Pershing Limited and Investment Technology Group Limited Agreement relating to the provision of Back Office Services

Clause

Parties

Recitals

1.

Definitions

2.

Information

3.

Services by PL

4.

Fees

5.

Clearing Agency Bank Account

6.

Maintenance of Records by PL

7.

Liaison

8.

Customers

9.

Duration and Termination

10.

Liability and indemnity

11.

Covenant

12.

Employees

13.

Confidentiality

14.

Construction of Agreement

15.

Force Majeure

16.

Notices

17.

Assignment

18.

Modification

19.

Governing Law

20.

Arbitration

21.

Miscellaneous

Schedule Part I - Included Services

 Part II - Schedule of Settlement and Handling Fees

THIS AGREEMENT is made

BETWEEN:-

(1)

PERSHING LIMITED (“PL”) of ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,

▇▇▇▇▇▇ ▇▇▇ ▇▇▇ and

INVESTMENT TECHNOLOGY GROUP LIMITED (the “Correspondent”) of ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇

WHEREAS

(A)

PL is a member of the Stock Exchange and the SFA able to do business as a provider of “back office” clearing agency facilities for members of the Stock Exchange and The SFA.

(B)

The Correspondent is a member of the Stock Exchange and is regulated by the Central Bank of Ireland and for the purposes of conduct of business in the UK accepts the authority of the SFA under the Investment Services Directive issued by the European Commission.

1.

Definitions

1.1

In this Agreement (except where the context otherwise requires) the following words and expressions shall have the following meanings respectively:-

“Business Day”

a day when the Stock Exchange is open for dealings

“the Commencement Date”

“Customer”

any person by whom the Correspondent is instructed in connection with dealings in securities and other connected matters relevant to this Agreement

“the Included Services”

shall have the meaning ascribed to that expression by Clause 3.1

“Relevant Quarter”

A period of three calendar months ending on 31st March, 30th June,
30th September and 31st December in each year during the continuance of this Agreement

“the Rules”

the Rules and Regulations for the time being of the Stock Exchange, the Rules of The SFA, the Rules and Regulations of the Securities and Investments Board, and/or such other rules, regulations or laws of any regulatory body including the Rules of The Central Bank of Ireland or jurisdiction as may have application to the provision of the Included Services and the terms of this Agreement.

“the Stock Exchange”

The London Stock Exchange

“SFA”

The Securities & Futures Authority Limited, or any body which succeeds or replaces the same

“Retail Price Index”

The commonly recognised index number of a series of Prices paid by consumers for the cost to households of the goods they normally buy.

“Review Date”

means the first anniversary of the Commencement Date and each subsequent anniversary thereof

“Prior Transaction”

means any transaction the subject of this Agreement and effected by or on behalf of the Correspondent prior to the termination of this Agreement

1.2

The headings in this Agreement are inserted for convenience only and shall be ignored in construing the provisions hereof. References herein to Clauses are to Clauses of this Agreement and, unless the context otherwise requires, in this Agreement the singular shall include the plural and vice versa and words importing the masculine gender shall be deemed to include the neuter and feminine gender and vice versa and the word “person” shall include any body corporate or otherwise.

2.

Information

2.1

Prior to the Commencement Date the Correspondent will provide PL with all such information, co-operation, assistance, basic data and documents as PL shall reasonably request in order to enable PL to be ready to commence the provision of the Included Services on the Commencement Date and such request must be made in a timely manner.

2.2

During the continuance of this Agreement and in consultation with PL, the Correspondent will provide PL with all such information, co-operation, assistance, basic data and documents, including (without limitation) all appropriate details of Customers’ funds and securities received directly by the Correspondent as (in each case) PL shall reasonably request in order to permit PL to discharge the Included Services efficiently, and shall use all reasonable endeavours to ensure that all terminals or other computer hardware situated at the Correspondent’s premises and connected to the PL computer system shall be maintained in a proper working order.

2.3

Such information, data and documents must be compatible with the reasonable requirements of PL’s computerised book-keeping system, and PL shall be entitled to rely on such information and shall not be responsible for the consequences of any failure by the Correspondent to supply such information accurately, and in the required format, unless any such failure is caused by PL’s fraudulent, negligent or wilful acts or omissions. PL may from time to time notify the Correspondent of changes to the requirements of its computerised book-keeping system in order to enable PL to perform more effectively the provision of the Included Services. Any such changes shall take effect after the receipt by the Correspondent of the relevant notification (or such other time as PL and the Correspondent shall agree in writing) from PL, which notification shall be given sufficiently in advance to allow the Correspondent to make such modifications to said information, data, and documents as are necessary to ensure continued compatibility with the requirements of PL’s computerised book-keeping system.

3.

Services by PL

3.1

With effect from the Commencement Date and subject to the terms and conditions of this Agreement, PL will provide, acting solely as agent for the Correspondent, computer and back-office facilities to settle agency and principal accounts with respect to UK equity securities transactions executed by the Correspondent (as well as any other investment transaction agreed to by the parties hereto); and PL shall also provide associated administrative functions related thereto as agreed by the parties, including those services itemised in the Schedule.

3.2

Without prejudice to Clause 4.1.2 and for the avoidance of doubt, unless otherwise expressly agreed in writing, PL shall not be responsible for providing any of the following services or the costs and expenses related thereto (and the Correspondent undertakes to reimburse PL on demand if PL shall properly incur any such costs or expenses in the performance of any of said services at the Correspondent’s request):-

3.2.1

payment of CREST and CREST network charges;

3.2.2

payment of charges (if any) by the Stock Exchange for general services (known as Exchange Charges);

3.2.3

preparation of the Correspondent’s financial statements or any analysis thereof;

3.2.4

preparation and/or issue of cheques or other remittances in payment of the Correspondent’s expenses, other than expenses incurred by PL on behalf of the Correspondent in connection with the provision of the Included Services;

3.2.5

payment of commissions to the Correspondent’s salesmen or agents;

3.2.6

verification of address changes to Customers;

3.2.7

the cost of insurances effected by the Correspondent;

3.2.8

preparation of the Correspondent’s payroll records and administration of personnel;

3.2.9

cost of stamp duty;

3.2.10

other duties, obligations and responsibilities of the Correspondent or the Customer.

3.3

So long as this Agreement has not been terminated and PL is capable of providing the Included Services which for the avoidance of doubt relate only to UK equity securities transactions effected by the Correspondent, the Correspondent shall not accept services similar to any of the Included Services from any other person with respect to securities transactions itemised in the Schedule, except as may be agreed between the parties.

3.4

PL’s services hereunder shall not be exclusive to the Correspondent and it shall be free to provide services similar to the Included Services or such other services as it shall from time to time think fit to any other person and (without prejudice to Clause 13) nothing herein shall be deemed to restrict in any way the right of PL to compete with the Correspondent in any or all aspects of the Correspondent’s business. PL will not use under any circumstances the customer lists of the Correspondent other than as shall be necessary to carry out its business under this Agreement.

3.5

PL shall be entitled from time to time at its discretion to sub-contract to any responsible provider of data processing services or other relevant services the provision to the Correspondent of all or any part of the Included Services. In such case PL shall continue to be responsible to the Correspondent for such sub-contracted services. PL shall correct any failure of such service provided in the same manner and the same time as if the service had been performed (or should have been performed) by PL hereunder. [PL will make best efforts to inform the Correspondent concerning the sub-contracting of any services at the time such sub-contracting occurs].

4.

Fees

4.1

Subject to Clause 4.4, PL shall be entitled to invoice the Correspondent and the Correspondent shall pay to PL twice a month on PL’s accounting dates:-

4.1.1

the amount due for fees in respect of the Included Services carried out during such period and fees otherwise incurred during such period, such fees being calculated in accordance with Clause 4.3;

4.1.2

the amount of any of the following items reasonably and properly incurred by PL during such period on behalf of or for the benefit of, or which are otherwise reasonably attributable to, the Correspondent in the provision by PL of the Included Services:-

4.1.2.1

charges for bank and overseas handling services incurred by PL in connection with the provision of services hereunder;

4.1.2.2

out of pocket costs necessarily incurred by PL and relevant charges attributable to the provision by PL at the request of the Correspondent of computer facilities additional to the provision of the Included Services (such charges to be agreed in between PL and the Correspondent prior to such additional computer facilities being provided);

4.1.2.3

any charges imposed by the Stock Exchange not invoiced directly to the Correspondent and not arising as a result of PL’s membership of the Stock Exchange

4.1.2.4

reasonable costs of printing contract notes and statements using the Correspondent’s logostyle or format and any other personalised stationery or any other reasonably associated printing costs

4.1.2.5

any expenses necessarily borne by PL in discharging reasonable liabilities or obligations attributed to the Correspondent pursuant to Clause 3.2

4.1.2.6

costs of international telephone calls, telex and facsimile transmissions on behalf of the Correspondent not falling within the Included Services.

4.1.2 7

Cost of microfiche and other third party fees.

4.1.2.8

the installation, purchase or rental, and the maintenance of any communication devices and/or printer at the premises of the Correspondent or its agents in respect of the Included Services connected to PL’s computer system and any other relevant hardware at said premises in respect of the Included Services,.

4.1.2.9

the cost of Pricing Service Provider fees attributable to the Correspondent

4.2

The fees and charges payable under the terms of Clauses 4.1.1 and 4.1.2 hereof shall be payable in accordance with our invoice accounting dates.

4.3

The fees payable pursuant to Clause 4.1 shall be fixed according to the scale set out in Part II of the Schedule provided that the fees shall be subject to review and amendment by the parties on each Review Date and remain effective until the next Review Date. For this purpose PL shall give notice of proposed modification to the fee structure.

4.4

All amounts referred to in this Clause 4 shall be deemed to be exclusive of Value Added Tax (if any) chargeable thereon.

4.5

The Correspondent may request PL to carry out additional services not mentioned in the Included Services. Any cost charged by PL to the Correspondent for PL carrying out those services will be mutually agreed between PL and the Correspondent prior to PL providing the additional services.

4.6

In the event that the fees paid or payable by the Correspondent pursuant to Clause 4.2 in respect of each calendar month is less than £6000.00 then the Correspondent shall pay to PL an additional fee equal to the difference between the amount of fees paid or payable as aforesaid and the sum of £6000.00. This fee may be increased at each Review Date. For this purpose PL shall give written notice to the Correspondent, of any increase, prior to the Review Date. For the first six months of the contract this monthly minimum fee will be replaced by a minimum composite charge of £36,000.00 which will be invoiced in arrears.

4.7

The fees payable under Clause 4.6 in respect of each calendar month shall be paid as per Clause 4.2.

5.

Clearing Agency Bank Account

As soon as practicable after the date thereof, the Correspondent shall open or will have opened bank accounts at such bank or banks as shall be approved by PL, designated in the Correspondent’s name, and shall appoint such personnel of PL as PL shall nominate as authorised signatories to such bank accounts. PL shall in all financial transactions relating to the provision of the included Services use such bank accounts. Subject as hereinafter provided, the Correspondent shall be responsible for ensuring that such bank accounts are sufficiently funded and that these accounts are correctly given trust status if so required under the Rules. PL shall not be liable for any loss or damage suffered by the Correspondent by virtue of any such bank accounts being overdrawn by reason of the provision of the Included Services, except as such overdrafts are caused by any dishonest, fraudulent or criminal acts on the part of PL, its employees, or its agents. PL shall indemnify the Correspondent for any losses, liabilities, damages, costs, and expenses resulting from the dishonest, fraudulent or criminal acts of PL, its employees, or its agents relating to the use of such bank accounts. PL shall keep the Correspondent informed of the balances and overdrafts (if any) of cash bank accounts and shall promptly notify the Correspondent if it becomes aware that any such bank account is, or is likely to become, overdrawn, irrespective of any overdraft facilities available in respect thereof.

6.

Maintenance of Records by PL and Compliance

6.1

PL will provide to the Correspondent all such information as the Correspondent may reasonably require to enable it to maintain records in accordance with the Rules which information will include a full record of all transactions executed or cleared through it under the terms hereof and shall provide the Correspondent with access to such information at all reasonable times and, where required, reasonable extracts from its records. Any added cost incurred by PL associated with these extracts will be paid by the Correspondent subject to prior agreement between PL and the Correspondent.

6.2

Unless required by the Stock Exchange or The SFA to do so, or unless the Correspondent undertakes to pay reasonable charges for PL’s doing so, PL shall not be bound to make any investigation into the facts surrounding any dealings which the Correspondent may have with its Customers or other persons, nor shall PL be under any responsibility for compliance by the Correspondent with any laws or regulations which may be applicable to the Correspondent other than the Rules insofar as they relate to the provision of the Included Services and the records to be created by PL hereunder. In the event said investigation is necessitated by the proven negligent or wilful acts or omissions or fraudulent acts on the part of PL, its employees, or its agents, the Correspondent shall not be responsible for paying for the costs of the investigation.

▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇

6th July’ 98

Authorised Signature

Date

For and on behalf of Pershing Limited

▇▇▇▇▇▇ ▇▇▇▇▇

7th July 1998

Authorised Signature

Date

(i)

the processing of bargains transmitted to PL by the Correspondent;

(ii)

the clearance and settlement of sales or purchases of securities by causing securities delivered to or held by or (where permitted by the Rules) on behalf of PL pursuant to a sale to be delivered to or at the direction of the purchaser thereof against payment of the purchase price and receiving securities purchased from the vendor thereof and, if and to the extent that funds are on hand for a Customer, paying the purchase price of those securities;

(iii)

the holding of cheques, drafts, negotiable instruments and sums collected or received for a Customer for payment subject to the terms of this Agreement;

(iv)

in the case of transactions affected on behalf of a Customer the collection for the Correspondent of fees, commissions and charges as set by the Correspondent and which are payable by the Customer;

(v)

the issue of confirmations and contract notes in the Correspondent’s name in respect of orders for the purchase and sale of securities settled by PL for the Correspondent and the production thereof within one business day of the relevant transaction or (at the Correspondent’s option) the transmission from PL’s premises of relevant information to facilitate the mailing thereof by the Correspondent within one business day of the relevant transaction;

(vi)

the preparation of summary statements of account in the Correspondent’s name in respect of all accounts maintained by PL for the Correspondent and any Customers in respect of each Dealing Period and the mailing or delivery thereof on the next business day following the end of the relevant Dealing Period or (at the Correspondent’s option) the transmission from PL’s computer facilities to a terminal situated at the Correspondent’s premises of relevant information to facilitate the mailing thereof by the Correspondent on the next business day following the end of the Dealing Period;

(vii)

the receipt and delivery of securities (responsibility therefore becoming PL’s at such a time as the securities have been physically received by PL or its agents or representative authorised for this purpose);

(viii)

nominee and safe custody facilities;

(ix)

notification of entitlements in relation to the acceptance, rejection, renunciation splitting or other dealing with offers to purchase, subscribe, exchange, sell, convert or redeem securities and the exercise of rights to vote or any other rights incidental to the ownership of securities and following such notification to act in accordance with the instructions of the Correspondent in respect of such matters;

(x)

on the instructions of the Correspondent, the release and delivery to Customers, at the relevant address contained in PL’s records, of securities in respect of orders to purchase executed or settled by PL;

(xi)

the delivery of returns relating to transactions to The Stock Exchange or any other regulatory body established by or by virtue of statute;

(xii)

the production of the necessary records required to meet the settlement obligations imposed by the Rules;

(xiii)

the maintenance in easily retrievable form or such other form (including machine readable form) as permitted by the Rules of all records required by the Rules and the creation of the records under the Included Services to permit the Correspondent to maintain all required records.

(xiv)

the handling of transactions in all currencies identified by the Correspondent and if agreed between PL and the Correspondent the dealing in forward currency contracts for the Correspondent;

(xv)

the provision to the Correspondent of all necessary information from time to time required by it to make reports required by The Stock Exchange;

(xvi)

the investment of funds belonging to the Correspondent and under the control of PL and not required to meet the obligations of the Correspondent or PL on behalf of the Correspondent (sometimes called “Free Funds’) on a daily basis at the direction of the Correspondent in a security of the Correspondent’s choice or in the alternative, transmission of such funds to an account designated by the Correspondent;

(xvii)

the training of the Correspondent’s personnel (at the Correspondent’s premises or PL’s premises as PL shall deem appropriate) to enable the Correspondent’s personnel to carry out relevant transactions using PL’s computer system and procedures for the conduct of business pursuant to this Agreement such training to be provided at such times and from time to time as shall be necessary having regard to the value of business conducted by PL on behalf of the Correspondent; and

(xviii)

(for the avoidance of doubt) the employment of such staff as shall be reasonably necessary for the purposes of (i) to (xvi) above);

(xix)

prompt notification of any irregularities or failure in performance on the part of PL, any Customer, the Correspondent, any counterparty or other person.