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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)

 

 

 

 

 

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

 

 

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

  

 

1

 

	

   

  	

  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

  

 

2

 

	

   

  	

  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

  

 

3

 

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:

 

4

 

 

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,

 

5

 

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;

 

6

 

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:

 

7

 

(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:

 

8

 

(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,

 

9

 

 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 =                       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.

 

10

 

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;

 

11

 

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;

 

12

 

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,

 

13

 

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;

 

14

 

(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

 

(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:

 

16

 

(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.

 

17

 

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

 

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

 

19

 

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.

 

20

 

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

 

21

 

 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.

 

22

 

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

 

(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.

 

24

 

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.

 

25

 

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;

 

26

 

(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

 

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.

 

28

 

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

 

29

 

(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 =  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

 

 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.

 

31

 

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

 

(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

 

33

 

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

 

 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).

35

 

 

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

 

36

 

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.

 

37

 

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).

 

38

 

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

 

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

 

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

 

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

 

Schedule 1 - Delegation Agreement

 

 

 

 

 

 

 

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

 

	

  (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

 

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

 

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

 

 

	

  (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

 

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

 

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

 

 

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

 

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

 

	

  (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

 

	

  (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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

EXECUTED as a deed

 

 

16

 

Schedule 1

 

[ACM Mandates

as at 30 September 2000 - clause 1.1]

 

 

17

 

Schedule 2

 

 

[NMFM

Australia Mandates as at 30 September 2000 - clause 1.1]

 

 

18

 

Schedule 3

 

[NMFM

New Zealand Mandates as at 30 September 2000 - clause 1.1]

 

 

19

 

Schedule 4

 

[Examples

of Indexed Base Fee calculations - clauses 2.3, 3.3 and 4.3]

 

 

20

 

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

 

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

 

Schedule 7

 

[Examples

of circumstances in which fee cap can be exceed - clause 12]

 

 

23

 

 

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

 

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

 

Schedule 4 -

Sub-Distributor Agreement

 

 

 

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

 

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

 

(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

 

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

 

Agreed and

Accepted

	

  ALLIANCE FUND DISTRIBUTORS, INC.

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Firm:

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  (Authorized

  Signature)

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Date:

  	

   

  	

   

  
	

   

  	

  Date:

  	

   

  	

   

  

 

 

5Fulbright & Jaworski Document

Exhibit

10.19

 

BIO-TECHNOLOGY GENERAL CORP.

2001 STOCK OPTION PLAN

 

1.             Purpose.  The purpose of the Bio-Technology General

Corp. 2001 Stock Option Plan (the “Plan”) is to enable Bio-Technology General

Corp. (the “Company”) and its stock­holders to secure the benefits of common

stock ownership by key personnel of the Company and its affiliates.  The Board of Directors of the Company (the

“Board”) believes that the granting of options under the Plan will foster the

Company’s ability to attract, retain and motivate those individuals who will be

largely responsible for the continued profitability and long-term future growth

of the Company.

 

2.             Stock

subject to the Plan.  Subject

to adjustment as provided in Section 6 below, the Company may issue a total of

10,000,000 shares of its common stock, $.01 par value (the “Common Stock”),

pursuant to the Plan.  Such shares may

be either authorized and unissued or held by the Company in its treasury.  New options may be granted under the Plan

with respect to shares of Common Stock which are covered by the unexercised

portion of an option which has terminated or expired by its terms, by

cancellation or otherwise.

 

3.             Administration.  The Plan will be administered by the Board

or by a committee (the Board in such capacity or such committee being referred

to as the “Committee”) consisting of at least three directors appointed by and

serving at the pleasure of the Board. 

Subject to the provisions of the Plan, the Committee, acting in its sole

and absolute discre­tion, will have full power and authority to grant options

under the Plan, to interpret the provisions of the Plan, to fix and interpret

the provisions of option agreements made under the Plan, to supervise the

administration of the Plan, and to take such other action as may be necessary

or desirable in order to carry out the provisions of the Plan.  A majority of the members of the Committee

will constitute a quorum.  The Committee

may act by the vote of a majority of its members present at a meeting at which

there is a quorum or by unanimous written consent.  The decision of the Committee as to any disputed question, includ­ing

questions of construction, interpretation and administra­tion, will be final

and conclusive on all persons.  The

Commit­tee will keep a record of its proceedings and acts and will keep or

cause to be kept such books and records as may be necessary in connection with

the proper administration of the Plan. The Company shall indemnify and hold

harmless each member of the Committee and the Board and any employee of the

Company who provides assistance with the administration of the Plan from and

against any loss, cost, liability (including any sum paid in settlement of a

claim with the approval of the Board), damage and expense (including the

advancement of reasonable legal and other expenses incident thereto) arising

out of or incurred in connection with the Plan, unless and except to the extent

attributable to such person’s fraud or willful misconduct.

 

4.             Eligibility.  Options may be granted under the Plan to

present or future employees of the Company or an affiliate of the Company and

to directors of, or consultants to, the Company or an affiliate who are not

employees, provided that incentive stock options (“Incentive Stock Options”)

within the meaning of Section 422 of the Internal Revenue Code of 1986, as

amended (the “Code”), may only be granted to employees of the Company or a

subsidiary of the Company (a “Subsidiary”) within the meaning of Section 424(f)

of the Code. 

 

 

Subject to the provisions of the Plan, the Committee may from time to

time select the persons to whom options will be granted, and will fix the

number of shares covered by each such option and establish the terms and

conditions thereof, including, without limitation, the exercise price,

restrictions on exercisability of the option or on the disposition of the

shares of Common Stock issued upon exercise of the option, and whether or not

the option is to be treated as an Incentive Stock Option.  For purposes hereof, affiliate of the

Company means a person that directly, or indirectly through one or more

intermediaries, controls, or is controlled by, or is under common control with,

the Company.

 

5.             Terms and

Conditions of Options.  Each

option granted under the Plan will be evidenced by a written agreement in a

form approved by the Committee.  Each

such option will be subject to the terms and conditions set forth in this

Section and such additional terms and conditions not inconsistent with the Plan

(and, in the case of an Incentive Stock Option, not inconsis­tent with the

provisions of the Code applicable thereto) as the Committee deems appropriate.

 

(a)           Option

Exercise Price.  In the case

of an option which is not treated as an Incentive Stock Option, the exercise

price per share may not be less than 85% of the Fair Market Value of a share of

Common Stock on the date the option is granted; and, in the case of an

Incentive Stock Option, the exercise price per share may not be less than 100%

of the Fair Market Value of a share of Common Stock on the date the option is

granted (110% in the case of an optionee who, at the time the option is

granted, owns stock possessing more than 10% of the total combined voting power

of all classes of stock of the Company or a Subsidiary (a “ten percent stockholder”)).  For purposes hereof, the Fair Market Value

of a share of Common Stock on any date will be equal to the closing sale price

per share as published by a national securities exchange on which shares of the

Common Stock are traded on such date or, if there is no sale of Common Stock on

such date, the average of the bid and asked prices on such exchange at the

close of trading on such date or, if shares of the Common Stock are not listed

on a national securi­ties exchange on such date, the closing price or, if none,

the average of the bid and asked prices in the over the counter market at the

close of trading on such date, or if the Common Stock is not traded on a

national securities exchange or the over the counter market, the fair market

value of a share of the Common Stock on such date as determined in good faith

by the Committee.

 

(b)           Option

Period.  The period during

which an option may be exercised will be fixed by the Committee and will not

exceed ten years from the date the option is granted (five years in the case of

an Incentive Stock Option granted to a ten percent stockholder).

 

(c)           Exercise of

Options.  Subject to earlier

termination of the option as provided herein, unless the Committee determines

otherwise, options will be exercisable from and after the date of grant.  Vesting or other restrictions on the

exercisability of an option will be set forth in the related option

agreement.  All or part of the exercisable

portion of an option may be exercised at any time during the option period.  An option may be exercised by transmitting

to the Company (1) a written notice specifying the number of shares to be

purchased, and (2) payment of the exercise price, together with the amount, if

any, deemed necessary by the Committee to enable the Company to satisfy its tax

withholding obligations with respect to such

 

2

 

exercise (unless other arrangements acceptable to the Company are made

with respect to the satisfaction of such withholding obligations).

 

(d)           Payment of

Exercise Price.  The purchase

price of shares of Common Stock acquired pursuant to the exercise of an option

granted under the Plan may be paid in cash, certified or bank check, and/or

such other form of payment as may be permitted by the Committee from time to

time, including, without limitation, shares of Common Stock which, if acquired

from the Company, have been owned by the optionee (free and clear of any liens

or encumbrances) for at least six months or, if the Common Stock is publicly-traded,

pursuant to a cashless exercise procedure established by the Company in

accordance with Regulation T of the Federal Reserve Board.

 

(e)           Rights as a Stockholder.  No shares of Common Stock will be issued in

respect of the exercise of an option granted under the Plan until full payment

therefore has been made and the applicable tax withholding obligation has been

satisfied or provided for, which withholding obligation, if satisfied with

shares of Common Stock subject to an option being exercised, shall not exceed

the statutory minimum rate. The holder of an option will have no rights as a

stockholder with respect to any shares covered by an option until the date a

stock certificate for such shares is issued to him or her.  Except as otherwise provided herein, no

adjustments shall be made for dividends or distributions of other rights for

which the record date is prior to the date such stock certificate is issued.

 

(f)            Nontransferability of Options.  No option granted under the Plan may be

assigned or transferred except by will or by the applicable laws of descent and

distribution; and each such option may be exercised during the optionee’s

lifetime only by the optionee. 

Notwithstanding the preceding sentence, the Committee may, in its sole

discretion, permit an optionee to transfer an option (other than an Incentive

Stock Option), in whole or in part, to such persons and/or entities as are

approved by the Committee from time to time and subject to such terms and

conditions as the Committee may determine from time to time.

 

(g)           Termination of Employment or Other Service.  Except as otherwise provided herein or

determined by the Committee, the following rules will apply with regard to

options held by an optionee at the time of his or her termination of employment

or other service with the Company and its affiliates:

 

                (1)           Termination due to Death or Disability.  If an optionee’s employment or other service

terminates due to his or her death or Disability (or if the optionee’s

employment or other service is terminated by reason of his or her Disability

and the optionee dies within one year of such termination of employment or

other service), then: (A) that portion of an option that is not exercisable on

the date of termination will immediately terminate, and (B) that portion of an

option that is exercisable on the date of termination will remain exercisable,

to the extent exercisable on the date of termination, by the optionee (or the

optionee’s designated beneficiary or representative) during the one year period

following the date of termination (or, during the one year period after the

later death of a disabled optionee) or, if sooner, until the expiration of the

stated term thereof, and, to the extent not exercised during such period, will

thereupon terminate. For purposes hereof, unless otherwise determined by the

Committee, the term “Disability” means the inability of an optionee to perform

the customary duties of his or her

 

3

 

employment or other service for the Company or an affiliate by reason

of a physical or mental incapacity which is expected to result in death or be

of indefinite duration.

 

                (2)           Termination for Cause or at a Time when Cause Exists.  If an optionee’s employment or other service

is terminated by the Company or an affiliate for Cause or if, at the time of

his or her termination, grounds for a termination for Cause exist, then any

option held by the optionee (whether or not then exercisable) will immediately

terminate and cease to be exercisable. 

For purposes hereof, unless otherwise determined by the Committee, the

term “Cause” means: (A) in the case where there is no employment or consulting

agreement between the optionee and the Company or its affiliates at the time of

grant or where such an agreement exists but does not define “cause” (or words

of like import), the optionee’s dishonesty, fraud, insubordination, willful

misconduct, refusal to perform services, unsatisfactory performance of services

or material breach of any written agreement between the optionee and the

Company or its affiliates, or (B) in the case where there is an employment or

consulting agreement between the optionee and the Company or its affiliates at

the time of grant which defines “cause” (or words of like import), the meaning

ascribed to such term under such agreement.

 

                (3)           Other Termination.  Except as provided in subsections (1) and

(2) above, if an optionee’s employment or other service terminates for any

reason or no reason, then: (A) that portion of an option held by the optionee

that is not exercisable on the date of termination will immediately terminate,

and (B) that portion of an option that is exercisable on the date of

termination will remain exercisable, to the extent exercisable on the date of termination,

by the optionee during the ninety day period following the date of termination

or, if sooner, until the expiration of the stated term thereof, and, to the

extent not exercised during such period, will thereupon terminate.

 

(h)           Incentive

Stock Options.  In the case

of an Incentive Stock Option granted under the Plan, at the time the option is

granted, the aggregate fair market value (determined at the time of grant) of

the shares of Common Stock with respect to which Incentive Stock Options are exercisable

for the first time by the optionee during any calendar year may not exceed

$100,000 (or such other amount required by the Code from time to time).

 

(i)            Other Provisions.  The Committee may impose such other conditions with respect to

the exercise of options, including, without limitation, any conditions relating

to the application of federal or state securities laws, as it may deem

necessary or advisable.

 

(j)            Maximum Option Grant.  The maximum option grant which may be made

to an employee of the Company or an affiliate in any calendar year shall not

cover more than 250,000 shares.

 

6.             Capital

Changes, Reorganization, Sale.

 

(a)           Adjustments

Upon Changes in Capitalization. 

The aggregate number and class of shares which may be issued under the

Plan, the maximum number of shares for which options may be granted to any

employee in any calendar year, the number and class of shares covered by each

outstanding option and the exercise price per share shall all be adjusted

proportionately for

 

4

 

any increase or decrease in the number of issued shares of Common Stock

resulting from a split-up or consolidation of shares or any like capital

adjustment, or the payment of any stock dividend.

 

(b)           Acceleration

of Vesting Upon Change of Control. 

If there is a change of control of the Company (as defined in subsection

(f) below), then all outstanding options shall become fully exercisable whether

or not the vesting conditions, if any, set forth in the related option

agreements have been satisfied, and each optionee shall have the right to

exercise his or her options prior to such change of control and for as long

thereafter as the option shall remain in effect in accor­dance with its terms

and the provisions hereof.

 

(c)           Conversion

of Options on Stock for Stock Exchange.  If the stockholders of the Company receive capital stock of

another corporation (“Exchange Stock”) in exchange for their shares of Common

Stock in any transaction involving a merger (other than a merger of the Company

in which the holders of Common Stock immediately prior to the merger have the

same proportion­ate ownership of Common Stock in the surviving corporation

immedi­ately after the merger), consolidation, acquisition of property or

stock, separation or reorganization (other than a mere reincorporation or the

creation of a holding company), all options granted hereunder shall be

converted into options to purchase shares of Exchange Stock unless the Company

and the corporation issuing the Exchange Stock, in their sole discre­tion,

determine that any or all such options granted hereunder shall not be converted

into options to purchase shares of Exchange Stock but instead shall terminate,

in which case the Company shall notify the optionees in writing or

electronically, at least 15 days prior to the consummation of the transaction,

that the options shall become fully exercisable whether or not the vesting

conditions, if any, set forth in the related option agreements have been

satisfied for the period specified in the notice (but in any case not less than

15 days from the date of such notice). 

The amount and price of converted options shall be determined by

adjusting the amount and price of the options granted hereunder in the same

proportion as used for determining the number of shares of Exchange Stock the

holders of the Common Stock receive in such merger, consolida­tion, acquisition

of property or stock, separation or reorganization.  To the extent provided in subsection (b) above, the convert­ed

options shall be fully vested whether or not the vesting requirements set forth

in the option agreement have been satisfied.

 

(d)           Fractional

Shares. In the event of any adjustment in the number of shares

covered by any option pursuant to the provi­sions hereof, any fractional shares

resulting from such adjust­ment will be disregarded and each such option will

cover only the number of full shares resulting from the adjustment.

 

(e)           Determination

of Board to be Final.  All

adjustments under this Section 6 shall be made by the Board, and its determina­tion

as to what adjustments shall be made, and the extent thereof, shall be final,

binding and conclusive.  Unless an

optionee agrees otherwise, any change or adjustment to an Incentive Stock

Option shall be made in such a manner so as not to constitute a “modification”

as defined in Section 424(h) of the Code and so as not to cause the optionee’s

Incentive Stock Option issued hereunder to fail to continue to qualify as an

Incentive Stock Option.

 

5

 

(f)            Change of

Control Defined.  For

purposes hereof, a change in control of the Company is deemed to occur if (1)

there occurs (A) any consolidation or merger in which the Company is not the

continuing or surviving entity or pursuant to which shares of the Common Stock

would be converted into cash, securities or other property, other than (x) a

consolidation or merger of the Company in which the holders of the Common Stock

immediately prior to the consolidation or merger have the same proportionate

ownership of common stock of the surviving corporation immediately after the

consolidation or merger, or (y) a

consolidation or merger which would result in the voting securities of the

Company outstanding immediately prior thereto continuing to represent (by being

converted into voting securities of the continuing or surviving entity) more

than 50% of the combined voting power of the voting securities of the surviving

or continuing entity immediately after such consolidation or merger and which

would result in the members of the Board immediately prior to such

consolidation or merger (including, for this purpose, any individuals whose

election or nomination for election was approved by a vote of at least

two-thirds of such members), constituting a majority of the board of directors

(or equivalent governing body) of the surviving or continuing entity

immediately after such consolidation or merger; or (B) any sale, lease,

exchange or other transfer (in one transaction or a series of related

transactions) of all or substantially all the Company’s assets; (2) the

Company’s stockholders approve any plan or proposal for the liquidation or

dissolution of the Company; (3) any person (as such term is used in Sections

13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) shall

become the beneficial owner (within the meaning of Rule 13d-3 under said Act)

of 40% or more of the Common Stock other than pursuant to a plan or arrangement

entered into by such person and the Company; or (4) during any period of two

consecutive years, individuals who at the beginning of such period consti­tute

the entire Board of Directors shall cease for any reason to constitute a

majority of the Board unless the election or nomination for election by the

Company’s stockholders of each new director was approved by a vote of at least

two-thirds of the directors then still in office who were directors at the

beginning of the period.

 

7.             Amendment

and Termination of the Plan. 

The Board may amend or terminate the Plan.  Except as otherwise provided in the Plan with respect to equity

changes, any amendment which would increase the aggregate number of shares of

Common Stock as to which options may be granted under the Plan, or modify the

class of employees eligible to receive options under the Plan shall, to the

extent required by applicable law or exchange requirements, be subject to the

approval of the holders of the Common Stock. 

No amendment or termina­tion may affect adversely any outstanding option

without the written consent of the optionee.

 

8.             No Rights

Conferred.  Nothing contained

herein will be deemed to give any individual any right to receive an option

under the Plan or to be retained in the employ or service of the Company or any

affiliate.

 

9.             Governing

Law.  The Plan and each

option agreement shall be governed by the laws of the State of Delaware,

without regard to its principles of conflicts of law.

 

10.           Decisions

and Determinations of Committee to be Final.  Except to the extent rights or powers under

this Plan are reserved specifically to the discretion of the Board, the

Committee shall have full power and authority to interpret the Plan and any

option agreement made under the Plan and to determine all issues which arise

thereunder or in connection

 

6

 

therewith, and the decision of the Board or the Committee, as the case

may be, shall be binding and conclusive on all interested persons.

 

11.           Term of the

Plan.  The Plan shall be

effective as of April 30, 2001, the date on which it was adopted by the Board,

subject to the approval of the stockholders of the Company.  The Plan will terminate on April 30, 2011,

the date ten years after the date of its adoption by the Board, unless sooner

terminated by the Board.  The rights of

optionees under options outstanding at the time of the termination of the Plan

shall not be affected solely by reason of the termination and shall continue in

accordance with the terms of the option (as then in effect or thereafter

amended).

 

7

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