Subscription and Shareholders Agreement

 

 

Alliance Capital Management Corporation of Delaware

 

Alliance Capital Management Australia Limited

 

AXA Asia Pacific Holdings Limited

 

National Mutual Funds Management Limited

 

ACN 095 022 718 Limited
(to be renamed Alliance Capital Management Australia Limited)

 

Cidwell Developments Limited

(to be renamed Alliance Capital Management New Zealand Limited)

 

 

 

 

[j3006ex10d20image002.gif]

 

101 Collins Street Melbourne VIC 3000 Australia

Telephone 61 3 9288 1234  Facsimile 61 3 9288 1567

www.freehills.com.au  DX240 Melbourne

 

SYDNEY MELBOURNE PERTH CANBERRA BRISBANE HANOI HO CHI MINH CITY

Correspondent Offices JAKARTA KUALA LUMPUR SINGAPORE

 

Liability limited by the Solicitor’s Limitation of Liability Scheme,

approved under the Professional Standards Act 1994 (NSW)

 

Reference  JH

 

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Table of contents

 

Clause

 

1 Definitions and interpretation

 

 

1.1 Definitions

 

1.2 Interpretation

 

1.3 Business Day

 

2 Conditions precedent

 

 

2.1 Conditions precedent

 

2.2 Reasonable endeavours

 

2.3 Termination prior to satisfaction

 

3 Capital contributions

 

 

3.1 Subscription by ACMCD and AXA APH

 

3.2 Change of name

 

3.3 Completion

 

3.4 Shares to rank equally

 

3.5 Constitution

 

3.6 Security Interests

 

4 Appointments

 

 

4.1 Boards of Joint Venture Group

 

4.2 Composition of the Board

 

4.3 Chair

 

4.4 Secretary

 

5 Board activities

 

 

5.1 Meetings

 

5.2 Voting at meetings

 

5.3 Quorum

 

5.4 Notice of meetings

 

6 Business plans, budgets and reporting

 

 

6.1 Business Plan

 

6.2 Budget

 

6.3 Financial statements

 

6.4 Auditor

 

6.5 Access to documents

 

7 Management

 

 

7.1 Delegation of powers

 

7.2 Dividend policy

 

7.3 Matters requiring joint consent

 

7.4 Deadlock resolution

 

7.5 Sub-delegation

 

7.6 Offshore Funds

 

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7.7 Distribution of Alliance Capital Mutual Funds

 

7.8 Payment of Fees

 

7.9 Fee Scales

 

7.10 Termination of Delegation Agreements

 

8 Meetings of shareholders

 

 

8.1 Quorum

 

8.2 Notice of meetings

 

9 Exclusivity

 

 

9.1 Exclusivity for the Company

 

9.2 AXA APH Undertakings

 

9.3 ACMCD Undertakings

 

9.4 Companies’ Undertakings

 

9.5 Other Activities

 

9.6 Duration of Undertakings

 

9.7 Limitation

 

9.8 Acquisition of financial services company

 

9.9 Existing sub-delegations

 

9.10 Compensation agreements

 

10 Transfers of shares - general

 

 

10.1 General prohibition

 

10.2 Transfer to Latest Core Shareholder

 

10.3 Approval of transfer

 

11 Transfers of shares - pre-emptive rights

 

 

11.1 Right to transfer

 

11.2 Transfer Notice

 

11.3 Non-revocation

 

11.4 Acceptance Notice

 

11.5 Completion

 

11.6 Remaining Shares

 

12 Tag-along Right

 

 

12.1 Tag-Along Notice

 

12.2 No Transfer

 

12.3 Transfer to Proposed Transferee

 

13 Transfers of shares - required transfers

 

 

13.1 Notice of Trigger Event

 

13.2 Rights following a Trigger Event

 

13.3 Fair Value

 

13.4 Notice of Fair Value

 

14 New shareholders

 

15 Confidentiality and announcements

 

 

15.1 Prohibitions on use of Confidential Information

 

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15.2 Permitted disclosure

 

16 Representations and warranties

 

 

16.1 Representations and warranties

 

16.2 Reliance

 

16.3 Non limitation

 

16.4 Investigation

 

16.5 Waiver of rights

 

16.6 Future events

 

17 Term and termination

 

 

17.1 Termination

 

17.2 Survival

 

18 GST

 

 

18.1 GST pass on clause

 

18.2 Tax Invoices/Adjustment Notes

 

18.3 Later adjustment to price or GST

 

18.4 Cost reduction clause

 

19 Notices

 

 

19.1 How notices may be given

 

19.2 When notice by fax taken as given

 

19.3 Change of address or fax number

 

20 General

 

 

20.1 Relationship of parties

 

20.2 Costs and expenses

 

20.3 Governing law and jurisdiction

 

20.4 Delegation

 

20.5 Cumulative rights

 

20.6 Waiver

 

20.7 Whole agreement

 

20.8 Variation of agreement

 

20.9 Prohibition or enforceability

 

20.10 Counterparts

 

20.11 Attorney

 

 

Schedule 1 - Delegation Agreement

 

Schedule 2 - Adherence Agreement

 

Schedule 3 - Fees Deed

 

Schedule 4 - Sub-Distributor Agreement

 

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This subscription and shareholders agreement

 

is made on      January 2001 between the following parties:

 

1.                                      Alliance Capital Management Corporation
of Delaware

of 1345 Avenue of the Americas, New York, NY 10105, United States of America

(ACMCD)

 

2.                                      Alliance Capital Management Australia
Limited

ABN 58 007 212 606

of Level 29, Governor Phillip Tower, 1 Farrer Place, Sydney, NSW 2000

(ACM)

 

3.                                      AXA Asia Pacific Holdings Limited

ABN 78 069 123 011

of 447 Collins Street, Melbourne, Vic 3000

(AXA APH)

 

4.                                      National Mutual Funds Management Limited

ABN 32 006 787 720

of 447 Collins Street, Melbourne, Vic 3000

(NMFM)

 

5.                                      ACN 095 022 718 Limited

ACN 095 022 718

(to be renamed Alliance Capital Management Australia Limited)

of Level 29, Governor Phillip Tower, 1 Farrer Place, Sydney, NSW 2000

(Aus Co)

 

6.                                      Cidwell Developments Limited, a company
incorporated in New Zealand

(to be renamed Alliance Capital Management New Zealand Limited)

of 80 The Terrace, Wellington, New Zealand

(NZ Co)

 

Recitals

 

A.                                   ACM (which is a subsidiary of ACMCD) and
NMFM and National Mutual Funds Management NZ Limited (“NMFM NZ”) (both of which
are subsidiaries of AXA APH) carry on separate existing investment management
businesses.

 

B.                                     ACMCD and AXA APH wish to establish the
Joint Venture Group (comprising Aus Co and NZ Co) to carry out certain
investment management business activities in Australia and New Zealand and to
carry out investment management activities in support of the investment
management businesses of other companies, including ACM, NMFM and NMFM NZ.

 

The parties agree

 

in consideration of, among other things, the mutual promises contained in this
agreement:

 

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1              Definitions and interpretation

 

1.1          Definitions

 

In this agreement:

 

ACCC means the Australian Competition and Consumer Commission;

 

Acceptance Notice means a notice in writing stating that the Offeree is willing
to purchase the Sale Shares on the Nominated Terms;

 

Acceptance Period means the period within 45 Business Days of an Offeree
receiving the Transfer Notice from the Proposing Transferor under clause 11.2;

 

Accounting Period means a year which ends on 31 December of each year, the first
accounting period being the period ending on 31 December 2001;

 

Accounting Standards means the Australian Accounting Standards from time to time
and if and to the extent that any matter is not covered by Australian Accounting
Standards means generally accepted accounting principles applied from time to
time in Australia or New Zealand (as the case may be) for a business similar to
the relevant Business;

 

ACMCD Shares means the shares issued to ACMCD under clause 3.1;

 

ACM Delegation Agreement means an agreement in substantially the form set out in
schedule 1 between ACM and Aus Co which sets out arrangements for the delegation
or sub-delegation of mandates by ACM to Aus Co;

 

Acquired Business has the meaning given to it in clause 9.8((a));

 

Adherence Agreement means a deed substantially in the form set out in schedule 2
the purpose of which is, among other things, to ensure that this agreement will
apply to a Shareholder who is not already a party as if that new Shareholder was
a party to this agreement;

 

Adjustment Note includes any document or record treated by the Commissioner of
Taxation as an adjustment note or as enabling the claiming of an input tax
credit for which an entitlement otherwise arises;

 

Alliance Group or ACMCD’s Group means Alliance Capital Management L.P. and its
Controlled Entities (excluding the Companies) and “member of the Alliance Group”
will be construed accordingly;

 

APRA means the Australian Prudential Regulation Authority;

 

ASIC means the Australian Securities and Investments Commission;

 

ASX means Australian Stock Exchange Limited ACN 008 624 691;

 

Audited Accounts means, in respect of an Accounting Period:

 

(a)           the report of the Directors;

 

(b)           the report of the Auditors; and

 

(c)           the audited accounts,

 

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in respect of:

 

(d)           each Company; and

 

(e)           each of its Controlled Entities,

 

which are for that Accounting Period and accord with the Accounting Standards;

 

Auditors means the auditors from time to time of each Company;

 

Aus Co Shares means fully paid ordinary shares in the capital of Aus Co;

 

AXA means the ultimate holding company of ACMCD and of AXA APH as at the date of
this agreement which is incorporated in France;

 

AXA APH Group means AXA APH and its Controlled Entities and “member of the AXA
APH Group” will be construed accordingly;

 

AXA APH Shares means the Shares issued to AXA APH under clause 3.1;

 

Bank has the meaning given to the word “bank” in section 9 of the Corporations
Law;

 

Board means the board of Directors of each Company from time to time;

 

Budget means, in respect of an Accounting Period, the budget of each Company for
that Accounting Period including:

 

(a)           a revenue and capital budget which provides estimates of the
material items of expenditure for each month;

 

(b)           a cash flow forecast for each month;

 

(c)           a balance sheet, and

 

(d)           a profit and loss,

 

which has been approved by resolution or written consent or direction made or
given in accordance with clause 7.3 or clause 7.4;

 

Business means:

 

(a)           the performance of certain investment management activities (in
the case of Aus Co) in Australia and (in the case of NZ Co) in New Zealand; and

 

(b)           each other business which is conducted by each Company from time
to time;

 

Business Day means a day on which trading banks are open for business in
Melbourne, Sydney and (where the reference relates to NZ Co) Wellington, except
a Saturday, Sunday or public holiday;

 

Business Plan means, in respect of an Accounting Period, the business plan of
each Company for each of the three Accounting Periods from the start of that
Accounting Period including for each Accounting Period:

 

(a)           projections for sales, new business, business loss, revenue and
cash flow;

 

(b)           forecasts; and

 

(c)           an analysis of business prospects and objectives,

 

which has been approved by resolution or written consent or direction made or
given in accordance with clause 7.3 or clause 7.4;

 

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Cease to Control means in respect of an entity:

 

(a)                                  the entity is no longer a Controlled Entity
of the entity which has ceased control; or

 

(b)                                 the entity is no longer a Subsidiary of the
entity which has ceased control,

 

and Ceasing to Control shall be construed accordingly.

 

Company means each of Aus Co and NZ Co as the context requires and Companies
means both Aus Co and NZ Co;

 

Compensation Amount means the amount determined in accordance with
clause 9.10((a));

 

Completion Date means the date being 5 Business Days after:

 

(a)           satisfaction of the conditions precedent in clause 2.1; or

 

(b)           such other date from which the parties agree that this agreement
is to be of full force and effect;

 

Confidential Information means any information that is by its nature
confidential or which is designated by a party as confidential:

 

(a)           provided by one party to another party; or

 

(b)           which relates to:

 

(1)           the Business;

 

(2)           a Shareholder or a Controlled Entity of a Shareholder;

 

(3)           a Company;

 

(4)           the property, rights, business activities, customers, assets or
affairs of any of the persons referred to in paragraphs (b)(1) to (3) of this
definition; or

 

(5)                                  the subject matter of this agreement;

 

Constitution means the constitution of each Company as amended from time to
time;

 

Controlled Entity of an entity means another entity in respect of which the
first entity has the capacity to determine the outcome of decisions about the
second entity’s financial and operating policies;

 

Controller means, in relation to the property of a corporation:

 

(a)           a receiver, or receiver and manager, of that property; or

 

(b)                                 anyone else who (whether or not as agent for
the corporation) is in possession, or has control, of that property for the
purpose of enforcing a Security Interest;

 

Core Shareholder means ACMCD, AXA APH and any person to whom Shares are
transferred under clause 11;

 

Directors means the directors from time to time of each Company;

 

Disposal means:

 

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(a)                                  the grant or creation of any Security
Interest over any Share (or over any legal or beneficial interest in or any
rights of any Share);

 

(b)                                 the sale, transfer or other disposal of any
Share (or any legal or beneficial interest in or any rights of any Share);

 

(c)                                  the entry into an agreement in respect of
the rights to vote which are conferred in respect of any Share;

 

(d)                                 the provision of any warrant, option or
right of first refusal or offer in respect of any of the matters which are
provided in paragraphs (a) to (c) of this definition;

 

(e)                                  the offer or entry into of an agreement,
whether or not subject to any condition precedent or subsequent, to do any of
the matters which are provided in paragraphs (a) to (d) of this definition; or

 

(f)                                    the creation of any interest in a Share
in favour of a third person,

 

and Dispose shall be construed accordingly;

 

Fair Value means the amount which is:

 

(a)                                  agreed by the Trigger Shareholder and the
Non-Trigger Shareholder as the fair value of the Trigger Shares; or

 

(b)                                 failing such agreement within 20 Business
Days, is calculated by a Valuer as the fair value of the Trigger Shares in
accordance with clause 13.3;

 

First Budget means the Budget for the first Accounting Period, being the period
ending on 31 December 2001, which has been approved by written consent by an
authorised representative of ACMCD and by an authorised representative of AXA
APH;

 

Fees Deed means an agreement between ACM, NMFM, NMFM New Zealand and the
Companies substantially in the form set out in schedule 3 concerning fee
arrangements;

 

First Business Plan means the Business Plan for the first Accounting Period,
being the period ending on
31 December 2001, which has been approved by written consent by an authorised
representative of AXA APH;

 

Governmental Agency means any government or any governmental, semi-governmental,
administrative, fiscal or judicial body, department, commission, department,
tribunal, agency or entity;

 

Group means the Alliance Group or the AXA APH Group as the context requires;

 

GST has the same meaning as in the GST Act and includes any replacement or
subsequent similar tax;

 

GST Act means A New Tax System (Goods and Services Tax) Act 1999 (Cth) and in
clause 18.1 if the context requires includes goods and services tax under the
Goods and Services Tax Act 1985 (New Zealand);

 

Holding Company has the meaning given to the words “holding company” in the
Corporations Law;

 

Insolvency Event means, in respect of a party:

 

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(a)                                  a final order is made that the party be:

 

(1)           wound up; or

 

(2)           otherwise dissolved;

 

(b)                                 a final order is made to appoint a
liquidator or provisional liquidator in respect of that party; or

 

(c)                                  a Controller is appointed over
substantially all of the assets or undertaking of that party;

 

Institutional Investor means an investor:

 

(a)                                  being a life insurance company;

 

(b)                                 being a superannuation fund with net assets
of:

 

(1)                                  (in the case of an Australian investor) at
least A$25 million; or

 

(2)                                  (in the case of a New Zealand investor) at
least NZ$5 million;

 

(c)                                  being a building society or friendly
society;

 

(d)                                 being a person who controls at least:

 

(1)                                  (in the case of an Australian investor)
A$25 million (including any amount held by an associate or under a trust that
the person manages) for the purpose of investment in securities; or

 

(2)                                  (in the case of a New Zealand investor)
NZ$5 million (including any amount held by an associate or under a trust that
the person manages) for the purpose of investment in securities;

 

(e)                                  being an investor directed discretionary
portfolio service, portfolio administration service or master fund (including
but not limited to Deutsche, IPAC, AM Corp, Mercer, SMF, Wilson Dilworth and
Access master funds), where all of the underlying investors in the service or
fund are persons falling within any of paragraphs (a) to (d) of this definition;
or

 

(f)                                    being an investor who gives an investment
management mandate under a stand alone investment management agreement provided
that such an investor will not be an Institutional Investor under this
definition, in respect of any other investments by that investor unless the
investor is also a person falling within any of paragraphs (a) — (e) of this
definition.

 

Joint Venture Group means Aus Co and NZ Co;

 

Latest Core Shareholder in relation to a Shareholder means:

 

(a)                                  where the Shareholder is a Core
Shareholder, that Core Shareholder; and

 

(b)                                 when the Shareholder is not a Core
Shareholder, the most recent Core Shareholder to hold the Shares held by that
Shareholder;

 

Law includes:

 

(a)                                  any general law;

 

(b)                                 any law, rule, regulation, authorisation,
ruling, judgement, order or decree of any Governmental Agency or Regulator; and

 

(c)                                  any statute, regulation, proclamation,
ordinance or by-law,

 

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 in Australia, New Zealand, United States of America or any other relevant
jurisdiction;

 

Management Accounts means, in respect of a month of an Accounting Period, the
management accounts of each Company and of each of its Controlled Entities for
that month, including:

 

(a)                                  a profit and loss statement;

 

(b)                                 a balance sheet;

 

(c)                                  a cash flow statement;

 

(d)                                 an analysis of revenue;

 

(e)                                  a review of the Budget and Business Plan;

 

(f)                                    a comparison of the Budget and Business
Plan with actual results;

 

(g)                                 a rolling cash flow forecast for the next 12
months; and

 

(h)                                 a description of each material matter which
occurred in or relates to that month,

 

or as otherwise required by the Board;

 

Material Appointments Assets means the assets referred to in paragraph (b) of
the definition of Material Appointments Notice;

 

Material Appointment Notice means a notice by AXA APH that:

 

(a)                                  AXA APH or members of the AXA APH Group
intend to appoint persons other than the Companies to provide investment
management services and such appointments either relate to the proper discharge
by an officer of the AXA APH Group of any fiduciary obligation or duty or the
proper discharge of any equivalent responsibility by a member of the AXA APH
Group or do not come within any other proviso or exception to the restrictions
on the members of AXA APH Group in clause 9;

 

(b)                                 specifies the asset classes to which the
appointments referred to in (a) will relate;

 

(c)                                  confirms that the New Appointment
Percentage is greater than 50 when calculated in accordance with the following
formula:

 

New Appointment Percentage =                      [j3006ex10d20image004.gif] x
100

where:

 

R is equal to:

 

(1)                                  where it is the first Material Appointment
Notice - the annual fees that are or would have been payable under the Fees Deed
by AXA APH to the Companies for the investment management of the Material
Appointments Assets as at the end of the last quarter before the giving of the
Material Appointment Notice;

 

(2)                                  where there has been at least one Material
Appointment Notice - the aggregate of the annual fees relating to the investment
of the Material Appointment Assets for each such notice determined in accordance
with R(1) above.

 

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E is equal to:

 

(3)                                  where it is the first Material Appointment
Notice - the aggregate of:

 

(A)                              the annual fees that are or would have been
payable under the Fees Deed by AXA APH to the Companies or their delegates for
the investment management of all of the assets referable to the AXA APH Group
(including, without limitation, assets of unit trusts managed by the AXA APH
Group) as at the end of the last quarter before the giving of the Material
Appointments Notice; and

 

(B)                                the fees calculated under R(1).

 

(4)                                  where there has been at least one prior
Material Appointment Notice - the aggregate of the annual fees determined in
accordance with E(3)(A) above and the fees calculated under R(2) above.

 

Minor Appointment Percentage means the number calculated in accordance with
clause 9.7;

 

New Constitutions means the constitution of each Company in a form to be agreed
between the parties (acting reasonably) to be adopted on or before the
Completion Date in accordance with clause 3.5((b));

 

New Tax System changes has the same meaning as in the Trade Practices Act 1974
(Cth);

 

NMFM Delegation Agreement means an agreement between NMFM and Aus Co
substantially in the form set out in schedule 1 which sets out arrangements for
the delegation or sub-delegation of mandates by NMFM to Aus Co;

 

NMFM New Zealand means National Mutual Funds Management NZ Limited of 80 The
Terrace, Wellington, New Zealand;

 

NMFM New Zealand Delegation Agreement means an agreement between NMFM New
Zealand and NZ Co substantially in the form set out in schedule 1 which sets out
arrangements for the delegation or sub-delegation of mandates by NMFM New
Zealand to NZ Co;

 

Nominated Terms means the terms and conditions on which the Sale Shares are
offered to be sold including, without limitation, the sale price which must be
payable in cash only;

 

Non-Trigger Shareholder means the Shareholder other than the Trigger
Shareholder;

 

NZ Co Shares means fully paid ordinary shares in the capital of NZ Co;

 

Offeree means each Shareholder other than the Proposing Transferor;

 

Ordinary Share means an ordinary share in the capital of each Company as
provided in the relevant New Constitution;

 

Proposed Transferee means the person to whom the Proposing Transferor proposes
to sell or transfer the Sale Shares if they are not purchased by the Offeree
under clause 11.6;

 

Proposing Transferor means a Shareholder proposing to Dispose of its Shares;

 

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Regulator means each of:

 

(a)           ACCC;

 

(b)           APRA;

 

(c)           ASIC; and

 

(d)           ASX,

 

and any other person, company or Governmental Agency responsible for the
administration of any applicable Law;

 

Related Body Corporate has the same meaning given to “related body corporate” in
section 9 of the Corporations Law;

 

Related Party Transaction means a transaction between the Company and a
Shareholder or any of the members of its Group or their respective directors or
partners;

 

Region means Australia and New Zealand;

 

Removed Assets means the assets referred to in paragraph (b) of the definition
of Removed Assets Notice;

 

Removed Assets Notice means an notice by AXA APH to the other parties that:

 

(a)                                  AXA APH or members of the AXA APH Group
intend to appoint persons other than the Companies to provide investment
management services and such appointments either relate to the proper discharge
by an officer of the AXA APH Group of any fiduciary obligation or duty or the
proper discharge of any equivalent responsibility by a member of the AXA APH
Group or do not come within any other proviso or exception to the restrictions
on the members of the AXA APH Group in clause 9 (including, and not limited to,
the exception where the Companies or the third party as delegate of the
Companies do not have appropriate expertise, capacity and proven ability to
manage the asset class or classes concerned); and

 

(b)                                 specifies the assets class or classes to
which the appointments referred to in paragraph (a) above will relate;

 

Retail Investor means an investor who is not an Institutional Investor;

 

Sale Shares means all of the Shares held by a Proposing Transferor;

 

Secretary means the secretary from time to time of the Company;

 

Securities means shares, debentures, stocks, bonds, notes, prescribed interests,
units, warrants, options, derivative instruments or any other securities;

 

Security Interest includes any mortgage, charge, bill of sale, pledge, deposit,
lien, encumbrance, hypothecation or other right, entitlement, interest, power,
authority, discretion, claim, remedy or arrangement of any nature having the
purpose or effect of providing security for the obligations of any person;

 

Shares means Aus Co Shares and NZ Co Shares;

 

Shareholder means a registered holder of a Share including each of ACMCD and AXA
APH while and for so long as they are registered holders of a Share;

 

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Sub-Distributor Agreements means agreements between certain members of the AXA
APH Group and certain members of the Alliance Group substantially in the form
set out in schedule 4 or, in the case of Luxemburg funds, the form of agreement
agreed among the parties under clause 2.1((f)), which provide for the
appointment of the relevant member of the AXA APH Group as sub-distributors of
certain Alliance Capital retail mutual funds;

 

Subsidiary has the meaning given to the word “subsidiary” in section 9 of the
Corporations Law;

 

Tag-Along Notice means a notice in writing stating that the Offeree is willing
to sell its Shares on the Nominated Terms;

 

Tax Invoice includes any document or record treated by the Commissioner of
Taxation as a tax invoice or as enabling the claiming of an input tax credit for
which an entitlement otherwise arises;

 

Transaction Document means each of:

 

(a)                                  the ACM Delegation Agreement;

 

(b)                                 the NMFM Delegation Agreement;

 

(c)                                  the NMFM New Zealand Delegation Agreement;

 

(d)                                 the Sub-Distributor Agreements; and

 

(e)                                  the Fees Deed;

 

Transfer Notice means a notice:

 

(a)           specifying that the Proposing Transferor proposes to transfer the
Sale Shares;

 

(b)           specifying the Nominated Terms;

 

(c)           specifying the Proposed Transferee; and

 

(d)                                 advising the Offeree that it is entitled, by
giving notice in writing to the Proposing Transferor within the next 30 Business
Days, to purchase the Sale Shares on the Nominated Terms and in accordance with
clause 11;

 

Trigger Event, in relation to a Shareholder, means:

 

(a)                                  a person, other than that Shareholder,
acquiring any legal or equitable interest in the Shares held by the Shareholder
(other than as permitted under clause 10);

 

(b)                                 an Insolvency Event occurs in respect of
that Shareholder;

 

(c)                                  that Shareholder is prohibited from being a
shareholder in the Company by a change in any Law; or

 

(d)                                 that Shareholder materially breaches:

 

(1)                                  this agreement;

 

(2)                                  a Constitution; or

 

(3)                                  a Transaction Document,

 

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and such breach is not remedied within 20 Business Days after written notice
requiring the remediation of the breach has been given by the other Shareholder;

 

(a)           AXA APH gives a Material Appointment Notice to ACMCD and the
Companies;

 

whether or not such event as described in paragraphs (a) to (d) of this
definition is in the control of the Shareholder;

 

Trigger Shareholder means the Shareholder in relation to which a Trigger Event
has occurred;

 

Trigger Shares means, in relation to a Trigger Shareholder, all of the Shares
held by the Trigger Shareholder or a Related Entity (as defined in clause 10.1
((b))((2))); and

 

Valuer means the president from time to time of the Victorian branch of the
Institute of Chartered Accountants or the nominee of that president with not
less than 10 years experience in valuing companies which carry on business
similar to or the same as that carried on by the Company.

 

1.2          Interpretation

 

In this agreement, headings are only for convenience and do not affect
interpretation and, unless the context requires otherwise:

 

(a)                                  words in the singular include the plural
and the other way around;

 

(b)                                 words of one gender include any gender;

 

(c)                                  a reference to a person includes an
individual, a company, partnership, joint venture, association, corporation or
other body corporate and a Governmental Agency or Regulator;

 

(d)                                 a reference to a party to this agreement
includes that party’s executors, administrators, successors and permitted
assigns;

 

(e)                                  a promise or agreement by 2 or more persons
binds each person individually and all of them jointly;

 

(f)                                    a reference to a clause, party, schedule,
annexure or exhibit is a reference to a clause of, and a party, schedule,
annexure and exhibit to, this agreement and a reference to this agreement
includes any schedule, annexure or exhibit;

 

(g)                                 a reference to a thing (including, but not
limited to, a right) includes any part of that thing;

 

(h)                                 a reference to a right includes a remedy,
power, authority, discretion or benefit;

 

(i)                                     a reference to legislation includes any
amendment to that legislation, any consolidation or replacement of it, and any
subordinate legislation made under it;

 

(j)                                     terms defined in the GST Act have the
same meaning in clause 19 of this agreement;

 

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(k)           a reference to an agreement other than this agreement includes an
undertaking, deed, agreement or legally enforceable arrangement or
understanding, whether or not in writing;

 

(l)            a reference to a document includes any amendment or supplement
to, or replacement or novation of, that document;

 

(m)          if a word or phrase is defined, another grammatical form of that
word or phrase has a corresponding meaning;

 

(n)           examples are descriptive only and not exhaustive;

 

(o)           a reference to “$” means the lawful dollar currency of Australia;

 

(p)           a provision must not be construed against a party merely because
that party was responsible for preparing this agreement or that provision;

 

(q)           a reference to a body, other than a party to this agreement
(including, but not limited to, an association, authority, corporation, body
corporate or institution), whether statutory or not:

 

(1)           which ceases to exist;

 

(2)           which is reconstituted, renamed or replaced; or

 

(3)           whose powers or functions are transferred to another body,

 

is a reference to the body which replaces it or which serves substantially the
same purposes or has the same powers or functions; and

 

(r)                                    a document expressed to be “in the agreed
terms” means a document in the form of the draft initialled for identification
by or on behalf of the parties to this agreement.

 

1.3          Business Day

 

Where the day on or by which something must be done is not a Business Day, that
thing must be done on or by the next Business Day.

 

2              Conditions precedent

 

2.1          Conditions precedent

 

This agreement (except this clause 2 and clauses 1 and 1 to 15 to 20) will be of
no force or effect unless or until the following conditions precedent are
satisfied:

 

(a)                                  the satisfaction or waiver of each
condition precedent to (other than the execution of or the performance of any
obligation under this agreement) each Transaction Document;

 

(b)                                 the New Constitution has been adopted by
each Company;

 

(c)                                  the grant of all licences, consents and
approvals required by Law in respect of the conduct of the Business on terms and
conditions satisfactory to the parties;

 

(d)                                 the approval of the First Budget;

 

15

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(e)                                  the approval of the First Business Plan;
and

 

(f)                                    the parties agree the form of
Sub-Distributor Agreement for the distribution of Luxemburg funds,

 

unless the parties otherwise agree in writing.

 

2.2                               Reasonable endeavours

 

The parties shall use their reasonable endeavours to satisfy the conditions
precedent set out in clause 2.1 (unless they have been waived by written
agreement between the parties) on or before 31 January 2001.

 

2.3                               Termination prior to satisfaction

 

A party may immediately terminate this agreement by written notice to the other
parties if:

 

(a)                                  any of the conditions precedent set out in
clause 2.1 (not having been waived by the parties) are not satisfied on or
before 30 June 2001; or

 

(b)                                 prior to satisfaction of all the conditions
precedent set out in clause 2.1:

 

(1)           an Insolvency Event occurs in respect of a party;

 

(2)           there occurs:

 

(A)                              an event;

 

(B)                                the introduction into the relevant
legislature of a proposed Law or the proposal or making of any new Law;

 

(C)                                the adoption by a Governmental Agency or
Regulator of a policy; or

 

(D)                               the official announcement on behalf of the
relevant legislature or a Governmental Agency or Regulator that a Law will be
introduced or policy adopted in the future,

 

which in the reasonable opinion of that party has or is likely to have a
material adverse effect on the actual or likely future financial or trading
position of that party or the Joint Venture Group.

 

3              Capital contributions

 

3.1          Subscription by ACMCD and AXA APH

 

(a)           ACMCD will subscribe for:

 

(1)                                  4,750,000 Aus Co Shares at a subscription
price of $1 per Aus Co Share (being a total subscription price of $4,750,000);
and

 

(2)                                  2,000,000 NZ Co Shares at a subscription
price of NZ$1 per NZ Co Share (being a total subscription price of
NZ$2,000,000).

 

(b)           AXA APH will subscribe for:

 

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(1)                                  4,750,000 Aus Co Shares at a subscription
price of $1 per Aus Co Share (being a total subscription price of $4,750,000);
and

 

(2)                                  2,000,000 NZ Co Shares at a subscription
price of NZ$1 per NZ Co Share (being a total subscription price of
NZ$2,000,000).

 

3.2          Change of name

 

(a)                                  ACM agrees that it will change its name on
or prior to the Completion Date to a name which may include the words “Alliance
Capital Management” but is not identical to the name of the Companies.

 

(b)                                 If ACMCD ceases to hold any Shares in the
Companies, the other parties will promptly procure that the names of the
Companies are changed to names which do not include the words “Alliance Capital
Management”. The other parties acknowledge that all right, title and interest in
and to the name “Alliance Capital Management” belongs to ACMCD or its Group and
nothing in this agreement or the other Transaction Documents creates any
proprietary right or interest of the other parties to that name.

 

3.3          Completion

 

(a)                                  Completion of the subscription and issue of
the Shares subscribed for under clause 3.1 will occur on the Completion Date.

 

(b)                                 On the Completion Date:

 

(1)                                  ACMCD must pay to Aus Co and NZ Co
$4,750,000 and NZ$2,000,000 respectively in respect of the Shares subscribed for
under clause 3.1(a) and, subject to receipt of the total subscription price, Aus
Co must issue 4,750,000 Aus Co Shares and NZ Co must issue 2,000,000 NZ Co
Shares to ACMCD;

 

(2)                                  AXA APH must pay to Aus Co and NZ Co
$4,750,000 and NZ$2,000,000 respectively in respect of the Shares subscribed for
under clause 3.1(b) and, subject to receipt of the total subscription price, Aus
Co must issue 4,750,000 Aus Co Shares and NZ Co must issue 2,000,000 NZ Co
Shares to AXA APH;

 

(3)                                  the name of Aus Co must be changed to
Alliance Capital Management Australia Limited and the name of NZ Co must be
changed to Alliance Capital Management New Zealand Limited;

 

(4)                                  ACM and Aus Co will enter into the ACM
Delegation Agreement;

 

(5)                                  ACM, NMFM, NMFM New Zealand and the
Companies will enter into the Fees Deed;

 

(6)                                  NMFM and Aus Co will enter into the NMFM
Delegation Agreement;

 

(7)                                  NMFM New Zealand and NZ Co will enter into
the NMFM New Zealand Delegation Agreement; and

 

(8)                                  certain members of the AXA APH Group and
certain members of the Alliance Group will enter into the Sub-Distributor
Agreements.

 

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3.4          Shares to rank equally

 

(a)                                  The Shares in each Company will rank
equally in all respects except as provided otherwise in this agreement or the
relevant Constitution.

 

(b)                                 Unless otherwise agreed in writing between
the parties, at all times Shares in each Company will be held by ACMCD and AXA
APH in equal proportions. It is the intention of ACMCD and AXA APH that the
Shares in each Company be dealt with as if they were shares in one company.
ACMCD and AXA APH agree that Aus Co Shares and NZ Co Shares are stapled and must
not be dealt with separately.

 

3.5          Constitution

 

(a)                                  The rights and liabilities of the
Shareholders under each Constitution will be subject to their rights and
liabilities under this agreement.

 

(b)                                 Each of the parties acknowledges and agrees
that the New Constitutions will be in a form consistent with the provisions of
this agreement but to the extent of any inconsistency this agreement will
prevail.

 

3.6          Security Interests

 

(a)                                  A Shareholder must not grant, create or
permit to exist any Security Interest in respect of any Shares (including a
Security Interest over any legal or beneficial interest in or any rights of any
Shares) without having obtained the prior written approval of all other
Shareholders.

 

(b)                                 A Shareholder may, among other things,
refuse to give its approval under clause 3.6((a)) if the person in whose favour
the Security Interest is proposed to be granted, created or permitted to exist
does not acknowledge and agree (in a form reasonably satisfactory to that
Shareholder) that the Security Interest is subject to the terms and conditions
of this agreement including, without limitation, the restrictions on Disposal
set out in clause 10.

 

4              Appointments

 

4.1          Boards of Joint Venture Group

 

The provisions in clauses 4 to 10 (inclusive) of this agreement apply to each
of:

 

(a)           Aus Co; and

 

(b)           NZ Co.

 

4.2          Composition of the Board

 

(a)           Each of ACMCD and AXA APH is entitled while and for so long as it
holds any Shares to:

 

(1)                                  appoint up to 3 Directors; and

 

(2)                                  remove and replace any Director appointed
by it,

 

18

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by written notice to the other parties.

 

(b)                                 Each of ACMCD and AXA APH must ensure that
each Director appointed by it is a person with suitable qualifications,
experience and expertise to fulfil the position of Director of the Company.

 

(c)                                  Each of ACMCD and AXA APH will be
responsible for and hold harmless the other parties against any claim for unfair
or wrongful dismissal arising out of the removal of a Director appointed by it.

 

(d)                                 An alternate Director may be appointed and
removed or replaced in accordance with the relevant Constitution.

 

(e)                                  Until such time as AXA Ceases to Control
either:

 

(1)           ACMCD or any transferee of the ACMCD Shares; or

 

(2)           AXA APH or any transferee of the AXA APH Shares,

 

ACMCD and AXA APH will request AXA to nominate one person for appointment as
Director. ACMCD and AXA APH will together procure the appointment of such person
as a Director.

 

(f)            Upon AXA Ceasing to Control either:

 

(1)           ACMCD or any transferee of the ACMCD Shares; or

 

(2)           AXA APH or any transferee of the AXA APH Shares,

 

any person nominated by AXA and appointed to act as a Director will become
ineligible to act as a Director (and the New Constitutions will so provide) and
the Shareholders will together as soon as reasonably practicable procure the
retirement or removal of that person as a Director.

 

4.3          Chair

 

ACMCD may from time to time elect one of the Directors to the office of chairman
of Directors and determine the period for which that Director is to be chairman
of Directors.

 

4.4          Secretary

 

(a)           The Board may appoint and remove and replace a Secretary.

 

(b)                                 The parties contemplate that the Secretary
will be responsible for, among other things, the preparation and circulation of
agenda and notices of meetings of the Board and Shareholders.

 

5              Board activities

 

5.1          Meetings

 

(a)                                  The Board must meet together for the
dispatch of business at such times as are required for the proper conduct of the
business and affairs of the relevant Company but, in any event, not less
frequently than once every quarter. For the purposes of this agreement,
attendance at meetings may be

 

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by way of telephone or videoconference participation and the parties agree that
the New Constitutions shall provide accordingly.

 

(b)                                 No business may be conducted at a meeting of
the Board unless:

 

(1)           notice of such business has been given in accordance with
clause 5.4;

 

(2)           notice of such business has been given to each Director by the
Secretary or a Director; or

 

(3)           all of the Directors otherwise agree.

 

5.2          Voting at meetings

 

(a)                                  The Directors appointed by ACMCD and AXA
APH will each have 1 vote on any resolution which requires approval provided
that the Directors appointed by ACMCD present at the meeting (whether in person
or by telephone or videoconference) will be entitled to exercise a majority of
votes on any resolution (including, for the avoidance of doubt, a resolution for
the appointment of chief executive officer of the relevant Company) except a
resolution which requires approval in accordance with clause 7.3.

 

(b)                                 The Director (if any) appointed by AXA will
have 1 vote on any resolution which requires approval in accordance with clause
7.4 but in no other circumstances.

 

(c)                                  The Chairman will not have a casting vote.

 

(d)                                 If AXA Ceases to Control either:

 

(1)           ACMCD or any transferee of the ACMCD Shares; or

 

(2)           AXA APH or any transferee of the AXA APH Shares,

 

the Director (if any) appointed by AXA will no longer have a vote on any
resolution including a resolution which requires approval in accordance with
clause 7.4.

 

5.3          Quorum

 

(a)                                  No business may be conducted at a meeting
of the Board unless a quorum is present.

 

(b)                                 Subject to clause 5.3(d), a quorum for a
meeting of the Board (or a particular resolution) comprises any two Directors,
one of whom has been appointed by ACMCD and one of whom has been appointed by
AXA APH, or their properly appointed alternates.

 

(c)                                  A meeting of the Board must be convened for
the same place and time on the same day in the following week if a quorum is not
present within one hour after the time for which a meeting was convened.

 

(d)                                 Any Director (or that Director’s properly
appointed alternate) in attendance at a meeting convened in accordance with
clause 5.3(c) comprises a quorum at such meeting.

 

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5.4          Notice of meetings

 

The parties must ensure that each Director is given at least 5 Business Days
notice of a meeting of the Board with such notice being accompanied by all board
papers and other information relevant to the meeting unless all the Directors
agree otherwise.

 

6              Business plans, budgets and reporting

 

6.1          Business Plan

 

Each Company must update the Business Plan including the First Business Plan,
and provide the updated Business Plan to each Shareholder and Director
40 Business Days before the start of each Accounting Period for approval by the
Board.

 

6.2          Budget

 

Each Company must prepare a Budget for each financial year and provide the
Budget to each Shareholder and Director 40 Business Days before the start of
each Accounting Period for approval by the Board.

 

6.3          Financial statements

 

(a)                                  Each Company must maintain, in accordance
with the Accounting Standards, proper, usual and up-to-date financial and
accounting records in relation to the assets, profits and losses, cash flow,
business and affairs of the Company.

 

(b)                                 Each Company must ensure that the Auditors
prepare the Audited Accounts for each Accounting Period within 3 months after
the end of that Accounting Period.

 

(c)                                  Each Company must ensure that Audited
Accounts for each Accounting Period are provided to each Shareholder and
Director and laid before the Company in general meeting within 4 months after
the end of that Accounting Period.

 

(d)                                 Each Company must produce Management
Accounts for each month of an Accounting Period and provide the Management
Accounts to each Shareholder and Director within 45 days after the end of that
month.

 

6.4          Auditor

 

Each Company must appoint an Auditor.  The appointment of the Auditor must be
approved by two Directors, one of whom has been appointed by ACMCD and one of
whom has been appointed by AXA APH.

 

6.5          Access to documents

 

Subject to clause 15 and the provision of reasonable notice to the Secretary,
each of the parties and their respective nominees (including, at that party’s
cost, its

 

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 internal auditor and/or an independent auditor) is entitled during normal
business hours and other times which are reasonable in the circumstances to:

 

(a)           enter any premises which are occupied by each Company;

 

(b)           inspect any property or assets of each Company;

 

(c)           have access to and inspect the board papers, books, records,
accounts and documents of each Company and to take copies at their own expense;

 

(d)           perform (at that party’s cost) an audit of each Company; and

 

(e)           ask questions in relation to the affairs, finances and accounts of
each Company of:

 

(1)           any Director;

 

(2)           any Shareholder;

 

(3)           any employee of the Company;

 

(4)           any professional adviser of the Company in that capacity; and

 

(5)           the Auditors,

 

but not so as to unreasonably interfere with or disrupt the business operations
of the Companies.

 

Subject to clause 15, each of AXA APH and ACMCD and their respective nominees
(including, at AXA APH or ACMCD’s cost, as the case may be, its internal auditor
and/or an independent auditor) is entitled (at their own expense) to be provided
with copies of any information in the possession or under the control of the
other party or its Group as may be reasonably required for the purposes of:

 

(a)                                  verifying any financial calculations under
this agreement or the Fees Deed; or

 

(b)                                 verifying that all of the obligations under
clause 9 of this agreement of the other party or its Group which directly affect
such financial calculations have been met in accordance with their terms,

 

but not:

 

(a)                                  so as to unreasonably interfere with or
disrupt the business operations of the other party or its Group; or

 

(b)                                 to the extent that the provision of such
information is restricted or prohibited by any Law or would result in the
contravention of any duty of confidentiality or contractual obligation binding
on the other party or its Group.

 

7              Management

 

7.1          Delegation of powers

 

The Board may (subject to clause 5.2((a)) in its discretion delegate the powers
of management to the chief executive officer of the relevant Company in
accordance with the service agreement between the Company and the chief
executive officer or written directions from the Board from time to time.

 

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7.2          Dividend policy

 

(a)                                  Subject to clause 7.2(b), each Company must
and each party must do all things within its power to procure that the Company
distributes 100% of the net profit after tax (after providing for the regulatory
capital and other funding requirements of the Company as specified in the Budget
and the Business Plan) as a dividend payable to the Shareholders equally in
respect of each Share.

 

(b)                                 Neither Company is required to distribute
the net profit after tax under clause 7.2(a):

 

(1)           to the extent that such dividend is prohibited under:

 

(A)          Law; or

 

(B)           a restriction imposed by any Governmental Agency or Regulator; or

 

(2)                                  as otherwise permitted by resolution or
written consent or direction made or given in accordance with clause 7.3.

 

7.3          Matters requiring joint consent

 

Subject to clauses 7.4 and 7.5, neither Company must do or omit to do any of the
following without a resolution approved by at least one Director appointed by
ACMCD and one Director appointed by AXA APH:

 

(a)                                  acquire or dispose of any Securities in any
Controlled Entity;

 

(b)                                 declare or pay any dividend otherwise than
in accordance with clause 7.2;

 

(c)                                  incur any:

 

(1)                                  liability in respect of any interest
bearing borrowings or debt or other financial accommodation exceeding
$5,000,000; or

 

(2)                                  liability in respect of the provision, or
agreement for the provision, of any guarantees, indemnities or similar
obligations by any person otherwise than in the ordinary course of the Business;

 

(d)                                 enter into any Related Party Transaction
(other than any delegation under clause 7.5);

 

(e)                                  approve the Budget;

 

(f)                                    approve the Business Plan;

 

(g)                                 approve an increase in the number of
Directors which the parties are in total entitled to appoint, remove and replace
under clause 4;

 

(h)                                 approve the acquisition of an Acquired
Business;

 

(i)                                     approve the issue of Shares to the
Shareholders on a pro rata basis to fund the acquisition of an Acquired
Business;

 

(j)                                     amend or propose a resolution for an
amendment to the Constitution;

 

(k)                                  propose or take any step in the voluntary
winding up of the Company; or

 

(l)                                     change the share capital of the Company
including, without limitation, any:

 

 

23

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(1)                                  issue, grant or creation of any Securities
or issue, grant, creation or entry into of any options, warrants, offers or
agreements or other rights in respect of any Securities except as provided in
this agreement;

 

(2)                                  reduction of capital;

 

(3)                                  buy back of any Share;

 

(4)                                  consolidation or subdivision of any Share;
or

 

(5)                                  call on any unpaid share capital.

 

7.4          Deadlock resolution

 

Either Company may do or omit to do any of the actions described in clause
7.3(a) to (i) if approved by resolution or the written consent or direction of
all of the Directors appointed by either ACMCD or AXA APH and by a Director
appointed from time to time by AXA.

 

7.5          Sub-delegation

 

(a)                                  AXA APH acknowledges and agrees that the
Companies will sub-delegate their investment management functions with respect
to all asset classes (other than Australian or New Zealand Securities) to the
members of the Alliance Group which have appropriate expertise, capacity and
proven capability to manage the asset class or classes concerned. However, such
sub-delegation will not relate to Australian or New Zealand Securities without
the prior written agreement of NMFM.

 

(b)                                 AXA APH acknowledges and agrees that the
sub-delegation by the Companies of their investment management functions to the
members of the Alliance Group during the term of this agreement may require the
approval of the New York Insurance Authority (or any successor body) which may
or may not be forthcoming. The Companies and the members of the Alliance Group 
will have no liability to AXA APH or its Controlled Entities if such approval is
not forthcoming for any reason.

 

(c)                                  ACMCD or any member of the Alliance Group
to which a Company makes a sub-delegation may not further delegate an investment
management function to investment managers who are not a member of the Alliance
Group unless a member of the AXA APH Group approves such further delegation in
writing.

 

(d)                                 Where at the Completion Date there are
existing sub-delegations by ACM, National Mutual Funds Management (Global)
Limited, NMFM or NMFM NZ (whether or not to a Related Body Corporate) the
parties agree that these sub-delegations may be maintained and all fees payable
under them will continue to be paid by ACM, National Mutual Funds Management
(Global) Limited, NMFM or NMFM NZ as the case may be.  These payments may be
made either directly or through the relevant Company.  This clause is subject to
clause 12 of the Fees Deed.

 

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7.6          Offshore Funds

 

ACMCD agrees to procure that where any of the funds or portfolios managed by it
or its Group are required by their investment objectives or guidelines to invest
65% or more of the value of assets under management of the relevant fund or
portfolio in the Region, the investment management of the relevant fund or
portfolio is assigned, delegated or sub–delegated (as ACMCD deems appropriate)
to the most appropriate of the Companies. The terms of such assignment,

 

delegation or sub–delegation must provide for the relevant Company to be
entitled to be paid at least 70% of the fees actually received in respect of the
relevant assets. If the consent of the client to such assignment, delegation or
sub-delegation cannot be obtained, the parties will enter into arrangements of
equivalent financial effect (such as the payment of a research fee of the same
amount).

 

7.7          Distribution of Alliance Capital Mutual Funds

 

For the duration of this agreement, ACMCD agrees to procure that the members of
the AXA APH Group nominated by AXA APH will be appointed as sub-distributors of
any mutual fund products offered by the Alliance Group to Retail Investors in
the Region on the terms of the Sub-Distributor Agreements. This will be a
non-exclusive appointment.

 

7.8          Payment of Fees

 

For the duration of this agreement, ACMCD will procure the payment of fees to
AXA APH in respect of all mutual fund products offered by the Alliance Group in
the Region:

 

(a)                                  sold by the members of the AXA APH Group
nominated by AXA APH to investors in the Region; or

 

(b)                                 sold by any other distributor to investors
in the Region and in respect of which the members of the AXA APH Group have
provided such assistance as may be reasonably required by the Alliance Group or
the global distributor of such products for the sale of such products in the
Region.

 

7.9          Fee Scales

 

The fees payable to the members of the AXA APH Group under clause 7.8((a)) will
be calculated at rates commensurate with the rates paid to other distributors of
the relevant products. The fees payable to the members of the AXA APH Group
under clause 7.8((b)) will be that number of bp of the actual amount of the
sales of such products in the Region as ACMCD and AXA APH agree acting
reasonably.  AXA APH and ACMCD acknowledge that their expectation is that the
fee will be approximately 15 bp.

 

7.10        Termination of Delegation Agreements

 

(a)                                  The Companies may not terminate the NMFM
Delegation Agreement or the NMFM New Zealand Delegation Agreement without the
prior consent in writing of AXA APH.

 

(b)                                 Aus Co may not terminate the ACM Delegation
Agreement without the prior consent in writing of ACMCD.

 

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8              Meetings of shareholders

 

8.1          Quorum

 

(a)                                  No business may be conducted at a meeting
of the Shareholders unless a quorum is present.

 

(b)                                 Subject to clause 8.1(d), a quorum for a
meeting of the Shareholders comprises all Shareholders (in person or by proxy or
by representative).

 

(c)                                  A meeting of the Shareholders must be
convened for the same place and time on the same day in the following week if a
quorum is not present within one hour after the time for which a meeting was
convened.

 

(d)                                 The Shareholders in attendance (in person or
by proxy or by representative) at a meeting convened in accordance with clause
8.1(c) comprise a quorum at such meeting if all Shareholders are not present (in
person or by proxy or by representative) within one hour after the time for
which the meeting was convened.

 

8.2          Notice of meetings

 

The parties must ensure that each Shareholder is given at least 21 days notice
of a meeting of the Shareholders with such notice being accompanied by all
information relevant to the meeting unless all the Shareholders agree otherwise.

 

9              Exclusivity

 

9.1          Exclusivity for the Company

 

(a)                                  Each of AXA APH and ACMCD undertake to each
other and to each of the Companies to procure that save as provided in the
remainder of this clause 9, the Companies shall be the vehicles through which
they conduct their asset management activities in the Region.

 

(b)                                 AXA APH acknowledges and agrees that there
will be circumstances, as provided in the remainder of this clause 9, in which
assets belonging to Australian or New Zealand investors are managed outside the
Region by a member of the Alliance Group.

 

9.2          AXA APH Undertakings

 

AXA APH undertakes to ACMCD and to each of the Companies that it and each member
of the AXA APH Group will do or procure the following:

 

(a)                                  the AXA APH Group will not establish,
acquire or otherwise be interested in any undertaking in the Region (other than
portfolio investments in the ordinary course or as the holder of not more than
15% of the issued shares of any company listed on a stock exchange) the
principal business of which is to undertake asset management activities;

 

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(b)                                 the AXA APH Group will not market any asset
management activities to or undertake such activities for any Institutional
Investor in the Region independently of the Companies;

 

(c)                                  the AXA APH Group will not distribute any
single manager product, branded AXA or branded with any of AXA APH’s own brands,
in the Region for Retail Investors which is not managed by either of the
Companies or by a third party as the delegate of either of the Companies
(subject to the Companies or the third party having appropriate expertise
capacity and proven capability to manage the asset class or classes concerned);
and

 

(d)                                 the AXA APH Group will ensure that the
investment management services in connection with all products offered to Retail
Investors and all investment assets of the statutory funds of the AXA APH Group
are carried out exclusively by the Companies (subject to the Companies having
appropriate expertise capacity and proven capability to manage the asset class
or classes concerned) subject to:

 

(1)                                  obtaining consent to the sub-delegation
from those clients whose consent is required, which consent the AXA APH Group
will use all reasonable endeavours to obtain; and

 

(2)                                  the multi-manager products of the AXA APH
Group for Retail Investors for which it is agreed that the relevant Company
shall be included in the list of managers for such products (subject to the
relevant Company having appropriate expertise capacity and proven capability to
manage the asset class or classes concerned).

 

9.3          ACMCD Undertakings

 

ACMCD undertakes to AXA APH and each of the Companies that it and each member of
the Alliance Group will do or procure the following:

 

(a)                                  the Alliance Group will not establish,
acquire or otherwise be interested in any undertaking in the Region (other than
portfolio investments in the ordinary course or as the holder of not more than
15% of the issued shares of any company listed on a stock exchange) the
principal business of which is to undertake asset management activities;

 

(b)                                 subject to clause 9.5(b), the Alliance Group
will not actively market in the Region its asset management activities (which
includes but is not limited to products other than funds of the type referred to
in the proviso to clause 9.3(c)) to any Institutional Investor in the Region
provided however that nothing shall prevent the Alliance Group from accepting a
mandate from an Institutional Investor (whether as an investor in a mutual fund
or as a segregated account) that has not been actively solicited by it.  To the
extent that the investment objectives or guidelines of the relevant mandate
requires 65 per cent or more of the value of assets under management of the
portfolio to be invested in Australian or New Zealand securities, such mandate
will be delegated by the relevant member of the Alliance Group to the relevant
Company as appropriate or sub-delegated by the relevant Company as the parties
shall determine in accordance with the

 

27

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requirements of the relevant client and the terms of the ACM Delegation
Agreement;

 

(c)                                  the Alliance Group will not establish or
operate any business or arrangement for the public distribution or
administration (including unit holder settlements) of funds to or for Retail
Investors in the Region provided however, that nothing shall prevent the
Alliance Group from arranging for the distribution and marketing of its funds
established under the laws of a jurisdiction outside the Region to Retail
Investors and Institutional Investors in the Region pursuant to its distribution
arrangements with AXA APH or with third parties in accordance with clauses 7.7
and 7.8:

 

Nothing in this clause 9.3((c)) prevents the Alliance Group from establishing,
sponsoring or otherwise being interested in mutual funds or investment
portfolios of any kind established under the laws of a jurisdiction outside the
Region and managed outside the Region and which invest in securities or other
assets located in the Region.  Where 65 per cent or more of the value of assets
under management of the relevant fund or portfolio is required by its investment
objectives or guidelines to be invested in assets located in the Region, the
second sentence in clause 9.3((b)) will apply;

 

(d)                                 the Alliance Group will not establish or
operate any business or arrangement in the Region for the management in the
Region of property vehicles (including listed property trusts) which invest
directly in real property (“Direct Property Vehicles”) provided however that
nothing shall prevent the Alliance Group establishing, sponsoring or managing
real estate investment vehicles outside the Region which hold and trade in the
securities of property companies (wherever such property companies may be
domiciled) (“Indirect Property Vehicles”); and

 

(e)                                  the Alliance Group will not establish or
operate any business in the Region which engages in residential or commercial
lending in the Region.

 

9.4          Companies’ Undertakings

 

Save to the extent required by law or any regulatory authority, each Company
undertakes to ACMCD and to AXA APH not to engage or otherwise arrange or be
involved in:

 

(a)                                  the public distribution or administration
(including unit holder settlements) of any products in the Region for Retail
Investors; or

 

(b)                                 the management in the Region of Direct
Property Vehicles provided however that nothing shall prevent the Company
establishing, sponsoring and managing Indirect Property Vehicles in the Region;
or

 

(c)                                  residential or commercial lending in the
Region; or

 

(d)                                 the trading or management of real property
in the Region.

 

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9.5          Other Activities

 

Nothing in this agreement will, or is intended to, prevent:

 

(a)           the AXA APH Group from conducting any business which:

 

(1)           is not expressly limited or prohibited by clause 9.2;

 

(2)           is listed in clause 9.4((a)) to 9.4((d));

 

(3)           is the management of multi-manager products offered by members of
the AXA APH Group;

 

(4)                                  involves the creation, management or
distribution of private debt, private equity or structured finance products in
the Region or elsewhere which the Joint Venture Group is unable or unwilling to
undertake; or

 

(5)                                  each of the relevant Companies and a
Director appointed by ACMCD consents to in its absolute discretion.

 

(b)           the Alliance Group from conducting any business which:

 

(1)                                  is not expressly limited or prohibited by
clause 9.3; or

 

(2)                                  involves the creation, management or
distribution by way of private placement (as that term is understood in the US)
to eligible investors of private debt, private equity or structured finance
products or portfolios in the Region or elsewhere;

 

(c)           the Companies from conducting any business which is not expressly
limited or prohibited by clause 9.4.

 

9.6          Duration of Undertakings

 

The undertakings in this clause 9 will apply:

 

(a)           to ACMCD for so long as a member of the Alliance Group has a
holding of Shares; and

 

(b)           to AXA APH for so long as a member of the AXA APH Group has a
holding of Shares.

 

9.7          Limitation

 

(a)                                  The parties acknowledge that neither AXA
APH nor ACMCD will have any obligation under clause 9 to do or procure any
action by (in the case of AXA APH) a member of the AXA APH Group or (in the case
of ACMCD) a member of the Alliance Group where compliance will cause a member of
the AXA APH Group or a member of the Alliance Group to breach any law,
regulation or directive from a Governmental Agency, provided that where the
breach relates to the proper discharge by an officer of the AXA APH Group of any
fiduciary obligation or duty or the proper discharge of any equivalent
responsibility by a member of the AXA APH Group:

 

(1)                                  until the end of the third anniversary of
the date of this agreement, a Removed Assets Notice; and

 

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(2)                                  after the third anniversary of the date of
this agreement a notice specifying that this clause applies and the class or
classes of assets concerned,

 

must also be given to ACMCD.

 

(b)                                 The parties acknowledge that nothing in this
agreement will prevent AXA APH or members of the AXA APH Group from using
investment management services provided by persons other than the Companies
following the giving of a Removed Assets Notice in respect of Removed Assets
provided that AXA APH will pay the Compensation Amount in accordance with clause
9.10 to the Companies if the Minor Appointment Percentage is 7.5 or above when
calculated in accordance with the following formula:

 

Minor Appointment Percentage = [j3006ex10d20image005.gif] x 100

 

where:

 

R is equal to:

 

(1)                                  where there has only been one Removed
Assets Notice - the annual fees that are or would have been payable under the
Fees Deed by AXA APH to the Companies  for the investment management of the
Removed Assets as at the end of the last quarter before the giving of the
Removed Assets Notice; and

 

(2)                                  where there has been more than one Removed
Assets Notice - the aggregate of the annual fees relating to the investment of
the Removed Assets for all such notices determined in accordance with R(1)
above;

 

E is equal to:

 

(3)                                  where there has only been one Removed
Assets Notice - the aggregate of:

 

(A)                              the annual fees that are or would have been
payable under the Fees Deed by AXA APH to the Companies or their delegates for
the investment management of all of the assets referable to the AXA APH Group
(including, without limitation, assets of unit trusts managed by AXA APH Group)
as at the end of the last quarter before the giving of the Removed Assets
Notice; and

 

(B)                                fees calculated under R(1) above.

 

(4)                                  where there has been more than one Removed
Assets Notice - the aggregate of the annual fees determined in accordance with
(3)(A) above and the fees calculated under R(2).

 

(c)           From the third anniversary of the Completion Date, AXA APH may
give a Material Appointment Notice. AXA APH may give more than one Material
Appointment Notice.

 

(d)                                 From the date which is one month after the
date of the Material Appointment Notice, the restrictions in clause 9 will cease
to apply to the

 

30

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 parties to this agreement in respect of the asset classes specified in the
Material Appointment Notice.  On the giving of a Material Appointment Notice,
AXA APH shall be deemed to have served a notice on each Company of a Trigger
Event, and the provisions of clause 13 shall apply.

 

9.8                               Acquisition of financial services company

 

(a)                                  If a member of the AXA APH Group or a
member of the Alliance Group (“Acquirer”) agrees to acquire a company or
business with an interest in asset management activities in the Region, the
Acquirer must within 30 days of such agreement give notice to the Companies
offering such asset management activities in the Region (“Acquired Business”)
for sale to the

 

relevant Company for fair value (as agreed between ACMCD and AXA APH or, failing
such agreement within 20 Business Days of such notice, as calculated by a Valuer
as fair value in accordance with clause 13.3) but, in addition, requiring the
Valuer to take into account any taxation obligations of the Vendor of the
Acquired Business and other payments to third parties arising from the sale of
the Acquired Business and to determine an amount to so compensate the Vendor)
and otherwise on reasonable arm’s length terms and conditions (including, but
not limited to, terms and conditions relating to shareholders’ and regulatory
approvals).

 

(b)                                 Within 40 Business Days of receipt of a
notice under clause 9.8((a)) or (if fair value is calculated by a Valuer under
clause 13.3) within 20 Business Days of the date of receipt of the valuation
prepared by the Valuer, the relevant Company must give notice to the Acquirer
stating whether the relevant Company wishes to acquire the Acquired Business for
fair value and on the other terms of the offer.

 

(c)                                  If the relevant Company fails to give a
notice under clause 9.8((a)), or gives notice that it does not wish to acquire
the Acquired Business, or the acquisition of the Acquired Business is not
completed within 4 months of the notice given under clause 9.8((a)) then the
Acquirer may give notice to the parties that the undertakings given by it under
this clause 9 will not apply to the Acquired Business.

 

(d)                                 If the relevant Company gives a notice that
it does wish to acquire the Acquired Business, then the parties undertake to use
their reasonable efforts to complete the sale within 4 months of the date of the
notice. If the sale is not completed within 4 months, the parties will not be
bound to complete the sale and will have no further liability to each other in
relation thereto (save for any failure to use their reasonable efforts as
aforesaid).

 

(e)                                  The Shareholders agree to subscribe for the
Shares approved by the Board under clause 7.3(i).

 

9.9          Existing sub-delegations

 

This clause has been intentionally deleted.

 

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9.10        Compensation agreements

 

(a)                                  Until the end of the third anniversary of
the date of this agreement, AXA APH will pay on a quarterly basis within 30 days
of the end of the quarter to the Companies an amount calculated in accordance
with the following formula:

 

(F1 - F2) - (F1 x 0.075)

 

where:

 

F1                                     means the fees for the relevant quarter
that would have been payable under the Fees Deed by AXA APH to the Companies
arising from the investment management of all of the assets referable to the AXA
APH Group (including assets of unit trusts managed by the AXA APH Group) and
managed by the Companies, including the Removed Assets; and

 

F2                                     means the fees for the relevant quarter
that were actually payable under the Fees Deed by AXA APH to the Companies
arising from the investment management of all of the assets referable to the AXA
APH Group (including assets of unit trusts managed by the AXA APH Group) but
excluding the Removed Assets.

 

(b)                                 After the third anniversary of the date of
this agreement, ACMCD and the Companies are entitled (subject to clause
9.10((c))) to pursue any remedies against AXA APH available at law to compensate
for any loss or damage suffered or incurred as a result of any breach of clause
9.7((b)) if the Minor Appointment Percentage is at any time 7.5 or above
including, without limitation, actions for damages and/or injunctive relief.

 

(c)                                  AXA APH will have no liability under clause
9.10((b)) to the extent the breach relates to a member of the AXA APH Group
using investment services provided by persons other than the Companies due to
the proper discharge by an officer of the AXA APH Group of any fiduciary
obligation or duty or the proper discharge of any equivalent responsibility by a
member of the AXA APH Group.

 

10           Transfers of shares - general

 

10.1        General prohibition

 

A Shareholder must not Dispose of, or purport to Dispose of, and neither Company
must give effect to a Disposal of, any Shares unless:

 

(a)                                  the prior written consent of the other
Shareholder has been obtained (which consent may be withheld in the absolute
discretion of the other Shareholder);

 

(b)                                 the Disposal is:

 

(1)           of all of a Shareholders’ Shares; and

 

32

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(2)                                  in favour of a Controlled Entity of the
Latest Core Shareholder or a body corporate which has the same Holding Company
as the Latest Core Shareholder (a “Related Entity”); or

 

(c)                                  the Disposal is in accordance with clauses
11 to 13.

 

10.2        Transfer to Latest Core Shareholder

 

A Disposal under clause 10.1((b)) is on the basis that if the transferee ceases
to be a Related Entity of the Latest Core Shareholder, that transferee must
transfer all of the Shares it holds to the Latest Core Shareholder or to another
Related Entity of the Latest Core Shareholder.

 

10.3        Approval of transfer

 

Where a transfer of Shares is in conformity with this agreement, each party must
take any steps which for the time being are within its power and are necessary
to procure that any approval required under the relevant Constitution for the
transfer is given and that the Directors register the transfer.

 

 

11           Transfers of shares - pre-emptive rights

 

11.1        Right to transfer

 

At any time after 3 years from the Completion Date, each Shareholder may
transfer all (but not less than all) of the Shares held by it to a third party
in accordance with this clause 11 if the third party can demonstrate adequate
financial, technical and any other capacities reasonably required to be able to
perform the rights and obligations under this agreement and all other agreements
which would be incumbent upon them if the transfer were to go ahead.

 

11.2        Transfer Notice

 

A Proposing Transferor must give a Transfer Notice to each Company and the other
Shareholder.

 

11.3        Non-revocation

 

A Transfer Notice may not be revoked without the prior consent of the Offeree
and will by force of this agreement constitute an unconditional and irrevocable
offer by the Proposing Transferor to sell the Sale Shares to the Offeree on the
Nominated Terms and in accordance with this clause 11.

 

11.4        Acceptance Notice

 

An Offeree may give an Acceptance Notice to the Proposing Transferor at any time
during the Acceptance Period.

 

11.5        Completion

 

(a)                                  Completion of a sale which is the subject
of an Acceptance Notice given to the Proposing Transferor during the Acceptance
Period must take place at

 

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a time and place to be agreed by the Proposing Transferor and the Offeree or,
failing agreement, at 10 am at the registered office of the Company on the
Business Day being 10 Business Days after the date that the Acceptance Notice
was given to the Proposing Transferor.

 

(b)           Subject to any relevant Nominated Terms, at completion:

 

(1)                                  the Offeree must pay to the Proposing
Transferor any cash consideration specified in the Nominated Terms for the Sale
Shares by bank cheque; and

 

(2)                                  the Proposing Transferor must deliver to
the Offeree:

 

(A)                              a share transfer form for the transfer of the
Sale Shares to the Offeree (or its nominee) duly executed by the Proposing
Transferor;

 

(B)                                the certificate (if any) relating to the Sale
Shares;

 

(C)                                any resignations or notices of removal of and
releases of all obligations of the Company to each of the Directors of the
Company appointed by the Proposing Transferor;

 

 

(c)                                  Any transfer of Sale Shares by the
Proposing Transferor to the Offeree shall be a transfer of the legal and
beneficial interest together with all rights attaching to the Sale Shares free
and clear from all claims and Security Interests.

 

11.6        Remaining Shares

 

(a)                                  Subject to clause 12, if no Acceptance
Notice is given to the Proposing Transferor during the Acceptance Period, the
Proposing Transferor may, at any time within 30 Business Days after the expiry
of the Acceptance Period, sell and transfer the Sale Shares to the Proposed
Transferee specified in the Transfer Notice on the Nominated Terms.

 

(b)                                 If the Proposing Transferor fails to sell
and transfer the Sale Shares within the period specified in clause 11.6((a)),
the Proposing Transferor loses its entitlement to do so without first complying
with this clause 11 again.

 

12           Tag-along Right

 

12.1        Tag-Along Notice

 

Where the Offeree has not exercised its pre-emptive right under clause 11, the
Offeree may within the Acceptance Period give a Tag Along Notice to the
Proposing Transferor and the Proposed Transferee that it requires the Proposed
Transferee to purchase all of the Shares held by the Offeree on the same
Nominated Terms.

 

12.2        No Transfer

 

If the Offeree gives a Tag Along Notice under clause 12.1 the Proposing
Transferor must not transfer its Shares to the Proposed Transferee and must not

 

34

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 permit the Company to register any such transfer, unless the Proposed
Transferee purchases the Shares the subject of the Tag Along Notice at the same
time as the Proposing Transferor’s Shares on the same Nominated Terms.

 

12.3        Transfer to Proposed Transferee

 

If the Offeree does not exercise its pre-emptive right under clause 11 or its
tag-along right under this clause within the Acceptance Period, the Proposing
Transferor may within 30 Business Days after the expiry of the Acceptance
Period, sell and transfer the Sale Shares to the Proposed Transferee specified
in the Transfer Notice on the Nominated Terms.

 

13           Transfers of shares - required transfers

 

13.1        Notice of Trigger Event

 

(a)                                  Where a Trigger Event occurs, the Trigger
Shareholder must immediately give notice in writing to each Company setting out
full particulars of the Trigger Event.

 

(b)                                 Each Company must as soon as practicable
after:

 

(1)                                  receiving a notice of a Trigger Event from
a Trigger Shareholder; or

 

(2)                                  otherwise becoming aware of the occurrence
of a Trigger Event in relation to a Trigger Shareholder,

 

give a notice in writing to the Non-Trigger Shareholder advising that a Trigger
Event has occurred in relation to the Trigger Shareholder and:

 

(3)                                  if clause 13.1(b)(1) applies, attaching a
copy of the notice received from the Trigger Shareholder; or

 

(4)                                  if clause 13.1(b)(2) applies, giving
details (so far as they are known to the Company) of the Trigger Event.

 

13.2        Rights following a Trigger Event

 

Without limitation to its other rights:

 

(a)                                  the Non-Trigger Shareholder may:

 

(1)                                  at any time within 10 Business Days of
receiving a notice from the Company under clause 13.1(b), give a notice in
writing to the Company requiring that the Fair Value of the Trigger Shares be
ascertained; and

 

(2)                                  at any time within 20 Business Days after
the Fair Value is ascertained, terminate this agreement by written notice to the
other parties; and

 

(b)                                 if no notice is given within the period
specified in clause 13.2(a), the Non-Trigger Shareholder has no further rights
under this clause 13.2 in relation to the Trigger Event the subject of the
notice from the Company under clause 13.1(b).

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13.3        Fair Value

 

(a)                                  If the Non-Trigger Shareholder requires in
accordance with clause 13.2(a)(1) that the Fair Value of the Trigger Shares be
ascertained and the Trigger Shareholder and the Non-Trigger Shareholder have not
agreed the Fair Value within 20 Business Days the Company must appoint a Valuer
within 10 Business Days to ascertain the Fair Value of the Trigger Shares as
soon as practicable:

 

(1)                                  by first assessing the value of the Company
as a whole and then allocating that value among the classes of issued securities
in the Company; and

 

(2)                                  by having regard to any other basis
considered appropriate including:

 

(A)                              the profit, strategic positioning, future
prospects and undertaking of the Business;

 

(B)                                the amount which a person of repute and
credibility would be prepared to pay for the Trigger Shares acting at arm’s
length;

 

(C)                                any loss or damage suffered or incurred by
the Company as a result of the Trigger Event;

 

(D)                               whether the transfer of the Trigger Shares to
the Non-Trigger Shareholder would give control of the Company to the Non-Trigger
Shareholder; and

 

(E)                                 the Accounting Standards.

 

(b)                                 The Fair Value of the Trigger Shares
ascertained by a valuer appointed under this clause 13.3 and such valuation will
be final and binding on all Shareholders.

 

(c)                                  A Valuer appointed to ascertain the Fair
Value of the Trigger Shares under this clause 13.3 acts as expert and not as
arbitrator.

 

(d)                                 Each Shareholder and the Company must
provide all information and assistance reasonably requested by and may make
submissions to any Valuer appointed to ascertain the Fair Value of the Trigger
Shares under this clause 13.3.

 

(e)                                  The costs of the any Valuer appointed to
ascertain the Fair Value of the Trigger Shares under this clause 13.3 must be
borne by the Company and indemnified by the Trigger Shareholder.

 

13.4        Notice of Fair Value

 

(a)                                  As soon as practicable after the Fair Value
of the Trigger Shares has been ascertained, the Company must give:

 

(1)                                  a notice in writing to the Non-Trigger
Shareholder:

 

(A)                              advising it of the Fair Value of the Trigger
Shares and that it is entitled by giving notice in writing to the Company within

 

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20 Business Days of receiving the notice from the Company to purchase the
Trigger Shares at the Fair Value; and

 

(B)                                if the Fair Value was ascertained by a Valuer
appointed under clause 13.3, enclosing a copy of the valuation prepared by the
Valuer; and

 

(2)                                  if the Fair Value was ascertained by a
Valuer appointed under clause 13.3, a copy of the valuation prepared by the
Valuer to the Trigger Shareholder.

 

(b)                                 The provisions of clause 11 shall apply to
the Trigger Shares as if:

 

(1)                                  the notice under clause 13.4(a)(1) was a
Transfer Notice given by the Trigger Shareholder as Proposing Transferor under
clause 11.2;

 

(2)                                  a notice given in accordance with the
request under clause 13.4(a)(1)(B) was an Acceptance Notice given by the
Non-Trigger Shareholder as Proposing Transferor under clause 11.4; and

 

(3)                                  the Fair Value was the Nominated Terms,

 

and clause 11.6 does not operate.

 

14           New shareholders

 

Before:

 

(a)           either Company allots or issues; or

 

(b)           a Shareholder transfers,

 

any Share to any person (except to a party), each party and that person must
enter into an Adherence Agreement.

 

15           Confidentiality and announcements

 

15.1        Prohibitions on use of Confidential Information

 

(a)                                  A party must not disclose any Confidential
Information to any person except as permitted under clause 15.2.

 

(b)                                 A party must not use or attempt to use any
Confidential Information in a manner which may damage in any way:

 

(1)                                  the Business;

 

(2)                                  the prospects of success of the Business;

 

(3)                                  the actual or likely future financial or
trading position of the Joint Venture Group; or

 

(4)                                  the interests of a Shareholder in the
Business or the Joint Venture Group including, without limitation, the value of
the Shares.

 

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15.2        Permitted disclosure

 

A party may disclose Confidential Information:

 

(a)                                  which pertains exclusively to that party;

 

(b)                                 to the extent that Confidential Information
is within the public domain (except as a result of a breach of this clause 15);

 

(c)                                  to the extent that Confidential Information
was within the possession of the party prior to receiving that Confidential
Information (except as a result of a breach of this clause 15);

 

(d)                                 to the extent that Confidential Information
was lawfully received by that party from a third party with the right to
disclose the Confidential Information (except as a result of a breach of this
clause 15);

 

(e)                                  to a Controlled Entity of the party;

 

(f)                                    to the extent the other parties have
given written notice to that party of their consent to that disclosure;

 

(g)                                 to an employee of that party or a member of
that party’s Group for the sole purpose of that person fulfilling their services
to that party as an employee;

 

(h)                                 to an auditor for the sole purpose of that
person fulfilling their services to that party as an auditor;

 

(i)                                     to a person for the sole purpose of that
person advising or providing other services to that party in a professional
capacity;

 

(j)                                     to the extent required by:

 

(1)                                  Law;

 

(2)                                  any Governmental Agency;

 

(3)                                  any Regulator; or

 

(4)                                  any applicable stock exchange on which the
securities of the party or its Parent Entity are traded,

 

in which case the party must give such notice to the other parties as is
reasonably practicable to give and is permitted by Law, the relevant
Governmental Agency, the relevant Regulator and the rules of the applicable
stock exchange; or

 

(k)                                  to enforce or conduct any claim or
proceeding which arises in connection with this agreement or a policy of
insurance, in which case, if that disclosure is made under clauses 15(e) to (i),
that party:

 

(l)                                     must use its reasonable endeavours to
ensure that the person to whom that disclosure is made does not disclose that
Confidential Information to any person other than that party unless that
disclosure falls within clause 15(a) to (k); and

 

(m)                               will be liable for any disclosure of that
Confidential Information by the person to whom that disclosure is made to any
person other than that party unless that disclosure falls within clause 15(a) to
(k).

 

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16           Representations and warranties

 

16.1        Representations and warranties

 

Each party represents and warrants to the other parties at the Completion Date
that:

 

(a)                                  it is a corporation which is registered (or
taken to be registered) and validly existing under the laws of its place of
incorporation;

 

(b)           it has the corporate power to own its assets and to carry on its
business as it is now being conducted;

 

(c)                                  it has taken all action which is necessary
to authorise the execution of and performance of its obligations under this
agreement;

 

(d)                                 it has the power, without the consent of any
other person (subject, in the case of ACMCD and ACM to clause 7.5((b))), to
enter into and perform its obligations under this agreement;

 

(e)                                  this agreement, when executed, will
constitute legal, valid and binding obligations of it in accordance with its
terms;

 

(f)                                    the execution of and performance of its
obligations under this agreement comply with all applicable Laws and its
constituent documents (if any) and do not result in any breach or default under
any agreement or instrument to which it is a party;

 

(g)                                 it has obtained all necessary
authorisations, permits, licences and registrations required in order to execute
and perform its obligations under this agreement and such authorisations,
permits, licences and registrations are in full force and effect; and

 

(h)                                 any broker’s fee or finder’s fee payable to
any broker or intermediary engaged by that party with respect to the
transactions contemplated by this agreement will be paid by that party and not
by the Joint Venture Group.

 

16.2        Reliance

 

Each party acknowledges that the other parties are entering into this agreement
in reliance on the representations and warranties made by it under clause 16.1.

 

16.3        Non limitation

 

Each representation and warranty under clause 16.1 is separate and independent
and not limited by reference to any other representation or warranty or anything
in this agreement.

 

16.4        Investigation

 

All right and powers of a party in connection with the representations and
warranties made under clause 16.1 may be enforced or made whether or not, before
entry into this agreement, that party knew or could have discovered (whether by
any investigation made by or on behalf of that party) that any such
representation or warranty has not been complied with or is otherwise untrue,
incorrect or misleading.

 

39

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16.5        Waiver of rights

 

Each party waives all rights which any of them may have in respect of any
misrepresentation, inaccuracy or omission in or from any information or advice
which is supplied or given by any of them or any of its employees, directors or
other officers or Controlled Entities in enabling that party to give the
representations and warranties made by it under clause 16.1.

 

16.6        Future events

 

If anything occurs or arises which results or may result in any of the
representations and warranties made under clause16.1 by a party being
unfulfilled, untrue, misleading or incorrect, the party must immediately give
written notice of that thing to the other parties.

 

17           Term and termination

 

17.1        Termination

 

This agreement is intended to have indefinite operation and will only terminate:

 

(a)                                  under clauses 2.3 or 13;

 

(b)                                 when there is only one Shareholder; or

 

(c)                                  as agreed in writing between the parties.

 

17.2        Survival

 

Clauses 1, 15, 16 and 18 to 20 and the accrued rights and obligations of the
parties survive termination of this agreement.

 

18           GST

 

18.1        GST pass on clause

 

If GST is or will be imposed on any supply made under this agreement, the
supplier may, to the extent that the consideration otherwise provided for that
supply under this agreement is not stated to already include an amount in
respect of GST on the supply:

 

(a)                                  increase the consideration otherwise
provided for that supply under this agreement by the amount of that GST; or

 

(b)                                 otherwise recover from the recipient the
amount of that GST.

 

18.2        Tax Invoices/Adjustment Notes

 

The recovery of any amount in respect of GST by the supplier under this
agreement on a supply is subject to the issuing of the relevant Tax Invoice or
Adjustment Note to the recipient. Subject to any other provision of the
agreement, the recipient must pay any amount in respect of GST within 7 days of
the issuing  of the relevant Tax Invoice or Adjustment Note to the recipient.

 

40

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18.3        Later adjustment to price or GST

 

If there is an adjustment event in relation to a supply which results in the
amount of GST on a supply being different from the amount in respect of GST
recovered by the supplier, as appropriate, the supplier:

 

(a)                                  may recover from the recipient the amount
by which the amount of GST on the supply exceeds the amount recovered; and

 

(b)                                 must refund to the recipient the amount by
which the amount recovered exceeds the amount of GST on the supply.

 

18.4        Cost reduction clause

 

The supplier must reduce the consideration provided for a supply under this
agreement (excluding any amount in respect of GST on the supply) if the
suppliers’ costs are reduced having regard alone to the direct and indirect
impact of the New Tax System changes. Such reduction must be made in a manner
consistent with Part VB of the Trade Practices Act 1974 (Cth) and any guidelines
made under that Act, whether or not that Act and the guidelines would otherwise
apply to the supplier.

 

19           Notices

 

19.1        How notices may be given

 

A notice, request, demand, consent or approval (each a notice) under this
agreement:

 

(a)                                  must be in writing;

 

(b)                                 may be signed for the party giving it by the
party’s authorised officer, attorney or solicitor;

 

(c)                                  may be delivered personally to the person
to whom it is addressed, or left at or sent by prepaid post to the person’s
address, or faxed to the person’s fax number, given below:

 

(1)

if to ACMCD:

 

 

 

 

 

 

 

Address:

 

1345 Avenue of the Americas

 

 

 

New York

 

 

 

NY 10105

 

 

 

USA

 

 

 

 

 

Fax:

 

0011 1 212 969 1334

 

 

 

 

 

Attention:

 

General Counsel;

 

 

41

--------------------------------------------------------------------------------

 

 

 

 

 

(2)

if to ACM:

 

 

 

 

 

 

 

Address:

 

Level 29

 

 

 

Governor Phillip Tower

 

 

 

1 Farrer Place

 

 

 

Sydney  NSW  2000

 

 

 

 

 

Fax:

 

02 9247 9910

 

 

 

 

 

Attention:

 

Company Secretary;

 

 

 

 

(3)

if to AXA APH:

 

 

 

 

 

 

 

Address:

 

Level 15

 

 

 

447 Collins Street

 

 

 

Melbourne  Vic  3000

 

 

 

 

 

Fax:

 

(61 3) 9618 5298

 

 

 

 

 

Attention:

 

Company Secretary;

 

 

 

 

(4)

if to NMFM:

 

 

 

 

 

 

 

Address:

 

Level 15

 

 

 

447 Collins Street

 

 

 

Melbourne  Vic  3000

 

 

 

 

 

Fax:

 

(61 3) 9618 5298

 

 

 

 

 

Attention:

 

Company Secretary;

 

 

 

 

(5)

if to Aus Co:

 

 

 

 

 

 

 

Address:

 

Level 29

 

 

 

Governor Phillip Tower

 

 

 

1 Farrer Place

 

 

 

Sydney  NSW 2000

 

 

 

 

 

Fax:

 

02 9247 9910

 

 

 

 

 

Attention:

 

Managing Director; and

 

 

 

 

(6)

if to NZ Co:

 

 

 

 

 

 

 

Address:

 

Level 29

 

 

 

Governor Phillip Tower

 

 

 

1 Farrer Place

 

 

 

Sydney  NSW 2000

 

 

 

 

 

Fax:

 

02 9247 9910

 

 

 

 

 

Attention:

 

Managing Director.

 

19.2        When notice by fax taken as given

 

A notice is taken as given by the sender and received by the intended recipient
if faxed, on completion of transmission but if delivery or receipt is on a day
which is not a business day in the jurisdiction of the recipient or is after
5.00 pm at the place of delivery or receipt, it is taken as given at 9.00 am on
the next business day in such jurisdiction.

 

42

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19.3        Change of address or fax number

 

A party may change its address or fax number for notices by giving notice to the
other party.

 

20           General

 

20.1        Relationship of parties

 

This agreement does not:

 

(a)                                  constitute a relationship of agency,
partnership, joint venture or trust between the parties; or

 

(b)                                 authorise a party to assume or create any
obligations on behalf of the other party except as specifically permitted under
this agreement.

 

20.2        Costs and expenses

 

(a)                                  The Company must pay the costs and expenses
in respect of the incorporation of the Company.

 

(b)                                 Each party must pay its own costs and
expenses in respect of the negotiation, preparation, execution and  delivery of
this agreement and the Transaction Documents.

 

(c)                                  Each of ACMCD and AXA APH must pay 50% of
any stamp duty payable on this agreement and the Transaction Documents.

 

(d)                                 Each party must pay its own costs and
expenses in respect of the enforcement or protection or attempted enforcement or
protection of any rights under this agreement and the Transaction Documents.

 

20.3        Governing law and jurisdiction

 

(a)                                  This agreement is governed by the law of
Victoria.

 

(b)                                 Each party irrevocably submits to the
non-exclusive jurisdiction of the courts of Victoria and courts hearing appeals
from them.

 

20.4        Delegation

 

A party (“Delegator”) may not delegate performance of its obligations under this
agreement except to a wholly owned member of the same Group without the written
consent of the other party (which may be withheld by a party in its absolute
discretion). As between the parties, notwithstanding any such delegation the
Delegator will remain primarily responsible for the performance of its
obligations under this agreement.

 

20.5        Cumulative rights

 

The powers, rights, authorities, discretions or remedies of a party under this
agreement do not exclude any other power, right, authority, discretion or
remedy.

 

43

--------------------------------------------------------------------------------

 

20.6        Waiver

 

(a)                                  A party waives a right under this agreement
(including a right under this clause 20.6((a))) only if it does so in writing.

 

(b)                                 A party does not waive a right simply
because it:

 

(1)           fails to exercise the right;

 

(2)           delays exercising the right; or

 

(3)           only exercises part of the right.

 

(c)                                  A party may not rely on any conduct of
another party as a defence to exercise of a right under this agreement by that
party.

 

(d)                                 A waiver of one breach of a term of this
agreement does not operate as a waiver of another breach of the same term or any
other term.

 

20.7        Whole agreement

 

This agreement replaces any previous agreement, representation, warranty or
understanding between the parties concerning the subject matter and contains the
whole agreement between the parties.

 

20.8        Variation of agreement

 

A variation of this agreement must be in writing and signed by all of the
parties or by persons authorised to sign for them.

 

20.9        Prohibition or enforceability

 

(a)                                  Any provision of, or the application of any
provision of, this agreement which is prohibited in any jurisdiction is, in that
jurisdiction, ineffective only to the extent of that prohibition.

 

(b)                                 Any provision of, or the application of any
provision of this agreement, which is void, illegal or unenforceable in any
jurisdiction does not affect the validity, legality or enforceability of that
provision in any other jurisdiction or of the remaining provisions of this
agreement in that or any other jurisdiction.

 

(c)                                  If any provision of this agreement is void,
illegal or unenforceable, it may be severed without affecting the enforceability
of the other provisions in this agreement.

 

20.10      Counterparts

 

This agreement may be executed in any number of counterparts and all of those
counterparts taken together constitute one and the same instrument.

 

20.11      Attorney

 

Each person who is specified to execute this agreement as attorney for a party,
represents and warrants to each party that:

 

(a)                                  such person is duly empowered to do so
under a validly subsisting power of attorney; and

 

44

--------------------------------------------------------------------------------

 

(b)                                 the provisions of this agreement will be
valid and binding on that party to the same extent that such provisions would be
valid and binding on that party if it had executed this agreement as principal.

 

45

--------------------------------------------------------------------------------

 

Executed as an agreement:

 

Signed for and on behalf of

Alliance Capital Management Corporation of Delaware

by Kathleen Corbet its duly authorised officer in the presence of:

 

 

/s/ Rosalie Rodriguez

 

/s/ Kathleen A. Corbet

Witness

 

Executive Vice President

 

 

 

Rosalie Rodriguez

 

Kathleen A. Corbet

Name (please print)

 

Name (please print)

 

 

 

Signed by

Alliance Capital Management Australia Limited

in accordance with section 127(1) of the Corporations Law:

 

 

/s/ Margaret Joy Adams

 

/s/ Antonios G. Poleondakis

Secretary/Director

 

Director

 

 

 

Margaret Joy Adams

 

Antonios G. Poleondakis

Name (please print)

 

Name (please print)

 

 

 

/s/ Philip Kennedy

 

 

Witness to both signatures

 

 

 

 

 

Philip Kennedy

 

 

Name

 

 

 

 

 

Signed for and on behalf of

AXA Asia Pacific Holdings Limited

by Les Owen its duly authorised officer in the presence of:

 

 

/s/ Sally Cormack

 

/s/ Arthur Leslie Owen

Witness

 

Group Chief Executive Officer

 

 

 

Sally Cormack

 

Arthur Leslie Owen

Name (please print)

 

Name (please print)

 

46

--------------------------------------------------------------------------------

 

Signed for and on behalf of

National Mutual Funds Management Limited

by its duly authorised officer in the presence of:

 

 

/s/ Sally Cormack

 

/s/ Arthur Leslie Owen

Witness

 

Group Chief Executive Officer

 

 

 

Sally Cormack

 

Arthur Leslie Owen

Name (please print)

 

Name (please print)

 

 

 

Signed by

ACN 095 022 718 Limited

in accordance with section 127(1) of the Corporations Law:

 

 

/s/ John Nairn

 

/s/ Antonios G. Poleondakis

Director

 

Director

 

 

 

John Nairn

 

Antonios G. Poleondakis

Name (please print)

 

Name (please print)

 

 

 

/s/ Philip Kennedy

 

 

Witness to both signatures

 

 

 

 

 

Philip Kennedy

 

 

Name

 

 

 

 

 

Signed by

Cidwell Developments Limited

 

 

/s/ John Nairn

 

/s/ Antonios G. Poleondakis

Director

 

Director

 

 

 

John Nairn

 

Antonios G. Poleondakis

Name (please print)

 

Name (please print)

 

 

 

/s/ Philip Kennedy

 

 

Witness to both signatures

 

 

 

 

 

Philip Kennedy

 

 

Name

 

 

 

47

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Schedule 1 - Delegation Agreement

 

 

 

 

--------------------------------------------------------------------------------

 

 

[j3006ex10d20image007.jpg]

 

INVESTMENT AND FINANCIAL SERVICES
ASSOCIATION

 

 

NATIONAL MUTUAL FUNDS MANAGEMENT LIMITED

(“NMFM”)

 

 

 

and

 

 

 

ACN 095 022 718 LIMITED

 

(“Manager”)

 

 

--------------------------------------------------------------------------------

 

STANDARD INVESTMENT MANAGEMENT AGREEMENT

 

--------------------------------------------------------------------------------

 

PLEASE NOTE:

 

Copyright in this Agreement and the Commentary is the property of the Investment
and Financial Services Association (IFSA).

 

A non-exclusive licence to use this Agreement and the commentary is granted to
the user on payment of the licence fee to IFSA.  The user may use the Agreement
and the Commentary for its own purposes but may not transfer this licence to any
other person except with the written permission of the IFSA.  Other than this
licence, no ownership rights or title in the copyright are granted to the user.

 

The user may copy all or part of the Agreement and the Commentary for its own
use but must ensure that any full or partial copy includes the copyright notice
which appears on the Agreement and the Commentary and this notice.

 

© 2000

 

--------------------------------------------------------------------------------

 

 

 

T A B L E   O F   C O N T E N T S

 

 

1.

DEFINITIONS AND INTERPRETATION

 

 

 

 

 

1.1

Definitions

 

1.2

Interpretation

 

 

 

2.

APPOINTMENT

 

 

 

 

 

2.1

Manager

 

2.2

Custodian

 

 

 

3.

DUTIES OF THE MANAGER

 

 

 

 

 

3.1

Manager

 

3.2

Investment Instructions

 

3.3

Investment objectives

 

3.4

Portfolio Changes

 

3.5

Compliance with Relevant Law

 

3.6

NMFM may instruct or vary decision of the Manager

 

 

 

4.

POWERS OF THE MANAGER

 

 

 

 

 

4.1

Powers and Limitations

 

4.2

Common investment of funds

 

4.3

Non-exclusivity

 

4.4

Derivative Contracts

 

 

 

5.

INDEMNITIES

 

 

 

 

 

5.1

Manager

 

5.2

NMFM

 

5.3

Action against Agents

 

5.4

Brokers

 

 

 

6.

WITHDRAWALS and DEPOSITS

 

 

 

 

 

6.1

Request

 

6.2

Satisfaction of request

 

6.3

Withdrawal by transfer of assets

 

6.4

Deposits

 

6.5

Cleared Funds

 

 

 

7.

MANAGEMENT FEES

 

 

 

 

 

7.1

Fee

 

7.2

Use of Related bodies corporate

 

 

 

 

--------------------------------------------------------------------------------

 

8.

REPORTS

 

 

 

 

 

8.1

Regular Reports

 

8.2

Notice of Adverse Effect and breach of the Relevant Law

 

8.3

Additional Information

 

 

 

9.

TERMINATION

 

 

 

 

 

9.1

Term

 

9.2

Right to terminate

 

9.3

Default of the Manager

 

9.4

Claims and transactions

 

9.5

Discharge of obligations

 

9.6

Report

 

 

 

10.

WARRANTIES AND ACKNOWLEDGMENT FROM NMFM AND THE MANAGER

 

 

 

 

 

11.1

Warranties of NMFM

 

11.2

Acknowledgment

 

11.3

Warranties of the Manager

 

11.4

Inaccurate warranty

 

 

 

11.

VOTING

 

 

 

 

 

11.1

Exercise of Voting rights

 

11.2

Notices of Meeting

 

11.3

Voting Policy

 

 

 

12.

AUTHORISED PERSON

 

 

 

 

 

12.1

Authorised Person

 

12.2

Variation of Authorised Persons

 

12.3

The Manager’s action

 

12.4

NMFM not liable

 

12.5

NMFM’s action

 

12.6

The Manager not liable

 

12.7

The Manager’s reliance on instruction

 

 

 

13.

INSURANCE

 

 

 

 

14.

NOTICES

 

 

 

 

15.

NO WAIVER

 

 

 

 

16.

ASSIGNMENT

 

 

 

 

17.

CONFIDENTIALITY

 

 

 

 

18.

FURTHER ASSURANCES

 

 

 

 

19.

ENTIRE AGREEMENT

 

 

 

 

20.

AMENDMENT

 

 

 

 

21.

GOVERNING LAW AND JURISDICTION

 

 

 

 

 

--------------------------------------------------------------------------------

 

22.

SEVERANCE

 

 

 

 

23.

COUNTERPARTS

 

 

 

--------------------------------------------------------------------------------

STANDARD INVESTMENT MANAGEMENT AGREEMENT

 

 

AGREEMENT dated 18 January 2001 between:

 

 

1.

 

NATIONAL MUTUAL FUNDS MANAGEMENT LIMITED (ACN 006 787 720) of Level 15, 447
Collins Street, Melbourne, Victoria (“NMFM”); and

 

 

 

2.

 

ACN 095 022 718 LIMITED (ACN 095 022 718) of Level 29 Governor Phillip Tower, 1
Farrer Place, Sydney, NSW (“Manager”) (to be renamed Alliance Capital Management
Australia Limited).

 

 

 

 

A.

 

NMFM is an investment manager of portfolios on behalf of its clients.

 

 

 

B.

 

NMFM wishes to sub-delegate its investment management for certain portfolios to
the Manager.

 

 

 

C.

 

The Manager wishes to accept appointment and manage the relevant portfolios as a
sub-delegate for NMFM on the understanding that the Manager may itself
sub-delegate where authorised.

 

1.                                                DEFINITIONS AND INTERPRETATION

1.1                                        DEFINITIONS

 

In this Agreement, unless the context otherwise requires:

 

ACM Group means Alliance Capital Management LP and any Related Body Corporate of
it and any other limited partnership that would be a Related Body Corporate of
Alliance Capital Management LP if Alliance Capital Management LP and that other
limited partnership were bodies corporate.

 

Authorised Person means each officer identified in Schedule 2 and any other
person appointed as an authorised person under clause 12.2 from time to time.

 

Block-Booked Transaction means entering into a trade on behalf of one or more
clients or one or more Portfolios and allocating parts of the trade among those
clients or Portfolios before, at the time of or after the trade has been entered
into.

 

Business Day means a day on which the Manager is open for business in Sydney or
Melbourne of the Manager, but excluding Saturday and Sunday.

 

Clearing House means a person who provides facilities for the transfer, clearing
or settlement of either securities or futures contracts, in the ordinary course
of trading in securities or futures contracts.

 

Custodian means if a body corporate or bodies corporate have been appointed a
Custodian of a Portfolio, that body corporate or bodies corporate, as notified
to the Manager in writing by NMFM in accordance with clause 2.2, which satisfies
any requirements imposed by the Regulator from time to time and includes any
sub-custodian appointed by a Custodian.

 

 

1

--------------------------------------------------------------------------------

 

 

Derivative Contracts has its ordinary meaning from time to time and includes,
without limitation, swaps, futures, forward rate agreements and options.

 

 

 

GST means any goods and services tax, consumption tax, value-added tax or any
similar impost or duty which is or may be levied or becomes payable in
connection with the supply of goods or services.

 

 

 

Portfolio means all assets of one or more defined pools or groups of assets
including any Derivative Contracts, which NMFM notifies to the Manager in
writing are to be invested and managed by the Manager under this Agreement, and
all income and accretions in respect of them or any part thereof.

 

 

 

Regulator means:

 

(a)

 

the Australian Prudential Regulation Authority established under the Australian
Prudential Regulation Authority Act 1998; and

 

 

 

(b)

 

the Australian Securities and Investments Commission established under the
Australian Securities and Investments Commission Act 1989; and

 

 

 

(c)

 

their successors.

 

Related Body Corporate means the same as in section 50 of the Corporations Law.

 

 

 

Relevant Law means any requirement of the Superannuation Industry (Supervision)
Act 1993, the Corporations Law, the Australian Securities and Investments
Commission Act 1989 and any other present or future law of the Commonwealth of
Australia or any State or Territory with which NMFM or the Manager must comply
or which NMFM or the Manager  must satisfy in order:

 

(a)

 

to secure imposition at a concessional rate of any income tax which, in the
opinion of NMFM, is or may become payable in connection with a Portfolio; or

 

 

 

(b)

 

for NMFM or the Manager to avoid a relevant penalty, detriment or disadvantage.

 

Supervised Agent means an agent identified in paragraph 1 of Schedule 1.

 

 

 

Taxes means all taxes of whatever nature lawfully imposed including income tax,
recoupment tax, land tax, sales tax, payroll tax, fringe benefits tax, group
tax, capital gains tax, profit tax, interest tax, GST, property tax,
undistributed profits tax, withholding tax, municipal rates, financial
institutions duty, bank account debit tax, stamp duties and other taxes,
charges, duties and levies assessed or charged or assessable or chargeable by or
payable to any national, federal, state or municipal taxation or excise
authority, including any interest, penalty or fee imposed in connection with any
tax, rates, duties, charges or levies.

 

1.2                                        INTERPRETATION

 

                          Headings are for convenience only and do not affect
interpretation.  In this Agreement, unless the context otherwise requires:

 

 

2

--------------------------------------------------------------------------------

 

(A)

 

THE SINGULAR INCLUDES THE PLURAL AND VICE VERSA.

 

 

 

(B)

 

A REFERENCE TO A PERSON INCLUDES A REFERENCE TO A BODY CORPORATE, A GOVERNMENT
ORGANISATION, BODY OR INSTRUMENTALITY, AN UNINCORPORATED BODY AND ANY OTHER
ENTITY.

 

 

 

(C)

 

EACH RECITAL AND SCHEDULE OF THIS AGREEMENT AND DIRECTION AND INSTRUCTION UNDER
THIS AGREEMENT FORMS PART OF THIS AGREEMENT.

 

 

 

(D)

 

A REFERENCE TO THIS AGREEMENT INCLUDES A REFERENCE TO ANY VARIATION, REPLACEMENT
OR NOVATION OF IT.

 

 

 

(E)

 

A REFERENCE TO ANY LEGISLATION OR TO ANY PROVISION OF ANY LEGISLATION INCLUDES A
REFERENCE TO ANY MODIFICATION OR RE-ENACTMENT OF IT, ANY LEGISLATIVE PROVISION
SUBSTITUTED FOR IT AND ALL REGULATIONS AND STATUTORY INSTRUMENTS ISSUED UNDER
IT.

 

 

 

(F)

 

A REFERENCE TO ANY PARTY TO THIS AGREEMENT WHERE RELEVANT INCLUDES A REFERENCE
TO THE PARTY’S SUCCESSORS AND PERMITTED ASSIGNS.

 

 

 

(G)

 

A REFERENCE TO DOLLARS OR $ IS A REFERENCE TO AUSTRALIAN CURRENCY.

 

 

 

(H)

 

WHERE A WORD OR PHRASE IS DEFINED, ITS OTHER GRAMMATICAL TERMS HAVE
CORRESPONDING MEANINGS.

 

 

 

(I)

 

A REFERENCE TO CONDUCT INCLUDES A REFERENCE TO ANY OMISSION, STATEMENT OR
UNDERTAKING, WHETHER OR NOT IN WRITING.

 

 

 

(J)

 

IF A PERIOD OF TIME IS SPECIFIED AND DATES FROM A GIVEN DAY OR THE DAY OF AN ACT
OR EVENT, IT IS TO BE CALCULATED EXCLUSIVE OF THAT DAY.

 

2.                                               APPOINTMENT

2.1                                        MANAGER

 

                          NMFM appoints the Manager as agent of NMFM to invest
and manage the Portfolios on the terms contained in this Agreement and the
Manager accepts the appointment.

2.2                                        CUSTODIAN

 

(a)

NMFM may notify the Manager of the appointment of a Custodian for each
Portfolio.  The Manager and a Custodian may use Clearing Houses as required in
the ordinary course of investment and management of the Portfolio. NMFM must
take all reasonable steps to procure that a Custodian will:

 

 

 

 

 

(i)

 

act in accordance with the instructions of the Manager under this Agreement;

 

 

 

 

 

(II)

 

OPEN AND MAINTAIN SAFE CUSTODY OF OWNERSHIP RECORDS;

 

 

 

 

 

(iii)

 

receive all dividends and income forming part of a Portfolio; and

 

 

3

--------------------------------------------------------------------------------

 

 

(iv)

 

promptly advise the Manager of cash movements of a Portfolio in an electronic
format consistent with industry practice.

 

 

 

 

(b)

If a Custodian is not able (itself or through its agents or sub-custodians) to
settle transactions in a place in which the Manager is authorised to invest or
to hold assets, provided the investment instructions notified pursuant to clause
3.2 and the Relevant Law are otherwise complied with, NMFM authorises (but the
Manager is not obliged) the Manager or a nominee of the Manager to act as
Custodian of the relevant assets.

 

 

3.                                               DUTIES OF THE MANAGER

3.1                                         MANAGER

 

 

THE MANAGER MUST:

 

 

 

(A)

 

INVEST AND MANAGE THE PORTFOLIOS FOR AND ON BEHALF OF NMFM IN ACCORDANCE WITH
THIS AGREEMENT;

 

 

 

(B)

 

KEEP EACH PORTFOLIO UNDER REVIEW AND CONFER AT REGULAR INTERVALS WITH NMFM
REGARDING THE INVESTMENT AND MANAGEMENT OF EACH PORTFOLIO;

 

 

 

(C)

 

KEEP PROPER BOOKS OF ACCOUNT IN RELATION TO EACH PORTFOLIO RECORDING
TRANSACTIONS BY THE MANAGER AND TO PROVIDE INFORMATION IN RELATION TO THE
PORTFOLIO TO ASSIST NMFM OR A CUSTODIAN IN THE PREPARATION OF REPORTS REQUIRED
UNDER THE RELEVANT LAW AS INSTRUCTED BY NMFM, UNLESS IN ANY PARTICULAR
CIRCUMSTANCE AND WITH THE CONSENT OF NMFM SUCH BOOKS OF ACCOUNT ARE TO BE
MAINTAINED BY A CUSTODIAN;

 

 

 

(D)

 

GIVE PROPER INSTRUCTIONS TO THE RELEVANT CUSTODIAN IN RELATION TO TRANSACTIONS
CONCERNING EACH PORTFOLIO;

 

 

 

(E)

 

COMPLY WITH ANY REASONABLE REQUESTS BY NMFM FOR INFORMATION OR ASSISTANCE, OR
UNDER FORCE OF LAW AND AS ADVISED TO NMFM, GIVE ANY INFORMATION AND ASSISTANCE
AND MAKE AVAILABLE ANY RECORDS RELATING TO ANY PORTFOLIO REASONABLY REQUIRED BY
ANY AUDITORS IN RELATION TO A PORTFOLIO OR THE REGULATOR;

 

 

 

(F)

 

PROVIDE ACCESS TO AND A COPY OF THE ACCOUNTS RELATING TO EACH PORTFOLIO WHENEVER
REASONABLY REQUESTED BY NMFM TO ANY PERSON DULY AUTHORISED BY NMFM;

 

 

 

(G)

 

EXERCISE ALL DUE DILIGENCE AND VIGILANCE IN CARRYING OUT ITS FUNCTIONS, POWERS
AND DUTIES UNDER THIS AGREEMENT;

 

 

 

(H)

 

PROMPTLY NOTIFY NMFM OF ANY INSTRUCTIONS GIVEN TO IT BY NMFM WHICH HAVE NOT BEEN
COMPLIED WITH;

 

 

 

(I)

 

ACCOUNT TO NMFM FOR ANY MONETARY BENEFITS, FEES OR COMMISSIONS RECEIVED BY THE
MANAGER OR ANY RELATED BODY CORPORATE OF THE MANAGER IN RELATION TO THE
INVESTMENT OF THE PORTFOLIO, OTHER THAN BENEFITS PERMITTED TO BE RECEIVED IN
ACCORDANCE WITH THE POLICY DISCLOSED UNDER CLAUSE 3.7 AND FEES AND COMMISSIONS
REFERRED TO IN CLAUSES 7.1 AND 7.2;

 

 

4

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(J)

 

EXERCISE DUE CARE IN SELECTING, APPOINTING AND REVIEWING THE PERFORMANCE OF ANY
AGENT OF THE MANAGER IN CONNECTION WITH A PORTFOLIO OR ANY BROKER ENGAGED BY THE
MANAGER UNDER CLAUSE 4.1(D);

 

 

 

(N)

 

SUBJECT TO CLAUSE 2.2(B), USE REASONABLE ENDEAVOURS TO ENSURE THAT THE ASSETS
COMPRISING EACH PORTFOLIO ARE VESTED AS SOON AS PRACTICABLE IN THE RELEVANT
CUSTODIAN OR CLEARING HOUSE, UNLESS THE MANAGER BELIEVES HAVING REGARD TO THE
NATURE OF THE INVESTMENT AND THE INTERESTS OF NMFM IT IS NOT REASONABLY
PRACTICABLE TO DO SO (FOR EXAMPLE, BECAUSE A STRUCTURED INVESTMENT PRODUCT
INVOLVES ANOTHER PARTY ACTING AS CUSTODIAN); AND

 

 

 

(O)

 

ACT IN GOOD FAITH IN DETERMINING ANY ALLOCATION OF A BLOCK-BOOKED TRANSACTION TO
ANY PORTFOLIO BEFORE, DURING AND AFTER THE TRANSACTION HAS BEEN ENTERED INTO BY
THE MANAGER.

 

3.2          Investment Instructions

 

 

 

 

 

(A)

THE INVESTMENT INSTRUCTIONS FOR A PORTFOLIO NOTIFIED TO THE MANAGER BY NMFM AT
THE COMMENCEMENT OF THIS AGREEMENT (OR AS SOON AS PRACTICABLE THEREAFTER) AND AS
AMENDED OR ADDED TO FROM TIME TO TIME IN ACCORDANCE WITH PARAGRAPH (B) MUST BE
COMPLIED WITH BY THE MANAGER IN EXERCISING ANY INVESTMENT DISCRETION.

 

 

 

 

(B)

THE INVESTMENT INSTRUCTIONS NOTIFIED IN ACCORDANCE WITH PARAGRAPH (A) MAY BE
AMENDED OR ADDED TO BY A SPECIFIC WRITTEN INSTRUCTION GIVEN TO THE MANAGER BY AN
AUTHORISED PERSON OF NMFM AND THE MANAGER MUST COMMENCE IMPLEMENTATION OF THE
AMENDED INVESTMENT INSTRUCTIONS FROM THE BUSINESS DAY FOLLOWING THE DAY THAT
NOTIFICATION IS RECEIVED BY THE MANAGER.  ANY AMENDED INVESTMENT INSTRUCTIONS
MUST BE COMPLETELY IMPLEMENTED AS SOON AS IS REASONABLY PRACTICAL HAVING REGARD
TO THE NATURE OF THE AMENDMENT AND THE NATURE OF THE RELEVANT ASSETS.

 

 

 

 

(C)

IF THE MANAGER IS UNABLE TO COMPLY WITH THE INVESTMENT INSTRUCTIONS GIVEN
PURSUANT TO PARAGRAPH (B) IT MUST IMMEDIATELY NOTIFY NMFM.  UPON RECEIPT OF SUCH
NOTICE NMFM MUST EITHER:

 

 

 

 

(I)

WITHDRAW THE SPECIFIC INSTRUCTIONS WITH WHICH THE MANAGER IS UNABLE TO COMPLY IN
ACCORDANCE WITH THIS CLAUSE;

 

 

 

 

 

(II)

OR TERMINATE THE AGREEMENT PURSUANT TO CLAUSE 9, IN WHICH CASE THE SPECIFIC
INSTRUCTION WILL HAVE NO EFFECT.

 

 

 

(D)

IF A SPECIFIC WRITTEN INSTRUCTION IS:

 

 

 

 

 

(I)

INCONSISTENT WITH THE INVESTMENT INSTRUCTIONS NOTIFIED IN ACCORDANCE WITH
PARAGRAPH (A) OF CLAUSE 3.2 BUT IS NOT EXPRESSED TO AMEND THOSE INSTRUCTIONS IN
ACCORDANCE WITH PARAGRAPH (B) OF CLAUSE 3.2; OR

 

 

 

 

 

(II)

IN THE MANAGER’S OPINION, AMBIGUOUS OR UNCLEAR IN ANY RESPECT,

 

 

 

 

the Manager must promptly clarify the instruction with NMFM and the instruction
will not operate until it has been clarified.

 

5

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3.3                                         INVESTMENT OBJECTIVES

 

                          The investment objectives for a Portfolio notified to
the Manager by NMFM at the commencement of this agreement (or as soon as
practicable thereafter) and as amended or added to from time to time are
guidelines and are not intended to be legally binding on the Manager but the
Manager must have regard to them in investing and managing each Portfolio.

3.4                                         PORTFOLIO CHANGES

 

IF BY REASON OF:

 

 

 

(A)

 

MARKET MOVEMENTS;

 

 

 

(B)

 

CONTRIBUTIONS TO OR WITHDRAWALS FROM A PORTFOLIO;

 

 

 

(C)

 

A CHANGE IN THE NATURE OF ANY INVESTMENT (WHETHER THROUGH CHANGE IN BUSINESS
ACTIVITY OR CREDIT RATING),

 

                          a Portfolio ceases to comply with an investment
instruction notified in accordance with clause 3.2, the Manager must remedy the
non-compliance in accordance with any instruction given under clause 3.2 or, if
no time is specified in such instruction, as soon as practicable after the
Manager becomes aware of the non-compliance.  If remedied in accordance with
this clause, the non-compliance will not constitute a breach of the Agreement
nor will it give rise to any right or remedy on the part of NMFM.

3.5                                        COMPLIANCE WITH RELEVANT LAW

 

The Manager must comply with any Relevant Law to the extent that it concerns the
functions, powers and duties of the Manager in relation to the management of
each Portfolio under this Agreement.  However, NMFM acknowledges that:

 

(A)

 

THE MANAGER IS NOT RESPONSIBLE IN RELATION TO ANY PORTFOLIO FOR MONITORING THE
TOTAL POSITION OF ANY FUND OR TRUST WHERE THE RELEVANT PORTFOLIO DOES NOT
CONSTITUTE THE WHOLE OF THE FUND OR TRUST;

 

 

 

(B)

 

THE MANAGER IS NOT REQUIRED TO COMPLY IN RELATION TO ANY PORTFOLIO WITH ANY
RELEVANT LAW RELATING TO IN-HOUSE ASSETS AS DEFINED IN SECTION 71 OF THE
SUPERANNUATION INDUSTRY (SUPERVISION) ACT 1993 UNLESS NMFM OR AN AUTHORISED
PERSON OF NMFM HAS GIVEN A SPECIFIC DIRECTION IN WRITING TO THE MANAGER AS TO
WHICH SPECIFIC INVESTMENTS MUST NOT FORM PART OF THE SPECIFIC PORTFOLIO OR A
PART IN EXCESS OF A CERTAIN SPECIFIED LEVEL IN ORDER TO ENSURE THAT A FUND OR
TRUST COMPLIES WITH RELEVANT LAW;

 

 

 

(C)

 

THE MANAGER MAY ACT ON SPECIFIC INSTRUCTIONS GIVEN BY NMFM WITHOUT INVESTIGATING
WHETHER THE ACT WILL COMPLY WITH THE RELEVANT LAW, BUT MUST NOT COMPLY WITH ANY
DIRECTION WHICH IT IS AWARE WILL CAUSE A BREACH OF THE RELEVANT LAW; AND

 

 

 

(D)

 

THE MANAGER HAS NO OBLIGATION TO ENSURE THAT IT COMPLIES WITH ANY RELEVANT LAW
APPLICABLE TO NMFM OR ANY CONSTITUTIONAL DOCUMENTS OR LEGISLATION REGULATING
NMFM TO THE EXTENT IT DOES NOT DIRECTLY CONCERN THE FUNCTIONS, POWERS AND DUTIES
OF THE MANAGER IN RELATION TO THE MANAGEMENT OF A PORTFOLIO UNDER THIS
AGREEMENT.

 

6

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3.6                                         NMFM MAY INSTRUCT OR VARY DECISION
OF THE MANAGER

 

                                                The Manager agrees that NMFM
may, at any time, instruct the Manager with respect to the identity of the
investments or vary any decision of the Manager in the performance of the
Manager’s functions in managing the assets of each Portfolio from that time, in
which circumstances NMFM has the sole responsibility for the consequences of
that instruction or variation.  However, the Manager may complete any
transaction already commenced except where it would be reasonable in all the
circumstances for the Manager to discontinue the transaction and the Manager
would not incur any liability to a third party in so doing.

 

3.7                              SOFT DOLLAR RECEIPTS

 

                                                The Manager must provide on
request to NMFM a copy of the Manager’s policy regarding the receipt by the
Manager or its associates or any other member of the ACM Group of benefits in
the nature of soft dollar receipts in relation to the investment or management
of each Portfolio.  The Manager will at all times comply with its policy.  In
addition, in the investment management of each Portfolio the Manager and its
associates and any other member of the ACM Group must only accept any soft
dollar receipts in the course of carrying on its business as an investment
manager where to do so also benefits its clients, including NMFM.

 

4.                                               POWERS OF THE MANAGER

4.1                                        POWERS AND LIMITATIONS

 

For the purpose of carrying out its functions and duties under this Agreement,
subject to any matter notified by NMFM to the Manager in writing, the Manager
has the powers of a natural person to deal with each Portfolio and to do all
things and execute all documents necessary for the purpose of managing each
Portfolio (including, without limitation, entering into a Block Booked
Transaction), but the Manager must not without the prior consent of NMFM (which
may be expressed in this Agreement or in an investment instruction):

 

 

 

(A)

HOLD DERIVATIVE CONTRACTS FOR A PORTFOLIO UNLESS THERE ARE AT ALL TIMES, IN THE
CASE OF EACH CONTRACT, SUFFICIENT ASSETS IN THE RELEVANT PORTFOLIO TO SUPPORT
THE UNDERLYING LIABILITY OF THE ASSET HOLDER UNDER EVERY CONTRACT IN THE FORM OF
ONE OR MORE OF THE FOLLOWING:

 

 

 

 

(I)

ASSETS OF THE KIND REQUIRED TO BE DELIVERED UNDER THE CONTRACT;

 

 

 

 

 

(II)

OTHER CONTRACTS OR ASSETS WHICH SUBSTANTIALLY OFFSET THE UNDERLYING LIABILITY
UNDER THE CONTRACT; AND/OR

 

 

 

 

 

(III)

CASH OR IMMEDIATELY REALISABLE ASSETS OF SUFFICIENT VALUE EITHER TO DISCHARGE
THE MAXIMUM CONTINGENT LIABILITY OR EFFECT AN OFFSET AS DESCRIBED IN CLAUSE
4.1(A)(II);

 

 

7

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(B)

EXCEPT AS DISCLOSED IN PARAGRAPH 2 OF SCHEDULE 1, DELEGATE ANY OF ITS
DISCRETIONARY MANAGEMENT POWERS UNDER THIS AGREEMENT;

 

 

(C)

CHARGE OR ENCUMBER IN ANY WAY (OTHER THAN AS ARISES BY LIEN IN THE ORDINARY
COURSE OF BUSINESS OR BY STATUTORY CHARGE) ANY ASSET OF A PORTFOLIO;

 

 

(D)

PERFORM ANY BROKING FUNCTION IN RELATION TO THE PORTFOLIO, BUT THE MANAGER MAY,
USING REASONABLE CARE AND DILIGENCE, ON BEHALF OF NMFM APPOINT ANY BROKER
(INCLUDING A MEMBER OF THE ACM GROUP) TO ACT ON BEHALF OF THE ASSET HOLDER IN
RELATION TO A PORTFOLIO, SUBJECT TO REASONABLE MONITORING OF CAPACITY AND
PERFORMANCE;

 

 

(E)

ENGAGE IN SECURITIES LENDING IN RELATION TO THE PORTFOLIO (IN WHICH CASE THE
MANAGER MUST PROVIDE A COPY OF THE AGREED POLICY AND ANY SET LIMITS); OR

 

 

(F)

ATTEMPT TO BORROW OR RAISE MONEY FOR, OR ON BEHALF OF, A PORTFOLIO.

4.2                                        COMMON INVESTMENT OF FUNDS

 

                                                Subject to Relevant Law and any
restrictions notified by NMFM in respect of a Portfolio, each  Portfolio may  be
invested with funds managed by the Manager on behalf of other persons.  If the
Manager is so authorised for a Portfolio NMFM consents to the Manager acting in
the acquisition and disposal of assets on behalf of other persons and authorises
the Manager to deal with each Portfolio and any other funds managed by the
Manager as an undivided whole, to the extent necessary for the efficient
management or administration of a Portfolio, subject to the Manager maintaining
systems and records that distinguish each Portfolio from the property of any
other person.  A Portfolio must not be invested in any managed investment scheme
(as defined by the Corporations Law) except with prior written authorisation of
NMFM or if expressly provided for in an investment instruction.

 

4.3                                         NON-EXCLUSIVITY

 

The Manager may from time to time perform similar investment and management
services for itself and other persons to the services performed for NMFM under
this Agreement. NMFM acknowledges that:

 

 

 

(A)

 

THE MANAGER HAS NO OBLIGATION TO PURCHASE OR SELL, OR RECOMMEND FOR PURCHASE OR
SALE, FOR THE ACCOUNT OF NMFM, ANY INVESTMENT WHICH THE MANAGER PURCHASES OR
SELLS FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANY OTHER CLIENT OF THE MANAGER;
AND

 

 

 

(B)

 

THE MANAGER MAY GIVE ADVICE AND TAKE ACTION IN THE PERFORMANCE OF ITS DUTIES FOR
OTHER CLIENTS WHICH DIFFER FROM ADVICE GIVEN AND ACTION TAKEN IN RELATION TO THE
PORTFOLIO.

 

4.4                                        DERIVATIVE CONTRACTS

 

If the Manager is authorised to enter into Derivative Contracts in instructions
given pursuant to clause 3.2, it may subject to any contrary notification by
NMFM to the Manager

 

8

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in writing do so on behalf of the asset holder in its own name, or in the name
of another person, as nominee for the Custodian and:

 

(a)

The Manager will:

 

 

 

 

 

(i)

promptly arrange payment of net proceeds received in respect of Derivative
Contracts to the relevant Custodian; and

 

 

 

 

(ii)

provide to NMFM a risk management statement in such form as is prescribed by the
Regulator; and

 

 

 

(b)

NMFM will:

 

 

 

 

 

(i)

procure that the relevant Custodian will comply with authorised directions of
the Manager in relation to payment of liabilities under or settlement of
Derivative Contracts; and

 

 

 

 

 

(ii)

if required by the Manager; execute a statement in the form set out in Schedule
3 to this Agreement.

 

 

5.                                               INDEMNITIES

5.1                                        MANAGER

 

                                                NMFM must indemnify the Manager
against any losses or liabilities reasonably incurred by the Manager arising out
of, or in connection with, and any costs, charges and expenses incurred in
connection with, the Manager or any of its officers or agents acting under this
Agreement or on account of any bona fide investment decision made by the Manager
or its officers or agents except insofar as any loss, liability, cost, charge or
expense is caused by the negligence, breach of this agreement, fraud or
dishonesty of the Manager or its officers or Supervised Agents.  This obligation
continues after the termination of this Agreement. NMFM is not otherwise liable
to the Manager for any loss or liability.

5.2                                        NMFM

 

                                                The Manager must indemnify NMFM
against any losses or liabilities reasonably incurred by NMFM arising out of, or
in connection with, and any costs, charges and expenses incurred in connection
with, any negligence, breach of this Agreement, fraud or dishonesty of the
Manager or its officers or Supervised Agents.  This obligation continues after
the termination of this Agreement.  the Manager is not otherwise liable to NMFM
for any loss or liability.

5.3                                         ACTION AGAINST AGENTS

 

                                                If NMFM is not indemnified by
the Manager under clause 5.2 for the negligence, default, fraud or dishonesty of
an agent of the Manager the Manager must provide reasonable assistance to NMFM
(at the cost of NMFM) in any action of NMFM against an agent of the Manager
arising out of, or in connection with any negligence, default, fraud or
dishonesty of the agent.  These obligations continue after the termination of
this Agreement.

 

 

9

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5.4                                         BROKERS

 

                                                NMFM is responsible to any
broker appointed by the Manager pursuant to clause 4.1(d) for all brokerage and
other charges arising from the implementation by the broker of any authorised
transaction initiated by the Manager. NMFM authorises the Manager to approve any
deduction from a Portfolio in respect of brokerage and other charges.

6.                                     WITHDRAWALS AND DEPOSITS

6.1                                        REQUEST

 

                                                NMFM may instruct the Manager to
authorise a Custodian to make a withdrawal from a Portfolio in accordance with
the procedures notified by NMFM to the Manager from time to time.

6.2                                        SATISFACTION OF REQUEST

 

                                                The Manager, in respect of a
withdrawal instruction for cash, must use reasonable endeavours to satisfy the
instruction within 5 Business Days.

6.3                                         WITHDRAWAL BY TRANSFER OF ASSETS

 

                                                A withdrawal pursuant to clause
6.1 may be made by transfer of assets, property or investments comprised in a
Portfolio as agreed by the Manager and NMFM.

6.4                                         DEPOSITS

 

                                                NMFM must advise the Manager of
any additional money made available for investment and management pursuant to
this Agreement, prior to transfer to a Custodian.

6.5                                         CLEARED FUNDS

 

                                                The Manager may deal with any
payment by either NMFM or a Custodian as if made in cleared funds. NMFM must
indemnify the Manager against any losses and expenses incurred by the Manager if
the amount tendered does not result in cleared funds in the normal course.

 

7.                                               MANAGEMENT FEES

7.1                                        FEE

 

                                                In consideration for the Manager
providing the services specified in this Agreement, the Manager is entitled to a
management fee as set out in the agreement titled Fees and Adjustments Deed
dated 18 January 2001.

7.2                                         USE OF OTHER MEMBERS OF ACM GROUP

 

                                                NMFM acknowledges that the
Manager may invest in, deal with or engage the services of a member of the ACM
Group engaged in separate business activities which are entitled to charge fees,
brokerage and commissions provided that they are in the ordinary course of
business and on arm’s length terms.

 

 

10

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7.3                                         EXPENSES

 

                                                NMFM must pay all Taxes and all
costs, charges and expenses provided that they are reasonably incurred in
connection with the management of the Portfolio or the acquisition, disposal or
maintenance of any investment of the Portfolio (including all Custodian and
Clearing House fees) or in acting under this Agreement.  The Manager may invoice
NMFM on account of such amounts and NMFM agrees to pay such amounts within 30
days of the date of the invoice.

7.4                                         REGULATORY COSTS

 

                                                NMFM must bear the reasonable
costs of the Manager associated with the provision of information and other
assistance to the Regulator relating to a Portfolio, if the Regulator requires
the information or other assistance under Relevant Law.

 

8.                                               REPORTS

8.1                                         REGULAR REPORTS

 

                                                The Manager must provide NMFM or
such other persons as NMFM notifies the Manager in writing with the reports
notified to the Manager by NMFM at the commencement of this agreement (or as
soon as practicable thereafter) and as varied from time to time by further
notifications from NMFM to the Manager and must take reasonable steps to ensure
that those reports are complete and accurate in all material respects to the
extent the necessary information is within the reasonable control of the
Manager.  The Manager will also provide, upon request by NMFM, additional
information which is complete and accurate in all material respects to the
extent the necessary information is within the reasonable control of the
Manager, as to the making of, and return on, the investments in a Portfolio and
as is necessary to enable NMFM to assess the capability of the Manager to manage
the investments of each Portfolio, and otherwise to comply with Relevant Law.

8.2                                         NOTICE OF ADVERSE EFFECT AND BREACH
OF THE RELEVANT LAW

 

The Manager must promptly advise NMFM upon becoming aware of any event:

 

 

 

(a)

 

having a significant effect on the financial position of the Portfolio;

 

 

 

(b)

 

which causes a breach of the Relevant Law.

 

8.3                                         ADDITIONAL INFORMATION

 

                                                NMFM may request the Manager to
provide to NMFM additional information required by NMFM to complete returns to
regulatory authorities, including the Regulator and taxation authorities, and
the Manager, if requested by NMFM, will promptly provide the information
required by NMFM to fulfil its obligations.

 

 

11

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9.                                                TERMINATION

9.1                                        TERM

 

                                                This Agreement commences as of
and from the date specified in paragraph 3 of Schedule 1.

9.2                                        RIGHT TO TERMINATE

 

                                                Subject to clause 9.3, this
Agreement remains in force until terminated by NMFM giving to the Manager not
less than 20 Business Days’ written notice of termination or by the Manager
giving to NMFM not less than 20 Business Days’ written notice of termination or
such lesser period of notice as the parties agree.

9.3                                        DEFAULT OF THE MANAGER

 

NMFM may terminate this Agreement at any time by written notice to the Manager
if:

 

(A)

A RECEIVER, RECEIVER AND MANAGER, ADMINISTRATIVE RECEIVER OR SIMILAR PERSON IS
APPOINTED WITH RESPECT TO THE ASSETS AND UNDERTAKINGS OF THE MANAGER;

 

 

(B)

THE MANAGER:

 

 

 

 

 

(I)    GOES INTO LIQUIDATION (OTHER THAN FOR THE PURPOSES OF A RECONSTRUCTION OR
AMALGAMATION ON TERMS PREVIOUSLY APPROVED IN WRITING BY NMFM);

 

 

 

 

 

(II)   CEASES TO CARRY ON BUSINESS IN RELATION TO ITS ACTIVITIES AS AN
INVESTMENT MANAGER;

 

 

 

 

 

(III)  BREACHES ANY PROVISION OF THIS AGREEMENT, OR FAILS TO OBSERVE OR PERFORM
ANY REPRESENTATION, WARRANTY OR UNDERTAKING GIVEN BY THE MANAGER UNDER THIS
AGREEMENT AND THE MANAGER FAILS TO CORRECT SUCH BREACH OR FAILURE WITHIN 10
BUSINESS DAYS OF RECEIVING NOTICE IN WRITING FROM NMFM SPECIFYING SUCH BREACH OR
FAILURE;

 

 

 

 

(C)

THE MANAGER SELLS OR TRANSFERS OR MAKES ANY AGREEMENT FOR THE SALE OR TRANSFER
OF THE MAIN BUSINESS AND UNDERTAKING OF THE MANAGER OR OF A BENEFICIAL INTEREST
THEREIN, OTHER THAN TO A RELATED BODY CORPORATE FOR PURPOSES OF CORPORATE
RECONSTRUCTION ON TERMS PREVIOUSLY APPROVED IN WRITING BY NMFM; OR

 

 

(D)

RELEVANT LAW REQUIRES THE AGREEMENT TO TERMINATE OR ANY CIRCUMSTANCE OCCURS
GIVING RISE TO A BREACH OF SECTION 126 OF THE SUPERANNUATION INDUSTRY
(SUPERVISION) ACT 1993.

 

 

 

 

 

9.4                                        CLAIMS AND TRANSACTIONS

 

The termination of this Agreement does not affect any:

 

 

 

(A)

 

TRANSACTION PROPERLY ENTERED INTO PRIOR TO TERMINATION;

 

 

12

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(B)

 

CLAIM BY THE MANAGER IN RESPECT OF ACCRUED MANAGEMENT FEES AND EXPENSES INCURRED
IN RESPECT OF THE PERIOD TO TERMINATION; OR

 

 

 

(C)

 

OTHER CLAIM WHICH EITHER PARTY MAY HAVE AGAINST THE OTHER.

9.5                                        DISCHARGE OF OBLIGATIONS

 

The Manager may deal with the Portfolio for up to 30 Business Days from the
effective date of termination of this Agreement in order to vest control of it
in NMFM (or as NMFM may otherwise direct in writing) and during that time the
Manager:

 

(A)

 

SUBJECT TO THE CONSENT OF NMFM, MAY ENTER TRANSACTIONS TO SETTLE OR OTHERWISE
EXTINGUISH OR OFFSET OBLIGATIONS INCURRED BY THE MANAGER IN RELATION TO A
PORTFOLIO BEFORE THAT DATE;

 

 

 

(B)

 

MUST, WITH RESPECT TO OBLIGATIONS NOT CAPABLE OF SETTLEMENT BEFORE TRANSFER OF A
PORTFOLIO, CREATE PROVISION FOR SUCH CONTINGENT LIABILITY AS WILL ARISE, NOTIFY
NMFM OF THAT PROVISION, AND NMFM MUST PROCURE THAT THE RELEVANT CUSTODIAN HOLDS
SUFFICIENT ASSETS OF THE RELEVANT PORTFOLIO TO SATISFY THAT LIABILITY;

 

 

 

(C)

 

MAY INSTRUCT THE RELEVANT CUSTODIAN TO DEDUCT FROM A PORTFOLIO THE FEES, CHARGES
AND EXPENSES DUE TO THE DATE ON WHICH THE TRANSFER OF THE RELEVANT PORTFOLIO IS
EFFECTED IF, AFTER GIVING 10 BUSINESS DAYS’ NOTICE TO NMFM OF ITS INTENTION TO
SO DIRECT THE RELEVANT CUSTODIAN, NMFM HAS NOT OBJECTED, AND ALL CHARGES AND
EXPENSES INCURRED IN THE ACTIONS ENVISAGED BY THIS CLAUSE;

 

 

 

(D)

 

MUST DELIVER TO NMFM (OR AS NMFM REASONABLY DIRECTS) ALL RECORDS AND OTHER
DOCUMENTS WHICH MAY REASONABLY BE REQUIRED BY NMFM IN RESPECT OF EACH PORTFOLIO;
AND

 

 

 

(E)

 

MAY DEAL WITH EACH PORTFOLIO IN ACCORDANCE WITH INSTRUCTIONS FROM A NEW MANAGER
APPOINTED BY NMFM.

 

 

 

NMFM MUST TAKE ALL NECESSARY STEPS TO FACILITATE THE TRANSFER OF THE PORTFOLIOS
FROM THE MANAGER

 

9.6                                        REPORT

 

                                                The Manager must, within the
period specified in paragraph 4 of Schedule 1, provide NMFM with a report which
is complete and accurate in all material respects on the Portfolios and all
investment transactions conducted since the last reports.

 

10.                                        WARRANTIES AND ACKNOWLEDGMENT FROM
NMFM AND THE MANAGER

10.1                                 WARRANTIES OF NMFM

 

NMFM warrants and represents to the Manager that during the term of this
Agreement:

 

 

13

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(A)

NMFM IS THE INVESTMENT MANAGER OF EACH PORTFOLIO AND IT HAS THE POWER TO ENTER
INTO AND PERFORM THIS AGREEMENT, SUBJECT ONLY TO THOSE EXPRESS LIMITATIONS THAT
HAVE BEEN ADVISED TO THE MANAGER IN WRITING;

 

 

(B)

THERE ARE NO OTHER INVESTMENT MANAGERS OF EACH PORTFOLIO;

 

 

(C)

NMFM WILL ADVISE IN WRITING OF ANY CHANGE OF THE STATUS FOR TAXATION PURPOSES OF
A PORTFOLIO;

 

 

(D)

ANY CUSTODIAN APPOINTED WILL NOT ENGAGE IN SECURITIES LENDING IN RELATION TO ANY
INVESTMENTS IN A PORTFOLIO UNLESS WRITTEN NOTICE IS GIVEN BY NMFM TO THE MANAGER
AND NMFM WILL ENSURE THAT THE PORTFOLIO IS ABLE TO BE TRADED BY ALLIANCE CAPITAL
AND THAT ANY SECURITIES LENDING DOES NOT INTERFERE WITH ALLIANCE CAPITAL’S
ABILITY TO INVEST AND MANAGE THE PORTFOLIO UNDER THIS AGREEMENT.;

(E)

NMFM, FOR THE PURPOSES OF INVESTMENT IN SECURITIES, CONTROLS AN AMOUNT OF NOT
LESS THAN $10,000,000 BEING AN AMOUNT THAT INCLUDES ANY AMOUNT HELD:

 

 

 

(I)

BY AN ASSOCIATE OF NMFM, OR

 

(II)

UNDER A TRUST THAT NMFM MANAGES; AND

 

 

 

 

(F)

NMFM IS NOT A RETAIL INVESTOR FOR THE PURPOSES OF REGULATION 7.3.02B OF THE
CORPORATIONS LAW.

 

10.2                                 ACKNOWLEDGMENT

 

                                                NMFM acknowledges that neither
the Manager nor any other member of the ACM Group guarantees the repayment of
capital or the performance of a Portfolio or makes any representation concerning
any of these matters.

10.3                                  WARRANTIES OF THE MANAGER

 

The Manager warrants and represents to NMFM:

 

 

 

(A)

 

THAT IT HAS AND WILL AT ALL TIMES DURING THE TERM OF THIS AGREEMENT HAVE THE
SKILL, FACILITIES, CAPACITY AND STAFF NECESSARY TO PERFORM THE DUTIES AND
OBLIGATIONS UNDER THIS AGREEMENT;

 

 

 

(B)

 

THAT IT WILL ENSURE THAT SUFFICIENT COMPETENT INVESTMENT MANAGEMENT STAFF
EXPERIENCED IN INVESTMENT MANAGEMENT WILL HAVE CHARGE AT ALL TIMES OF THE
CONDUCT OF, AND WILL MAINTAIN CLOSE SUPERVISION OF, THE INVESTMENT AND
MANAGEMENT OF EACH PORTFOLIO;

 

 

 

(C)

 

THAT IT WILL, AT ALL TIMES DURING THE TERM OF THIS AGREEMENT, BE THE HOLDER OF A
CURRENT DEALERS LICENCE OR INVESTMENT ADVISERS LICENCE AND ALL OTHER LICENCES
REQUIRED TO BE HELD UNDER ALL APPLICABLE LEGISLATION GOVERNING THE ACTIVITIES OF
THE MANAGER AND IS NOT AND, AT ALL TIMES DURING THE TERM OF THIS AGREEMENT, WILL
NOT BE A DISQUALIFIED PERSON UNDER A RELEVANT LAW;

 

 

 

(D)

 

THAT IT WILL COOPERATE WITH EACH CUSTODIAN WHENEVER REQUESTED TO ENSURE THAT
INVESTMENTS FORMING PART OF EACH PORTFOLIO ARE IN GOOD AND PROPER FORM WITH FREE
AND CLEAR TITLE IN FAVOUR OF NMFM OR ANY PERMITTED NOMINEE AND NOT SUBJECT TO
ANY EXPRESS LIEN, CHARGE OR ENCUMBRANCE OF ANY NATURE OTHER THAN AS PERMITTED BY
THE RELEVANT LAW; AND

 

 

14

--------------------------------------------------------------------------------

 

 

(E)

 

THAT IT WILL INVEST AND MANAGE EACH PORTFOLIO AT ALL TIMES TO PERFORM ITS
OBLIGATIONS UNDER THIS AGREEMENT AND IN ACCORDANCE WITH THE DIRECTIONS OF NMFM.

 

10.4                                  INACCURATE WARRANTY

 

                                                If a warranty given by a party
to this Agreement ceases to be accurate, that party must immediately advise the
other party in writing.

 

11.                                        VOTING

11.1                                  EXERCISE OF VOTING RIGHTS

 

                                                NMFM will notify the Manager in
writing if it is authorised to exercise any right to vote attached to a share or
unit forming part of a Portfolio or to so direct the relevant Custodian.  In the
event that the Manager receives a direction from NMFM in relation to the
appointment of a proxy and the way in which the proxy should vote, the Manager
must use its best endeavours to implement the direction, but in the absence of
any direction, the Manager may exercise or not exercise the right to vote as it
sees fit, having regard to any general instruction notified in accordance with
clause 3.2.

11.2                                  NOTICES OF MEETING

 

                                                The Manager is not required to
dispatch to NMFM any notice of meeting relating to any person, company or unit
trust in which a Portfolio is invested.

11.3                                 VOTING POLICY

 

                                                The Manager must provide a copy
of its proxy voting policy to NMFM upon request.  the Manager must inform NMFM
of any change to the Manager’s proxy voting policy.

 

12.                                        AUTHORISED PERSON

12.1                                  AUTHORISED PERSON

 

                Authorised Persons of NMFM and the Manager are authorised to
make any written communication or take action on behalf of NMFM and the Manager
respectively under this Agreement.

12.2                                  VARIATION OF AUTHORISED PERSONS

 

                                                NMFM and the Manager may vary
their respective Authorised Persons by notice to the other.

12.3                                  THE MANAGER’S ACTION

 

 

15

--------------------------------------------------------------------------------

 

 

                                                The Manager is not obliged to
take any action if a communication or action is not made by an Authorised Person
of NMFM nor to enquire as to the identity of any person if it reasonably
believes such person is an Authorised Person.

12.4                                  NMFM NOT LIABLE

 

                                                NMFM is not liable in respect of
any action or omission by the Manager in reliance on any communication given or
action taken by any person acting or purporting to act on behalf of NMFM who
neither is an Authorised Person nor a person whom the Manager reasonably
believes to be an Authorised Person, but NMFM can ratify such an action or
omission in which case NMFM will be liable.

12.5                                  NMFM’S ACTION

 

                                                NMFM is not obliged to take any
action if a communication or action is not made by an Authorised Person of the
Manager nor to enquire as to the identity of any person if it reasonably
believes such person is an Authorised Person.

12.6                                  THE MANAGER NOT LIABLE

 

                                                The Manager is not liable in
respect of any action or omission by NMFM in reliance on any communication given
or action taken by any person acting or purporting to act on behalf of the
Manager who neither is an Authorised Person nor a person whom NMFM reasonably
believes to be an Authorised Person, but the Manager can ratify such an action
or omission in which case the Manager will be liable.

12.7                                  THE MANAGER’S RELIANCE ON INSTRUCTION

 

                                                If the Manager receives an
instruction in circumstances where it is reasonable for the Manager to assume it
was from an Authorised Person, subject to the Relevant Law the Manager is not
liable for any properly performed action or omission by the Manager in reliance
on that instruction.

 

13.                                        INSURANCE

 

                                                The Manager must maintain at its
own expense or at the expense of a member of the ACM Group appropriate insurance
in relation to its investment management business.  the Manager must, upon
written request from NMFM, give NMFM any information it may reasonably require
concerning the scope of such insurances but is not required to provide a copy of
any policy of insurance to NMFM.

 

 

16

--------------------------------------------------------------------------------

14.                               NOTICES

 

Any notice given under this Agreement:

 

 

 

 

 

 

 

(A)

MUST BE SENT TO THE ADDRESS,  FACSIMILE NUMBER OR EMAIL ADDRESS AS SET OUT IN
SCHEDULE 2 OR TO ANY OTHER ADDRESS,  FACSIMILE NUMBER OR EMAIL ADDRESS THAT
EITHER PARTY MAY SPECIFY IN WRITING TO THE OTHER;

 

 

(B)

WILL BE TAKEN TO HAVE BEEN GIVEN:

 

 

 

 

 

(I)

(IN THE CASE OF DELIVERY IN PERSON OR BY POST) WHEN DELIVERED, RECEIVED OR LEFT
AT THE PARTY’S ADDRESS;

 

 

 

 

 

(II)

(IN THE CASE OF DELIVERY BY FACSIMILE) ON PRODUCTION OF A TRANSMISSION REPORT BY
THE MACHINE FROM WHICH THE FACSIMILE WAS SENT WHICH INDICATES THAT THE FACSIMILE
WAS SENT IN ITS ENTIRETY TO THE NUMBER OF THE RECIPIENT;

 

 

 

 

 

(III)

(IN THE CASE OF DELIVERY BY EMAIL ADDRESS) ON PRODUCTION OF AN EMAIL RECEIPT
FROM THE RECIPIENT TO THE SENDER WHICH INDICATES THAT THE EMAIL WAS SENT TO THE
EMAIL ADDRESS OF THE RECIPIENT AND HAS BEEN OPENED BY THE RECIPIENT,

 

 

 

 

 

but if delivery or receipt occurs on a day which is not a Business Day or is
later than 2 pm (local time) it will be taken to have been duly given at the
commencement of the next Business Day; and

 

 

(C)

IS SUBJECT TO THE PROVISIONS OF CLAUSE 12.

 

15.                                        NO WAIVER

 

                                                No failure to exercise and no
delay in exercising any right, power or remedy under this Agreement will operate
as a waiver.  No single or partial exercise of any right, power or remedy
precludes any other or further exercise of that or any other right, power or
remedy will operate as a waiver.

 

16.                                        ASSIGNMENT

 

                A party may not assign any of its rights and obligations under
this Agreement without the prior written consent of the other party.

 

 

17.                                         CONFIDENTIALITY

 

                                                Except as required by law or as
is necessary for the performance of its obligations under this Agreement by its
officers or agents, neither party may directly or indirectly disclose to any
other person, or use or permit to be disclosed or used for any purpose other
than a purpose contemplated by this Agreement or as a consequence of any
direction given pursuant to this Agreement or in the normal course of business
for credit assessment, the terms of this Agreement or any information that may
be acquired by the party under or for the purposes of this Agreement and each
party must keep all such information confidential, except where publicly
available other than by breach of this Agreement.

 

 

17

--------------------------------------------------------------------------------

 

18.                                        FURTHER ASSURANCES

 

                          NMFM agrees to enter into and perform any instrument
or agreement necessary to give effect to this Agreement. Where practicable NMFM
will seek to procure that the asset holder or Custodian will enter into any
master trading or clearing agreement required for orderly trading of investments
pursuant to this Agreement and authorises the Manager to act as its agent under
these agreements as is reasonably necessary for the Manager to comply with its
investment management obligations under this Agreement.

 

19.                                        AMENDMENT

 

                          This Agreement other than clause 3.2 and clause 8.1
may be amended by exchange of letters signed by the parties.  The instructions
given by NMFM pursuant to clause 3.2 and clause 8.1 may be amended by specific
written instruction from an Authorised Person of NMFM to the Manager.

 

20.                                        GOVERNING LAW AND JURISDICTION

 

                          This Agreement is governed by the laws of the State or
Territory referred to in paragraph 5 of Schedule 1.  The parties submit to the
non-exclusive jurisdiction of Courts exercising jurisdiction there.

 

21.                                         SEVERANCE

 

                          Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction will be ineffective in that jurisdiction to
the extent of the prohibition or unenforceability.  That will not invalidate the
remaining provisions of this Agreement nor affect the validity or enforceability
of that provision in any other jurisdiction.

 

22.                                         COUNTERPARTS

 

                          This Agreement may be executed in any number of
counterparts.  All counterparts taken together will be deemed to constitute one
document.

 

 

 

 

 

EXECUTED in Melbourne.

 

 

18

--------------------------------------------------------------------------------

 

SCHEDULE 1

Additional definitions

 

 

 

1.                                                CLAUSE 1.1, DEFINITION OF
SUPERVISED AGENT

 

Supervised Agent means an agent of the Manager which in fact acts under the
control and supervision of the Manager, but does not include a person which:

 

 

 

(a)

 

is either a broker, a Clearing House or a counterparty, or another person who
acts in a broker, a Clearing House or a counterparty capacity; or

 

 

 

(b)

 

is an agent, or one of a class of agents, nominated in writing by the Manager
for this purpose and which is not objected to by NMFM within 10 Business Days of
the date NMFM receives the nomination; or

 

 

 

(c)

 

is an agent whose conduct or actions is not capable of supervision by the
Manager, in respect of the particular matter to which reference is made; or

 

 

 

(d)

 

acts in accordance with the direction of NMFM in respect of the particular
matter to which reference is made.

 

 

 

 

2.                CLAUSE 4.1(b)

 

Discretionary management powers which may be delegated:

 

The Manager may at its discretion sub-delegate its investment management
functions to a member of the ACM Group that have appropriate expertise capacity
and proven capability to manage the asset class or classes concerned.  However,
such sub-delegation may not relate to assets domiciled in Australia or New
Zealand without the prior written agreement of NMFM.

 

The Manager may sub-delegate its investment management functions to investment
managers who are not member of the ACM Group but only with the prior agreement
of NMFM.

 

 

3.                CLAUSE 9

 

Commencement Date:  1 February 2001

 

 

 

4.                CLAUSE 9

 

Period for termination report:  60 days

 

 

5.                CLAUSE 20

 

 

19

--------------------------------------------------------------------------------

 

State or Territory:  Victoria

 

 

20

--------------------------------------------------------------------------------

 

SCHEDULE 2

 

Notices

(Clause 2 and Clause 4)

 

 

1.                NMFM

 

Attention:    John Nairn

 

 

Address:      Level 14, 440 Collins Street, Melbourne

 

 

Facsimile:     9617 2460

 

 

Email:            jnairn@axa.com.au

 

 

Copy (if required):

 

 

Authorised Persons:        John Nairn, Daniel Craine

 

 

 

2.                MANAGER

 

Attention:    Michael Bargholz

 

 

Address:      Level 29, Governor Phillip Tower, 1 Farrer Place, Sydney, NSW,
2000

 

 

Facsimile:

 

 

Email:

 

 

Copy (if required):

 

 

Authorised Persons:        Michael Bargholz, Joy Adams

 

 

21

--------------------------------------------------------------------------------

 

SCHEDULE 3

 

Derivatives Trading

(Clause 4.4)

 

 

[To be agreed between the parties — IFSA, together with AFMA and the ABA, intend
to release a standard version of this letter to be used by investment managers
and their clients]

 

 

22

--------------------------------------------------------------------------------

 

 

 

SIGNED for and on behalf of

)

NATIONAL MUTUAL FUNDS MANAGEMENT

)

LIMITED

)

by its duly authorised officer in the presence of:

)

 

 

 

Sally Cormack

 

Arthur Leslie Owen

 

Witness

Group Chief Executive

 

 

 

 

Sally Cormack

 

Arthur Leslie Owen

 

Print name

Print Name

 

 

 

 

 

EXECUTED by

)

 

)

ACN 095 022 718 LIMITED

)

 in accordance with section 127(1) of the Corporations Law)

Michael Bargholz

 

Signature

 

 

John Nairn

 

Michael Bargholz

Signature

Print name

 

 

John Nairn

 

CEO 

Print name

Office held

 

 

23

--------------------------------------------------------------------------------

 

 

Schedule 2 - Adherence Agreement

 

 

 

--------------------------------------------------------------------------------

 

Date:

 

 

 

 

 

Parties:

 

[insert name] having its office at [insert address]

(“Transferee”)

 

 

 

 

 

[insert name] having its office at

 

 

[insert address] (“Transferor”)

 

 

 

 

 

[insert name] having its office at

 

 

[insert address] (“Other Party”)

 

Recitals

 

 

A.

Pursuant to the Shareholders’ Agreement the share capital of the Joint Venture
Group is held equally by each of Transferor and Other Party.

 

 

B.

Transferor wishes to sell the Joint Venture Group Shares to Transferee and
Transferee wishes to buy the Joint Venture Group Shares from Transferor.

 

 

C.

Under the Shareholders’ Agreement a Shareholder may transfer all of its holding
to a third party provided, amongst other things, it enters into a deed of
adherence substantially in the form of this deed.

 

Operative Provisions:

1

 

Definitions and Interpretations

1.1

 

The following words have these meanings in this deed unless the contrary
intention appears.

 

 

 

 

 

Joint Venture Group Shares means [number] ordinary shares held by Transferor in
the Company.

 

 

 

 

 

Shareholders’ Agreement means the shareholders’ agreement dated [        ] among
Alliance Capital Management Corporation of Delaware, Alliance Capital Management
Australia Limited, AXA Asia Pacific Holdings Limited, National Mutual Funds
Management Limited and the Company.

 

 

 

1.2

 

Unless otherwise required by the context, words and terms in the Shareholders’
Agreement have the same meaning when used in this deed.

 

 

 

1.3

 

Headings are used for convenience only and do not affect the interpretation of
this deed.

 

 

 

2

 

Notification of Transfer

 

 

 

 

 

Upon completion of the transfer of Joint Venture Group Shares to Transferee,
Transferor will immediately notify the Joint Venture Group and the Other Party
and deliver copies of this deed executed by Transferor and Transferee.

 

 

1

--------------------------------------------------------------------------------

 

3

 

Obligations of Transferor and Transferee

 

 

 

3.2

 

Transferee, other than a Transferee under clause 10.1(b), will not have to
adhere to and will not be bound by clause 9 of the Shareholders’ Agreement.

 

 

 

3.3

 

Transferee is aware of and understands all of the obligations and liabilities
that it is required to undertake under clause 3.1.

 

 

 

3.4

 

Transferor, other than a Transferor under clause 10.1(b):

 

 

 

 

 

(A)

IS RELEASED FROM ITS OBLIGATIONS TO FURTHER PERFORM THE SHAREHOLDERS’ AGREEMENT,
EXCEPT OBLIGATIONS:

 

 

 

(I)

IMPOSING AN OBLIGATION OF CONFIDENTIALITY; AND

 

 

 

(II)

OWED BY THE TRANSFEROR TO ANY PARTY TO THE SHAREHOLDERS’ AGREEMENT IN RESPECT OF
ANY PAST BREACHES AND UNDER ANY INDEMNITIES FOR ACTIONS OCCURING PRIOR TO THE
TRANSFER; AND

 

 

(B)

WILL RETAIN THE RIGHTS IT HAS AGAINST ANY PARTY TO THE SHAREHOLDERS’ AGREEMENT
IN RESPECT OF ANY PAST BREACHES AND UNDER ANY INDEMNITIES FOR ACTIONS OCCURING
PRIOR TO THE TRANSFER.

3.5

 

Transferee may not transfer the Joint Venture Group Shares to any person unless
that person enters into a deed of adherence in the form of this deed.

 

 

 

4

 

Affirmations

 

 

The parties to this deed confirm the Shareholders’ Agreement in all respects.

 

 

 

5

 

Governing Law

 

 

This deed will be governed by and construed in accordance with the laws of
Victoria and the parties submit to the jurisdiction of the courts of Victoria.

 

2

--------------------------------------------------------------------------------

 

SIGNED by [                                     ]

)

 

as attorney for TRANSFEREE in the

)

 

presence of:

)

 

 

)

 

Signature of witness

)

 

 

)

 

Name of witness (block letters)

)

 

 

)

 

Address of witness

)

By executing this deed the attorney

 

)

states that the attorney has received

Occupation of witness

)

no notice of revocation of the power

 

)

of attorney

 

 

SIGNED by [                                     ]

)

 

as attorney for TRANSFEROR in the

)

 

presence of:

)

 

 

)

 

Signature of witness

)

 

 

)

 

Name of witness (block letters)

)

 

 

)

 

Address of witness

)

By executing this deed the attorney

 

)

states that the attorney has received

Occupation of witness

)

no notice of revocation of the power

 

)

of attorney

 

 

SIGNED by [                                     ]

)

 

as attorney for OTHER PARTY in

the presence of:

)

 

 

)

 

Signature of witness

)

 

 

)

 

Name of witness (block letters)

)

 

 

)

 

Address of witness

)

By executing this deed the attorney

 

)

states that the attorney has received

Occupation of witness

)

no notice of revocation of the power

 

)

of attorney

 

 

3

--------------------------------------------------------------------------------

 

 

Schedule 3 - Fees Deed

 

Dated               18 January 2001

 

 

 

Fees and Adjustments Deed

 

 

Alliance Capital Management
Australia Limited
(to be renamed
Alliance Capital Australia Limited)
(ABN 58 007 212 606)

(“ACM”)

 

National Mutual Funds
Management Limited
(ABN 32 006 787 720)

(“NMFM Australia”)

 

National Mutual Funds
Management NZ Limited

(“NMFM New Zealand”)

 

ACN 095 022 718 Limited
(to be renamed
Alliance Capital Management Australia Limited

(“Aus Co”)

 

Cidwell Developments Limited

(to be renamed

Alliance Capital Management New Zealand Limited)

(“NZ Co”)

 

 

 

Mallesons Stephen Jaques

Solicitors

 

Rialto

525 Collins Street

Melbourne   Vic   3000

Telephone (61 3) 9643 4000

Fax (61 3) 9643 5999

DX 101 Melbourne

Ref: D. Lewis

Mel_Corp#386080.02

 

 

1

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Contents                                            Fees and Adjustments Deed

 

1

Definitions and interpretation

 

 

 

 

2

Fees payable to Aus Co and NZ Co by ACM under the ACM IMA

 

 

 

 

 

Fees payable by ACM

 

 

What if ACM Mandate Fees < ACM Indexed Base Fee?

 

 

ACM Indexed Base Fee

 

 

ACM Index

 

 

ACM Average Index Movement

 

 

ACM Mandate Fees

 

 

Identification of ACM Mandates

 

 

 

 

3

Fees payable to Aus Co by NMFM Australia under the NMFM Australian IMA

 

 

 

 

 

Fee payable by NMFM Australia

 

 

What if NMFM Australia Mandate Fees < NMFM Australia Indexed Base Fee?

 

 

NMFM Australia Indexed Base Fee

 

 

NMFM Australia Index

 

 

NMFM Australia Average Index Movement

 

 

NMFM Australia Mandate Fees

 

 

Identification of NMFM Australia Mandates

 

 

 

 

4

Fees payable to NZ Co by NMFM New Zealand under the NMFM New Zealand IMA

 

 

 

 

 

Fee payable by NMFM New Zealand

 

 

What if NMFM New Zealand Mandate Fees < NMFM New Zealand Indexed Base Fee?

 

 

NMFM New Zealand Indexed Base Fee

 

 

NMFM New Zealand Index

 

 

NMFM New Zealand Average Index Movement

 

 

NMFM New Zealand Mandate Fees

 

 

Identification of NMFM New Zealand Mandates

 

 

 

 

5

Adjustments for retention of mandates

 

 

 

 

 

Adjustment payments

 

 

Amount of adjustment payment

 

 

 

 

6

Determination of value of funds under management

 

 

 

 

7

GST adjustments made in calculation of fees

 

 

 

 

 

Australian GST Adjustments

 

 

New Zealand GST Adjustments

 

 

 

 

8

Timing and method of payment of fees and adjustment payments

 

 

 

 

 

When fees are paid?

 

 

When are adjustment payments paid?

 

 

Method of payment

 

 

Currency of payment

 

 

 

 

9

Approximation and verification of payments

 

 

 

 

 

Approximation of payments

 

 

Changing method of approximation

 

 

Verification

 

 

Payment for verification

 

 

Access to documents

 

 

Supply of information

 

 

 

 

10

Australian Goods and Services Tax

 

 

 

 

 

Australian GST exclusive fees and payments

 

 

Australian GST inclusive fees and payments

 

 

Adjustments

 

 

Calculation method

 

 

 

 

11

New Zealand Goods and Services Tax

 

 

 

 

 

Fees inclusive of New Zealand GST

 

 

Adjustment payments inclusive of New Zealand GST

 

 

New Zealand GST invoice required

 

 

 

 

12

Sub-advisory fees

 

 

 

 

13

Governing law, jurisdiction and service of process

 

 

 

 

14

Counterparts

 

 

 

 

Schedule 1

 

 

 

2

--------------------------------------------------------------------------------

 

 

 

 

Schedule 2

 

 

 

 

 

Schedule 3

 

 

 

 

 

Schedule 4

 

 

 

 

 

Schedule 5

 

 

 

 

 

Schedule 6

 

 

 

 

 

Schedule 7

 

 

 

 

 

Execution page

 

 

 

3

--------------------------------------------------------------------------------

 

 

 

Fees and Adjustments Deed

 

 

 

Date:

 

18 January 2001

 

 

 

Parties:

 

ALLIANCE CAPITAL MANAGEMENT AUSTRALIA LIMITED (to be renamed Alliance Capital
Australia Limited) having its registered office at Level 29, Governor Phillip
Tower, 1 Farrer Place, Sydney, New South Wales, Australia (“ACM”)

 

 

 

 

 

NATIONAL MUTUAL FUNDS MANAGEMENT LIMITED having its registered office at Level
15, 447 Collins Street, Melbourne, Victoria, Australia (“NMFM Australia”)

 

 

 

 

 

NATIONAL MUTUAL FUNDS MANAGEMENT NZ LIMITED having its registered office at 80
The Terrace, Wellington, New Zealand (“NMFM New Zealand”)

 

 

 

 

 

ACN 095 022 718 LIMITED (to be renamed Alliance Capital Management Australia
Limited) having its registered office at Level 29, Governor Phillip Tower, 1
Farrer Place, Sydney, Australia (“Aus Co”)

 

 

 

 

 

CIDWELL DEVELOPMENTS LIMITED (to be renamed Alliance Capital Management New
Zealand Limited) having its registered office at 80 The Terrace, Wellington, New
Zealand (“NZ Co”)

Recitals:

 

 

 

A.

By an agreement dated 18 January 2001 Alliance Capital Management Corporation of
Delaware, ACM, AXA Asia Pacific Holdings Limited, NMFM Australia, Aus Co and NZ
Co have entered into a subscription and shareholders agreement in relation to
Aus Co and NZ Co (“Shareholders Agreement”).

 

 

 

 

B.

In accordance with the Shareholders Agreement , NMFM Australia proposes to enter
into the NMFM Australian IMA with Aus Co.

 

 

 

 

C.

In accordance with the Shareholders Agreement , NMFM New Zealand proposes to
enter into the NMFM New Zealand IMA with NZ Co.

 

 

 

 

D.

In accordance with the Shareholders Agreement, ACM proposes to enter into the
ACM IMA with Aus Co.

 

 

 

 

E.

Each of the NMFM Australian IMA and the ACM IMA provides that Aus Co is entitled
to a management fee as determined in accordance with this deed.

 

 

 

 

F.

The NMFM New Zealand IMA provides that NZ Co is entitled to a management fee as
determined in accordance with this deed.

Operative provisions:

1              DEFINITIONS AND INTERPRETATION

1.1           IN THIS DEED, UNLESS THE CONTEXT OTHERWISE REQUIRES EXPRESSIONS
USED HAVE THESE MEANINGS:

 

 

1

--------------------------------------------------------------------------------

 

ACM IMA: the investment management agreement entered into/to be entered into
between ACM and Aus Co under which ACM appoints Aus Co as agent of ACM to invest
and manage the portfolios referred to in that agreement.

ACM Index: see clause 2.7.

ACM Indexed Base Fee: see clauses 2.3 to 2.6.

ACM Average Index Movement: see clause 2.8.

ACM Mandate Fees: see clause 2.9.

ACM Mandates:

(a)            all mandates entered into by Alliance Capital Management L.P.,
ACM or Sanford C. Bernstein & Co. Proprietary Ltd with clients in Australia or
New Zealand; and

 

(b)            all mandates entered into by Alliance Capital Management L.P.,
ACM or Sanford C. Bernstein & Co. Proprietary Ltd the investment objective of
which is to invest more than 65% of the relevant client’s assets in the relevant
portfolio in Australia and/or New Zealand,

excluding mandates entered into with NMFM.  The mandates entered into by
Alliance Capital Management L.P., ACM or Sanford C. Bernstein & Co Proprietary
Limited as at 30 September 2000 are set out in Schedule 1.  For the avoidance of
doubt, details of these mandates are provided in this deed merely to assist the
parties in identification of the types of mandates likely to be included in the
definition.

Anniversary Date: an anniversary date of the Commencement Date.

Australian GST: has the same meaning as in A New Tax System (Goods & Services)
Tax Act (Cth) 1999.

Commencement Date: 1 February 2001.

Existing Mandate: a mandate the fees from which are included in the calculation
of:

 

(a)            ACM Indexed Base Fee; or

 

(b)            NMFM Australia Indexed Base Fee; or

 

(c)            NMFM New Zealand Indexed Base Fee

 

and which has been or is proposed to be transferred to Aus Co or NZ Co.  For the
purpose of this definition “transferred” includes any form of assignment or
novation as well as a replacement or substitution or a new mandate with the same
client in respect of substantially the same funds.

Fee Period: a quarter or, in the case of the first Fee Period, the period from
the Commencement Date to the end of the quarter in which the Commencement Date
occurs.

 

 

2

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IMAs: the ACM IMA, the NMFM Australian IMA and the NMFM New Zealand IMA.

New Zealand GST: the goods and services tax under the Goods and Services Tax Act
1985 (New Zealand).

NMFM: NMFM Australia, NMFM New Zealand and/or NMFM Global.

NMFM Australia Index: see clause 3.7.

NMFM Australia Indexed Base Fee: see clauses 3.3 to 3.6.

NMFM Australia Average Index Movement: see clause 3.8.

NMFM Australia Mandate Fees: see clause 3.9.

NMFM Australia Mandates:

(a)            all mandates entered into by NMFM Australia or NMFM Global with
clients in Australia; and

(b)            all mandates entered into by NMFM Australia or NMFM Global, the
investment objective of which is to invest more than 65% of the relevant
client’s assets in the relevant portfolio in Australia and/or New Zealand

excluding mandates to the extent (if any) that they relate to loans secured by
real or personal property, unsecured loans and real property management.  The
mandates entered into by NMFM Australia and NMFM Global as at 30 September 2000
are set out in Schedule 2.  For the avoidance of doubt, details of these
mandates are provided in this deed merely to assist the parties in
identification of the types of mandates likely to be included in the definition.

NMFM Australian IMA: the investment management agreement entered into/to be
entered into between NMFM Australia and Aus Co under which NMFM Australia
appoints Aus Co as agent of NMFM Australia to invest and manage the portfolio
referred to in that agreement.

NMFM Global: National Mutual Funds Management (Global) Limited ABN 74 057 398
393.

NMFM IMAs: the NMFM Australian IMA and the NMFM New Zealand IMA.

NMFM Mandates: the NMFM Australia Mandates and the NMFM New Zealand Mandates.

NMFM New Zealand IMA: the investment management agreement entered into/to be
entered into between NMFM New Zealand and NZ Co under which NMFM New Zealand
appoints NZ Co as agent of NMFM New Zealand to invest and manage the portfolio
referred to in that agreement.

NMFM New Zealand Index:  see clause 4.7.

 

 

3

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NMFM New Zealand Indexed Base Fee: see clauses 4.3 to 4.6.

NMFM New Zealand Average Index Movement:  see clause 4.8.

NMFM New Zealand Mandate Fees: see clause 4.9.

NMFM New Zealand Mandates:

(a)            all mandates entered into by NMFM New Zealand or NMFM Global with
clients in New Zealand; and

(b)            all mandates entered into by NMFM New Zealand or NMFM Global, the
investment objective of which is to invest more than 65% of the relevant
client’s assets in the relevant portfolio In Australia and/or New Zealand

excluding mandates to the extent (if any) that they relate to loans secured by
real or personal property, unsecured loans and real property management.  The
mandates entered into by NMFM New Zealand and NMFM Global as at 30 September
2000 are set out in Schedule 3.  For the avoidance of doubt, details of these
mandates are provided in this deed merely to assist the parties in
identification of the types of mandates likely to be included in the definition.

1.2           IN THIS DEED UNLESS A CONTRARY INTENTION APPEARS:

 

(a)            all references to money, monetary amounts or currency are to the
currency of Australia or the currency of New Zealand (as the case requires);

 

(b)            a reference to this agreement or another instrument includes any
variation or replacement of any of them;

 

(c)            a reference to a statute, ordinance, code or other law includes
regulations and other instruments under it and consolidations, amendments,
re-enactments or replacements of any of them;

 

(d)            the singular includes the plural and vice versa;

 

(e)            the word “person” includes a firm, a body corporate, an
unincorporated association or an authority;

 

(f)             a reference to a person includes a reference to the person’s
executors, administrators, successors, substitutes (including, without
limitation, any persons taking by novation) and assigns;

 

(g)            a reference to any thing (including, without limitation, any
amount) is a reference to the whole and each part of it and a reference to a
group of persons is a reference to all of them collectively, to any two or more
of them collectively and to each of them individually; and

 

(h)            a reference to a quarter is a period of 3 calendar months ending
on 31 March, 30 June, 30 September or 31 December.

 

 

4

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1.3           HEADINGS ARE INSERTED FOR CONVENIENCE.  THEY DO NOT AFFECT THE
INTERPRETATION OF THIS DEED.

2              FEES PAYABLE TO AUS CO AND NZ CO BY ACM UNDER THE ACM IMA

FEES PAYABLE BY ACM

 

2.1           SUBJECT TO CLAUSE 2.2, THE FEE PAYABLE IN RESPECT OF EACH FEE
PERIOD TO AUS CO BY ACM UNDER THE ACM IMA IS DETERMINED IN ACCORDANCE WITH THIS
FORMULA:

 

FACM = (0.65 x IBFACM) + (MFACM - IBFACM)

where

FACM is the fee payable under this clause by ACM;

IBFACM is the ACM Indexed Base Fee;

MFACM is the ACM Mandate Fees.

If the first Fee Period does not commence at the start of a quarter, the fee
payable for that first Fee Period is reduced in proportion to the length of the
Fee Period relative to length of the quarter.  For example if the Fee Period is
two thirds of the length of the quarter, the fee payable is two thirds of the
amount determined in accordance with the formula.

What if ACM Mandate Fees < ACM Indexed Base Fee?

2.2           IF AT THE END OF A FEE PERIOD THE ACM MANDATE FEES ARE LESS THAN
THE ACM INDEXED BASE FEE, THE FOLLOWING FORMULA SHALL BE SUBSTITUTED FOR THE
FORMULA IN CLAUSE 2.1 WHEN DETERMINING THE FEE PAYABLE IN RESPECT OF THAT FEE
PERIOD:

 

FACM = 0.65 x MFFACM

ACM Indexed Base Fee

2.3           SUBJECT TO CLAUSE 2.4, FOR THE FIRST FEE PERIOD, THE ACM INDEXED
BASE FEE IS AN AMOUNT DETERMINED IN ACCORDANCE WITH THIS FORMULA:

 

IBFACM = AFACM / 4

 

where:

IBFACM has the same meaning as in clause 2.1.

AFACM is the aggregate of the annualised fees payable on each ACM Mandate (after
deduction of fees, or deemed fees, payable to sub-advisors in connection with
those mandates) as at the last day of the quarter ending prior to the
Commencement Date.

For the avoidance of doubt, example calculations showing how the ACM Indexed
Base Fee would be calculated are set out in Schedule 4.

2.4           FOR THE PURPOSES OF CLAUSE 2.3, IF THE FEES PAID TO SUB-ADVISORS
IN CONNECTION WITH ACM MANDATES DURING THE RELEVANT PERIOD ARE MORE THAN 49% OF
THE FEES PAID TO ACM IN RESPECT OF THOSE MANDATES, THE

 

 

5

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fees paid to sub-advisors are deemed to be 49% of the fees paid to ACM in
respect of those mandates.

2.5           SUBJECT TO CLAUSE 2.6, FOR EACH FEE PERIOD AFTER THE FIRST FEE
PERIOD, THE ACM INDEXED BASE FEE IS DETERMINED IN ACCORDANCE WITH THIS FORMULA:

       X                                     X-1

IBFACM                =          IBFACM      x              (1 + AIMACM)

where

 

       X

IBFACM is the ACM Indexed Base Fee for the Fee Period;

       X-1

IBFACM is the ACM Indexed Base Fee for the immediately preceding Fee Period;

AIMACM is the ACM Average Index Movement for the Fee Period.

2.6           IF THE VALUE OF THE FUNDS UNDER MANAGEMENT IN ACM MANDATES ON ANY
ANNIVERSARY DATE IS LESS THAN HALF OF THE VALUE OF THE FUNDS UNDER MANAGEMENT IN
ACM MANDATES AS AT THE COMMENCEMENT DATE, THE ACM INDEXED BASE FEE ON THAT
ANNIVERSARY DATE IS AN AMOUNT EQUAL TO THE TOTAL FEES (AFTER DEDUCTION OF FEES
PAID TO SUB-ADVISORS ) PAYABLE ON ALL ACM MANDATES IN RESPECT OF THE FEE PERIOD
ENDING ON THAT ANNIVERSARY DATE.

ACM Index

2.7           THE ACM INDEX IS CALCULATED AS AT THE END OF EACH FEE PERIOD.  IT
IS A COMPOSITE INDEX, MADE UP OF THE INDICES APPLICABLE TO THE ASSET CLASSES OF
THE ASSETS MANAGED IN ACM MANDATES AND WEIGHTED BY THE VALUE OF ASSETS IN EACH
OF THOSE ASSET CLASSES:

 

(A)            FOR FEE PERIODS ENDING ON OR BEFORE 31 DECEMBER 2001, AS AT 31
DECEMBER 2000; AND

 

(B)            FOR ALL SUBSEQUENT FEE PERIODS, AS AT THE PRECEDING 31 DECEMBER.

 

The applicable indices may be varied from time to time by agreement between the
parties.  The applicable indices as at the Commencement Date are set out in
Schedule 5.

ACM Average Index Movement

2.8           THE ACM AVERAGE INDEX MOVEMENT FOR A FEE PERIOD IS THE CHANGE IN
THE ACM INDEX AS AT THE END OF THE FEE PERIOD AS COMPARED WITH THE ACM INDEX AS
AT THE END OF THE IMMEDIATELY PRECEDING FEE PERIOD, EXPRESSED AS A FRACTION OF
THE ACM INDEX AS AT THE END OF THE IMMEDIATELY PRECEDING FEE PERIOD DIVIDED BY
TWO.

ACM Mandate Fees

2.9           THE ACM MANDATE FEES ARE THE TOTAL FEES (AFTER DEDUCTION OF FEES
PAID TO SUB-ADVISORS) EARNED ON ACM MANDATES IN THE FEE PERIOD.

 

 

6

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Identification of ACM Mandates

2.10         ACM WILL NOTIFY THE OTHER PARTIES OF THE DETAILS OF ALL ACM
MANDATES AS AT THE END OF EACH FEE PERIOD WITHIN 90 DAYS OF THE END OF THAT FEE
PERIOD.

 

 

 

3

 

FEES PAYABLE TO AUS CO BY NMFM AUSTRALIA UNDER THE NMFM AUSTRALIAN IMA

 

 

 

FEE PAYABLE BY NMFM AUSTRALIA

 

3.1           SUBJECT TO CLAUSE 3.2, THE FEE PAYABLE IN RESPECT OF EACH FEE
PERIOD TO AUS CO BY NMFM AUSTRALIA UNDER THE NMFM AUSTRALIAN IMA IS DETERMINED
IN ACCORDANCE WITH THIS FORMULA:

 

FNMFMA = (0.65 x IBFNMFMA) + (MFNMFMA - IBFNMFMA)

where

FNMFMA is the fee payable under this clause by NMFM Australia;

IBFNMFMA is the NMFM Australia Indexed Base Fee;

MFNMFMA is the NMFM Australia Mandate Fees.

If the first Fee Period does not commence at the start of a quarter, the fee
payable for that first Fee Period is reduced in proportion to the length of the
Fee Period relative to length of the quarter.  For example if the Fee Period is
two thirds of the length of the quarter, the fee payable is two thirds of the
amount determined in accordance with the formula.

What if NMFM Australia Mandate Fees < NMFM Australia Indexed Base Fee?

3.2           IF AT THE END OF A FEE PERIOD THE NMFM AUSTRALIA MANDATE FEES ARE
LESS THAN THE NMFM AUSTRALIA INDEXED BASE FEE, THE FOLLOWING FORMULA IS
SUBSTITUTED FOR THE FORMULA IN CLAUSE 3.1 WHEN DETERMINING THE FEE PAYABLE IN
RESPECT OF THAT FEE PERIOD:

FNMFMA = 0.65 x MFNMFMA

NMFM Australia Indexed Base Fee

3.3           SUBJECT TO CLAUSE 3.4, FOR THE FIRST FEE PERIOD, THE NMFM
AUSTRALIA INDEXED BASE FEE IS AN AMOUNT DETERMINED IN ACCORDANCE WITH THIS
FORMULA:

 

IBFNMFMA = AFNMFMA / 4

 

where:

IBFNMFMA has the same meaning as in clause 3.1.

AFNMFMA is the aggregate of the annualised fees payable on each NMFM Australia
Mandate (after deduction of fees, or deemed fees, payable to sub-advisors in
connection with those mandates) as at the last day of the quarter ending prior
to the Commencement Date.

 

 

7

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For the avoidance of doubt, an example calculation showing how the NMFM
Australia Indexed Base Fee would be calculated based on the period from 1 July
2000 to 30 September 2000 is set out in Schedule 4.

3.4           FOR THE PURPOSES OF CLAUSE 3.3, IF THE FEES PAID TO SUB-ADVISORS
IN CONNECTION WITH NMFM AUSTRALIA MANDATES DURING THE RELEVANT PERIOD ARE MORE
THAN 49% OF THE FEES PAID TO NMFM AUSTRALIA IN RESPECT OF THOSE MANDATES, THE
FEES PAID TO SUB-ADVISORS ARE DEEMED TO BE 49% OF THE FEES PAID TO NMFM
AUSTRALIA IN RESPECT OF THOSE MANDATES.

3.5           SUBJECT TO CLAUSE 3.6, FOR EACH FEE PERIOD AFTER THE FIRST FEE
PERIOD, THE NMFM AUSTRALIA INDEXED BASE FEE IS DETERMINED IN ACCORDANCE WITH
THIS FORMULA:

 

      X                                             X-1

IBFNMFMA                  =       IBFNMFMA                       x           (1
+ AIMNMFMA)

where

 

      X

IBFNMFMA is the NMFM Australia Indexed Base Fee for the Fee Period;

 

       X-1

IBFNMFMA is the NMFM Australia Indexed Base Fee for the immediately preceding
Fee Period;

AIMNMFMA is the NMFM Australia Average Index Movement for the Fee Period.

3.6           IF THE VALUE OF THE FUNDS UNDER MANAGEMENT IN NMFM MANDATES ON ANY
ANNIVERSARY DATE IS LESS THAN HALF OF THE VALUE OF THE FUNDS UNDER MANAGEMENT IN
NMFM MANDATES AS AT THE COMMENCEMENT DATE, THE NMFM AUSTRALIA INDEXED BASE FEE
ON THAT ANNIVERSARY DATE IS AN AMOUNT EQUAL TO THE TOTAL FEES (AFTER DEDUCTION
OF FEES PAID TO SUB-ADVISORS) PAYABLE ON ALL NMFM AUSTRALIA MANDATES IN RESPECT
OF THE FEE PERIOD ENDING ON THAT ANNIVERSARY DATE.

NMFM Australia Index

3.7           THE NMFM AUSTRALIA INDEX IS CALCULATED AS AT THE END OF EACH FEE
PERIOD.  IT IS A COMPOSITE INDEX, MADE UP OF THE INDICES APPLICABLE TO THE ASSET
CLASSES OF THE ASSETS MANAGED IN NMFM AUSTRALIA MANDATES AND WEIGHTED BY THE
VALUE OF ASSETS IN EACH OF THOSE ASSET CLASSES:

 

(A)            FOR FEE PERIODS ENDING ON OR BEFORE 31 DECEMBER 2001, AS AT 31
DECEMBER 2000; AND

 

(B)            FOR ALL SUBSEQUENT FEE PERIODS, AS AT THE PRECEDING 31 DECEMBER.

 

The applicable indices may be varied from time to time by agreement between the
parties.  The applicable indices as at the Commencement Date are set out in
Schedule 5.

 

 

8

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NMFM Australia Average Index Movement

3.8           THE NMFM AUSTRALIA AVERAGE INDEX MOVEMENT FOR A FEE PERIOD IS THE
CHANGE IN THE NMFM AUSTRALIA INDEX AS AT THE END OF THE FEE PERIOD AS COMPARED
WITH THE NMFM AUSTRALIA INDEX AS AT THE END OF THE IMMEDIATELY PRECEDING FEE
PERIOD EXPRESSED AS A FRACTION OF THE NMFM AUSTRALIA INDEX AS AT THE END OF THE
IMMEDIATELY PRECEDING FEE PERIOD DIVIDED BY TWO.

 

NMFM Australia Mandate Fees

3.9           THE NMFM AUSTRALIA MANDATE FEES ARE THE TOTAL FEES (AFTER
DEDUCTION OF FEES PAID TO SUB-ADVISORS) EARNED ON NMFM AUSTRALIA MANDATES IN THE
FEE PERIOD.

 

Identification of NMFM Australia Mandates

3.10         NMFM AUSTRALIA WILL NOTIFY THE OTHER PARTIES OF THE DETAILS OF ALL
NMFM AUSTRALIA MANDATES AS AT THE END OF EACH FEE PERIOD WITHIN 90 DAYS OF THE
END OF THAT FEE PERIOD.

4              FEES PAYABLE TO NZ CO BY NMFM NEW ZEALAND UNDER THE NMFM NEW
ZEALAND IMA

Fee payable by NMFM New Zealand

4.1           SUBJECT TO CLAUSE 4.2, THE FEE PAYABLE IN RESPECT OF EACH FEE
PERIOD TO NZ CO BY NMFM NEW ZEALAND UNDER THE NMFM NEW ZEALAND IMA IS DETERMINED
IN ACCORDANCE WITH THIS FORMULA:

 

FNMFMNZ = (0.65 x IBFNMFMNZ) + (MFNMFMNZ - IBFNMFMNZ)

where

FNMFMNZ is the fee payable under this clause by NMFM New Zealand;

IBFNMFMNZ is the NMFM New Zealand Indexed Base Fee;

MFNMFMNZ is the NMFM New Zealand Mandate Fees.

If the first Fee Period does not commence at the start of a quarter, the fee
payable for that first Fee Period is reduced in proportion to the length of the
Fee Period relative to length of the quarter.  For example if the Fee Period is
two thirds of the length of the quarter, the fee payable is two thirds of the
amount determined in accordance with the formula.

What if NMFM New Zealand Mandate Fees < NMFM New Zealand Indexed Base Fee?

4.2           IF AT THE END OF A FEE PERIOD THE NMFM NEW ZEALAND MANDATE FEES
ARE LESS THAN THE NMFM NEW ZEALAND INDEXED BASE FEE, THE FOLLOWING FORMULA IS
SUBSTITUTED FOR THE FORMULA IN CLAUSE 4.1 WHEN DETERMINING THE FEE PAYABLE IN
RESPECT OF THAT FEE PERIOD:

 

FNMFMNZ = 0.65 x MFNMFMNZ

NMFM New Zealand Indexed Base Fee

4.3           SUBJECT TO CLAUSE 4.4, FOR THE PERIOD FROM THE FIRST FEE PERIOD,
THE NMFM NEW ZEALAND INDEXED BASE FEE IS AN AMOUNT DETERMINED IN ACCORDANCE WITH
THIS FORMULA:

 

 

9

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IBFNMFMNZ = AFACM / 4

 

where:

IBFNMFMNZ has the same meaning as in clause 4.1.

AFNMFMNZ is the aggregate of the annualised fees payable on each NMFM New
Zealand Mandate (after deduction of fees, or deemed fees, payable to
sub-advisors in connection with those mandates) as at the last day of the
quarter ending prior to the Commencement Date.

For the avoidance of doubt, an example calculation showing how the NMFM New
Zealand Indexed Base Fee would be calculated based on the period from 1 July
2000 to 30 September 2000 is set out in Schedule 4.

4.4           FOR THE PURPOSES OF CLAUSE 4.3, IF THE FEES PAID TO SUB-ADVISORS
IN CONNECTION WITH NMFM NEW ZEALAND MANDATES DURING THE RELEVANT PERIOD ARE MORE
THAN 49% OF THE FEES PAID TO NMFM NEW ZEALAND IN RESPECT OF THOSE MANDATES, THE
FEES PAID TO SUB-ADVISORS ARE DEEMED TO BE 49% OF THE FEES PAID TO NMFM NEW
ZEALAND IN RESPECT OF THOSE MANDATES.

4.5           SUBJECT TO CLAUSE 4.6, FOR EACH FEE PERIOD AFTER THE FIRST FEE
PERIOD, THE NMFM NEW ZEALAND INDEXED BASE FEE IS DETERMINED IN ACCORDANCE WITH
THIS FORMULA:

 

       X                                       X-1

IBFNMFMNZ               =     IBFNMFMNZ                     x              (1 +
AIMNMFMNZ)

where

 

       X

IBFNMFMNZ is the NMFM New Zealand Indexed Base Fee for the Fee Period;

 

       X-1

IBFNMFMNZ is the NMFM New Zealand Indexed Base Fee for the immediately preceding
Fee Period;

AIMNMFMNZ is the NMFM New Zealand Average Index Movement for the Fee Period.

4.6           IF THE VALUE OF THE FUNDS UNDER MANAGEMENT IN NMFM NEW ZEALAND
MANDATES ON ANY ANNIVERSARY DATE IS LESS THAN HALF OF THE VALUE OF THE FUNDS
UNDER MANAGEMENT IN NMFM NEW ZEALAND MANDATES AS AT THE COMMENCEMENT DATE, THE
NMFM NEW ZEALAND INDEXED BASE FEE ON THAT ANNIVERSARY DATE IS AN AMOUNT EQUAL TO
THE TOTAL FEES (AFTER DEDUCTION OF FEES PAID TO SUB-ADVISORS) PAYABLE ON ALL
NMFM NEW ZEALAND MANDATES IN RESPECT OF THE FEE PERIOD ENDING ON THAT
ANNIVERSARY DATE.

 

 

10

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NMFM New Zealand Index

4.7           THE NMFM NEW ZEALAND INDEX IS CALCULATED AS AT THE END OF EACH FEE
PERIOD.  IT IS A COMPOSITE INDEX, MADE UP OF THE INDICES APPLICABLE TO THE ASSET
CLASSES OF THE ASSETS MANAGED IN NMFM NEW ZEALAND MANDATES AND WEIGHTED BY THE
VALUE OF ASSETS IN EACH OF THOSE ASSET CLASSES:

 

(A)            FOR FEE PERIODS ENDING ON OR BEFORE 31 DECEMBER 2001, AS AT 31
DECEMBER 2000; AND

 

(B)            FOR ALL SUBSEQUENT FEE PERIODS, AS AT THE PRECEDING 31 DECEMBER.

 

The applicable indices may be varied from time to time by agreement between the
parties.  The applicable indices as at the Commencement Date are set out in
Schedule 5.

NMFM New Zealand Average Index Movement

4.8           THE NMFM NEW ZEALAND AVERAGE INDEX MOVEMENT FOR A FEE PERIOD IS
THE CHANGE IN THE NMFM NEW ZEALAND INDEX AS AT THE END OF THE FEE PERIOD AS
COMPARED WITH THE NMFM NEW ZEALAND INDEX AS AT THE END OF THE IMMEDIATELY
PRECEDING FEE PERIOD, EXPRESSED AS A FRACTION OF THE NMFM NEW ZEALAND INDEX AS
AT THE END OF THE IMMEDIATELY PRECEDING FEE PERIOD DIVIDED BY TWO.

 

NMFM New Zealand Mandate Fees

4.9           THE NMFM NEW ZEALAND MANDATE FEES ARE THE TOTAL FEES (AFTER
DEDUCTION OF FEES PAID TO SUB-ADVISERS) EARNED ON NMFM NEW ZEALAND MANDATES IN
THE FEE PERIOD.

 

Identification of NMFM New Zealand Mandates

4.10         NMFM NEW ZEALAND WILL NOTIFY THE OTHER PARTIES OF THE DETAILS OF
ALL NMFM NEW ZEALAND MANDATES AS AT THE END OF EACH FEE PERIOD WITHIN 90 DAYS OF
THE END OF THAT FEE PERIOD.

5              ADJUSTMENTS FOR RETENTION OF MANDATES

Adjustment payments

5.1           THE PARTIES ACKNOWLEDGE THAT, WHILE IT IS THEIR INTENTION THAT ALL
EXISTING MANDATES BE TRANSFERRED (WHETHER BY MEANS OF ASSIGNMENT, NOVATION OR
SUBSTITUTION) TO AUS CO OR NZ CO, IN SOME CASES THIS MAY NOT BE ACHIEVABLE DUE
TO FACTORS BEYOND THEIR CONTROL.  FOR EXAMPLE, SOME CLIENTS MAY WITHHOLD THEIR
CONSENT.  THE PARTIES THEREFORE AGREE TO MAKE ADJUSTMENT PAYMENTS TO AUS CO
AND/OR NZ CO IN ACCORDANCE WITH THIS CLAUSE 5 IN RESPECT OF EACH FEE PERIOD
DURING WHICH EXISTING MANDATES REMAIN UNTRANSFERRED.

 

Amount of adjustment payment

5.2           THE ADJUSTMENT PAYMENT PAYABLE BY EACH OF ACM, NMFM AUSTRALIA AND
NMFM NEW ZEALAND IN RESPECT OF EACH FEE PERIOD IS AN AMOUNT NECESSARY TO RESTORE
AUS CO AND/OR NZ CO (AS THE CASE MAY BE) TO THE POSITION THEY WOULD HAVE BEEN IN
(AFTER ALLOWING FOR AUSTRALIAN GST OR NEW ZEALAND GST IF APPLICABLE) IF ALL OF
THE FUNDS UNDER MANAGEMENT IN EVERY EXISTING MANDATE, OTHER THAN THE PARTS OF
THE FUNDS UNDER MANAGEMENT IN THE NMFM AUSTRALIA MANDATES AND NMFM NEW

 

 

11

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ZEALAND MANDATES LISTED IN SCHEDULE 6, THAT IS NOT TRANSFERRED HAD BEEN
TRANSFERRED.

6              DETERMINATION OF VALUE OF FUNDS UNDER MANAGEMENT

For the purposes of this deed, wherever it is necessary to determine the value
of funds under management, this is done in Australian currency or New Zealand
currency (as appropriate) and in accordance with the valuation methods
applicable in determining fees under the terms of the relevant mandates.

7              GST ADJUSTMENTS MADE IN CALCULATION OF FEES

Australian GST Adjustments

7.1           FOR THE PURPOSES OF CLAUSES 2.3, 2.8, 3.3 AND 3.8, A FEE EARNED BY
ACM IN RELATION TO ACM MANDATES AND NMFM AUSTRALIA IN RELATION TO NMFM AUSTRALIA
MANDATES IS CALCULATED:

 

(a)            on an Australian GST-exclusive basis, if under the relevant
mandate, the fee was increased on or after 1 July 2000 by an amount on account
of Australian GST; or

 

(b)            on an Australian GST-inclusive basis, if the Australian GST in
respect of the supply (ie 1/11th of the consideration for the supply) is
recovered by way of an expense by ACM or NMFM Australia (whichever is
appropriate) under an expense recovery or indemnity mechanism; or

 

(c)            if the fee is in respect of a supply that does not attract
Australian GST, the fee will not be affected by sub-paragraphs (a) and (b) of
this clause.

 

New Zealand GST Adjustments

7.2           IF NECESSARY, APPROPRIATE ADJUSTMENTS WILL BE MADE WITH THE OBJECT
OF ENSURING THAT THE FEE ARRANGEMENTS ARE NEW ZEALAND GST NEUTRAL.

8              TIMING AND METHOD OF PAYMENT OF FEES AND ADJUSTMENT PAYMENTS

When fees are paid?

8.1           THE FEES PAYABLE UNDER CLAUSES 2, 3 AND 4 AND AMOUNTS ON ACCOUNT
OF AUSTRALIAN GST OR ANY NEW ZEALAND GST IN CONNECTION WITH THOSE FEES PAYABLE
UNDER CLAUSES 10 AND 11 ACCRUE MONTHLY AND ARE TO BE PAID WITHIN 30 DAYS OF THE
END OF EACH FEE PERIOD.

 

When are adjustment payments paid?

8.2           ADJUSTMENT AMOUNTS PAYABLE UNDER CLAUSE 5 ACCRUE AND ARE PAYABLE
AT THE SAME TIME AS FEES ACCRUE AND ARE PAYABLE UNDER CLAUSES 2, 3 AND 4.

 

Method of payment

8.3           THE FEES PAYABLE UNDER CLAUSES 2, 3 AND 4 AND THE ADJUSTMENT
AMOUNTS (IF ANY) PAYABLE UNDER CLAUSE 5 ARE PAYABLE IN CASH IN SUCH MANNER AS IS
AGREED BETWEEN THE PARTIES.

 

 

12

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Currency of payment

8.4           FEES AND ADJUSTMENT PAYMENTS PAYABLE TO AUS CO ARE PAID IN
AUSTRALIAN CURRENCY.

8.5           FEES AND ADJUSTMENT PAYMENTS PAID TO NZ CO ARE PAID IN NEW ZEALAND
CURRENCY.

9              APPROXIMATION AND VERIFICATION OF PAYMENTS

Approximation of payments

9.1           THE PARTIES RECOGNISE THAT IT MAY BE IMPRACTICAL TO DETERMINE THE
FEES PAYABLE UNDER CLAUSES 2, 3 AND 4 AND THE ADJUSTMENT PAYMENTS UNDER CLAUSE 5
BY THE TIME THE FEES AND ADJUSTMENT PAYMENTS ARE PAYABLE UNDER CLAUSE 8.  ACM,
NMFM AND AUS CO OR NZ CO AS APPROPRIATE MAY THEREFORE AGREE ON A METHOD FOR
REASONABLE APPROXIMATION OF THE FEES AND ADJUSTMENT PAYMENTS AND USE THAT METHOD
TO DETERMINE THE FEES AND ADJUSTMENT PAYMENTS.  THE FEES AND ADJUSTMENT PAYMENTS
WILL THEN BE ADJUSTED WHEN IT IS PRACTICAL TO DETERMINE THE CORRECT AMOUNT OF
THE FEES AND ADJUSTMENT PAYMENTS IN ACCORDANCE WITH CLAUSES 2, 3, 4 AND 5.

 

Changing method of approximation

9.2           THE METHOD OF APPROXIMATION CHOSEN UNDER CLAUSE 9.1 MAY BE CHANGED
FROM TIME TO TIME (ALWAYS BY AGREEMENT OF BETWEEN ACM, NMFM AND AUS CO OR NZ CO
AS APPROPRIATE) AND DIFFERENT METHODS OF APPROXIMATION MAY BE USED FOR DIFFERENT
FEES AND ADJUSTMENT PAYMENTS (AGAIN ALWAYS BY AGREEMENT).

 

Verification

9.3           ANY ONE OR MORE OF THE PARTIES MAY (NOT MORE THAN ONCE IN A YEAR)
REQUIRE THAT THE CALCULATION OF FEES OR ADJUSTMENT PAYMENTS UNDER THIS DEED (AND
THE DETERMINATION OF ANY AMOUNT NECESSARY TO CALCULATE THOSE FEES OR ADJUSTMENT
PAYMENTS) BE AUDITED BY THAT PARTY’S EXTERNAL OR INTERNAL AUDITOR.

 

Payment for verification

9.4           UNLESS THE PARTIES OTHERWISE AGREE, AN AUDIT UNDER CLAUSE 9.3 IS
TO BE DONE AT THE EXPENSE OF THE PARTY OR PARTIES REQUESTING IT.

 

Access to documents

9.5           THE PARTIES MUST PROVIDE REASONABLE ACCESS TO SUCH INFORMATION AS
AN AUDITOR CONDUCTING AN AUDIT UNDER CLAUSE 9.3 REASONABLY REQUIRES TO COMPLETE
THE AUDIT BUT NOT SO AS TO UNREASONABLY INTERFERE WITH OR DISRUPT THE BUSINESS
OPERATIONS OF ANY PARTY.

 

Supply of information

9.6           ACM, NMFM AUSTRALIA AND NMFM NEW ZEALAND AGREE TO PREPARE AND
SUPPLY AUS CO AND NZ CO WITH INFORMATION IN SUCH FORMAT AS AUS CO AND NZ CO MAY
REASONABLY REQUIRE IN ORDER FOR IT TO COMPUTE OR VERIFY THE FEES, ANY ADJUSTMENT
PAYMENTS AND ANY APPLICABLE AUSTRALIAN GST OR NEW ZEALAND GST DUE UNDER THIS
DEED.

 

 

13

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10            AUSTRALIAN GOODS AND SERVICES TAX

Australian GST exclusive fees and payments

10.1         THE FEES PAYABLE TO AUS CO UNDER CLAUSES 2 AND 3 ARE AUSTRALIAN
GST-EXCLUSIVE.

10.2         IF AUSTRALIAN GST HAS AN APPLICATION TO ANY SUPPLY MADE UNDER THE
IMAS OR THIS DEED, AND THE CONSIDERATION PAYABLE OR TO BE PROVIDED UNDER THE
IMAS OR THIS DEED IS NOT OTHERWISE EXPRESSLY STATED TO BE INCLUSIVE OF
AUSTRALIAN GST, THE PARTY MAKING THE SUPPLY (IN THIS CLAUSE 10 REFERRED TO AS
“SUPPLIER”) MAY, IN ADDITION TO THE CONSIDERATION PAYABLE OR TO BE PROVIDED
ELSEWHERE IN THE IMAS OR THIS DEED, SUBJECT TO ISSUING A VALID TAX INVOICE,
RECOVER FROM THE PARTY RECEIVING THE SUPPLY (IN THIS CLAUSE 10 REFERRED TO AS
“RECIPIENT”) AN ADDITIONAL AMOUNT ON ACCOUNT OF AUSTRALIAN GST, SUCH AMOUNT TO
BE CALCULATED BY MULTIPLYING THE AMOUNT OR CONSIDERATION PAYABLE OR TO BE
PROVIDED BY THE RECIPIENT FOR THE SUPPLY BY THE PREVAILING AUSTRALIAN GST RATE.

 

Australian GST inclusive fees and payments

10.3         IN RELATION TO ANY FEE OR CONSIDERATION THAT IS EXPRESSED AS
AUSTRALIAN GST INCLUSIVE IN THE IMAS OR THIS DEED, IN THE EVENT OF AN INCREASE
IN THE RATE OF AUSTRALIAN GST, THE NEW AUSTRALIAN GST INCLUSIVE FEE IS
DETERMINED BY CONVERTING THE EXISTING AUSTRALIAN GST INCLUSIVE FEE TO A
AUSTRALIAN GST EXCLUSIVE FIGURE (BASED ON THE AUSTRALIAN GST RATE IMMEDIATELY
PRIOR TO THE NEW PREVAILING AUSTRALIAN GST RATE) AND MULTIPLYING IT BY (1+N)
WHERE “N” IS THE NEW PREVAILING RATE OF AUSTRALIAN GST (EXPRESSED AS A DECIMAL).

 

Adjustments

10.4         IF, IT IS DETERMINED ON REASONABLE GROUNDS THAT THE AMOUNT OF
AUSTRALIAN GST PAID OR PAYABLE ON ANY SUPPLY MADE UNDER THE IMAS OR THIS DEED
DIFFERS FOR ANY REASON FROM THE AMOUNT OF AUSTRALIAN GST RECOVERED FROM THE
RECIPIENT THEN THE AMOUNT OF AUSTRALIAN GST RECOVERED OR RECOVERABLE FROM THE
RECIPIENT SHALL BE ADJUSTED ACCORDINGLY.

 

Calculation method

10.5         ALL AMOUNTS PAYABLE BY THE RECIPIENT TO THE SUPPLIER BY WAY OF
REIMBURSEMENT OF AN AMOUNT PAID OR PAYABLE BY THE SUPPLIER TO ANY OTHER PERSON,
OR CALCULATED ON THE BASIS OF AMOUNTS INCURRED OR TO BE INCURRED BY THE
SUPPLIER, MUST BE CALCULATED ON THE BASIS OF SUCH AMOUNTS PAYABLE BY THE
SUPPLIER, OR COSTS INCURRED BY THE SUPPLIER, EXCLUDING ANY APPLICABLE AMOUNT IN
RESPECT OF AUSTRALIAN GST INCURRED BY THE SUPPLIER TO THE EXTENT TO WHICH THE
SUPPLIER IS ENTITLED TO AN INPUT TAX CREDIT IN RESPECT OF SUCH AUSTRALIAN GST OR
AMOUNT.

11            NEW ZEALAND GOODS AND SERVICES TAX

Fees inclusive of New Zealand GST

11.1         ALL FEES PAYABLE TO NZ CO UNDER THIS DEED ARE EXPRESSED EXCLUSIVE
OF NEW ZEALAND GST, IF ANY.  IF NEW ZEALAND GST IS PAYABLE IN RESPECT OF ANY
GOOD OR SERVICE SUPPLIED BY NZ CO UNDER THE IMAS, THE PERSON RECEIVING THAT
SUPPLY IS LIABLE TO PAY TO NZ CO AN AMOUNT EQUAL TO THE AMOUNT OF THE NEW
ZEALAND GST.

 

 

14

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Adjustment payments inclusive of New Zealand GST

11.2         ALL ADJUSTMENT PAYMENTS PAYABLE TO NZ CO UNDER THIS DEED ARE
EXPRESSED EXCLUSIVE OF NEW ZEALAND GST, IF ANY.  IF NEW ZEALAND GST IS PAYABLE
IN RESPECT OF ANY SUCH ADJUSTMENT PAYMENT, THE PERSON LIABLE TO MAKE THE
ADJUSTMENT PAYMENTS IS LIABLE TO PAY TO NZ CO AN AMOUNT EQUAL TO THE AMOUNT OF
THE NEW ZEALAND GST.

 

New Zealand GST invoice required

11.3         THE LIABILITY OF ANY PERSON TO PAY AN AMOUNT UNDER CLAUSE 11.1 OR
CLAUSE 11.2 IS SUBJECT TO THAT PERSON FIRST RECEIVING A VALID NEW ZEALAND GST
INVOICE IN RESPECT OF THE AMOUNT PAYABLE.

12            SUB-ADVISORY FEES

12.1         THE PARTIES MUST ENSURE THAT, IN RESPECT OF ANY FEE PERIOD, THE
FEES PAYABLE TO SUB-ADVISERS IN RELATION TO ALL MANDATES WILL NOT EXCEED 49% OF
THE GROSS FEES PAYABLE BY CLIENTS ON THOSE MANDATES UNTIL THE ACM INDEXED BASE
FEE, NMFM AUSTRALIA INDEXED BASE FEE, NMFM NEW ZEALAND INDEXED BASE FEE AS THE
CASE MAY BE HAS BEEN EQUALLED.  FEES PAYABLE ON ALL SUB-ADVISORY MANDATES CAN BE
UP TO 70% OF GROSS FEES PAYABLE BY CLIENTS ON THOSE MANDATES ONCE THE ACM
INDEXED BASE FEE, NMFM AUSTRALIA INDEXED BASE FEE, NMFM NEW ZEALAND INDEXED BASE
FEE (AS THE CASE MAY BE) HAS BEEN EXCEEDED .  REFERENCE IS TO BE MADE TO
SCHEDULE 7 FOR EXAMPLES OF THE CALCULATIONS TO BE MADE FOR THE PURPOSE OF CLAUSE
12.1.

12.2         IN THE EVENT THAT AUS CO OR NZ CO IS RESPONSIBLE FOR PAYING THE
SUB-ADVISORY FEES, THEN THOSE FEES AS CALCULATED IN ACCORDANCE WITH CLAUSE 12.1
SHALL BE PAID IN FULL BY ACM, NMFM AUSTRALIA OR NMFM NZ (AS THE CASE MAY BE) TO
AUS CO OR NZ CO AS RELEVANT.  THESE FEES WILL BE IN ADDITION TO AMOUNTS PAID TO
AUS CO OR NZ CO (AS THE CASE MAY BE) IN ACCORDANCE WITH CLAUSES 2, 3 OR 4.

13            GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS

13.1         THIS DEED IS GOVERNED BY THE LAW IN FORCE IN THE STATE OF VICTORIA.

13.2         EACH PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THAT STATE AND COURTS OF APPEAL FROM
THEM.

13.3         WITHOUT PREVENTING ANY OTHER MODE OF SERVICE, ANY DOCUMENT IN AN
ACTION (INCLUDING, WITHOUT LIMITATION, ANY WRIT OF SUMMONS OR OTHER ORIGINATING
PROCESS OR ANY THIRD OR OTHER PARTY NOTICE) MAY BE SERVED ON ANY PARTY BY BEING
DELIVERED TO OR LEFT FOR THAT PARTY AT ITS REGISTERED OFFICE.

14            COUNTERPARTS

This agreement may consist of a number of copies, each signed by one or more
parties to the agreement.  If so, the signed copies are treated as making up the
one document and the date on which the last counterpart is executed will be the
date of the agreement.

 

 

15

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EXECUTED as a deed

 

 

16

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Schedule 1

 

[ACM Mandates as at 30 September 2000 - clause 1.1]

 

 

17

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Schedule 2

 

 

[NMFM Australia Mandates as at 30 September 2000 - clause 1.1]

 

 

18

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Schedule 3

 

[NMFM New Zealand Mandates as at 30 September 2000 - clause 1.1]

 

 

19

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Schedule 4

 

[Examples of Indexed Base Fee calculations - clauses 2.3, 3.3 and 4.3]

 

 

20

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Schedule 5

 

[Lists of applicable indices - clauses 2.7, 3.7 and 4.7]

Sector

 

Australian Index

Australian Shares

 

S&P/ASX 200 Accumulation Index in A$

International Shares

 

MSCI World ex Australia Accumulation Index in A$

Australian Fixed Interest

 

UBS Warburg Australian Composite Bond Index in A$

International Fixed Interest

 

Salomon Brothers World Government Bond Index Hedged in A$

Australian Cash

 

UBS Warburg Australian Bank Bill Index in A$

Listed Property

 

S&P/ASX 200 Property Accumulation in A$

 

Sector

 

NZ Index

NZ Shares

 

NZSE 40 Accumulation Index in NZ$

International Shares

 

MSCI World Accumulation Index in NZ$

NZ Fixed Interest

 

CSFB NZ Government Stock Index in NZ$

International Fixed Interest

 

Salomon Brothers World Government Bond Index Hedged in NZ$

NZ Cash

 

CSFB 90-day Bank Bill Index in NZ$

 

 

21

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Schedule 6

 

[Lists NMFM Australia Mandates and NMFM New Zealand Mandates, or parts of those
mandates, that do not trigger compensating payments under clause 5.2]

 

 

22

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Schedule 7

 

[Examples of circumstances in which fee cap can be exceed - clause 12]

 

 

23

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Execution page

 

 

Signed for and on behalf of

Alliance Capital Management

Australia Limited

by its duly authorised officer in the presence of::

Mark Kenneth McFarlane

 

Margaret Joy Adams

Witness

 

Director

 

 

 

 

 

 

Mark Kenneth McFarlane

 

Margaret Joy Adams

Name (please print)

 

Name (please print)

 

 

Signed for and on behalf of

National Mutual Funds Management Limited

by its duly authorised officer in the presence of:

Sally Cormack

 

Arthur Leslie Owen

Witness

 

Group Chief Executive

 

 

 

 

 

 

Sally Cormack

 

Arthur Leslie Owen

Name (please print)

 

Name (please print)

 

 

Signed for and on behalf of

National Mutual Funds Management NZ Limited

by its duly authorised officer in the presence of:

Sally Cormack

 

Arthur Leslie Owen

Witness

 

Group Chief Executive

 

 

 

 

 

 

Sally Cormack

 

Arthur Leslie Owen

Name (please print)

 

Name (please print)

 

 

24

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Executed by

ACN 095 022 718 Limited

in accordance with section 127(1) of the Corporations Law:

John Nairn

 

Michael Bargholz

Director

 

Director

 

 

 

 

 

 

John Nairn

 

Michael Bargholz

Name (please print)

 

Name (please print)

 

 

 

 

 

 

John Hutchinson

 

 

Witness to both signatures

 

 

 

 

 

 

 

 

John Hutchinson

 

 

Name

 

 

 

 

Executed by

Cidwell Developments Limited

 

John Nairn

 

Michael Bargholz

Director

 

Director

 

 

 

 

 

 

John Nairn

 

Michael Bargholz

Name (please print)

 

Name (please print)

 

 

 

 

 

 

John Hutchinson

 

 

Witness to both signatures

 

 

 

 

 

 

 

 

John Hutchinson

 

 

Name

 

 

 

 

25

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Schedule 4 - Sub-Distributor Agreement

 

 

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ALLIANCE FUND DISTRIBUTORS

AUSTRALIAN BROKER AGREEMENT

 

 

 

Dear Sirs:

 

We are the distributor of shares (the “shares”) of the investment companies
listed on Exhibit A to this Agreement (each a “Fund” and collectively the
“Funds”).  We may amend Exhibit A from time to time upon notice to you to add or
subtract Funds and this Agreement shall automatically apply to any Fund added to
Exhibit A.  We authorize you to offer and sell, as a non-exclusive intermediary,
shares of any and all of the Funds in Australia upon the following terms and
conditions:

 

1.                                       You are to offer and sell shares of a
Fund only at the offering price in accordance with the terms of the then current
prospectus (“Prospectus”) of the Fund.  You understand that all purchase orders
for shares submitted by you or your clients are subject to acceptance by the
Fund and become effective only upon confirmation by the Fund.

 

2.                                       (a)           On each purchase of
shares of a Fund subject to a front-end sales charge (“Front-End Shares”), the
total sales charges charged to your clients shall not exceed the amount stated
in the Prospectus.  You understand that you may be entitled to receive from such
sales charge only that portion reallowed to you as agreed upon between you and
us.

(b)           On each purchase of shares of a Fund by your clients subject to a
contingent deferred sales charge (“CDSC Shares”), you understand that you will
be entitled to receive as a commission that percentage of the offering price as
will be agreed upon between you and us.

(c)           During the term of this Agreement we may make other payments to
you, in such amounts as we may from time to time agree, in consideration of your
furnishing distribution or other services with respect to the shares of each
Fund.

(d)           We have no obligation to make any payment to you and you waive the
right to receive any such payment until we receive monies therefor from the
Fund.  You agree that we may set off against any commission or fees owed to you
any amounts you may owe us or our affiliates.

 

3.                                       You shall not impose any sales charge
or commission in connection with the reinvestment of dividends or distributions
on the shares.

 

4.                                       You are hereby authorized (i) to place
orders to purchase shares directly with the Funds (acting through their local
agent) subject to the applicable terms and conditions governing the placement of
orders set forth in each Fund’s Distribution Agreement and Prospectus, (ii) to
place orders to redeem shares directly to the Funds (acting through their local
agent) subject to the applicable terms and conditions set forth in the
applicable Fund’s Distribution Agreement and Prospectus.

 

1

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5.                                       Redemptions of shares by a Fund will be
made at the net asset value of such shares, less the applicable contingent
deferred sales charge or redemption fee, if any, in accordance with the
Prospectus.

 

6.                                       In offering and selling shares:

(a)           you may offer and sell shares of a Fund only to Australian
residents and such offers and sales may be made through any of your offices
located in Australia provided, however, that you (including any of your
representatives) may not under any circumstances offer shares in a Fund to any
person while that person is not physically present in Australia.  For this
purpose, “offer” shall include, but not be limited to, any communication
designed to advise as to the availability for investment of a Fund, advising on
the desirability of investing in a Fund, otherwise discussing with a potential
investor investment in a Fund or providing any Prospectus or sales literature
regarding a Fund;

(b)           you shall not accept any order (whether initial or subsequent) for
the purchase of shares of a Fund from an investor while the investor is not in
Australia;

(c)           subject to this paragraph 6(c), you will obtain from each customer
who invests in a Fund, prior to the time such customer makes the initial
investment in the Fund, an executed application in the form provided by the
Fund.  If, pursuant to agreement between you and us, you do not supply the
executed application to the Fund, you agree to maintain in your files an
originally executed copy of the application or other documentation containing
representations and warranties substantially similar to those contained in the
relevant Fund’s application and to make such application or other documentation
available for inspection by us or the relevant Fund during normal business hours
upon reasonable advance request;

(d)           you further agree to send to any dealer or other intermediary to
whom you may sell shares a notice stating in substance that, by purchasing such
shares, such dealer or other intermediary represents and agrees that it is not
purchasing any of the shares for the account of any non-Australian Person, that
it will not offer to resell such shares directly or indirectly outside of
Australia or to any non-Australian Person and that it will send to any other
dealer or other intermediary to whom it sells any of the shares a notice
containing substantially the same statement as contained in this sentence;

(e)           you agree to implement and maintain appropriate procedures
designed to assure that offers and sales of the shares by you (and your
representatives) are made in compliance with the preceding four paragraphs. 
Upon our written request, you agree to provide us with written certification,
executed by one of your compliance officers, to the effect that offers and sales
of the shares have been made in compliance with the preceding four paragraphs;
and

(f)            for purposes of the foregoing, “Australian Person” means any
citizen or resident of Australia (including any corporation, partnership or
other entity created or organized under the laws of Australia or of any
political subdivision thereof).

 

7.                                       You agree:

(a)           to place orders to shares only for the purpose of covering
purchase orders already received or for your own bona fide investment;

 

2

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(b)           that you will not purchase any shares from your customers at
prices lower than the redemption or repurchase prices then quoted by the
relevant Fund;

(c)           that you will not withhold placing clients’ orders for shares so
as to profit yourself as a result of such withholding; and

(d)           that if any shares purchased by you or your clients are redeemed
or repurchased by you or them within seven business days after the original
order, you shall forthwith refund to us the full commission allowed, or fee
paid, to you on such sales.  Termination or cancellation of this Agreement shall
not relieve you from the requirements of this subparagraph.

 

8.                                       We shall not accept from you any
conditional orders for shares.  Delivery of shares purchased shall be made by
the Funds only against receipt of the offering price for such shares, subject to
deduction for the commission reallowed to you and our portion, if any, of the
sales charge with respect to Front-End Shares purchased.  If payment for shares
purchased is not received within the time customary for such payments, the sale
may be cancelled forthwith without any responsibility or liability on our part
or on the part of the Funds (in which case you will be responsible for any loss
including loss of profit suffered by the Funds resulting from your failure to
make payments as aforesaid).

 

9.                                       You understand that, except as we shall
have specifically advised you in writing, no action has been or will be taken in
any jurisdiction by us or the Funds that will permit a public offering of shares
or possession or distribution of any prospectus, in preliminary or final form,
by you in any jurisdiction outside Australia.  You agree that you will comply
with all applicable law and regulations and make or obtain all necessary
filings, consents or approvals required of you in connection with the purchase,
offer, sell or deliver shares (including, without limitation, any applicable
requirements relating to the delivery of a Prospectus) in each case at your own
expense.

 

10.                                 (a)           You shall take appropriate
steps to establish and document the identity of a customer when the customer
first applies to invest in the shares of a Fund.  For all customers, you will
obtain information regarding the business or occupation of the customer so as to
ensure that the funds used to purchase shares of a Fund by a customer are not
the proceeds of any illegal activity.  You shall retain for at least five years
(or longer if required by Australia law) after the customer’s account with you
has been closed and make available to appropriate authorities the records
described above and any other records used in establishing the identity of such
customers.

(b)           You shall promptly forward to your customers any information
provided by the Funds or us for such customers.  You shall promptly forward to
us any relevant information provided by your customers for the Funds or us.

 

11.                                 You represent and warrant that you have all
necessary authorizations, licenses, registrations and consents to enter into
this Agreement and to offer and sell the shares as contemplated by this
Agreement.  You will on request provide us with evidence of any such
authorization, registration or consent.  You will immediately notify us if any
such authorization, registration or consent is altered, suspended or revoked. 
You further represent that you are not required to be registered as a broker
dealer under the U.S. Securities Exchange Act of 1934.  In performing your
obligations under this Agreement you will not imply nor represent that you are
acting in the name of us or the Funds.

 

3

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12.                                 No person is authorized to make any
representations concerning shares of a Fund except those contained in the
Prospectus, and printed information issued by the Fund or by us as information
supplemental to each Prospectus.  We shall supply Prospectuses, reasonable
quantities of reports to shareholders, supplemental sales literature, sales
bulletins, and additional information as issued.  You agree to distribute
Prospectuses and reports to shareholders of the Funds to your clients, except to
the extent that we expressly undertake to do so on your behalf.  You agree not
to use other advertising or sales material relating to the Funds, unless
approved in writing by us in advance of such use.  Any printed information
furnished by us other than the Prospectus for each Fund, periodic reports and
proxy solicitation materials are our sole responsibility and not the
responsibility of the Funds, and you agree that the Funds shall have no
liability or responsibility to you in these respects unless expressly assumed in
connection therewith.

 

13.                                 You agree to indemnify and hold harmless the
Funds and us from and against any and all losses, claims, damages and
liabilities (including fees and disbursements of counsel) arising from any
breach by you of any of the provisions of this Agreement.  Such agreement to
indemnify shall survive the termination of this Agreement.

 

14.                                 We, our affiliates and the Funds shall not
be liable for any loss, expense, damages, costs or other claim arising out of
any redemption or exchange pursuant to telephone instructions from any persons
or our refusal to execute such instructions for any reason.

 

15.                                 Either party to this Agreement may terminate
this Agreement by giving written notice to the other.  Such notice shall be
deemed to have been given on the date on which it was either delivered
personally to the other party or any officer or member thereof, or was sent via
courier or by regular mail (post pre-paid) to the other party at his or its
address as shown below.  We may amend this Agreement at any time and your
placing of an order after the effective date of any such amendment shall
constitute your acceptance thereof.

 

16.                                 We may assign our rights and duties under
this Agreement to one of our affiliates if we give you one month’s written
notice of such assignment.  You may not assign your rights or duties under this
Agreement without our prior written consent.

 

This Agreement shall be construed in accordance with the laws of the State of
New York and shall be binding upon both parties hereto when signed by us and
accepted by you in the space provided below.

 

4

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Agreed and Accepted

ALLIANCE FUND DISTRIBUTORS, INC.

 

 

 

 

 

 

Firm:

 

 

 

 

 

 

 

By:

 

 

 

By:

 

 

 

 

(Authorized Signature)

 

 

 

 

 

 

Date:

 

 

 

Date:

 

 

 

 

5

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