. JOHCM may employ agents (including Associates) to perform any
administrative, dealing, custodial and ancillary services required to
enable JOHCM to perform its services under this Agreement. JOHCM
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 JOHCM 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, JOHCM 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 JOHCM, JOHCM
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<PAGE>
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.
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 JOHCM 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 JOHCM 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 JOHCM's
appointment; but JOHCM 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 JOHCM.
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 JOHCM, 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
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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.
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 JOHCM verbally or in writing about any
service JOHCM has rendered to the Client under this Agreement the complaint
shall immediately be referred to JOHCM'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 JOHCM.
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 186 of 258 Pages
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SCHEDULE I
THE PORTFOLIO
Valuation and composition of Portfolio
(see attached letter/opening valuation - where applicable)
SCHEDULE II
PART I - Investment Policy, Benchmarks, Guidelines and Restrictions
Investment Policy, Benchmarks, Guidelines and Restrictions are to be recorded on
the accompanying Investment Strategy Schedule which forms a part of the Client
Questionnaire. JOHCM may from time to time require this form to be updated in
order that the Client's requirements are accurately recorded.
PART II - Risk Warnings, Risk Disclosure Statement and
Soft Commission Disclosure Statement
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 JOHCM 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.
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<PAGE>
"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 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".
Soft Commission
JOHCM has entered into agreements with each of Southcoast Capital Corporation
and Wheat First Butcher Singer (US brokers), whereby they have agreed to pay the
costs of JOHCM's on-line Reuters and First Call computerised analysis services.
These arrangements are known as soft commission agreements.
It is JOHCM's policy to enter into soft commission agreements where it believes
that such arrangements will benefit its clients. The existence of these soft
commission agreements does not deflect from JOHCM's obligation to provide best
execution in respect of any transaction JOHCM executes on behalf of it Clients.
PART III - Application of Client Money Regulations to Offshore Accounts
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Any uninvested cash in the Client's Portfolio not invested in US Treasury Bills
will be held in designated client bank accounts with Bank of Scotland (Isle of
Man) Ltd. The Bank of Scotland (Isle of Man) Ltd. has acknowledged in writing
that (i) all money held to the credit of such accounts is held by JOHCM as
trustee, and that it is not entitled to combine the accounts with any other
account or to exercise any right of set-off or counterclaim against money in
those accounts in respect of any sum owed on any of JOHCM's other accounts, (ii)
that interest earned on these accounts shall be accredited to such accounts or
to accounts of that type, and (iii) that the title of these accounts
sufficiently distinguishes those accounts from any accounts containing money
belonging to JOHCM, and are in the form requested by JOHCM.
By signing and returning this contract the Client agrees that it is happy for
its uninvested cash to be held in accounts with the Bank of Scotland (Isle of
Man) Ltd. on the terms set out in this agreement.
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SCHEDULE III
Scale Rates and Charges
MANAGEMENT FEES
To be levied six monthly
DISCRETIONARY PORTFOLIO SERVICE
0.5%
COMMISSION RATES
EQUITIES GILTS/FIXED INTEREST
1.25% on transactions up to (Pounds)10,000 0.5% on transactions up to
0.50% thereafter (Pounds)10,000
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
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FOR JO HAMBRO CAPITAL MANAGEMENT
19th December 1997 /s/ R. C. O. Hellyer
- ----------------------------------------------- --------------------------
(Date)
FOR THE CLIENT*
19th December 1997 /s/ signature appears here
- ----------------------------------------------- --------------------------
(Date)
*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 JOHCM have a certified true copy of a Board resolution confirming the
appointment of JOHCM 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 JOHCM have a copy
of the Trust Deed.
A Partnership.
All the partners should sign and insert the date.
Page 191 of 258 Pages
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CLIENT AGREEMENT
R. C. BONSOR WILL TRUST
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<PAGE>
J.O HAMBRO INVESTMENT MANAGEMENT
--------------------------------
THIS INVESTMENT MANAGEMENT AGREEMENT is made BETWEEN,
(1) J O HAMBRO INVESTMENT MANAGEMENT LIMITED ("JOHIM") a member of the
Investment Management Regulatory Organization Limited ("IMRO") whose
registered office is at 30 Queen Anne's Gate London SW1H 9AL; and
(2) R.C. Bonsor Will Trust (the "Client") of c/o Morley and Scott, Lynton
House, 7-12 Tanstock Square, London WCIH 9LT
WHEREBY IT IS AGREED as follows:
56. APPOINTMENT
The Client hereby appoints JOHIM to act as investment manager, subject to the
terms and conditions hereof in relation to the Client's investment 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.
57. AUTHORIZED BUSINESS
The business which JOHIM is authorized 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.
58. 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 authorized 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.
(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
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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 interest to do so.
The Client hereby forfeits its right under Section 56 of the Financial
Services Act 1986 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) The Client's United Kingdom in vestments will be registered in the name
of a nominee company of Bank of Scotland of P.O. Box 30, 55 Old Broad
Street, London EC2P 2HL or of another clearing bank int he United Kingdom
(the "Bank") or, if in bearer form, will be held by the Bank for the
account of JOHIM clients. Unless otherwise advised this nominee company
will be Bank of Scotland London Nominees Limited. The Client's overseas
investments will be registered in the name of one of the Bank's
correspondents or agents or, if in bearer form will be held by the Bank,
its correspondents or agents for the account of JOHIM clients. Documents
of title will be retained in the custody of the Bank, its correspondents or
agents, which will hold them to the order of the Bank for the account of
JOHIM clients. The nominee company, correspondents and agents referred to
above are not companies associated with JOHIM, JOHIM may register the
Client's investments in the name of a company, correspondent or agent
associated with JOHIM at any time after given prior written notice to the
Client.
(g) The Client's investments or documents of title or certificates evidencing
title to investments or any other property belong to the Client will not be
lent by JOHIM to a third party. Money will not be borrowed 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 adviser without additional
charge.
(j) The Client understands that JOHIM's directors or staff may from time to
time hold shares of securities including holdings that may be in the
Portfolio.
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<PAGE>
(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
stabilized.
59. RESTRICTIONS
(a) 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.
(b) JOHIM shall not effect any transactions on behalf of the Client in
securities, of which the issue or offer for sale was to JOHIM's
knowledge underwritten, managed or arranged by any person or company
connected with JOHIM, unless prior disclosure is made to the Client.
(c) Save as may be required otherwise in this Agreement, JOHIM may not
commit the Client to supplement funds in the Portfolio.
(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.
60. 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
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The Client's investments will be held in this account. 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 Client 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 on 5th
April, 30th June, 30th September and 31st December in each year.
Money drawn on behalf of the Client from the account shall not
exceed the total 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 held outside the
United Kingdom, JOHIM may hold such investments and cash in a
bank account outside the United Kingdom.
(b) The Client may at any time instruct JOHIM to realize 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.
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<PAGE>
(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.
61. FEES, COMMISSIONS AND EXPENSES
(a) The Client will pay to JOHIM from the date hereof a management fee in
arrears on the lst May and lst November of each year in respect of the
period of six months or any lesser period ending on the day prior to
such date, and on the Termination Date (as defined in Clause 9.1) in
respect of the period ending on that date, all in accordance with the
'Scale Rates and Charges' set out in Schedule III. In addition the
Client shall reimburse JOHIM for any expenses or liabilities which it
may incur in property carrying out its duties hereunder.
(b) The management fee shall accrue on a day-to-day basis, so that, if
this Agreement commences or terminates other than on lst May or lst
November, the amount of the fee shall be duly apportioned.
(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 recognizes 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 which JOHIM receives such
benefits and commissions, disregarding any benefit which might enure
directly or indirectly to the Client 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
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<PAGE>
(and corresponding entire shall be made in the relevant ledger account
maintained on the Client's behalf).
62. REVIEWS AND VALUATIONS
(a) JOHIM will send to the Client on each Valuation Date (being in each
year such half-yearly dates as are agreed between JOHIM and the Client
from time to time) a review of the Portfolio incorporating an up-to-
date valuation of each investment comprised in the Portfolio and a
statement indicating how it was values.
(b) On each Valuation Date cash will be valued at its face value and each
investment will be valued at its 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 biding 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 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, London 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.
(c) Each valuation will be made no more than 25 business days before the
day on which the review incorporating it is sent to the Client
provided that JOHIM accepts no liability for any longer period which
may elapse as a result only of any act or omission of any third party.
63. VOTING AND OTHER RIGHTS
(a) 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 schedule 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.
64. TERMINATION OF AGREEMENT
(a) The Agreement is terminable by the Client without penalty and without
prejudice to the completion of transaction 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
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<PAGE>
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 procure 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.
(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 party of the period of six months ending on 30th April or
31st October of each year 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 realized 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.
65. 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 for 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
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<PAGE>
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 the Bank or its nominee
company or any person to which either 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.
(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 protection of the Client
against losses arising from any negligence of JOHIM, any dishonest 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 Finance Services Act 1986 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.
66. 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.
67. GENERAL
(a) The Client warrants that the Client is the beneficial owner of the
whole of the Portfolio free from all liens and encumbrances and will
so remain during the currency of the Agreement.
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(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.
(e) Notice required or authorized 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
complain 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 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 without prior
reference to JOHIM.
Page 201 of 258 Pages
<PAGE>
(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 each of
reference only and shall not affect its interpretation.
(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.
For J. O. Hambro Investment Management Limited
/s/ [signature appears here] Date 23/2/89
- ---------------------------------------------- ---------------------
For the Client*
/s/ [signature appears here] Date 8/3/89
- ----------------------------------------------- ---------------------
/s/ [signature appears here]
- -----------------------------------------------
- -----------------------------------------------
*This Client should sign here as follows:
Page 202 of 258 Pages
<PAGE>
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 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 203 of 258 Pages
<PAGE>
CLIENT AGREEMENT
EARL SPENCER (FORMERLY VISCOUNT ALTHORP)
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<PAGE>
Note to the file
Viscount Althorp became
Earl Spencer in March 1992
J O HAMBRO INVESTMENT
- ---------------------
THIS INVESTMENT MANAGEMENT AGREEMENT is made the 18th day of November 1991
BETWEEN:
(1) J O HAMBRO INVESTMENT MANAGEMENT LIMITED ("JOHIM") a member of the
Investment Management Regulatory Organisation Limited ("IMRO") whose
registered office is at 30 Queen Anne's Gate London SW1H9AL; 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 Act 1986 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.
Page 206 of 258 Pages
<PAGE>
(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.
Page 207 of 258 Pages
<PAGE>
(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
Page 208 of 258 Pages
<PAGE>
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.
Page 209 of 258 Pages
<PAGE>
(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
Page 210 of 258 Pages
<PAGE>
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.
Page 211 of 258 Pages
<PAGE>
(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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<PAGE>
(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 Act 1986 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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<PAGE>
(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.
Page 215 of 258 Pages
<PAGE>
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.
Page 217 of 258 Pages
<PAGE>
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
<PAGE>
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
<TABLE>
<CAPTION>
EQUITIES GILTS/FIXED INTEREST
<S> <C>
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
</TABLE>
(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
<PAGE>
FOR J O HAMBRO 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
<PAGE>
CLIENT AGREEMENT
JAMES NORTON
Page 221 of 258 Pages
<PAGE>
J O HAMBRO INVESTMENT
- ---------------------
THIS INVESTMENT MANAGEMENT AGREEMENT is made the 11th day of October 1994
BETWEEN:
(1) J O HAMBRO INVESTMENT MANAGEMENT LIMITED ("JOHIM") a member of the
Investment Management Regulatory Organisation Limited ("IMRO") whose
registered office is at 30 Queen Anne's Gate London SW1H9AL; and
(2) James Norton, Esq. ("the Client") of 12 Ovinghon Street, London SwB 2JB
NOW IT IS HEREBY AGREED as follows:
80. 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.
81. 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.
82. 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.
(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,
Page 222 of 258 Pages
<PAGE>
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 Act 1986 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.
(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
Page 223 of 258 Pages
<PAGE>
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.
83. 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.
(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.
Page 224 of 258 Pages
<PAGE>
(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.
84. 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 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
Page 225 of 258 Pages
<PAGE>
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.
85. 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.
(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
Page 226 of 258 Pages
<PAGE>
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).
86. 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 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
Page 227 of 258 Pages
<PAGE>
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.
87. 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.
88. 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.
(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:
Page 228 of 258 Pages
<PAGE>
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.
89. 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.
(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
Page 229 of 258 Pages
<PAGE>
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 Act 1986 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.
90. 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.
91. 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.
(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
Page 230 of 258 Pages
<PAGE>
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.
(o) The Schedules to this Agreement are an integral part of it.
Page 231 of 258 Pages
<PAGE>
(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.
Page 232 of 258 Pages
<PAGE>
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.
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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
<TABLE>
<CAPTION>
EQUITIES GILTS/FIXED INTEREST
<S> <C>
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
</TABLE>
(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
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FOR J O HAMBRO INVESTMENT MANAGEMENT LIMITED
/s/ [signature appears here] Date 11/10/94
- ---------------------------------------- --------------------
For the Client*
/s/ James Norton Date 11/10/94
- ---------------------------------------- --------------------
- -----------------------------
- -----------------------------
*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 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.
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CLIENT AGREEMENT
MRS. S. E. Z. MORRISON
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THIS INVESTMENT MANAGEMENT AGREEMENT is made the 26th day of February, 1996
BETWEEN:
(1) J O HAMBRO INVESTMENT MANAGEMENT LIMITED ("JOHIM") a member of the
Investment Management Regulatory Organisation Limited ("IMRO") and
regulated in the conduct of investment business by it, whose registered
office is at 10 Park Place, London SW1A 1LP; and
(2) Mrs. S. E. Z. Morrison
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(portfolio name) (hereafter known as the "Client") of
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34 Norland Square
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London SW1L 4PU (address)
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NOW IT IS HEREBY AGREED as follows:
APPOINTMENT AND STATUS OF CLIENT
92. The Client, a private customer as defined in the rules of IMRO, hereby
appoints JOHIM 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 JOHIM (the
"Portfolio") and JOHIM hereby agrees to manage and administer the
Portfolio. The appointment will commence on the date on which this
Agreement is delivered to JOHIM by the Client having been signed first by
the Client then by JOHIM. The assets comprising the Portfolio and their
opening value are set out in Schedule 1.
MANAGEMENT OF INVESTMENTS
93. JOHIM 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 JOHIM and the Client and set our 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 from time to time 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
warnings set out in Part III of Schedule II.
94. JOHIM shall not be obliged to undertake the management of investments the
management of which would in its opinion be onerous to it.
DEALING TERMS
95. In effecting transactions for the Portfolio JOHIM 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
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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
JOHIM may take all such steps as may be required or permitted by such rules
and regulations and/or by good market practice.
96. 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.
97. 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. JOHIM
will not borrow money on the Client's behalf against the security of any of
the Client's investments, documents of title or property.
98. JOHIM shall only commit the Client to any obligation to underwrite any
issue or offer for sale of securities with the Client's prior written
consent.
99. JOHIM may act as principal in any transaction for the Client provided that
JOHIM shall secure for the Client best execution of such transaction.
100. Subject to the IMRO Rules, JOHIM may, without prior reference to the
Client, enter into a transaction on behalf of more than one client
collectively.
101. JOHIM has the right under this Agreement to effect transactions on the
Client's behalf in investments the price 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.
CONFLICTS OF INTEREST
102. Subject to paragraphs 12 and 13, 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 is disclosed in writing to the Client.
103. 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 JOHIM during the preceding twelve months.
104. 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, and that JOHIM's directors or staff may from time to time be
directors or companies whose shares are held in the Portfolio.
105. 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
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<PAGE>
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 or
exclusion from the Portfolio.
CUSTODIAL SERVICES
106.
(a) Save where the Client has notified JOHIM 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 JOHIM.
(b) In those cases where the Client is situated overseas or where the
Client so requests by notice in writing to JOHIM, 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 a nominee company which is an Associate
of JOHIM and Client's documents of title may be held by that Associate
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.
ACCOUNTS, INTERESTS AND DIVIDENDS
107. 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:
(a) INVESTMENT ACCOUNT
The Client's investments will be held in this account. Subject to
paragraphs 5 and 6, 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.
(b) CAPITAL ACCOUNT
All uninvested cash will be held in this account by a bank chosen by
JOHIM. 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
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<PAGE>
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 our in Schedule III). 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.
(e) OFF-SHORE FUNDS
In those cases where the Client is situated overseas or if the Client
notifies JOHIM in writing that the Client wishes cash in the Portfolio
to be held outside the United Kingdom, JOHIM will be (subject to
applicable laws and regulations) hold such cash in a bank account
outside the United Kingdom.
108. 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.
109. 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 ledge
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
110. In the interests of proper administration of the Portfolio and for related
investment purposes JOHIM, 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 Act 1986 to treat as
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<PAGE>
unenforceable any investment agreement entered into in the course of or in
consequence of such a call.
ADMINISTRATION
111. 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.
112. JOHIM will be on the Client's request forward details of all transactions
on the Client's behalf to the Client's tax advisor without additional
charge.
113. 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 ensure that they are maintained
for not less than seven years from the date of the relevant transaction.
114. 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 JOHIM in writing of any changes of address, and that
JOHIM will not be responsible for any consequences which may arise from
failure to do so.
REVIEWS AND VALUATIONS
115. JOHIM will prepare six monthly 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. 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"), and JOHIM will send six monthly reviews to the Client
within twenty-five business days of each Valuation Date.
116. 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 JOHIM (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 JOHIM 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.
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<PAGE>
117. JOHIM 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
118. JOHIM 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. JOHIM will
not forward to the Client any circulars, notices or proxy cards received in
respect of investments comprised in the Portfolio.
FILES, COMMISSIONS AND EXPENSES
119.
(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
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 JOHIM on the 14th day after despatch of such
notice.
(d) In addition the Client shall reimburse JOHIM for any expenses or
liabilities which it may incur in properly carrying out its duties
hereunder.
120. 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.
121. 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 dealing on the Client's behalf; all such benefits and receipts
shall supplement
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<PAGE>
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.
122. 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 (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
123. JOHIM will indemnify the Client in respect of any loss incurred as a result
of negligence, wilful default or fraud by JOHIM or any of its employees.
Subject to the above, JOHIM 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 JOHIM; 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 156 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
or JOHIM or any breach of JOHIM of any term of this Agreement.
124. 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 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.
125. 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.
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<PAGE>
126. JOHIM has effected insurance to provide for the protection of the Client
against losses arising from any negligence of JOHIM or any dishonesty of
employees of JOHIM.
127. Under Section 54 of the Financial Services Act 1986 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 JOHIM's
inability to meet any liabilities to the Client. JOHIM 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
128. JOHIM 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 JOHIM's liability to the Client for all matters so
delegated shall not be affected thereby. JOHIM shall give to the Client
written notice of any delegation of a function which involves the exercise
of its discretionary investment management powers.
129. JOHIM may employ agents (including Associates) to perform any
administrative, dealing, custodial and ancillary services required to
enable JOHIM to perform its services under this Agreement. JOHIM
undertakes to act in good faith and with due diligence in the choice and
use of such agents.
TERMINATION OF AGREEMENT
130. 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 JOHIM 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.
131. Upon the Termination Date, JOHIM 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 JOHIM, JOHIM 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 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.
132. 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 JOHIM may charge the Client
an amount equal to:
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<PAGE>
(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 JOHIM necessarily incurs in terminating
this Agreement; and
(c) any losses necessarily realized in settling or concluding outstanding
obligations.
133. 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.
134. 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 inure to the
benefit of the survivor(s) unless otherwise specified by notice in writing
to JOHIM.
CLIENT WARRANTIES
135. The Client warrants that the Client is the beneficial owner (or the duly
authorized 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 JOHIM, and will so remain during
the currency of this Agreement.
136. 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
137. 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.
138. The Clause headings in this Agreement are included for ease of reference
only and shall not affect its interpretation.
139. The Schedules to this Agreement are an integral part of it.
140. If the Client is an individual this Agreement shall be binding on his legal
personal representatives.
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<PAGE>
141. This Agreement is personal to the parties hereto and shall not be capable
of assignment.
142. 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.
143. Notice required or authorized 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 serviced upon the
Client to an address outside the United Kingdom, the notice shall be
sufficiently served if served by prepaid 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 prepaid letter.
144. 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 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 JOHIM.
145. 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.
146. This Agreement is subject to English law and the parties hereto hereby
submit to the jurisdiction of the English Courts in respect of it.
SCHEDULE I
THE PORTFOLIO
Valuation and composition of Portfolio
(see attached letter/opening valuation - where applicable)
SCHEDULE II
Page 248 of 258 Pages
<PAGE>
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 JOHIM 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 JOHIM will not include advising on or effecting
Contingent Liability Transactions, nor will they 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 advised 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
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 16 of this
Agreement.
PART III - Risk Warnings and Risk Disclosure Statement
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 JOHIM 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 favorable or unfavorable 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
realizable. You should be aware that there can be no certainty that market
makers or brokers will be
Page 249 of 258 Pages
<PAGE>
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, unfavorable as well as favorable, 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 stabilizing 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 authorize 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 "stabilizing 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 stabilizing.
The rules limit the period in which he may stabilize, 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
Page 250 of 258 Pages
<PAGE>
interested in the new issue or interested in purchasing at the price at which
transactions are taking place".
FOR J O HAMBRO INVESTMENT
MANAGEMENT LIMITED
/s/ [signature appears here] Date: 26/2/96
- ------------------------------------------------ -------------------
FOR THE CLIENT*
/s/ Sandra Morrison Date: 26/2/96
- ------------------------------------------------ -------------------
- -----------------------------------
- -----------------------------------
*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 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 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 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 251 of 258 Pages
<PAGE>
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
Page 252 of 258 Pages
<PAGE>
POWER OF ATTORNEY
Page 253 of 258 Pages
<PAGE>
POWER OF ATTORNEY
-----------------
This general Power of Attorney is made this ninth day of July 1997 by
Christopher Harwood Bernard Mills.
I hereby appoint Claudia Margaret Cecil Perkins of 10 Park Place, London
SW1A 1LP to be my attorney whereby she is empowered to sign on my behalf all
documents required for the proper conduct of the businesses of J O Hambro &
Partners Limited, North Atlantic Smaller Companies Investment Trust Plc and its
subsidiaries, American Opportunity Trust PLC and its subsidiaries, Growth
Financial Services Limited and Eveswise Ltd Retirement & Death Scheme. This
Power shall include but not be limited to authorising all statutory, regulatory
and other legal submissions which may be required to be made by any of the above
companies.
IN WITNESS WHEREOF I have hereunto set my hand and seal the day and year first
above written:
Signed, Sealed and Delivered )
By the above named ) /s/ Christopher Harwood Bernard Mills
CHRISTOPHER HARWOOD BERNARD MILLS )
in the presence of: )
Maureen O'Hara
10 Park Place
London
SW1A 1LP
Page 254 of 258 Pages
<PAGE>
JOINT FILING AGREEMENT
Page 255 of 258 Pages
<PAGE>
JOINT FILING AGREEMENT
The undersigned hereby agree that the Statement on Schedule 13D dated April 13,
1998 with respect to the shares of common stock, Class A $0.01 par value, of
Maxicare Health Plans, Inc. and any further amendments thereto executed by each
or any of us shall be filed on behalf of each of us pursuant to and in
accordance with the provisions of Rule 13d-1(f) under the Securities Exchange
Act of 1934, as amended.
This Agreement may be executed in separate counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the same
instrument.
Date: April 13, 1998 AMERICAN OPPORTUNITY TRUST PLC
By: J O Hambro Capital Management Limited,
Its investment advisor
By: /s/ Claudia Perkins
-----------------------------------
Name: Claudia Perkins
Title: Director
Date: April 13, 1998 NORTH ATLANTIC SMALLER COMPANIES
INVESTMENT TRUST PLC
By: J O Hambro Capital Management Limited,
Its investment advisor
By: /s/ Claudia Perkins
-----------------------------------
Name: Claudia Perkins
Title: Director
Date: April 13, 1998 J O HAMBRO CAPITAL MANAGEMENT
LIMITED
By: /s/ Claudia Perkins
-----------------------------------
Name: Claudia Perkins
Title: Director
Page 256 of 258 Pages
<PAGE>
Date: April 13, 1998 J O HAMBRO & COMPANY LIMITED
By: /s/ J. D. Hambro
-----------------------------------
Name: J. D. Hambro
Title: Director
Date: April 13, 1998 J O HAMBRO ASSET MANAGEMENT
LIMITED
By: /s/ J. D. Hambro
-----------------------------------
Name: J. D. Hambro
Title: Director
Date: April 13, 1998 J O HAMBRO INVESTMENT MANAGEMENT
LIMITED
By: /s/ A. J. Steel
-----------------------------------
Name: A. J. Steel
Title: Director
Page 257 of 258 Pages
<PAGE>
Date: April 13, 1998 GROWTH FINANCIAL SERVICES LIMITED
By: /s/ Claudia Perkins
-----------------------------------
Name: C. H. B. Mills
Title: Director
CLAUDIA PERKINS PURSUANT TO A
POWER OF ATTORNEY DATED 9 JULY 1997
Date: April 13, 1998 CHRISTOPHER MILLS
/s/ Claudia Perkins
-------------------------------------------
CLAUDIA PERKINS PURSUANT TO A
POWER OF ATTORNEY DATED 9 JULY 1997
Page 258 of 258 Pages
