EXHIBIT 10.6
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT is made the 27 day of Dec. 1996 BETWEEN
X.X. XXXXXX INVESTMENT MANAGEMENT INC. (a company incorporated under the laws of
the State of Delaware) ("JPMIM" acting through its London Office at 00 Xxxx
Xxxxxx, Xxxxxx, XX0X 0XX;
and COMMERCIAL GUARANTY ASSURANCE, LTD (a company incorporated under the laws of
Bermuda) ("the Company") of Xxxxxxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx.
WHEREAS
The Company wishes to appoint JPMIM as discretionary investment manager of
certain assets of the Company which may be held in one or more accounts ("the
Portfolio") and JPMIM wishes to accept this appointment under the terms set out
below.
IT IS HEREBY AGREED AS FOLLOWS:-
1. Authority and Limitations
-------------------------
1.1 Except as may otherwise be notified in writing to JPMIM, the Company hereby
confirms that the Portfolio is and will be owned beneficially and
absolutely by it or held by it as trustee. The Company further confirms
that the Portfolio is free from any lien, charge or other impediment and
that the Company has full power and authority to appoint JPMIM to deal with
the Portfolio in accordance with the terms of this Agreement.
1.2 Subject to such investment objectives and restrictions ("Guidelines") as
are set out in this Agreement, JPMIM will have:-
(a) complete discretion on behalf of the Company to buy, sell, retain or
exchange investments of any nature, to subscribe to issues of
securities, to enter into spot or forward foreign exchange contracts
and to cause the Custodian to place and withdraw cash from deposit, as
and when JPMIM thinks fit or otherwise to act as it judges appropriate
in relation to the Portfolio;
(b) authority and power to purchase, sell, hold and generally deal in and
with all futures contracts (and any option on such contracts),
including without limitation contracts for differences with respect to
financial instruments and any group or index of securities (or any
interest therein based on the value thereof), and in connection
therewith to cause the Custodian to deposit any margin payment or
property as collateral with any agent and to grant security interests
in such collateral, all on such terms and conditions as JPMIM shall
determine;
1.3 In the performance of its services under this Agreement, JPMIM may
(a) effect or arrange transactions through or with any person, firm or
company that JPMIM may select other than associated or related
companies in the X.X. Xxxxxx group ("Xxxxxx");
(b) deal collectively as agent for the Company and for other clients
including Xxxxxx companies;
(c) commit the Company to underwriting any issue or offer for sale of
securities of a type and to the extent permitted by the Guidelines;
(d) effect transactions in which an issue of the relevant securities was
underwritten, managed or arranged by Xxxxxx within twelve months of
the date of the transaction;
(e) not borrow on behalf of the Company;
1.4 In the performance of its services under this Agreement JPMIM has no
authority or power except as expressly provided.
2. Guidelines
----------
2.1 The initial guidelines for the Portfolio are set out in Schedule 1 to this
Agreement. Any change which the Company wishes to make shall be discussed
with the agreed to by JPMIM and shall be confirmed by the Company in
writing, by telex or by facsimile telecopier.
2.2 If at any time due to major fluctuations in market prices, abnormal market
conditions or any other reason outside the control of JPMIM, there shall be
a deviation from the specific instructions set out in the Guidelines;
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(a) JPMIM shall not be in breach of the Guidelines provided it takes such
steps as may be necessary to ensure compliance within 7 days after
such deviation occurs; or
(b) JPMIM may, prior to the expiry of the 7 day period referred to in (a)
above, make a written recommendation to the Company on the most
appropriate way to deal with the deviation and, unless the Company
directs JPMIM to the contrary within 14 days of the receipt by the
Company of the recommendation, JPMIM shall be entitled to implement
its recommendation and shall not be in breach of the Guidelines.
3. Custody
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3.1 The Company will appoint a custodian ("the Custodian") by a separate
agreement under which all investments and cash comprising the Portfolio
will be held for the Company by the Custodian or its agents. JPMIM shall
not have control of the investments or cash in the Portfolio but shall have
authority to issue to the Custodian such instructions as it may consider
appropriate in connection with the settlement of any transaction relating
to the Portfolio which it has initiated.
3.2 The Company confirms that:--
(a) whether or not JPMIM directs the Custodian to exercise any voting or
other rights and entitlements attached to securities held in the
Portfolio, and how JPMIM directs that they are to be exercised, will
be at the total discretion of JPMIM.
(b) unless the Company gives written instructions to the contrary all
dividend and interest income received in respect of the Portfolio will
be retained by the Custodian for reinvestment as part of the
Portfolio.
(c) it shall have full responsibility for the payment of all taxes due on
capital or income held or collected for the Portfolio.
3.3 The Company and JPMIM will arrange for the Custodian to provide to JPMIM
daily cash account statements and monthly asset position statements. JPMIM
will compare these statements with its own records and inform the Custodian
of any differences. In the event that differences between the Custodian's
statements and JPMIM's records cannot be resolved between JPMIM and the
Custodian, JPMIM will inform the Company in writing.
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4. Portfolio reports and records
-----------------------------
4.1 JPMIM will provide the Company with:--
(a) a monthly valuation report of all investments and cash comprising the
Portfolio within ten working days of the end of each calendar month.
JPMIM will determine the value of all assets in the Portfolio
following methods consistently applied by it using the valuation basis
specified in the report;
(b) a monthly report of all transactions relating to the Portfolio within
ten working days of the end of each calendar month. If requested by
the Company, JPMIM will also send transaction advices containing full
details of each transaction to the Company or to such other persons as
the Company shall nominate on the next business day following the day
on which the transaction was effected or at such other frequency as
the Company shall request.
(c) a quarterly report on the performance of the Portfolio against the
performance benchmark specified in the Guidelines following the end of
each calendar quarter.
4.2 JPMIM will maintain full records of all transactions effected for the
Portfolio. JPMIM agrees to provide to the Company, the Custodian and to the
accountants and other professional advisers of the Company any information
which they may from time to time reasonably require in connection with the
Portfolio, but it is understood and agreed that JPMIM in maintaining its
records and providing such information does not assume responsibility for
the accuracy of any accounts, reports or other information furnished by the
Custodian or any other person, firm or corporation to the Company.
5. Fees
----
The Company accepts the scale of fees and terms of payment (as may be
varied from time to time by mutual agreement) set out in Schedule 2 to this
Agreement. No other fees or remuneration from any source shall be due to
JPMIM in respect of the services provided under this Agreement.
6. Termination
-----------
This Agreement may be terminated without penalty at any time by either
party giving at least thirty days written notice of termination, to the
other party.
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Termination shall be effective from the date specified in the notice and
will be without prejudice to the payment of any outstanding fees due to
JPMIM or to the completion of any transaction already initiated and JPMIM
shall be entitled if necessary after the date of effective termination to
direct the Custodian to settle such transactions.
7. Indemnity and Limitation of Liability
-------------------------------------
7.1 The Company will indemnify JPMIM from and against any and all claims,
proceedings, damages, loss and liability made or taken against or suffered
or incurred by JPMIM in its capacity as manager of the Portfolio except
insofar as the same arises as a result of negligence or wilful default
(including fraud or dishonesty) on the part of JPMIM.
7.2 JPMIM shall not be liable to the Company for any losses suffered by the
Company arising from any depreciation in the value of the Portfolio or from
the income derived from it (including, without limitation, where such
depreciation results from capital loss or taxation liability) or otherwise
in any way whatsoever except insofar as the same arises as a result of
negligence or wilful default (including fraud or dishonesty) on the part of
JPMIM.
7.3 JPMIM shall not be liable in respect of the default or fraud of any person,
firm or company through or with whom transactions are effected for the
Company's account.
8. Confidentiality
---------------
Except insofar as required by law or regulation, JPMIM shall ensure that
all matters relating to the Portfolio shall be kept strictly confidential.
9. Regulation
----------
JPMIM is registered as an investment adviser under the United States
Investment Advisers Act of 1940. Under the United Kingdom Financial
Services Xxx 0000, JPMIM is a member of the Investment Management
Regulatory Organisation Ltd. ("IMRO") and as such is regulated by IMRO in
the conduct of its investment business.
All services provided by JPMIM under this agreement are provided on the
basis that the Company is a non-private customer as that term is defined in
IMRO's rules.
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10. Additional Provisions--Transactions in Derivatives
--------------------------------------------------
To the extent that the Guidelines permit investment in futures or options,
the additional provisions in Schedule 3 form part of this Agreement.
11. Notices
-------
11.1 All directions and notifications to be given hereunder shall be addressed
to the appropriate party at the address appearing at the head of this
Agreement, or to such other address as shall be notified in writing by that
party to the other party] from time to time.
11.2 Any notice to be given in relation to this Agreement shall be given in
writing and may be given by delivering or posting it or by sending it by
fax or telex. Any notice given by post will be deemed given 24 hours after
posting and any notice given by delivery or by fax or telex will be deemed
given upon delivery or transmission, and in proving service of the notice
it shall be sufficient to prove that the letter was correctly addressed and
was posted or that where it was delivered otherwise than by post that it
was delivered to the correct address or that where it was sent by fax or
telex it was transmitted to the correct number.
12. Complaints
----------
Any complaint that the Company may have relating to any services provided
to it by JPMIM under this Agreement should be addressed to the Compliance
Officer of JPMIM at its London office. The Company also has a direct right
of complaint to the Office of the Investment Ombudsman, 0 Xxxxxxxxx'x
Xxxxx, Xxxxxx XX0X 0XX.
13. Assignment
----------
No assignment of this Agreement may be made by JPMIM without the prior
written consent of the Company.
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14. Governing Law
-------------
This Agreement will be governed by and construed in accordance with English
law.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed by their duly appointed agents so as to be effective as of the
date first written above.
/s/
--------------------------------------
Vice President
for and on behalf of
X.X. XXXXXX INVESTMENT MANAGEMENT INC.
/s/ A. R. XXXXXXXXXX
----------------------------------------
Director
for and on behalf of
COMMERCIAL GUARANTY ASSURANCE, LTD.
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SCHEDULE 1
GUIDELINES
Schedule 1 to the Investment Management Agreement dated 27, Dec. 1996 between
X.X. Xxxxxx Investment Management Inc. and Commercial Guaranty Assurance, Ltd
Objective
---------
The primary objective of the portfolio is to achieve a total rate of return in
excess of the stated benchmark, consistent with safety of principal and
liquidity. Performance will be measured against the AA or better subset of the
35 year Xxxxxxx Xxxxx Eurodollar index.
Guidelines
----------
1) Investments will be primarily in foreign (non-U.S.) securities denominated
in U.S. Dollars, as follows: Euro certificates of deposit ("C.D.'s"), Euro
time deposits, Euro medium-term notes, Eurobonds, Yankee bonds, Euro
commercial paper and Euro floating rate notes. Interest rates may be fixed
or variable. No U.S. income source is allowed.
2) In addition, up to 100% of the market value of the portfolio may be
invested in non U.S. dollar denominated foreign (non U.S.) securities,
provided that the foreign exchange exposure thus created is hedged back
into U.S. dollars at all times. Investment in non U.S. dollar denominated
securities may include those outlined above as well as government, agency
and corporate bonds issued in the domestic bond markets of OECD countries.
3) Obligations issued by foreign subsidiaries of U.S. companies, except for
banks, may be purchased as long as the obligations are not guaranteed by
the U.S. parent company.
4) Credit exposure
Only securities rated double A (Aa3/AA-) or better by Xxxxx'x,
Standard & Poor's or the equivalent rates by Duff & Xxxxxx may be
purchased. If an issue is unrated, it may be purchased, provided the
issuer or guarantor has a comparable issue with a Aa3/AA- or higher
rating or, in the opinion of the manager, the issue is equivalent to a
Aa3/AA- or better security.
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5) A maximum of 5% of the portfolio may be invested in the securities of any
one corporate obligor and 10% in the securities of non-guaranteed
government agencies of any one country. Non-U.S. Sovereign exposure is
limited to 20% of the portfolio per issuer.
6) Maturity
The portfolio shall be managed with a weighted average duration of not
less than two years nor more than five years.
(7) Derivatives
a) Options are not allowed
b) Interest rate futures are allowed in order to control overall
interest rate exposure, subject to the following conditions.
i) The notional value of net short futures positions must
not exceed the market value of the portfolio
ii) The notional value of net long positions must not exceed
the amount of available cash in the portfolio. No leverage
of the portfolio is allowed.
8) No equity exposure, convertible bonds, or equity linked securities are
allowed.
9) No commodity exposure, or commodity linked securities, are allowed.
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SCHEDULE 2
FEE SCHEDULE
Schedule 2 to the Investment Management Agreement dated 27 Dec. 1996 between
X.X. Xxxxxx Investment Management Inc. and Commercial Guaranty Assurance, Ltd.
The following fee scale, [payable in US Dollars], will apply in respect of
services provided under the above referenced agreement:--
.30 of 1% per annum on the first US$ 75 million
.25 of 1% per annum on the next US$ 75 million
.20 of 1% per annum on the balance over US$ 150 million.
There shall be a minimum fee of US$150,000.
Fees are based on the total market value of the assets under management at each
calendar quarter end and will be invoiced to the Company's Custodian in the
following month.
Broker's fees for transactions executed on the Company's behalf are charged to
the Company and any brokerage discounts or reallowances are passed on to the
Company. Any charges made by the Custodian appointed by the Company shall be for
the Company's account.
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SCHEDULE 3
FUTURES & OPTIONS
Schedule 3 to the Investment Management Agreement dated 27 Dec. 1996 between
X.X. Xxxxxx Investment Management Inc. and Commercial Guaranty Assurance, Ltd.
1. Further to JPMIM's authorization under this Agreement to invest and
reinvest in futures (subject to the Guidelines), the Company agrees that:
(a) JPMIM is authorized to select the brokerage firms through which
futures contracts and options are traded for the Portfolio and to sign
as the Company's agent any account agreements or other documents
required or deemed appropriate by such brokers or by JPMIM. In
connection with the opening of each account with each broker through
which futures contracts and/or options are traded for the Portfolio,
the Company specifically authorizes JPMIM to execute on its behalf a
Customer Application and Customer, Procedural and Safekeeping
Agreements and Customer's Options Agreements.
(b) In accordance with the regulations of the United States Commodity
Futures Trading Commission ("CFTC") and other regulatory agencies,
JPMIM is authorized to and may reveal the Company's identity, and
address to any broker through which futures contracts or options are
traded.
(c) The Company understands that the CFTC and other regulatory agencies
require that anyone trading in futures contracts must advance
collateral to meet initial and daily variation margins. In addition,
collateral may be required for trading in options. JPMIM is hereby
authorized to instruct the Custodian to advance cash or securities as
collateral to an account designated by the broker to meet margin
payments as required by the rules of exchanges or markets on which
contracts for Futures and Options are dealt by JPMIM as the Company's
agent. If, under the rules of such exchanges or markets, margin calls
are increased and insufficient funds are available in the Portfolio,
JPMIM may require the Company to make additional funds temporarily
available at short notice (in some cases less than 24 hours) until
assets can be realised to cover the related margin calls.
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2. The rules of the CFTC require JPMIM to furnish the following statements to
the Company and the Company to acknowledge by its signature that these
statements have been received and understood.
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Name and address of broker ("Broker"):
______________________________________
______________________________________
______________________________________
RISK DISCLOSURE STATEMENT FOR FUTURES AND OPTIONS
This brief statement does not disclose all of the risks and other significant
aspects of trading in futures and options. In light of the risks, you should
undertake such transactions only if you understand the nature of the contracts
(and contractual relationships) into which you are entering and the extent of
your exposure to risk. Trading in futures and options is not suitable for many
members of the public. You should carefully consider whether trading is
appropriate for you in light of your experience, objectives, financial resources
and other relevant circumstances.
FUTURES
1. Effect of 'Leverage' or "Gearing'
Transactions in futures carry a high degree of risk. The amount of initial
margin is small relative to the value of the futures contract so that
transactions are 'leveraged' or 'geared' A relatively small market movement
will have a proportionately larger impact on the funds you have deposited
or will have to deposit: this may work against you as well as for you. You
may sustain a total loss of initial margin funds and any additional funds
deposited with the firm to maintain your position. If the market moves
against your position or margin levels are increased, you may be called
upon to pay substantial additional funds on short notice to maintain your
position. If you fail to comply with a request for additional funds within
the time prescribed, your position may be liquidated at a loss and you will
be liable for any resulting deficit.
2. Risk-reducing orders or strategies
The placing of certain orders (e.g., 'stop-loss' orders, where permitted
under local law, or 'stop-limit' orders) which are intended to limit losses
to certain amounts may not be effective because market conditions may make
it impossible to execute such orders. Strategies using combinations of
positions, such as 'spread' and 'straddle' positions may be as risky as
taking simple 'long' or 'short' positions.
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OPTIONS
3. Variable degree of risk
Transactions in options carry a high degree of risk. Purchasers and sellers
of options should familiarize themselves with the type of option (i.e., put
or call) which they contemplate trading and the associated risks. You
should calculate the extent to which the value of the options must increase
for your position to become profitable, taking into account the premium and
all transaction costs.
The purchaser of options may offset or exercise the options or allow the
options to expire. The exercise of an option results either in a cash
settlement or in the purchaser acquiring or delivering the underlying
interest. If the option is on a future, the purchaser will acquire a
futures position with associated liabilities for margin (see the section on
Futures above). If the purchased options expire worthless, you will suffer
a total loss of your investment which will consist of the option premium
plus transaction costs. If you are contemplating purchasing
deep-out-of-the-money options, you should be aware that the chance of such
options becoming profitable ordinarily is remote.
Selling ('writing' or 'granting') an option generally entails considerably
greater risk than purchasing options. Although the premium received by the
seller is fixed, the seller may sustain a loss well in excess of that
amount. The seller will be liable for additional margin to maintain the
position if the market moves unfavourably. The seller will also be exposed
to the risk of the purchaser exercising the option and the seller will be
obligated to either settle the option in cash or to acquire or deliver the
underlying interest. If the option is on a future, the seller will acquire
a position in a future with associated liabilities for margin (see the
section on Futures above). If the position is 'covered' by the seller
holding a corresponding position in the underlying interest or a future or
another option, the risk may be reduced. If the option is not covered, the
risk of loss can be unlimited.
Certain exchanges in some jurisdictions permit deferred payment of the
option premium, exposing the purchaser to liability for margin payments not
exceeding the amount of the premium. The purchaser is still subject to the
risk of losing the premium and transaction costs. When the option is
exercised or expires, the purchaser is responsible for any unpaid premium
outstanding at that time.
ADDITIONAL RISKS COMMON TO FUTURES AND OPTIONS
4. Terms and conditions of contracts
You should ask the firm with which you deal about the term and conditions
of the specific futures or options which you are trading and associated
obligations (e.g., the circumstances under which you may become obligated
to make or take delivery of the underlying interest
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of a futures contract and, in respect of options, expiration dates and
restrictions on the time for exercise). Under certain circumstances the
specifications of outstanding contracts (including the exercise price of an
option) may be modified by the exchange or clearing house to reflect
changes in the underlying interest.
5. Suspension or restriction of trading and pricing relationships
Market conditions (e.g., illiquidity) and/or the operation of the rules of
certain markets (e.g., the suspension of trading in any contract or
contract month because of price limits or 'circuit breakers') may increase
the risk of loss by making it difficult or impossible to effect
transactions or liquidate/offset positions. If you have sold options, this
may increase the risk of loss.
Further, normal pricing relationships between the underlying interest and
the future, and the underlying interest and the option may not exist. This
can occur when, for example, the futures contract underlying the option is
subject to price limits while the option is not. The absence of an
underlying reference price may make it difficult to judge 'fair' value.
6. Deposited cash and property
You should familiarize yourself with the protections accorded money or
other property you deposit for domestic and foreign transactions,
particularly in the event of a firm insolvency or bankruptcy. The extent to
which you may recover your money or property may be governed by specified
legislation or local rules. In some jurisdictions, property which had been
specifically identifiable as your own will be pro-rated in the same manner
as cash for purposes of distribution in the event of a shortfall.
7. Commission and other charges
Before you begin to trade, you should obtain a clear explanation of all
commission, fees and other charges for which you will be liable. These
charges will affect your net profit (if any) or increase your loss.
8. Transactions in other jurisdictions
Transactions on markets in other jurisdictions, including markets formally
linked to a domestic market, may expose you to additional risk. Such
markets may be subject to regulation which may offer different or
diminished investor protection. Before you trade you should enquire about
any rules relevant to your particular transactions. Your local regulatory
authority will be unable to compel the enforcement of the rules of
regulatory authorities or markets in other jurisdictions where your
transactions have been effected. You should ask the firm with which you
deal for details about the types of redress available in both your home
jurisdiction and other relevant jurisdictions before you start to trade.
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9. Currency risks
The profit or loss in transactions in foreign curency-denominated contracts
(whether they are traded in your own or another jurisdiction) will be
affected by fluctuations in currency rates where there is a need to convert
from the currency denomination of the contract to another currency.
10. Trading facilities
Most open-outcry and electronic trading facilities are supported by
computer-based component systems for the order-routing, execution,
matching, registration or clearing of trades. As with all facilities and
systems, they are vulnerable to temporary disruption or failure. Your
ability to recover certain losses may be subject to limits on liability
imposed by the system provider, the market, the clearing house and/or
member firms. Such limits may vary; you should ask the firm with which you
deal for details in this respect.
11. Electronic trading
Trading on an electronic trading system may differ not only from trading in
an open-outcry market but also from trading on other electronic trading
systems. If you undertake transactions on an electronic trading system, you
will be exposed to risk associated with the system including the failure of
hardware and software. The result of any system failure may be that your
order is either not executed according to your instructions or is not
executed at all.
12. Off-exchange transactions
In some jursidictions, and only then in restricted circumstances, firms are
permitted to effect off-exchange transactions. The firm with which you deal
may be acting as your counterparty to the transaction. It may be difficult
or impossible to liquidate an existing position, to assess the value, to
determine a fair price or to assess the exposure to risk. For these
reasons, these transactions may involve increased risks. Off-exchange
transactions may be less regulated or subject to a separate regulatory
regime. Before you undertake such transactions, you should familiarize
yourself with applicable rules and attendant risks.
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I hereby acknowledge that I have received and understood this risk disclosure
statement.
Client: Commercial Guaranty Assurance Ltd Manager: X.X Xxxxxx Investment
Management Inc.
By: /s/ A. R. XXXXXXXXXX By: /s/
----------------------------------- ---------------------------------
Title: President & CEO Title: Vice President
--------------------------------- ---------------------------------
Date: 27 December 1996 Date: 18 December 1996
--------------------------------- ---------------------------------
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HEDGE ACCOUNT DESIGNATION AND ELECTION
Broker:__________________________
_________________________________
_________________________________
Gentlemen:
Unless specified in writing to the contrary, Broker is hereby notified that all
transactions effected for the undersigned Client's account and all positions
taken in this account will either be (a) bona fide hedging transactions and
positions as defined in section 4(a) of the Commodity Exchange Act, as amended,
the Regulation 1.3(z) promulgated thereunder by the Commodity Futures Trading
Commission ("CFTC") or (b) risk management positions as recognized in the rules
of the relevant commodities exchange. The undersigned Client and Manager/Advisor
have read and understand the relevant rules and regulations and agrees that all
transactions and positions executed or carried in this account will be
consistent with such rules and regulations and agree that all transactions and
positions executed or carried in this account will be consistent with such rules
and regulations and any interpretations thereof.
It is agreed that positions carried in the undersigned Client's account will be
strictly for hedge purposes and not for speculation. Broker may rely on the
representations made herein. Should the undersigned Manager/Advisor transmit
orders for the account which do not meet the definition of "hedging" or "risk
management", the undersigned Manager/Advisor shall advise Broker in writing to
that effect and will keep such contracts margined as required by Broker and the
applicable exchanges.
Pursuant to CFTC Regulation 190.06(d), in the event of Broker's bankruptcy,
Broker shall attempt to contact the undersigned Manager/Advisor for
instructions as to the disposition of the open contracts held in the undersigned
Client's account's).
Client: Commercial Guaranty Assurance Ltd Manager: X.X Xxxxxx Investment
Management Inc.
By: /s/ A. R. XXXXXXXXXX By: /s/
----------------------------------- ---------------------------------
Title: President & C.E.O. Title: Vice President
--------------------------------- ---------------------------------
Date: 27 December 1996 Date: 18 December 1996
--------------------------------- ---------------------------------
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[NON US]
CFTC EXEMPT ACCOUNT STATUS
Gentlemen:
We hereby consent to JPMIM treating such futures account(s) as an "exempt
account" under Rule 4.7 of the Commodity Futures Trading Commission (the
"CFTC"), the regulatory agency charged with oversight of futures trading in the
United States. Such consent permits JPMIM to dispense with certain disclosure
and recordkeeping requirements otherwise mandated by the CFTC with respect to
the accounts of clients who meet the objective criteria specified in Rule 4.7.
Such criteria are designed to indicate that a client possesses the investment
expertise and experience necessary to understand the risks involved in futures
trading as well as the financial resources to withstand the risks of such
trading.
In this regard the Client represents that:
(1) it owns an investment portfolio with a market value in excess of
$5,000,000; and
(2) it is, or is of the character of, or is otherwise analogous to, one or more
of the following client types: high net worth individual, collective
investment vehicle, employee benefit or retirement plan, commercial entity,
insurance company, bank, central bank, sovereign government, international
organization, endowment fund, foundation or other charitable organization.
JPMIM is hereby authorized to rely on the representations set forth in this
addendeum until notified by the client in writing of any changes.
Sincerely,
Commercial Guaranty Assurance, Ltd.
By: A. R. XXXXXXXXXX
--------------------------------
Title: President & C.E.O.
------------------------------
Date: 27 December 1996
-------------------------------
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