10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2005

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-10706

Comerica Incorporated

(Exact name of registrant as specified in its charter)

Delaware	38-1998421
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Comerica Tower at Detroit Center
Detroit, Michigan
48226
(Address of principal executive offices)
(Zip Code)

(248) 371-5000
(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes þ No o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

          $5 par value common stock:

               Outstanding as of October 14, 2005: 165,268,453 shares

COMERICA INCORPORATED AND SUBSIDIARIES

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Balance Sheets at September 30, 2005 (unaudited), December 31, 2004 and September 30, 2004 (unaudited)	3
Consolidated Statements of Income for the Three Months and Nine Months Ended September 30, 2005 and 2004 (unaudited)	4
Consolidated Statements of Changes in Shareholders’ Equity for the Nine Months Ended September 30, 2005 and 2004 (unaudited)	5
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2005 and 2004 (unaudited)	6
Notes to Consolidated Financial Statements (unaudited)	7
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	41
ITEM 4. Controls and Procedures	42
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings	44
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	44
ITEM 6. Exhibits	45
Signatures	46

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

     CONSOLIDATED BALANCE SHEETS

     Comerica Incorporated and Subsidiaries

	September 30,			December 31,			September 30,
(in millions, except share data)	2005			2004			2004
	(unaudited)						(unaudited)
ASSETS
Cash and due from banks	$	1,795		$	1,139		$	1,560
Short-term investments		3,619			3,230			5,055
Investment securities available-for-sale		4,088			3,943			4,198
Commercial loans		22,754			22,039			21,146
Real estate construction loans		3,289			3,053			3,276
Commercial mortgage loans		8,700			8,236			7,931
Residential mortgage loans		1,444			1,294			1,263
Consumer loans		2,696			2,751			2,722
Lease financing		1,286			1,265			1,260
International loans		1,972			2,205			2,117
Total loans		42,141			40,843			39,715
Less allowance for loan losses		(558	)		(673	)		(729	)
Net loans		41,583			40,170			38,986
Premises and equipment		499			415			399
Customers’ liability on acceptances outstanding		39			57			41
Accrued income and other assets		2,726			2,812			2,720
Total assets	$	54,349		$	51,766		$	52,959
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits	$	17,702		$	15,164		$	16,811
Interest-bearing deposits		25,968			25,772			25,424
Total deposits		43,670			40,936			42,235
Short-term borrowings		241			193			225
Acceptances outstanding		39			57			41
Accrued expenses and other liabilities		1,242			1,189			1,021
Medium- and long-term debt		4,066			4,286			4,401
Total liabilities		49,258			46,661			47,923
Common stock — $5 par value:
Authorized — 325,000,000 shares
Issued — 178,735,252 shares at 9/30/05, 12/31/04 and 9/30/04		894			894			894
Capital surplus		448			421			408
Accumulated other comprehensive loss		(158	)		(69	)		(24	)
Retained earnings		4,683			4,331			4,222
Less cost of common stock in treasury — 13,469,654 shares at 9/30/05, 8,259,328 shares at 12/31/04 and 8,169,292 shares at 9/30/04		(776	)		(472	)		(464	)
Total shareholders’ equity		5,091			5,105			5,036
Total liabilities and shareholders’ equity	$	54,349		$	51,766		$	52,959

See notes to consolidated financial statements.

3

     CONSOLIDATED STATEMENTS OF INCOME (unaudited)

     Comerica Incorporated and Subsidiaries

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in millions, except per share data)	2005			2004			2005			2004
INTEREST INCOME
Interest and fees on loans	$	674		$	514		$	1,856		$	1,510
Interest on investment securities		38			36			107			111
Interest on short-term investments		7			8			18			25
Total interest income		719			558			1,981			1,646
INTEREST EXPENSE
Interest on deposits		147			79			377			224
Interest on short-term borrowings		16			1			28			2
Interest on medium- and long-term debt		44			27			121			76
Total interest expense		207			107			526			302
Net interest income		512			451			1,455			1,344
Provision for loan losses		(30	)		—			(27	)		85
Net interest income after provision for loan losses		542			451			1,482			1,259
NONINTEREST INCOME
Service charges on deposit accounts		55			57			163			178
Fiduciary income		44			43			133			128
Commercial lending fees		16			14			44			41
Letter of credit fees		18			17			56			49
Foreign exchange income		9			9			27			28
Brokerage fees		10			9			27			27
Investment advisory revenue, net		14			8			36			26
Card fees		10			8			28			23
Bank-owned life insurance		9			10			28			28
Equity in earnings of unconsolidated subsidiaries		4			3			13			11
Warrant income		2			1			7			6
Net securities losses		—			(6	)		—			—
Net gain on sales of businesses		1			—			1			7
Other noninterest income		40			33			98			102
Total noninterest income		232			206			661			654
NONINTEREST EXPENSES
Salaries		209			185			595			567
Employee benefits		46			40			137			119
Total salaries and employee benefits		255			225			732			686
Net occupancy expense		30			32			90			93
Equipment expense		14			14			42			43
Outside processing fee expense		19			16			56			51
Software expense		12			11			35			31
Customer services		29			8			50			17
Litigation and operational losses		4			16			14			27
Other noninterest expenses		59			50			160			165
Total noninterest expenses		422			372			1,179			1,113
Income before income taxes		352			285			964			800
Provision for income taxes		114			89			310			250
NET INCOME	$	238		$	196		$	654		$	550
Basic net income per common share	$	1.43		$	1.15		$	3.90		$	3.19
Diluted net income per common share		1.41			1.13			3.85			3.15
Cash dividends declared on common stock		92			88			277			268
Dividends per common share		0.55			0.52			1.65			1.56

See notes to consolidated financial statements.

4

     CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited)

     Comerica Incorporated and Subsidiaries

						Accumulated
						Other									Total
	Common		Capital			Comprehensive			Retained			Treasury			Shareholders’
(in millions, except share data)	Stock		Surplus			Income (Loss)			Earnings			Stock			Equity
BALANCE AT JANUARY 1, 2004	$	894	$	384		$	74		$	3,973		$	(215	)	$	5,110
Net income		—		—			—			550			—			550
Other comprehensive loss, net of tax		—		—			(98	)		—			—			(98	)
Total comprehensive income																452
Cash dividends declared on common stock ($1.56 per share)		—		—			—			(268	)		—			(268	)
Purchase of 5,977,723 shares of common stock		—		—			—			—			(336	)		(336	)
Net issuance of common stock under employee stock plans		—		(2	)		—			(33	)		87			52
Recognition of stock-based compensation expense		—		26			—			—			—			26
BALANCE AT SEPTEMBER 30, 2004	$	894	$	408		$	(24	)	$	4,222		$	(464	)	$	5,036
BALANCE AT JANUARY 1, 2005	$	894	$	421		$	(69	)	$	4,331		$	(472	)	$	5,105
Net income		—		—			—			654			—			654
Other comprehensive loss, net of tax		—		—			(89	)		—			—			(89	)
Total comprehensive income																565
Cash dividends declared on common stock ($1.65 per share)		—		—			—			(277	)		—			(277	)
Purchase of 6,516,700 shares of common stock		—		—			—			—			(379	)		(379	)
Net issuance of common stock under employee stock plans		—		(5	)		—			(25	)		75			45
Recognition of stock-based compensation expense		—		32			—			—			—			32
BALANCE AT SEPTEMBER 30, 2005	$	894	$	448		$	(158	)	$	4,683		$	(776	)	$	5,091

See notes to consolidated financial statements.

5

     CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

     Comerica Incorporated and Subsidiaries

	Nine Months Ended
	September 30,
(in millions)	2005			2004
OPERATING ACTIVITIES
Net income	$	654		$	550
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		(27	)		85
Depreciation and software amortization		54			52
Amortization of stock-based compensation expense		33			24
Net amortization of securities		7			20
Net amortization of intangibles		—			1
Net gain on sales of businesses		(1	)		(7	)
Contributions to pension plan fund		(58	)		(62	)
Net increase in trading securities		—			(8	)
Net (increase) decrease in loans held-for-sale		(7	)		38
Net increase in accrued income receivable		(41	)		—
Net increase in accrued expenses		57			69
Other, net		(25	)		(76	)
Total adjustments		(8	)		136
Net cash provided by operating activities		646			686
INVESTING ACTIVITIES
Net increase in other short-term investments		(313	)		(1,072	)
Proceeds from sales of investment securities available-for-sale		—			330
Proceeds from maturities of investment securities available-for-sale		936			752
Purchases of investment securities available-for-sale		(1,120	)		(773	)
Net (increase) decrease in loans		(1,514	)		391
Fixed assets, net		(89	)		(81	)
Net decrease (increase) in customers’ liability on acceptances outstanding		18			(14	)
Proceeds from sales of businesses		1			8
Net cash used in investing activities		(2,081	)		(459	)
FINANCING ACTIVITIES
Net increase in deposits		2,874			772
Net increase (decrease) in short-term borrowings		48			(37	)
Net (decrease) increase in acceptances outstanding		(18	)		14
Proceeds from issuance of medium- and long-term debt		272			359
Repayments of medium- and long-term debt		(477	)		(750	)
Proceeds from issuance of common stock and other capital transactions		45			52
Purchase of common stock for treasury and retirement		(379	)		(336	)
Dividends paid		(274	)		(268	)
Net cash provided by (used in) financing activities		2,091			(194	)
Net increase in cash and due from banks		656			33
Cash and due from banks at beginning of period		1,139			1,527
Cash and due from banks at end of period	$	1,795		$	1,560
Interest paid	$	493		$	296
Income taxes paid	$	236		$	126
Noncash investing and financing activities:
Loans transferred to other real estate	$	29		$	21
Loans transferred to held-for-sale		69			—
Deposits transferred to held-for-sale		140			—

See notes to consolidated financial statements.

6

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 1 — Basis of Presentation and Accounting Policies

     The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the nine months ended September 30, 2005, are not necessarily indicative of the results that may be expected for the year ending December 31, 2005. Certain items in prior periods have been reclassified to conform to the current presentation. For further information, refer to the consolidated financial statements and footnotes thereto included in the Annual Report of Comerica Incorporated and Subsidiaries (the “Corporation”) on Form 10-K for the year ended December 31, 2004.

Derivative and Foreign Exchange Contracts

     The Corporation uses derivative financial instruments, including foreign exchange contracts, to manage exposure to interest rate and foreign currency risks. All derivative instruments are carried at fair value in either, “accrued income and other assets” or “accrued expenses and other liabilities” on the consolidated balance sheets. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument is determined by whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. For those derivative instruments that qualify as hedging instruments, the Corporation designates the hedging instrument as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. For further information, see Note 8.

Warrants

     The Corporation holds a portfolio of approximately 800 warrants for non-marketable equity securities. These warrants are primarily from high technology, non-public companies obtained as part of the loan origination process. The Corporation historically recognized income related to these warrants approximately 30 days prior to the warrant issuer’s publicly traded stock becoming free of restrictions, when a publicly traded company acquired the warrant issuer, or when cash was received. In third quarter 2005, the Corporation determined that, due to a net exercise provision embedded in the warrant agreements, the warrant portfolio should have been recorded at fair value in accordance with Implementation Issue 17a of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities,” (SFAS 133) since 2001. The required cumulative adjustments to record the portfolio at fair value were not material to the current or any prior reporting periods, and therefore have been reflected as of September 30, 2005. The adjustment included recording a $24 million warrant asset in “accrued income and other assets” on the consolidated balance sheet at September 30, 2005. The adjustment also included recording $20 million in “interest and fees on loans,” $4 million in incentive compensation expense in “salaries expense” and $5 million in “provision for income taxes” on the consolidated statements of income for the three and nine month periods ended September 30, 2005. Under the Corporation’s new accounting, the fair value of warrants covered by Implementation issue 17a of SFAS 133 that are received as part of the loan origination process will be deferred and amortized into interest and fees on loans over the life of the loan, in accordance with SFAS 91, “Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases.” In addition, the fair value of these warrants will be adjusted on a quarterly basis, with any changes in the fair value included in warrant income, which is recorded in “noninterest income” on the consolidated statements of income.

Stock-Based Compensation

     In 2002, the Corporation adopted the fair value recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 123, “Accounting for Stock-Based Compensation” (as amended by SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure”), which the Corporation is applying prospectively to all stock-based compensation awards granted to employees after December 31, 2001. Options granted prior to January 1, 2002 continue to be accounted for under the intrinsic value method, as outlined in APB Opinion No. 25, “Accounting for Stock Issued to Employees.” The effect on net income and earnings per share, if the fair value method had been applied to all outstanding and unvested awards in each period, is presented in the table below. For further information on the Corporation’s stock-based compensation plans, refer to Note 15 to the consolidated financial statements in the Corporation’s 2004 Annual Report.

7

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 1 — Basis of Presentation and Accounting Policies (continued)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions, except per share data)	2005		2004		2005		2004
Net income applicable to common stock, as reported	$	238	$	196	$	654	$	550
Add: Stock-based compensation expense included in reported net income, net of related tax effects		8		1		22		15
Deduct: Total stock-based compensation expense determined under fair value method for all awards, net of related tax effects		8		3		22		20
Proforma net income applicable to common stock	$	238	$	194	$	654	$	545
Net income per common share:
Basic—as reported	$	1.43	$	1.15	$	3.90	$	3.19
Basic—pro forma		1.43		1.14		3.90		3.16
Diluted—as reported		1.41		1.13		3.85		3.15
Diluted—pro forma		1.41		1.12		3.85		3.13

     In the second quarter 2005, the Corporation changed the model used to value its stock option grants from a Black-Scholes option pricing model to a binomial option pricing model for all stock options granted subsequent to March 31, 2005. The binomial model considers characteristics of fair value option pricing that are not recognized under the Black-Scholes model, and thus provides an estimated fair value option pricing that is more representative of actual experience and future expected experience. The after-tax decrease in compensation expense as a result of this change was nominal in the three and nine months ended September 30, 2005, and is reflected in the table above.

     The fair value of the options granted was estimated using the binomial option pricing model with the following weighted-average assumptions:

Risk-free interest rate	4.44	%
Expected dividend yield	3.85
Expected volatility factors of the market price of Comerica common stock	28.6
Expected option life (in years)	6.5

Impairment

     Goodwill and identified intangible assets that have an indefinite useful life are subject to impairment testing, which the Corporation conducts annually, or on an interim basis if events or changes in circumstances between annual tests indicate the assets might be impaired. The Corporation performs its annual impairment test for goodwill and identified intangible assets that have an indefinite useful life as of July 1 of each year. The impairment test involves assigning tangible assets and liabilities, identified intangible assets and goodwill to reporting units, which are a subset of the Corporation’s operating segments, and comparing the fair value of each reporting unit to its carrying value. If the fair value is less than the carrying value, a further test is required to measure the amount of impairment. The annual test of goodwill and intangible assets that have an indefinite life, performed as of July 1, 2005, did not indicate that an impairment charge was required.

     The Corporation reviews finite lived intangible assets and other long lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable from projected undiscounted net operating cash flows. If the projected undiscounted net operating cash flows are less than the carrying amount, the Corporation recognizes a loss to reduce the carrying amount to fair value. Additional information regarding the Corporation’s goodwill, intangible assets and impairment policies can be found in the Corporation’s 2004 Annual Report on page 56 and in Notes 1, 7 and 8 to the consolidated financial statements.

8

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 2 — Investment Securities

     At September 30, 2005, investment securities having a carrying value of $1.9 billion were pledged where permitted or required by law to secure $584 million of liabilities, including public and other deposits, and derivative contracts. This included securities of $1.2 billion pledged with the Federal Reserve Bank to secure actual treasury tax and loan borrowings of $108 million at September 30, 2005, and potential borrowings of up to an additional $742 million. The remaining pledged securities of $686 million are primarily with state and local government agencies to secure $476 million of deposits and other liabilities, including deposits of the State of Michigan of $134 million at September 30, 2005.

Note 3 — Allowance for Loan Losses

     The following summarizes the changes in the allowance for loan losses:

	Nine Months Ended
	September 30,
(in millions)	2005			2004
Balance at beginning of period	$	673		$	803
Loans charged-off:
Commercial		77			162
Real estate construction
Real estate construction business line		1			2
Other		—			—
Total real estate construction		1			2
Commercial mortgage
Commercial real estate business line		4			—
Other		12			19
Total commercial mortgage		16			19
Residential mortgage		—			1
Consumer		12			9
Lease financing		19			9
International		11			11
Total loans charged-off		136			213
Recoveries:
Commercial		42			38
Real estate construction		—			—
Commercial mortgage		2			2
Residential mortgage		—			—
Consumer		3			2
Lease financing		—			1
International		1			11
Total recoveries		48			54
Net loans charged-off		88			159
Provision for loan losses		(27	)		85
Balance at end of period	$	558		$	729

9

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 3 — Allowance for Loan Losses (continued)

     SFAS No. 114, “Accounting by Creditors for Impairment of a Loan,” considers a loan impaired when it is probable that interest and principal payments will not be made in accordance with the contractual terms of the loan agreement. Consistent with this definition, all nonaccrual and reduced-rate loans (with the exception of residential mortgage and consumer loans) are impaired. Impaired loans that are restructured and meet the requirements to be on accrual status are included with total impaired loans for the remainder of the calendar year of the restructuring. There was one loan ($4 million) included in the $188 million of impaired loans at September 30, 2005 that was restructured and met the requirements to be on accrual status. Impaired loans averaged $191 million and $239 million for the three and nine month periods ended September 30, 2005, compared to $392 million and $448 million, respectively, for the comparable periods last year. The following presents information regarding the period-end balances of impaired loans:

	Nine Months Ended			Year Ended
(in millions)	September 30, 2005			December 31, 2004
Total period-end impaired loans	$	188		$	318
Less: Impaired loans restructured during the period on accrual status at period-end		(4	)		(8	)
Total period-end nonaccrual business loans	$	184		$	310
Period-end impaired loans requiring an allowance	$	184		$	306
Allowance allocated to impaired loans	$	67		$	88

     Those impaired loans not requiring an allowance represent loans for which the fair value exceeded the recorded investments in such loans.

10

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 4 — Medium- and Long-term Debt

     Medium- and long-term debt consisted of the following at September 30, 2005 and December 31, 2004:

(dollar amounts in millions)	September 30, 2005		December 31, 2004
Parent company
7.25% subordinated note due 2007	$	157	$	163
4.80% subordinated note due 2015		301		304
7.60% subordinated note due 2050		359		357
Total parent company		817		824
Subsidiaries
Subordinated notes:
7.25% subordinated note due 2007		207		216
6.00% subordinated note due 2008		260		270
6.875% subordinated note due 2008		105		109
8.50% subordinated note due 2009		104		107
7.65% subordinated note due 2010		—		256
7.125% subordinated note due 2013		162		169
5.70% subordinated note due 2014		258		262
5.20% subordinated note due 2017		248		—
8.375% subordinated note due 2024		191		197
7.875% subordinated note due 2026		201		200
9.98% subordinated note due 2026		58		58
Total subordinated notes		1,794		1,844
Medium-term notes due 2005 to 2007:
Floating rate based on LIBOR indices		200		385
2.95% fixed rate note		98		99
2.85% fixed rate note		98		99
Variable rate secured debt financing due 2007		1,044		1,017
Variable rate note due 2009		15		18
Total subsidiaries		3,249		3,462
Total medium- and long-term debt	$	4,066	$	4,286

     The carrying value of medium- and long-term debt has been adjusted to reflect the gain or loss attributable to the risk hedged.

     In March 2005, a subsidiary of the Corporation purchased an operations center building in Auburn Hills, Michigan. The Corporation previously leased the building from a third party. The purchase resulted in the addition of fixed assets of $36 million, a reduction in deferred rent credits of $26 million and the assumption of a mortgage payable with a fair value of $42 million. The assumed mortgage required payments of $4.3 million, payable in January and July of each year, including interest at a fixed rate of 7.91%, and would have matured July 1, 2010. On July 6, 2005, the Corporation paid-off the assumed mortgage for an amount that approximated its carrying value.

     In August 2005, Comerica Bank (the “Bank”), a subsidiary of the Corporation, exercised its option to redeem, at par, a $250 million, 7.65% Subordinated Note, which was classified in medium- and long-term debt.

     In August 2005, the Bank issued $250 million of 5.20% Subordinated Notes, which are classified in medium- and long-term debt. The notes pay interest on February 22 and August 22 of each year, beginning with February 22, 2006, and mature August 22, 2017. The Bank used the net proceeds for general corporate purposes.

11

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 5 — Income Taxes

     The provision for income taxes is computed by applying statutory federal income tax rates to income before income taxes as reported in the financial statements after deducting non-taxable items, principally income on bank-owned life insurance and interest income on state and municipal securities. State and foreign taxes are then added to the federal provision.

Note 6 — Accumulated Other Comprehensive Income (Loss)

     Other comprehensive income (loss) includes the change in net unrealized gains and losses on investment securities available-for-sale, the change in accumulated gains and losses on cash flow hedges, the change in the accumulated foreign currency translation adjustment, and the change in accumulated minimum pension liability adjustment. The Consolidated Statements of Changes in Shareholders’ Equity on page 5 include only combined other comprehensive income (loss), net of tax. The following table presents reconciliations of the components of accumulated other comprehensive income (loss) for the nine months ended September 30, 2005 and 2004. Total comprehensive income totaled $565 million and $452 million for the nine months ended September 30, 2005 and 2004, respectively, and $179 million and $254 million for the three months ended September 30, 2005 and 2004, respectively. The $113 million increase in total comprehensive income in the nine month period ended September 30, 2005, when compared to the same period in the prior year, resulted principally from an increase in net income ($104 million) and a decrease in net losses on cash flow hedges ($24 million), partially offset by an increase in net unrealized losses on investment securities available-for-sale ($16 million), due to changes in the interest rate environment.

	Nine Months Ended
	September 30,
(in millions)	2005			2004
Net unrealized gains (losses) on investment securities available-for-sale:
Balance at beginning of period, net of tax	$	(34	)	$	(23	)
Net unrealized holding gains (losses) arising during the period		(32	)		(7	)
Change in net unrealized gains (losses) before income taxes		(32	)		(7	)
Less: Provision for income taxes		(11	)		(2	)
Change in net unrealized gains (losses) on investment securities available-for- sale, net of tax		(21	)		(5	)
Balance at end of period, net of tax	$	(55	)	$	(28	)
Accumulated net gains (losses) on cash flow hedges:
Balance at beginning of period, net of tax	$	(16	)	$	114
Net cash flow hedge gains (losses) arising during the period		(89	)		13
Less: Reclassification adjustment for gains (losses) included in net income		14			154
Change in cash flow hedges before income taxes		(103	)		(141	)
Less: Provision for income taxes		(36	)		(50	)
Change in cash flow hedges, net of tax		(67	)		(91	)
Balance at end of period, net of tax	$	(83	)	$	23
Accumulated foreign currency translation adjustment:
Balance at beginning of period	$	(6	)	$	(4	)
Net translation gains (losses) arising during the period		(1	)		(1	)
Change in foreign currency translation adjustment		(1	)		(1	)
Balance at end of period	$	(7	)	$	(5	)
Accumulated minimum pension liability adjustment:
Balance at beginning of period, net of tax	$	(13	)	$	(13	)
Minimum pension liability adjustment arising during the period before income taxes		—			(2	)
Less: Provision for income taxes		—			(1	)
Change in minimum pension liability, net of tax		—			(1	)
Balance at end of period, net of tax	$	(13	)	$	(14	)
Total accumulated other comprehensive loss at end of period, net of tax	$	(158	)	$	(24	)

12

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 7 — Employee Benefit Plans

     Net periodic benefit costs are charged to “employee benefits expense” on the consolidated statements of income. The components of net periodic benefit cost for the Corporation’s qualified pension plan, non-qualified pension plan and postretirement benefit plan are as follows:

	Three Months Ended						Nine Months Ended
Qualified Defined Benefit Pension Plan	September 30,						September 30,
(in millions)	2005			2004			2005			2004
Service cost	$	7		$	6		$	22		$	18
Interest cost		14			13			41			38
Expected return on plan assets		(23	)		(21	)		(69	)		(63	)
Amortization of unrecognized prior service cost		2			—			5			1
Amortization of unrecognized net loss		5			3			15			9
Net periodic benefit cost	$	5		$	1		$	14		$	3

	Three Months Ended				Nine Months Ended
Non-Qualified Defined Benefit Pension Plan	September 30,				September 30,
(in millions)	2005		2004		2005			2004
Service cost	$	1	$	1	$	3		$	3
Interest cost		1		1		4			4
Amortization of unrecognized prior service cost		—		—		(1	)		—
Amortization of unrecognized net loss		1		1		3			2
Net periodic benefit cost	$	3	$	3	$	9		$	9

	Three Months Ended						Nine Months Ended
Postretirement Benefit Plan	September 30,						September 30,
(in millions)	2005			2004			2005			2004
Interest cost	$	1		$	2		$	3		$	4
Expected return on plan assets		(1	)		(1	)		(3	)		(3	)
Amortization of unrecognized transition obligation		1			1			3			3
Amortization of unrecognized net loss		1			—			1			—
Net periodic benefit cost	$	2		$	2		$	4		$	4

     The Corporation adopted the provisions of Financial Accounting Standards Board Staff Position 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003,” in the quarter ended September 30, 2004. This had an immaterial impact on net periodic benefit cost for the nine months ended September 30, 2005. For further information on the Corporation’s employee benefit plans, refer to Note 16 to the consolidated financial statements in the Corporation’s 2004 Annual Report.

13

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 8 — Derivatives and Foreign Exchange Contracts

     The following table presents the composition of derivative financial instruments and foreign exchange contracts, excluding commitments, held or issued for risk management purposes, and in connection with customer-initiated and other activities.

	September 30, 2005									December 31, 2004
	Notional/									Notional/
	Contract		Unrealized				Fair			Contract		Unrealized				Fair
	Amount		Gains		Unrealized		Value			Amount		Gains		Unrealized		Value
(in millions)	(1)		(2)		Losses		(3)			(1)		(2)		Losses		(3)
Risk management
Interest rate contracts:
Swaps — cash flow	$	10,100	$	—	$	145	$	(145	)	$	9,930	$	17	$	59	$	(42	)
Swaps — fair value		2,006		139		3		136			2,157		201		—		201
Total interest rate contracts		12,106		139		148		(9	)		12,087		218		59		159
Foreign exchange contracts:
Spot, forward and options		400		1		13		(12	)		376		19		1		18
Swaps		68		—		1		(1	)		58		—		1		(1	)
Total foreign exchange contracts		468		1		14		(13	)		434		19		2		17
Total risk management		12,574		140		162		(22	)		12,521		237		61		176
Customer-initiated and other
Interest rate contracts:
Caps and floors written		286		—		1		(1	)		301		—		2		(2	)
Caps and floors purchased		286		1		—		1			349		2		—		2
Swaps		2,827		24		18		6			1,726		20		16		4
Total interest rate contracts		3,399		25		19		6			2,376		22		18		4
Energy derivative contracts:
Caps and floors written		51		—		4		(4	)		—		—		—		—
Caps and floors purchased		51		4		—		4			—		—		—		—
Swaps		40		1		1		—			—		—		—		—
Total energy derivative contracts		142		5		5		—			—		—		—		—
Foreign exchange contracts:
Spot, forward and options		4,135		46		52		(6	)		3,290		117		112		5
Swaps		—		—		—		—			31		1		—		1
Total foreign exchange contracts		4,135		46		52		(6	)		3,321		118		112		6
Total customer-initiated and other		7,676		76		76		—			5,697		140		130		10
Total derivatives and foreign exchange contracts	$	20,250	$	216	$	238	$	(22	)	$	18,218	$	377	$	191	$	186

(1)	Notional or contract amounts, which represent the extent of involvement in the derivatives market, are generally used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk, and are not reflected in the consolidated balance sheets.
(2)	Unrealized gains represent receivables from derivative counterparties, and therefore exposes the Corporation to credit risk. This risk is measured as the cost to replace, at current market rates, contracts in a profitable position. Credit risk is calculated before consideration is given to bilateral collateral agreements or master netting arrangements that effectively reduce credit risk.
(3)	The fair values of derivatives and foreign exchange contracts generally represent the estimated amounts the Corporation would receive or pay to terminate or otherwise settle the contracts at the balance sheet date. The fair values of all derivatives and foreign exchange contracts are reflected in the consolidated balance sheets.

14

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 8 — Derivatives and Foreign Exchange Contracts (continued)

Risk Management

     Fluctuations in net interest income due to interest rate risk result from the composition of assets and liabilities and the mismatches in the timing of the repricing of these assets and liabilities. In addition, external factors such as interest rates, and the dynamics of yield curve and spread relationships can affect net interest income. The Corporation utilizes simulation analyses to project the sensitivity of net interest income to changes in interest rates. Cash instruments, such as investment securities, as well as derivative financial instruments, are employed to manage exposure to these and other risks, including liquidity risk.

     As an end-user, the Corporation accesses the interest rate markets to obtain derivative instruments for use principally in connection with asset and liability management activities. As part of a fair value hedging strategy, the Corporation entered into interest rate swap agreements for interest rate risk management purposes. The interest rate swap agreements effectively modify exposure to interest rate risk by converting fixed-rate deposits and debt to a floating rate. These agreements involve the receipt of fixed rate interest amounts in exchange for floating rate interest payments over the life of the agreement, without an exchange of the underlying principal amount. For instruments that support a fair value hedging strategy, no ineffectiveness was required to be recorded in the consolidated statements of income.

     As part of a cash flow hedging strategy, the Corporation entered into predominantly 2 to 3 year interest rate swap agreements (weighted average original maturity of 2.8 years) that effectively convert a portion of its existing and forecasted floating-rate loans to a fixed-rate basis, thus reducing the impact of interest rate changes on future interest income over the next 2 to 3 years. Approximately 24 percent ($10 billion) of outstanding loans were designated as hedged items to interest rate swap agreements at September 30, 2005. During the three and nine month periods ended September 30, 2005, interest rate swap agreements designated as cash flow hedges decreased interest and fees on loans by $5 million and increased interest and fees on loans by $14 million, respectively, compared to increases of $45 million and $154 million, respectively, for the comparable periods last year. Other noninterest income in both the three and nine month periods ended September 30, 2005 included $3 million of ineffective cash flow hedge losses. If interest rates, interest yield curves and notional amounts remain at their current levels, the Corporation expects to reclassify $51 million of net losses on derivative instruments from accumulated other comprehensive income to earnings during the next twelve months due to receipt of variable interest associated with the existing and forecasted floating-rate loans.

     Foreign exchange rate risk arises from changes in the value of certain assets and liabilities denominated in foreign currencies. The Corporation employs cash instruments, such as investment securities, as well as derivative financial instruments and foreign exchange contracts, to manage exposure to these and other risks. In addition, the Corporation uses foreign exchange forward and option contracts to protect the value of its foreign currency investment in foreign subsidiaries. Realized and unrealized gains and losses from foreign exchange forward and option contracts used to protect the value of investments in foreign subsidiaries are not included in the statement of income, but are shown in the accumulated foreign currency translation adjustment account included in other comprehensive income, with the related amounts due to or from counterparties included in other liabilities or other assets. During the three and nine month periods ended September 30, 2005, the Corporation recognized $1 million and $3 million, respectively, of net losses in accumulated foreign currency translation adjustment, related to the forward foreign exchange contracts.

     Management believes these strategies achieve the desired relationship between the rate maturities of assets and funding sources which, in turn, reduces the overall exposure of net interest income to interest rate risk, although, there can be no assurance that such strategies will be successful. The Corporation also uses various other types of financial instruments to mitigate interest rate and foreign currency risks associated with specific assets or liabilities, which are reflected in the preceding table. Such instruments include interest rate caps and floors, foreign exchange forward contracts, foreign exchange option contracts and foreign exchange cross-currency swaps.

15

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 8 — Derivatives and Foreign Exchange Contracts (continued)

     The following table summarizes the expected maturity distribution of the notional amount of risk management interest rate swaps and provides the weighted average interest rates associated with amounts to be received or paid on interest rate swap agreements as of September 30, 2005. Swaps have been grouped by the asset or liability designation.

Remaining Expected Maturity of Risk Management Interest Rate Swaps as of September 30, 2005:
(dollar amounts in millions)

																			Sept. 30,			Dec. 31,
																2010-			2005			2004
	2005			2006			2007			2008			2009			2026			Total			Total
Variable rate asset designation:
Generic receive fixed swaps	$	1,100		$	3,000		$	3,000		$	3,000		$	—		$	—		$	10,100		$	9,800
Weighted average: (1)
Receive rate		5.15	%		4.01	%		4.97	%		6.98	%		—	%		—	%		5.30	%		5.12	%
Pay rate		6.54			5.16			5.48			6.55			—			—			5.82			4.37
Fixed rate asset designation:
Amortizing pay fixed swaps	$	1		$	2		$	2		$	1		$	—		$	—		$	6		$	7
Weighted average: (2)
Receive rate		2.72	%		2.75	%		2.73	%		2.72	%		—	%		—	%		2.73	%		2.55	%
Pay rate		3.52			3.54			3.53			3.52			—			—			3.53			3.53
Fixed rate deposit designation:
Generic receive fixed swaps	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	30
Weighted average: (1)
Receive rate		—	%		—	%		—	%		—	%		—	%		—	%		—	%		1.42	%
Pay rate		—			—			—			—			—			—			—			2.44
Medium — and long-term debt designation:
Generic receive fixed swaps	$	—		$	100		$	450		$	350		$	100		$	1,000		$	2,000		$	2,250
Weighted average: (1)
Receive rate		—	%		2.95	%		5.82	%		6.17	%		6.06	%		6.18	%		5.93	%		6.05	%
Pay rate		—			3.86			3.75			3.59			3.50			3.66			3.67			2.30
Total notional amount	$	1,101		$	3,102		$	3,452		$	3,351		$	100		$	1,000		$	12,106		$	12,087

(1)	Variable rates paid on receive fixed swaps are based on prime and LIBOR (with various maturities) rates in effect at September 30, 2005.
(2)	Variable rates received are based on three-month and six-month LIBOR or one-month and three-month Canadian Dollar Offered Rate (CDOR) rates in effect at September 30, 2005.

16

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 8 — Derivatives and Foreign Exchange Contracts (continued)

     The Corporation had commitments to purchase investment securities for its trading account and available-for- sale portfolios totaling $12 million at September 30, 2005 and $4 million at December 31, 2004. Commitments to sell investment securities related to the trading account totaled $12 million at September 30, 2005 and $4 million at December 31, 2004. Outstanding commitments expose the Corporation to both credit and market risk.

Customer-Initiated and Other

     On a limited scale, fee income is earned from entering into various transactions, principally foreign exchange contracts and interest rate contracts at the request of customers. Market risk inherent in customer contracts is often mitigated by taking offsetting positions. The Corporation generally does not speculate in derivative financial instruments for the purpose of profiting in the short-term from favorable movements in market rates.

     Fair values for customer-initiated and other derivative and foreign exchange contracts represent the net unrealized gains or losses on such contracts and are recorded in the consolidated balance sheets. Changes in fair value are recognized in the consolidated income statements. The following table provides the average unrealized gains and unrealized losses and noninterest income generated on customer-initiated and other interest rate contracts and foreign exchange contracts.

	Nine Months Ended		Year Ended		Nine Months Ended
(in millions)	September 30, 2005		December 31, 2004		September 30, 2004
Average unrealized gains	$	79	$	81	$	70
Average unrealized losses		75		71		61
Noninterest income		28		34		26

Derivative and Foreign Exchange Activity

     The following table provides a reconciliation of the beginning and ending notional amounts for interest rate derivatives and foreign exchange contracts for the nine months ended September 30, 2005.

	Risk Management						Customer-Initiated and Other
				Foreign						Energy		Foreign
	Interest Rate			Exchange			Interest Rate			Derivative		Exchange
(in millions)	Contracts			Contracts			Contracts			Contracts		Contracts
Balance at January 1, 2005	$	12,087		$	434		$	2,376		$	—	$	3,321
Additions		3,000			12,515			1,671			142		86,215
Maturities/amortizations		(2,981	)		(12,481	)		(375	)		—		(85,401	)
Terminations		—			—			(273	)		—		—
Balance at September 30, 2005	$	12,106		$	468		$	3,399		$	142	$	4,135

     Additional information regarding the nature, terms and associated risks of the above derivatives and foreign exchange contracts, can be found in the Corporation’s 2004 Annual Report on page 49 and in Notes 1 and 20 to the consolidated financial statements.

17

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 9 — Standby and Commercial Letters of Credit and Financial Guarantees

     The total contractual amounts of standby letters of credit and financial guarantees and commercial letters of credit at September 30, 2005 and December 31, 2004, which represents the Corporation’s credit risk associated with these instruments, are shown in the table below.

(in millions)	September 30, 2005		December 31, 2004
Standby letters of credit and financial guarantees	$	6,262	$	6,326
Commercial letters of credit		300		340

     Standby and commercial letters of credit and financial guarantees represent conditional obligations of the Corporation to guarantee the performance of a customer to a third party. Standby letters of credit and financial guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. These contracts expire in decreasing amounts through the year 2015. Commercial letters of credit are issued to finance foreign or domestic trade transactions and are short-term in nature. The Corporation may enter into participation arrangements with third parties, that effectively reduce the maximum amount of future payments which may be required under standby letters of credit. These risk participations covered $573 million of the $6,262 million of standby letters of credit and financial guarantees outstanding at September 30, 2005. At September 30, 2005, the carrying value of the Corporation’s standby and commercial letters of credit and financial guarantees, which is included in “accrued expenses and other liabilities” on the consolidated balance sheet, totaled $68 million.

Note 10 — Contingent Liabilities

Tax Contingency

     In the ordinary course of business, the Corporation enters into certain transactions that have tax consequences. From time to time, the Internal Revenue Service (IRS) questions and/or challenges the tax position taken by the Corporation with respect to those transactions. The Corporation engaged in certain types of structured leasing transactions and a series of loans to foreign borrowers that the IRS is challenging. The Corporation believes that its tax position related to both transaction groups referred to above is proper based upon applicable statutes, regulations and case law in effect at the time of the transactions. The Corporation intends to defend its position vigorously in accordance with its view of the law controlling these activities. However, a court, or administrative authority, if presented with the transactions, could disagree with the Corporation’s interpretation of the tax law. The ultimate outcome is not known.

     Based on current knowledge and probability assessment of various potential outcomes, management believes that the current tax reserves determined in accordance with SFAS No. 5, “Accounting for Contingencies,” are adequate to cover the above matters and the amount of any incremental liability arising from these matters is not expected to have a material adverse effect on the Corporation’s consolidated financial condition or results of operations. Probabilities and outcomes are reviewed as events unfold, and adjustments to the reserves are made when necessary.

Lease Accounting Contingency

     A proposed FASB Staff Position (No. FAS 13-a) was issued in July 2005 to address the impact of a change or projected change in the timing of cash flows related to income taxes generated by a leveraged lease transaction. The proposed FASB Staff Position would require a recalculation of lease income for changes in the timing of expected cash flows related to income taxes, including interest and penalties. The recalculation could result in the recognition of a gain or loss in earnings and the reclassification of the lease to a direct financing lease. The impact on the Corporation will not be known until the FASB issues final accounting guidance.

     See “Part II. Item 1. Legal Proceedings” for information regarding the Corporation’s legal contingencies.

18

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 11 — Business Segment Information

     The Corporation has strategically aligned its operations into three major business segments: the Business Bank, Small Business & Personal Financial Services, and Wealth & Institutional Management. These business segments are differentiated based on the type of customer and the related products and services provided. In addition to the three major business segments, the Finance Division is also reported as a segment. The Finance segment includes the Corporation’s securities portfolio and asset and liability management activities. This segment is responsible for managing the Corporation’s funding, liquidity and capital needs, performing interest sensitivity analysis and executing various strategies to manage the Corporation’s exposure to liquidity, interest rate risk, and foreign exchange risk. The Other category includes divested business lines, the income and expense impact of equity, cash and loan loss reserves not assigned to specific business segments, tax benefits not assigned to specific business segments and miscellaneous other expenses of a corporate nature. The loan loss reserves in the Other category include the unallocated allowance for loan losses and the portion of the allowance allocated based on industry specific and international risks. Business segment results are produced by the Corporation’s internal management accounting system. This system measures financial results based on the internal business unit structure of the Corporation. Information presented is not necessarily comparable with similar information for any other financial institution. The management accounting system assigns balance sheet and income statement items to each line of business using certain methodologies, which are regularly reviewed and refined. For comparability purposes, amounts in all periods are based on lines of business and methodologies in effect at September 30, 2005. These methodologies may be modified as management accounting systems are enhanced and changes occur in the organizational structure or product lines.

     For a description of the business activities of each line of business and the methodologies, which form the basis for these results, refer to Note 24 in the Corporation’s 2004 Annual Report.

     A discussion of the financial results and the factors impacting performance for the nine months ended September 30, 2005 can be found in the section entitled “Business Segments” in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

19

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 11 — Business Segment Information (continued)

     Business segment financial results for the nine months ended September 30, 2005 and 2004 are shown in the table below.

							Small Business &						Wealth &
							Personal Financial						Institutional
(dollar amounts in millions)	Business Bank						Services						Management
Nine Months Ended September 30,	2005			2004			2005			2004			2005			2004
Earnings summary:
Net interest income (expense) (FTE)	$	1,054		$	1,039		$	451		$	436		$	111		$	111
Provision for loan losses		—			(3	)		6			9			(4	)		(1	)
Noninterest income		212			211			156			162			241			230
Noninterest expenses		484			440			397			376			256			242
Provision (benefit) for income taxes (FTE)		258			290			72			77			35			36
Net income (loss)	$	524		$	523		$	132		$	136		$	65		$	64
Net charge-offs	$	66		$	142		$	17		$	13		$	5		$	4
Selected average balances:
Assets	$	35,444		$	32,929		$	6,486		$	6,462		$	3,656		$	3,321
Loans		34,127			31,801			5,803			5,730			3,377			3,067
Deposits		20,372			19,434			16,814			16,722			2,472			2,541
Liabilities		21,174			20,086			16,812			16,714			2,479			2,551
Attributed equity		2,509			2,451			792			786			416			406
Statistical data:
Return on average assets (1)		1.97	%		2.12	%		1.00	%		1.04	%		2.36	%		2.54	%
Return on average attributed equity		27.84			28.47			22.20			23.05			20.71			20.72
Net interest margin (2)		4.11			4.34			3.59			3.48			4.35			4.80
Efficiency ratio		38.30			35.22			65.35			62.96			72.66			71.04

	Finance						Other						Total
Nine Months Ended September 30,	2005			2004			2005			2004			2005			2004
Earnings summary:
Net interest income (expense) (FTE)	$	(162	)	$	(238	)	$	4		$	(2	)	$	1,458		$	1,346
Provision for loan losses		—			—			(29	)		80			(27	)		85
Noninterest income		42			48			10			3			661			654
Noninterest expenses		—			—			42			55			1,179			1,113
Provision (benefit) for income taxes (FTE)		(52	)		(69	)		—			(82	)		313			252
Net income (loss)	$	(68	)	$	(121	)	$	1		$	(52	)	$	654		$	550
Net charge-offs	$	—		$	—		$	—		$	—		$	88		$	159
Selected average balances:
Assets	$	5,412		$	7,373		$	961		$	806		$	51,959		$	50,891
Loans		(17	)		(15	)		43			18			43,333			40,601
Deposits		654			1,369			45			17			40,357			40,083
Liabilities		6,082			6,278			316			233			46,863			45,862
Attributed equity		524			677			855			709			5,096			5,029
Statistical data:
Return on average assets (1)		N/M			N/M			N/M			N/M			1.68	%		1.44	%
Return on average attributed equity		N/M			N/M			N/M			N/M			17.11			14.57
Net interest margin (2)		N/M			N/M			N/M			N/M			4.08			3.82
Efficiency ratio		N/M			N/M			N/M			N/M			55.63			55.66

(1)	Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.
(2)	Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds. N/M — Not Meaningful

20

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 11 — Business Segment Information (continued)

     The Corporation’s management accounting system also produces geographic market segment results for the Corporation’s four primary geographic markets: Midwest & Other Markets, Western, Texas, and Florida.

     Midwest & Other Markets includes all markets in which the Corporation has operations except for the Western, Texas and Florida markets, as described below. Substantially all of the Corporation’s international operations are included in the Midwest & Other Markets segment. Currently, Michigan operations represent the significant majority of this geographic market.

     The Western market consists of the states of California, Arizona, Nevada, Colorado and Washington. Currently, California operations represent the significant majority of the Western market.

     The Texas and Florida markets consist of the states of Texas and Florida, respectively.

     The Finance & Other Businesses segment includes the Corporation’s securities portfolio, asset and liability management activities, divested business lines, the income and expense impact of equity, cash and loan loss reserves not assigned to specific business lines/market segments, tax benefits not assigned to specific business lines/market segments and miscellaneous other expenses of a corporate nature. This segment includes responsibility for managing the Corporation’s funding, liquidity and capital needs, performing interest sensitivity analysis and executing various strategies to manage the Corporation’s exposure to liquidity, interest rate risk and foreign exchange risk.

     A discussion of the market segment financial results and the factors impacting performance for the nine months ended September 30, 2005 can be found in the section entitled “Geographic Market Segments” in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

21

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 11 — Business Segment Information (continued)

     Market segment financial results for the nine months ended September 30, 2005 and 2004 are shown in the table below.

(dollar amounts in millions)	Midwest & Other Markets						Western						Texas
Nine Months Ended September 30,	2005			2004			2005			2004			2005			2004
Earnings summary:
Net interest income (expense) (FTE)	$	808		$	803		$	596		$	576		$	180		$	179
Provision for loan losses		33			(19	)		(25	)		26			(5	)		(4	)
Noninterest income		448			428			91			106			58			58
Noninterest expenses		666			643			312			269			137			130
Provision (benefit) for income taxes (FTE)		172			197			149			160			36			39
Net income (loss)	$	385		$	410		$	251		$	227		$	70		$	72
Net charge-offs	$	65		$	82		$	12		$	71		$	7		$	6
Selected average balances:
Assets	$	25,093		$	24,221		$	13,929		$	12,538		$	5,131		$	4,646
Loans		23,669			22,982			13,276			11,837			4,942			4,483
Deposits		18,880			19,080			16,833			15,561			3,651			3,844
Liabilities		19,646			19,741			16,876			15,563			3,651			3,838
Attributed equity		2,142			2,121			1,040			1,025			465			435
Statistical data:
Return on average assets (1)		2.05	%		2.26	%		1.87	%		1.82	%		1.79	%		2.06	%
Return on average attributed equity		24.00			25.79			32.22			29.47			19.83			22.00
Net interest margin (2)		4.52			4.63			4.73			4.94			4.84			5.32
Efficiency ratio		53.05			52.30			45.35			39.45			57.72			54.92

	Florida						Finance & Other Businesses						Total
Nine Months Ended September 30,	2005			2004			2005			2004			2005			2004
Earnings summary:
Net interest income (expense) (FTE)	$	32		$	28		$	(158	)	$	(240	)	$	1,458		$	1,346
Provision for loan losses		(1	)		2			(29	)		80			(27	)		85
Noninterest income		12			11			52			51			661			654
Noninterest expenses		22			16			42			55			1,179			1,113
Provision (benefit) for income taxes (FTE)		8			7			(52	)		(151	)		313			252
Net income (loss)	$	15		$	14		$	(67	)	$	(173	)	$	654		$	550
Net charge-offs	$	4		$	—		$	—		$	—		$	88		$	159
Selected average balances:
Assets	$	1,433		$	1,307		$	6,373		$	8,179		$	51,959		$	50,891
Loans		1,420			1,296			26			3			43,333			40,601
Deposits		294			212			699			1,386			40,357			40,083
Liabilities		292			209			6,398			6,511			46,863			45,862
Attributed equity		70			62			1,379			1,386			5,096			5,029
Statistical data:
Return on average assets (1)		1.34	%		1.40	%		N/M			N/M			1.68	%		1.44	%
Return on average attributed equity		27.31			29.37			N/M			N/M			17.11			14.57
Net interest margin (2)		3.02			2.93			N/M			N/M			4.08			3.82
Efficiency ratio		50.60			41.90			N/M			N/M			55.63			55.66

(1)	Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.
(2)	Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds. N/M — Not Meaningful

22

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 12 — Pending Transactions

     In July 2005, Munder Capital Management (“Munder”), a subsidiary of the Corporation, announced that Framlington Holdings Limited, which is 49 percent owned by Munder’s United Kingdom subsidiary, Munder UK, L.L.C., and 51 percent indirectly owned by HSBC Holdings plc, reached an agreement to sell its 90.8 percent interest in London-based Framlington Group Limited. The sale closed on October 31, 2005. The sale, net of associated costs and assigned goodwill, will result in a net after-tax gain of approximately $32 million in the fourth quarter 2005. The effects of the sale will be reflected in the Corporation’s Wealth & Institutional Management business segment. The carrying amount of the assets and liabilities to be disposed of as a result of this transaction are not material to the consolidated balance sheet at September 30, 2005. The Corporation has recognized $7 million in “equity in earnings of unconsolidated subsidiaries” on the consolidated statement of income for the nine months ended September 30, 2005 related to its investment in Framlington Group Limited.

     In September 2005, the Corporation announced it had reached an agreement to sell its Mexican bank charter. The cash sale is subject to regulatory approvals, and is currently expected to close in the fourth quarter 2005. Subject to market effects, the Corporation expects that the sale will result in a nominal after-tax gain. The effects of the sale will be reflected in the Corporation’s Business Bank business segment. As a result of this transaction, in accordance with SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” approximately $69 million of assets have been classified as assets held-for-sale which are included in “short-term investments” on the consolidated balance sheet at September 30, 2005. In addition, approximately $140 million of liabilities have been classified as liabilities held-for-sale which are included in “accrued expenses and other liabilities” on the consolidated balance sheet at September 30, 2005.

Note 13 — Pending Accounting Pronouncements

     In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment,” a revision of SFAS No. 123, “Accounting for Stock-Based Compensation.” SFAS No. 123(R) requires all stock-based compensation awards granted to employees be recognized in the financial statements at fair value. SFAS No. 123(R) will allow for two transition alternatives for public entities: modified-prospective transition or modified-retrospective transition. Under the modified-prospective transition method, companies would be required to recognize compensation cost for share-based payments to employees based on their grant-date fair value from the beginning of the fiscal period in which the recognition provisions are first applied. Measurement and attribution of compensation cost for awards that were granted prior to, but not vested as of the date SFAS No. 123(R) is adopted would be based on the same estimate of the grant-date fair value and the same attribution method used previously under SFAS No. 123. Prior periods would not be restated. Under the modified-retrospective transition method, companies would be allowed to restate prior periods by recognizing compensation cost in the amounts previously reported in the proforma footnote disclosures under the provisions of SFAS No. 123. See Note 1 to the consolidated financial statements for proforma footnote disclosures reported for the three and nine months ended September 30, 2005 and 2004. New awards and unvested awards would be accounted for in the same manner for both the modified-prospective and modified-retrospective methods.

     The Corporation’s current accounting policy is to record expense associated with stock options and restricted stock awards (stock-based compensation) over the explicit service period (vesting period). Upon retirement, any remaining unrecognized costs related to stock-based compensation retained after retirement are expensed. SFAS No. 123(R) requires that the expense associated with stock-based compensation be recorded over the requisite service period. The requisite service period is defined as the period during which an employee is required to provide service in order to vest the award. This guidance requires that all stock-based compensation must be expensed by the retirement eligible date (the date at which the employee is no longer required to perform any service to receive the stock-based compensation). Therefore, the requisite service period for both stock options and restricted stock is the period between grant date and retirement eligible date. Under the Corporation’s current stock option plan, retiring employees forfeit stock options granted in the calendar year of retirement, but retain all stock options granted in prior years (whether vested or unvested at retirement). Restricted stock grants stipulate that unvested shares are forfeited upon retirement or other termination of employment unless the Compensation Committee of the Board of Directors of the Corporation determines otherwise. In certain instances, after review of the specific circumstances, the Compensation Committee waived the forfeiture provision for individuals who were retirement eligible. In May 2005, the Securities and Exchange Commission (SEC) indicated that, as a result of the widespread practice of recognizing compensation cost over the explicit service period (up to the date of actual retirement), the SEC will accept that practice and, in those circumstances, will require a continuation of that practice for stock-based compensation awards granted prior to the adoption of SFAS No. 123(R).

23

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 13 — Pending Accounting Pronouncements (continued)

As such, the Corporation will begin expensing stock-based compensation awards by the retirement eligible date prospectively, beginning with stock-based compensation grants subsequent to the adoption of SFAS No. 123(R). Stock-based compensation expense, net of related tax effects, would have increased $1 million in both the three months ended September 30, 2005 and 2004, and $2 million in both the nine months ended September 30, 2005 and 2004, had the requisite service period provisions of SFAS No. 123(R) been applied on a historical basis.

     In April 2005, the SEC delayed the required adoption date of SFAS No. 123(R) for public companies to the beginning of the first annual period beginning after June 15, 2005. Early adoption will be permitted in periods in which financial statements have not yet been issued. In 2002, the Corporation adopted the fair value recognition provisions of SFAS No. 123 on a prospective basis. The Corporation is currently evaluating the guidance contained in SFAS No. 123(R) to determine the effect, if any, adoption of the guidance will have on the Corporation’s financial condition and results of operations.

24

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

     Net income for the three months ended September 30, 2005 was $238 million, an increase of $42 million, or 22 percent, from $196 million reported for the three months ended September 30, 2004. Quarterly diluted net income per share increased 25 percent to $1.41 in the third quarter 2005, compared to $1.13 in the same period a year ago. Return on average common shareholders’ equity was 18.59 percent and return on average assets was 1.78 percent for the third quarter 2005, compared to 15.68 percent and 1.55 percent, respectively, for the comparable quarter last year. The increase in earnings in the third quarter of 2005 over the comparable quarter last year resulted primarily from a $61 million increase in net interest income and a $30 million decrease in the provision for loan losses, partially offset by a $50 million increase in noninterest expenses.

     Net income for the first nine months of 2005 was $3.85 per diluted share, or $654 million, compared to $3.15 per diluted share, or $550 million, for the comparable period last year, increases of 22 percent and 19 percent, respectively. Return on average common shareholders’ equity was 17.11 percent and return on average assets was 1.68 percent for the first nine months of 2005, compared to 14.57 percent and 1.44 percent, respectively, for the first nine months of 2004. The increase in earnings for the nine months ended September 30, 2005 over the comparable period a year ago resulted primarily from a $112 million decrease in the provision for loan losses and a $111 million increase in net interest income, partially offset by a $66 million increase in noninterest expenses.

Net Interest Income

     The rate-volume analysis in Table I details the components of the change in net interest income on a fully taxable equivalent (FTE) basis for the quarter ended September 30, 2005. On a FTE basis, net interest income increased $61 million to $513 million for the three months ended September 30, 2005, from $452 million for the comparable quarter in 2004. Net interest income in the third quarter 2005 was impacted by the warrant accounting change discussed in Note 1 to the consolidated financial statements resulting in a $20 million increase in net interest income and a 16 basis point increase in the net interest margin, in the third quarter 2005. The $61 million increase in net interest income in the third quarter 2005, as compared to the same period in 2004, resulted primarily from an improvement in spreads on earning assets due to a greater contribution from noninterest-bearing deposits in a higher rate environment, the warrant accounting change discussed above, loan growth, and a change in the earning asset mix from short-term investments to loans. Average earning assets increased $2.6 billion, or six percent, when compared to the third quarter of last year. A $3.9 billion increase in average loans to $44.6 billion for the third quarter 2005 was partially offset by a $1.0 billion decline in average short-term investments, and a $290 million decline in average investment securities available-for-sale. The net interest margin (FTE) for the three months ended September 30, 2005 was 4.15 percent, as compared to 3.86 percent for the comparable period in 2004. The increase in the net interest margin (FTE) was due to the reasons cited above for the increase in net interest income. For further discussion of the effects of market rates on net interest income, refer to “Item 3. Quantitative and Qualitative Disclosures about Market Risk”.

     Table II provides an analysis of net interest income for the first nine months of 2005. On a FTE basis, net interest income for the nine months ended September 30, 2005 was $1,458 million, compared to $1,346 million for the same period in 2004, an increase of $112 million. Average earning assets increased two percent, to $47.7 billion, in the nine months ended September 30, 2005, when compared to the same period in the prior year. Average loans increased $2.7 billion, to $43.3 billion, while average short-term investments declined $1.4 billion and average investment securities available-for-sale declined $609 million. Net interest income in the third quarter 2005 was impacted by the warrant accounting change discussed in Note 1 to the consolidated financial statements resulting in a $20 million increase in net interest income and a six basis point increase in the net interest margin, in the nine months ended September 30, 2005. The net interest margin (FTE) for the nine months ended September 30, 2005 increased to 4.08 percent from 3.82 percent for the same period in 2004, due to the reasons cited in the quarterly discussion above.

     Net interest income and net interest margin are impacted by the operations of the Corporation’s Financial Services Division (FSD). FSD customers deposit large balances (primarily noninterest-bearing) with a wholly-owned bank subsidiary of the Corporation. The wholly-owned subsidiary bank pays certain customer service expenses (included in noninterest expenses on the consolidated statements of income) and/or makes low-rate loans (included in net interest income on the consolidated statements of income) to such customers. Footnote (2) to Tables I and II displays average FSD loans and deposits, with related interest income/expense and average rates.

25

     The impact on the net interest margin (FTE) of FSD loans (primarily low-rate loans), assuming the loans were funded by FSD noninterest-bearing deposits, was as follows:

	Impact on Net Interest Margin (FTE)
Three months ended September 30, 2005	(0.18	)%
Three months ended June 30, 2005	(0.09	)
Three months ended September 30, 2004	(0.09	)
Nine months ended September 30, 2005	(0.13	)
Nine months ended September 30, 2004	(0.07	)

     Management currently expects net interest margin to be about 3.90% for the fourth quarter 2005.

26

Table I — Quarterly Analysis of Net Interest Income & Rate/Volume (FTE)

	Three Months Ended
	September 30, 2005									September 30, 2004
	Average						Average			Average					Average
(dollar amounts in millions)	Balance			Interest			Rate			Balance			Interest		Rate
Commercial loans (2)	$	25,230		$	378			5.95	%	$	22,096		$	234		4.21	%
Real estate construction loans		3,202			60			7.40			3,273			46		5.58
Commercial mortgage loans (2)		8,631			138			6.37			7,951			104		5.22
Residential mortgage loans		1,418			20			5.76			1,239			18		5.63
Consumer loans		2,703			41			6.04			2,671			31		4.68
Lease financing		1,300			10			2.98			1,266			11		3.46
International loans		2,098			33			6.27			2,149			26		4.87
Business loan swap income		—			(5	)		—			—			45		—
Total loans		44,582			675			6.01			40,645			515		5.04
Investment securities available-for-sale (1)		3,935			38			3.80			4,225			36		3.31
Short-term investments		549			7			4.76			1,556			8		2.17
Total earning assets		49,066			720			5.82			46,426			559		4.78
Cash and due from banks		1,788									1,652
Allowance for loan losses		(601	)								(774	)
Accrued income and other assets		3,209									3,044
Total assets	$	53,462								$	50,348
Money market and NOW deposits (2)	$	16,987			89			2.09		$	17,526			47		1.06
Savings deposits (2)		1,531			2			0.52			1,652			1		0.36
Certificates of deposit (2)		5,912			44			2.92			5,826			26		1.79
Foreign office time deposits		1,110			12			4.21			718			5		2.76
Total interest-bearing deposits		25,540			147			2.28			25,722			79		1.22
Short-term borrowings		1,804			16			3.52			251			1		1.36
Medium- and long-term debt		4,144			44			4.26			4,462			27		2.45
Total interest-bearing sources		31,488			207			2.61			30,435			107		1.40
Noninterest-bearing deposits (2)		15,734									14,012
Accrued expenses and other liabilities		1,124									911
Common shareholders’ equity		5,116									4,990
Total liabilities and shareholders’ equity	$	53,462								$	50,348
Net interest income/rate spread (FTE)				$	513			3.21					$	452		3.38
FTE adjustment				$	1								$	1
Impact of net noninterest bearing sources of funds								0.94								0.48
Net interest margin (as a percentage of average earning assets) (FTE)								4.15	%							3.86	%

(1) Average rate based on average historical cost.
(2) FSD balances included above:
FSD loans (primarily low-rate loans)	$	2,334	$	2	0.42	%	$	1,151	$	2	0.50	%
FSD interest-bearing deposits		2,578		20	3.04			2,080		8	1.54
FSD noninterest-bearing deposits		6,430						5,080

27

Table I — Quarterly Analysis of Net Interest Income & Rate/Volume (FTE) (continued)

	Three Months Ended
	September 30, 2005/September 30, 2004
	Increase
	(Decrease)
	Due to		Increase (Decrease)			Net
(in millions)	Rate		Due to Volume *			Increase (Decrease)
Loans	$	102	$	58		$	160
Investments securities available-for-sale		5		(3	)		2
Short-term investments		8		(9	)		(1	)
Total earning assets		115		46			161
Interest-bearing deposits		66		2			68
Short-term borrowings		1		14			15
Medium and long-term debt		21		(4	)		17
Total interest-bearing sources		88		12			100
Net interest income/rate spread (FTE)	$	27	$	34		$	61

* Rate/Volume variances are allocated to variances due to volume.

28

Table II – Year-to-date Analysis of Net Interest Income & Rate/Volume (FTE)

	Nine Months Ended
	September 30, 2005								September 30, 2004
	Average					Average			Average					Average
(dollar amounts in millions)	Balance			Interest		Rate			Balance			Interest		Rate
Commercial loans (2)	$	24,207		$	993		5.48	%	$	21,997		$	669		4.06	%
Real estate construction loans		3,119			163		6.97			3,293			129		5.24
Commercial mortgage loans (2)		8,488			385		6.07			7,989			304		5.08
Residential mortgage loans		1,362			58		5.70			1,225			52		5.71
Consumer loans		2,703			115		5.70			2,650			92		4.62
Lease financing		1,281			36		3.72			1,276			39		4.05
International loans		2,173			95		5.82			2,171			73		4.46
Business loan swap income		—			14		—			—			154		—
Total loans		43,333			1,859		5.73			40,601			1,512		4.97
Investment securities available-for-sale (1)		3,802			107		3.69			4,411			111		3.32
Short-term investments		581			18		4.18			1,948			25		1.73
Total earning assets		47,716			1,984		5.55			46,960			1,648		4.68
Cash and due from banks		1,709								1,681
Allowance for loan losses		(644	)							(805	)
Accrued income and other assets		3,178								3,055
Total assets	$	51,959							$	50,891
Money market and NOW deposits (2)	$	17,326			235		1.81		$	17,772			131		0.99
Savings deposits (2)		1,560			6		0.45			1,636			5		0.38
Certificates of deposit (2)		5,661			110		2.60			6,110			76		1.66
Foreign office time deposits		855			26		4.08			655			12		2.47
Total interest-bearing deposits		25,402			377		1.98			26,173			224		1.14
Short-term borrowings		1,148			28		3.26			275			2		1.05
Medium- and long-term debt		4,244			121		3.82			4,607			76		2.22
Total interest-bearing sources		30,794			526		2.28			31,055			302		1.30
Noninterest-bearing deposits (2)		14,955								13,910
Accrued expenses and other liabilities		1,114								897
Common shareholders’ equity		5,096								5,029
Total liabilities and shareholders’ equity	$	51,959							$	50,891
Net interest income/rate spread (FTE)				$	1,458		3.27					$	1,346		3.38
FTE adjustment				$	3							$	2
Impact of net noninterest bearing sources of funds							0.81								0.44
Net interest margin (as a percentage of average earning assets) (FTE)							4.08	%							3.82	%

(1) Average rate based on average historical cost.
(2) FSD balances included above:
FSD loans (primarily low-rate loans)	$	1,598	$	5	0.48	%	$	808	$	3	0.52	%
FSD interest-bearing deposits		2,596		53	2.75			1,890		19	1.32
FSD noninterest-bearing deposits		5,846						5,180

29

Table II — Year-to-date Analysis of Net Interest Income & Rate/Volume (FTE) (continued)

	Nine Months Ended
	September 30, 2005/September 30, 2004
	Increase
	(Decrease)
	Due to		Increase (Decrease)			Net
(in millions)	Rate		Due to Volume *			Increase (Decrease)
Loans	$	233	$	114		$	347
Investments securities available-for-sale		13		(17	)		(4	)
Short-term investments		27		(34	)		(7	)
Total earning assets		273		63			336
Interest-bearing deposits		162		(9	)		153
Short-term borrowings		5		21			26
Medium and long-term debt		55		(10	)		45
Total interest-bearing sources		222		2			224
Net interest income/rate spread (FTE)	$	51	$	61		$	112

* Rate/Volume variances are allocated to variances due to volume.

30

Provision for Loan Losses

     The provision for loan losses was a credit of $30 million for the third quarter 2005, compared to no provision for the same period in 2004. The provision for the first nine months of 2005 was a credit of $27 million, compared to a charge of $85 million for the same period in 2004. The Corporation establishes this provision to maintain an adequate allowance for loan losses, which is discussed in the section entitled “Allowance for Loan Losses and Nonperforming Assets.” The decrease in the provision for loan losses in the three and nine month periods ended September 30, 2005 over the comparable period last year was primarily the result of improving credit quality trends. These trends reflected improving economic conditions in certain of the Corporation’s geographic markets. While the economic conditions in the Corporation’s Michigan market remained relatively flat over the last year, the economic conditions in both the Western and Texas markets have continued to improve in line with, or slightly better than, growth in the national economy. Forward-looking indicators suggest these economic conditions should continue for the remainder of 2005.

Noninterest Income

     Noninterest income was $232 million for the three months ended September 30, 2005, an increase of $26 million, or 13 percent, over the same period in 2004. Noninterest income in the third quarter 2005 included $13 million of income (net of write-downs) from unconsolidated venture capital and private equity investments and $3 million of risk management hedge ineffectiveness losses (from interest rate and foreign exchange contracts), compared to $3 million of income distributions (net of write-downs) from unconsolidated venture capital and private equity investments and nominal risk management hedge ineffectiveness gains in the third quarter 2004. In addition, net investment advisory revenue increased $6 million, to $14 million in the third quarter 2005, compared to $8 million in the third quarter 2004, due to significant increases in assets under management resulting from new customers. Service charges on deposit accounts were $55 million for the quarter ended September 30, 2005, a decrease of $2 million from the comparable quarter in 2004, primarily due to higher earning credit allowances, driven by a higher rate environment, provided to business customers. Service charge income to business customers accounted for 67 percent of total service charges on deposit accounts in the third quarter 2005. Non-sufficient funds and overdraft fees accounted for 32 percent and 29 percent of service charges on deposit accounts in the third quarter 2005 and 2004, respectively. Noninterest income in the third quarter 2004 also included $6 million of net securities losses, principally due to a credit-related write-down of an investment in a private equity fund that is consolidated on the Corporation’s consolidated balance sheet.

     For the first nine months of 2005, noninterest income was $661 million, an increase of $7 million, or one percent, from the first nine months of 2004. Noninterest income in the first nine months of 2005 included $8 million of income distributions (net of write-downs) from unconsolidated venture capital and private equity investments, compared to $10 million of income distributions (net of write-downs) for the first nine months of 2004. Service charges on deposit accounts declined $15 million, to $163 million in the nine months ended September 30, 2005, when compared to the same period in the prior year. The decline in service charges was for the same reasons noted in for the quarterly discussion above. Other activity-based fees, which include commercial loan and letter of credit fees, increased $10 million in the nine months ended September 30, 2005 when compared to the same period in 2004. Net investment advisory revenue increased $10 million, to $36 million in the nine months ended September 30, 2005 for the same reasons noted in the quarterly discussion above. Noninterest income in the nine months ended September 30, 2004 also included a $7 million net gain on the sale of a portion of the Corporation’s merchant card processing business.

     Management currently expects low-single digit growth in noninterest income in the full-year 2005, compared to 2004.

Noninterest Expenses

     Noninterest expenses were $422 million for the quarter ended September 30, 2005, an increase of $50 million, or 13 percent, from the comparable quarter in 2004. Salaries and employee benefits expense increased $30 million, or 13 percent, in the third quarter 2005, when compared to the third quarter 2004, primarily due to an increase in business unit incentives, including an accrual of $4 million related to the warrant accounting change discussed in Note 1 to the consolidated financial statements, annual merit increases, increased pension expense, and an increase in stock-based compensation. Stock-based compensation in the third quarter 2004 was impacted by a $7 million reduction due to employee forfeitures and revisions to the employee forfeiture assumptions for stock options. Severance expense was $1 million in both the third quarter 2005 and 2004. Customer services expense, which represents compensation provided to customers, was $29 million in the third quarter 2005, compared to $8 million for the same period in 2004. The amount of customer services expense varies from period to period as a result of changes in the level of noninterest-bearing

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deposits in the Corporation’s Financial Services Division and the earnings credit allowances provided on these deposits, as well as a competitive environment. Litigation and operational losses, which include traditionally defined operating losses, such as fraud and processing losses, as well as uninsured losses and losses triggered by litigation, declined $12 million in the third quarter 2005, when compared to the third quarter 2004. These expenses are subject to fluctuation due to the timing of insurance receipts and litigation settlements. Occupancy expenses declined in spite of new branches added in the last year, due in part to the purchase of a previously leased operations center in March 2005, which results in annual savings of $7 million, beginning April 2005.

     Noninterest expenses for the nine months ended September 30, 2005 were $1,179 million, an increase of $66 million, or six percent, from the first nine months of 2004. Salaries and employee benefits expense increased $46 million for the reasons cited in the quarterly discussion above. For the first nine months of 2005, severance expense was $3 million, compared to $8 million for the same period in 2004. Customer services expense increased $33 million, to $50 million in the first nine months of 2005, when compared to the same period in 2004 for the reasons cited in the quarterly discussion above. Litigation and operating losses declined $13 million in the nine months ended September 30, 2005, when compared to 2004 levels.

     Management currently expects a mid-single digit increase in noninterest expenses in the full-year 2005, compared to 2004. Management also expects customer services expense to be between $17 million and $20 million in the fourth quarter 2005.

Provision for Income Taxes

     The provision for income taxes for the third quarter 2005 was $114 million, compared to $89 million for the same period a year ago. The effective tax rate was 33 percent and 31 percent for the third quarter 2005 and 2004, respectively. The provision for the first nine months of 2005 was $310 million, compared to $250 million for the first nine months of 2004. The effective tax rate was 32 percent for the first nine months of 2005, compared to 31 percent for the first nine months of 2004. Taxes in the first nine months of 2004 were reduced by a $4 million (after-tax) adjustment to the state tax reserves that resulted from settlement of a tax liability with the state of California.

     Management currently expects the effective tax rate to be approximately 32 to 33 percent for the full-year 2005.

Business Segments

     The Corporation’s operations are strategically aligned into three major business segments: the Business Bank, Small Business & Personal Financial Services, and Wealth & Institutional Management. These business segments are differentiated based on the products and services provided. In addition to the three major business segments, the Finance Division is also reported as a segment. The Other category includes items not directly associated with these business segments or the Finance Division. Note 11 to the consolidated financial statements presents financial results of these businesses for the nine months ended September 30, 2005 and 2004. For a description of the business activities of each business segment and the methodologies, which form the basis for these results, refer to Note 24 in the Corporation’s 2004 Annual Report.

     The following table presents net income (loss) by business segment.

	Nine Months Ended
(dollar amounts in millions)	September 30, 2005					September 30, 2004
Business Bank	$	524		73	%	$	523		72	%
Small Business & Personal Financial Services		132		18			136		19
Wealth & Institutional Management		65		9			64		9
		721		100	%		723		100	%
Finance		(68	)				(121	)
Other		1					(52	)
	$	654				$	550

     The Business Bank’s net income of $524 million increased $1 million for the nine months ended September 30, 2005, compared to the nine months ended September 30, 2004. Net interest income (FTE) increased $15 million from the comparable prior year period. The increase in net interest income (FTE) was primarily due a $20 million

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adjustment related to the change in warrant accounting discussed in Note 1 to the consolidated financial statements and increased loan and deposit balances, partially offset by higher levels of low rate loans in the Financial Services Division and lower loan and deposit spreads that resulted from increased pricing competition. The provision for loan losses increased $3 million due to higher loan growth in the first nine months of 2005, compared to the same period in 2004, partially offset by an improvement in credit quality compared to the same period in 2004. Noninterest income of $212 million increased $1 million from the comparable period even though 2004 noninterest income included a $7 million gain on the sale of a portion of the Corporation’s merchant card processing business. Noninterest expenses increased $44 million, primarily due to a $33 million increase in customer services expense in the Financial Services Division and a $19 million increase in salaries and benefits expense, which included a $4 million business unit incentive accrual related to the warrant accounting change discussed in Note 1 to the consolidated financial statements. These increases in noninterest expenses were partially offset by a $5 million decrease in the provision for credit losses on lending-related commitments.

     Small Business & Personal Financial Services’ net income decreased $4 million, or three percent, to $132 million for the nine months ended September 30, 2005, compared to the nine months ended September 30, 2004. Net interest income (FTE) increased $15 million, primarily due to an increase in deposit balances, deposit spreads, and loan balances, partially offset by declines in loan spreads. The provision for loan losses decreased $3 million, primarily due to an improvement in Small Business credit quality. Noninterest income decreased $6 million, primarily due to a $6 million decrease in service charges on deposits. Noninterest expenses increased $21 million, primarily due to a $9 million increase in salaries and benefits expense, due in part, from the opening of seven new branches in the nine months ended September 30, 2005, and an $8 million increase in allocated net corporate overhead expenses.

     Wealth & Institutional Management’s net income increased $1 million, or 2 percent, to $65 million for the nine months ended September 30, 2005, compared to the nine months ended September 30, 2004. Net interest income (FTE) remained unchanged at $111 million as increases in loan balances were offset by declines in loan spreads and deposit balances. The provision for loan losses declined $3 million due to an improvement in Private Banking credit quality. Noninterest income increased $11 million, primarily due to a $10 million increase in investment advisory fees and a $4 million increase in personal trust fees. Noninterest expenses increased $14 million, primarily due to an $8 million increase in litigation and operational losses and a $4 million increase in other real estate expenses.

     The net loss in the Finance Division was $68 million for the nine months ended September 30, 2005, compared to a net loss of $121 million for the nine months ended September 30, 2004. Contributing to the decline in net loss was a $76 million increase in net interest income (FTE), primarily due to the rising rate environment in which interest income received from the lending-related business units rises more quickly than the longer-term value attributed to deposits generated by the business units. Offsetting the increase in net interest income (FTE) was a $6 million decrease in noninterest income due to a $3 million decline in gains on the disposal of securities and a $2 million decline in risk management hedge income.

     The net income in the Other category was $1 million for the nine months ended September 30, 2005, compared to a net loss of $52 million for the nine months ended September 30, 2004. The lower net loss was primarily due to a $109 million decrease in the loan loss provision not assigned to other segments. Noninterest income as of the nine months ended September 30, 2005 increased $7 million from the comparable period in 2004. The nine months ended September 30, 2004 included $6 million of net securities losses resulting from a credit-related write-down of an investment in a consolidated private equity fund. The remaining variance is due to timing differences between when corporate overhead expenses are reflected as a consolidated expense and when the expenses are allocated to other segments.

Geographic Market Segments

     The Corporation’s management accounting system also produces market segment results for the Corporation’s four primary geographic markets: Midwest & Other Markets, Western, Texas, and Florida. Note 11 to the consolidated financial statements presents financial results of these market segments for the nine months ended September 30, 2005 and 2004.

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     The following table presents net income (loss) by market segment.

	Nine Months Ended
(dollar amounts in millions)	September 30, 2005					September 30, 2004
Midwest & Other Markets	$	385		53	%	$	410		57	%
Western		251		35			227		31
Texas		70		10			72		10
Florida		15		2			14		2
		721		100	%		723		100	%
Finance & Other Businesses		(67	)				(173	)
	$	654				$	550

     The Midwest & Other Markets’ net income decreased $25 million, or six percent, to $385 million for the nine months ended September 30, 2005, compared to the nine months ended September 30, 2004. Net interest income (FTE) increased $5 million as increases in deposit spreads and loan balances were partially offset by decreases in loan spreads and deposit balances. The provision for loan losses increased $52 million due to higher loan growth in 2005 compared to the same period in 2004 and a smaller benefit from improving credit quality compared to the same period of 2004. Noninterest income increased $20 million, primarily due to a $10 million increase in investment advisory fees, a $5 million increase in letter of credit fees, and a $5 million increase in investment banking fees, partially offset by a $7 million decline in service charges on deposits. Noninterest expenses increased $23 million, primarily due to a $14 million increase in salaries and benefits expense, a $5 million increase in litigation and operational losses, and a $5 million increase in allocated net corporate overhead expenses.

     The Western market’s net income increased $24 million, or 11 percent, to $251 million for the nine months ended September 30, 2005, compared to $227 million for the nine months ended September 30, 2004. Net interest income (FTE) increased $20 million from the comparable prior year period. The increase in net interest income (FTE) was primarily due to a $20 million adjustment related to the warrant accounting change discussed in Note 1 to the consolidated financial statements and increased deposit balances, partially offset by higher levels of low-rate loans in the Financial Services Division. The provision for loan losses decreased $51 million, primarily due to improving credit quality. Noninterest income declined $15 million, primarily due to a $7 million gain on the sale of a portion of the Corporation’s merchant card processing business in the second quarter of 2004 and a $5 million decline in service charges on deposits. Noninterest expenses increased $43 million, primarily due to a $33 million increase in customer services expenses in the Financial Services Division and an $8 million increase in salaries and benefits, due in part, from the opening of four new branches in the nine months ended September 30, 2005,and a $4 million business unit incentive accrual related to the warrant accounting change discussed above.

     The Texas market’s net income decreased $2 million, or four percent, to $70 million for the nine months ended September 30, 2005, compared to the nine months ended September 30, 2004. Net interest income (FTE) increased $1 million. The provision for loan losses decreased $1 million as improving credit quality was partially offset by an increase in loan balances. Noninterest expenses increased $7 million, primarily due to a $5 million increase in salaries and benefits expense, due in part, from the opening of two new branches in the nine months ended September 30, 2005.

     The Florida market’s net income increased $1 million, or five percent, to $15 million for the nine months ended September 30, 2005, compared to the nine months ended September 30, 2004. Net interest income (FTE) increased $4 million, as increases in loan and deposit balances were partially offset by decreases in loan and deposit spreads. The provision for loan losses decreased $3 million, primarily due to improving credit quality. Noninterest income increased $1 million, while noninterest expenses increased $6 million due, in part, to a $3 million increase in operational losses.

     The net loss in the Finance and Other Businesses segment was $67 million for the nine months ended September 30, 2005, compared to a net loss of $173 million for the nine months ended September 30, 2004. Contributing to the decline in net loss was an $82 million increase in net interest income (FTE), primarily due to the rising rate environment in which interest income received from the lending-related business units rises more quickly than the longer-term value attributed to deposits generated by the business units. The provision for loan losses decreased $109 million due to a decrease in the loan loss provision not assigned to other segments. Noninterest income increased $1 million. 2005 includes a $2 million decline in risk management hedge income, while 2004 included $6 million of net securities losses resulting from a credit-related write-down of an investment in a consolidated private equity fund, and a $3 million gain on the disposal of securities. The remaining variance is due to timing differences between when corporate overhead

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expenses are reflected as a consolidated expense and when the expenses are allocated to other segments.

Financial Condition

     Total assets were $54.3 billion at September 30, 2005, compared to $51.8 billion at year-end 2004 and $53.0 billion at September 30, 2004. Total period-end loans increased $1.3 billion, or three percent, from December 31, 2004 to September 30, 2005. Within loans, on an average basis, there was growth in nearly all businesses and markets. Average loans grew in the Specialty Businesses (40 percent), Middle Market (7 percent), Global Corporate Banking (7 percent), and Small Business (5 percent) loan portfolios, from the fourth quarter 2004 to the third quarter 2005. The increase in average loans in the Specialty Businesses loan portfolio was primarily due to increases in average Financial Services Division (110 percent), technology and life sciences (31 percent) and energy (19 percent) loans. Short-term investments increased $389 million from December 31, 2004 to September 30, 2005, as a result of the significant increase in short-term deposits discussed below.

     Management currently expects high-single digit average loan growth when compared to 2004 levels. Excluding the Corporation’s FSD loan portfolio, management expects mid-single digit average loan growth when compared to 2004 levels. Management also expects FSD-related average low-rate loans to be higher in the fourth quarter 2005, compared to third quarter 2005 levels.

     Total liabilities increased $2.6 billion, or six percent, from $46.7 billion at December 31, 2004, to $49.3 billion at September 30, 2005. Total deposits increased seven percent to $43.7 billion at September 30, 2005, from $40.9 billion at year-end 2004. Deposits in the Corporation’s Financial Services Division, some of which are not expected to be long-lived, increased to $11.0 billion at September 30, 2005, from $8.5 billion at December 31, 2004, primarily due to continued strong mortgage business activity. Average deposits in the Corporation’s Financial Services Division were $9.0 billion in the third quarter 2005, compared to $8.0 billion in the fourth quarter 2004.

     Management expects FSD-related average noninterest-bearing deposits to be lower in the fourth quarter 2005, compared to third quarter 2005 levels.

Allowance for Loan Losses and Nonperforming Assets

     The allowance for loan losses represents management’s assessment of probable losses inherent in the Corporation’s loan portfolio. The allowance provides for probable losses that have been identified with specific customer relationships and for probable losses believed to be inherent in the loan portfolio, but that have not been specifically identified. Internal risk ratings are assigned to each business loan at the time of approval and are subject to subsequent periodic reviews by the Corporation’s senior management. The Corporation performs a detailed quarterly credit quality review on both large business and certain large personal purpose consumer and residential mortgage loans that have deteriorated below certain levels of credit risk, and may allocate a specific portion of the allowance to such loans based upon this review. The Corporation defines business loans as those belonging to the commercial, real estate construction, commercial mortgage, lease financing and international loan portfolios. A portion of the allowance is allocated to the remaining business loans by applying projected loss ratios, based on numerous factors identified below, to the loans within each risk rating. In addition, a portion of the allowance is allocated to these remaining loans based on industry specific and international risks inherent in certain portfolios, including portfolio exposures to automotive suppliers, retailers, contractors, technology-related, entertainment, air transportation and healthcare industries, Small Business Administration loans and certain Latin American risks. The portion of the allowance allocated to all other consumer and residential mortgage loans is determined by applying projected loss ratios to various segments of the loan portfolio. Projected loss ratios incorporate factors, such as recent charge-off experience, current economic conditions and trends, and trends with respect to past due and nonaccrual amounts, and are supported by underlying analysis, including information on migration and loss given default studies from each of the three major domestic geographic markets, as well as mapping to bond tables. The allocated portion of the allowance was $504 million at September 30, 2005, a decrease of $117 million from December 31, 2004. The decrease resulted primarily from the impact of favorable migration data on projected loss factors and a decrease in loan specific reserves.

     Actual loss ratios experienced in the future may vary from those projected. The uncertainty occurs because factors affecting the determination of probable losses inherent in the loan portfolio may exist which are not necessarily captured by the application of projected loss ratios or identified industry specific and international risks. An unallocated portion of the allowance is maintained to capture these probable losses. The unallocated allowance reflects management’s view that the allowance should recognize the margin for error inherent in the process of estimating expected loan losses. Factors that were considered in the evaluation of the adequacy of the Corporation’s unallocated allowance include the

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inherent imprecision of the risk rating system, and the risk associated with new customer relationships. The unallocated allowance associated with the margin for imprecision in the risk rating system is based on a historical evaluation of the accuracy of the risk ratings associated with loans, while the unallocated allowance due to new business migration risk is based on an evaluation of the risk of rating downgrades associated with loans that do not have a full year of payment history. The unallocated allowance was $54 million at September 30, 2005, an increase of $2 million from December 31, 2004. This increase was due, in part, to an increase in new customer relationships.

     The total allowance, including the unallocated amount, is available to absorb losses from any segment within the portfolio. Unanticipated economic events, including political, economic and regulatory instability in countries where the Corporation has a concentration of loans, could cause changes in the credit characteristics of the portfolio and result in an unanticipated increase in the allocated allowance. Inclusion of other industry specific and international portfolio exposures in the allocated allowance, as well as significant increases in the current portfolio exposures, could also increase the amount of the allocated allowance. Any of these events, or some combination, may result in the need for additional provision for loan losses in order to maintain an adequate allowance.

     At September 30, 2005, the allowance for loan losses was $558 million, a decrease of $115 million from $673 million at December 31, 2004. The allowance for loan losses as a percentage of total period-end loans decreased to 1.33 percent from 1.65 percent at December 31, 2004. The Corporation also had an allowance for credit losses on lending-related commitments of $14 million and $21 million, at September 30, 2005 and December 31, 2004, respectively, which is recorded in “accrued expenses and other liabilities” on the consolidated balance sheets. These lending-related commitments include unfunded loan commitments and letters of credit.

     Nonperforming assets at September 30, 2005 were $220 million, compared to $339 million at December 31, 2004, a decrease of $119 million, or 35 percent. The allowance for loan losses as a percentage of nonperforming assets increased to 253 percent at September 30, 2005, from 198 percent at December 31, 2004.

     Nonperforming assets at September 30, 2005 and December 31, 2004 were categorized as follows:

	September 30,		December 31,
(in millions)	2005		2004
Nonaccrual loans:
Commercial	$	81	$	161
Real estate construction:
Real estate construction business line		4		31
Other		—		3
Total real estate construction		4		34
Commercial mortgage:
Commercial real estate business line		9		6
Other		35		58
Total commercial mortgage		44		64
Residential mortgage		1		1
Consumer		1		1
Lease financing		39		15
International		16		36
Total nonaccrual loans		186		312
Reduced-rate loans		—		—
Total nonperforming loans		186		312
Other real estate		34		27
Nonaccrual debt securities		—		—
Total nonperforming assets	$	220	$	339
Loans past due 90 days or more and still accruing	$	14	$	15

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     The following table presents a summary of changes in nonaccrual loans.

	Three Months Ended
(in millions)	September 30, 2005			June 30, 2005			March 31, 2005
Nonaccrual loans at beginning of period	$	212		$	269		$	312
Loans transferred to nonaccrual (1)		81			47			66
Nonaccrual business loan gross charge-offs (2)		(40	)		(38	)		(42	)
Loans transferred to accrual status (1)		—			—			(4	)
Nonaccrual business loans sold (3)		(19	)		—			(14	)
Payments/Other (4)		(48	)		(66	)		(49	)
Nonaccrual loans at end of period	$	186		$	212		$	269
(1) Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(2) Analysis of gross loan charge-offs:
Nonaccrual business loans	$	40		$	38		$	42
Performing watch list loans		1			2			1
Consumer and residential mortgage loans		6			3			3
Total gross loan charge-offs	$	47		$	43		$	46
(3) Analysis of loans sold:
Nonaccrual business loans	$	19		$	—		$	14
Performing watch list loans sold		34			7			4
Total loans sold	$	53		$	7		$	18
(4) Net change related to nonaccrual loans with balances less than $2 million, other than business loan gross charge- offs and nonaccrual loans sold, are included in Payments/Other.

     Loans with balances greater than $2 million transferred to nonaccrual status were $81 million in the third quarter 2005, an increase of $34 million, or 72 percent, from $47 million in the second quarter 2005. There were two loans greater than $10 million transferred to nonaccrual during the third quarter of 2005. These loans totaled $48 million and were to companies in the airline ($36 million) and automotive ($13 million) industries.

     The following table presents a summary of total internally classified nonaccrual and watch list loans (generally consistent with regulatory defined special mention, substandard and doubtful loans) at September 30, 2005, June 30, 2005 and December 31, 2004. Total nonaccrual and watch list loans decreased both in dollars and as a percentage of the total loan portfolio, mostly from the decline in nonaccrual loans.

(dollar amounts in millions)	September 30, 2005			June 30, 2005			December 31, 2004
Total nonaccrual and watch list loans	$	2,058		$	2,166		$	2,245
As a percentage of total loans		4.9	%		5.0	%		5.5	%

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     The following table presents a summary of nonaccrual loans at September 30, 2005 and loans transferred to nonaccrual and net charge-offs during the three months ended September 30, 2005. Except as noted, the summary is based on the Standard Industrial Classification (SIC) code.

							Three Months Ended
(dollar amounts in millions)	September 30, 2005						September 30, 2005
										Net
					Loans Transferred					Charge-Offs
SIC Category	Nonaccrual Loans				To Nonaccrual (1)					(Recoveries)
Airline	$	39	21	%	$	44		54	%	$	13		63	%
Automotive (2)		38	20			13		16			7		36
Manufacturing		26	14			7		8			2		11
Real estate		22	12			6		8			—		(1	)
Services		22	12			9		11			4		17
Retail trade		7	4			—		—			—		1
Contractors		7	3			—		—			(3	)	(14	)
Wholesale trade		6	3			—		—			(1	)	(3	)
Entertainment		5	3			—		—			—		—
Technology-related		2	1			—		—			1		5
Consumer non-durables		1	1			—		—			(5	)	(27	)
Transportation		1	1			—		—			(1	)	(6	)
Other		10	5			2		3			4		18
Total	$	186	100	%	$	81		100	%	$	21		100	%

(1)

Based on an analysis of nonaccrual loans with book balances greater than $2 million.

(2)

The Corporation’s concentration of credit in the automotive industry includes both a dealer and non-dealer component. The loans which should be aggregated into a concentration of credit are those which react similarly to change in economic conditions. This aggregation involves the exercise of judgment. The non-dealer component of automotive industry concentration focuses on those customers directly affected by automotive production. Included are: (a) original equipment manufacturers and Tier 1 and Tier 2 suppliers that produce components used in vehicles and whose primary revenue source is automotive-related (primary defined as greater than 50%) and (b) other manufacturers that produce components used in vehicles and whose primary revenue source is automotive-related. Loans less than $1 million and loans recorded in the Small Business division were excluded from the definition.

        Shared National Credit Program (SNC) loans comprised approximately 10 percent of total nonaccrual loans at September 30, 2005 and 11 percent at December 31, 2004. SNC loans are facilities greater than $20 million shared by three or more federally supervised financial institutions which are reviewed by regulatory authorities at the agent bank level. SNC loans comprised approximately 15 percent and 13 percent of total loans at September 30, 2005 and December 31, 2004, respectively. There were no SNC loans included in the third quarter 2005 total net charge-offs.

        Net charge-offs for the third quarter 2005 were $21 million, or 0.18 percent of average total loans, compared with $33 million, or 0.33 percent, for the third quarter 2004. The carrying value of nonaccrual loans as a percentage of contractual value declined to 51 percent at September 30, 2005, compared to 54 percent at December 31, 2004. The provision for loan losses was a credit of $30 million for the third quarter 2005, compared to no provision for the same period in 2004.

        Management currently expects full-year 2005 net charge-offs to average loans of about 25 basis points.

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Capital

     Common shareholders’ equity was $5.1 billion at both September 30, 2005, and December 31, 2004. The following table presents a summary of changes in common shareholders’ equity in the first nine months of 2005:

(in millions)
Balance at January 1, 2005	$	5,105
Retention of retained earnings (net income less cash dividends declared)		377
Recognition of stock-based compensation expense		32
Net issuance of common stock under employee stock plans		45
Change in accumulated other comprehensive income
Cash flow hedges		(67	)
Investment securities available-for-sale		(21	)
Foreign currency translation adjustment		(1	)
Repurchase of approximately 6.5 million common shares in the open market		(379	)
Balance at September 30, 2005	$	5,091

See “Part II. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” for information regarding the Corporation’s stock repurchases.

     The Corporation’s capital ratios exceed minimum regulatory requirements as follows:

	September 30,			December 31,
	2005			2004
Tier 1 common capital ratio*		8.00	%		8.13	%
Tier 1 risk-based capital ratio (4.00% — minimum)*		8.62			8.77
Total risk-based capital ratio (8.00% — minimum)*		11.99			12.75
Leverage ratio (3.00% — minimum)*		10.10			10.37

* September 30, 2005 ratios are estimated.

     At September 30, 2005, the Corporation and its banking subsidiaries exceeded the ratios required to be considered “well capitalized” (tier 1 risk-based capital, total risk-based capital and leverage ratios greater than 6 percent, 10 percent and 5 percent, respectively).

     The Corporation expects to continue to be an active capital manager throughout 2005.

Critical Accounting Policies

     The Corporation’s consolidated financial statements are prepared based on the application of accounting policies, the most significant of which are described in Note 1 to the consolidated financial statements included in the Corporation’s 2004 Annual Report, as updated in Note 1 to the unaudited consolidated financial statements in this report. These policies require numerous estimates and strategic or economic assumptions, which may prove inaccurate or subject to variations. Changes in underlying factors, assumptions or estimates could have a material impact on the Corporation’s future financial condition and results of operations. The most critical of these significant accounting policies are the policies for allowance for loan losses, pension plan accounting and goodwill. These policies are reviewed with the Audit and Legal Committee of the Corporation’s Board of Directors and are discussed more fully on pages 54-57 of the Corporation’s 2004 Annual Report. As of the date of this report, the Corporation does not believe that there has been a material change in the nature or categories of its critical accounting policies or its estimates and assumptions from those discussed in its 2004 Annual Report.

39

Other Matters

     In July 2005, the department head and approximately 20 other employees in the Corporation’s Financial Services Division resigned their positions and took employment at another financial institution, Commercial Capital Bank (CCB). The Corporation is committed to the business of the Financial Services Division and to maintaining quality service to its customers. Numerous steps have been taken to mitigate the potential loss of customers. On July 28, 2005, Comerica Bank filed a complaint in the Superior Court for the County of San Francisco against CCB, Commercial Capital Bancorp Inc. and the employees who resigned in July 2005 and took employment with CCB. The complaint asserted various tort and contractual claims and sought monetary and injunctive relief.

     On August 1, 2005, a Temporary Restraining Order (TRO) was entered that enjoins the corporate and individual defendants from using or destroying Comerica Bank’s confidential customer or employee information and requires the defendants to immediately turn over any such information in their custody or control. On November 2, 2005, the court heard Comerica Bank’s request for a preliminary injunction and took the matter under advisement. The TRO will continue in effect until the court rules on Comerica Bank’s request. The ultimate result of the litigation and the impact that will result from the staff departures is not known.

Long-term Outlook

     The Corporation’s long-term objectives include: 5 to 7 percent of revenue growth, 2 to 3 percent noninterest expense growth, net charge-offs of 40 to 60 basis points, a 7 to 8 percent tier 1 common capital ratio and return on average common shareholders’ equity of 15 to 18 percent.

40

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

     Net interest income is the predominant source of revenue for the Corporation. Interest rate risk arises primarily through the Corporation’s core business activities of extending loans and accepting deposits. The Corporation actively manages its material exposure to interest rate risk. Management attempts to evaluate the effect of movements in interest rates on net interest income and uses interest rate swaps and other instruments to manage its interest rate risk exposure. The primary tool used by the Corporation in determining its exposure to interest rate risk is net interest income simulation analysis. The net interest income simulation analysis performed at the end of each quarter reflects changes to both interest rates and loan, investment and deposit volumes. Management evaluates “base” net interest income under what is believed to be the most likely balance sheet structure and interest rate environment. This “base” net interest income is then evaluated against interest rate scenarios that increase and decrease 200 basis points (but no lower than zero percent) from the most likely rate environment. For purposes of this analysis, the rise or decline in short-term interest rates occurs ratably over four months. The measurement of risk exposure at September 30, 2005 for a decline in short-term interest rates by 200 basis points identified approximately $53 million, or three percent, of forecasted net interest income at risk over the next 12 months. If short-term interest rates rise 200 basis points, forecasted net interest income would be enhanced by approximately $81 million, or four percent. Corresponding measures of risk exposure at December 31, 2004 were approximately $74 million, or four percent, of net interest income at risk for a decline in short-term interest rates by 200 basis points and an approximately $99 million, or five percent, enhancement of net interest income for a 200 basis point rise in rates. Corporate policy limits adverse change to no more than five percent of management’s most likely net interest income forecast and the Corporation is operating within this policy guideline.

     Secondarily, the Corporation utilizes an economic value of equity analysis and a traditional interest sensitivity gap measure as alternative measures of interest rate risk exposure. At September 30, 2005, all three measures of interest rate risk were within established corporate policy guidelines.

     At September 30, 2005, the Corporation had a $98 million portfolio of indirect (through funds) private equity and venture capital investments, and had commitments of $44 million to fund additional investments in future periods. The value of these investments is at risk to changes in equity markets, general economic conditions and a variety of other factors. The majority of these investments are not readily marketable and are reported in other assets. The investments are individually reviewed for impairment on a quarterly basis, by comparing the carrying value to the estimated fair value. The Corporation bases estimates of fair value for the majority of its indirect private equity and venture capital investments on the percentage ownership in the fair value of the entire fund, as reported by the fund management. In general, the Corporation does not have the benefit of the same information regarding the fund’s underlying investments as does fund management. Therefore, after indication that fund management adheres to accepted, sound and recognized valuation techniques, the Corporation generally utilizes the fair values assigned to the underlying portfolio investments by fund management. For those funds where fair value is not reported by fund management, the Corporation derives the fair value of the fund by estimating the fair value of each underlying investment in the fund. In addition to using qualitative information about each underlying investment, as provided by fund management, the Corporation gives consideration to information pertinent to the specific nature of the debt or equity investment, such as relevant market conditions, offering prices, operating results, financial conditions, exit strategy, and other qualitative information, as available. The uncertainty in the economy and equity markets may affect the values of the fund investments. Approximately 16 percent of the underlying debt and equity in these funds are to companies in the automotive industry.

     The Corporation holds a portfolio of approximately 800 warrants for non-marketable equity securities. These warrants are primarily from high technology, non-public companies obtained as part of the loan origination process. The warrant portfolio is recorded at fair value, as discussed in Note 1 to the consolidated financial statements. Fair value was determined using a Black-Scholes valuation model, which has four inputs: risk free rate, term, volatility, and stock price. Key assumptions used in the valuation were as follows. The risk free rate was estimated using the US treasury rate, as of the valuation date, corresponding with the expected term of the warrant. The Corporation used an expected term of one half of the remaining contractual term, which approximates 7 years. Volatility was estimated using an index of comparable publicly traded companies, which was based on the Standard Industrial Classification codes. For a substantial majority of the subject companies, an index method was utilized to estimate stock price. Under the index method, the subject companies’ values were “rolled-forward” from the inception date through the valuation date based on the change in value of an underlying index of guideline public companies. For the remaining companies, where the Corporation retains a lending relationship and where sufficient financial data existed, a market approach method was utilized. The value of these warrants is at risk to changes in equity markets, general economic conditions and a variety of other factors.

     Certain components of the Corporation’s noninterest income, primarily fiduciary income and investment

41

advisory revenue, are at risk to fluctuations in the market values of underlying assets, particularly equity securities. Other components of noninterest income, primarily brokerage fees, are at risk to changes in the level of market activity.

     For further discussion of market risk, see Note 7 and pages 47-53 of the Corporation’s 2004 Annual Report.

ITEM 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures. Management has evaluated, with the participation of the Corporation’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the Corporation’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on the evaluation, the Corporation’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, the Corporation’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Corporation in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

(b) Changes in Internal Controls. During the period to which this report relates, there have not been any changes in the Corporation’s internal controls over financial reporting that have materially affected, or that are reasonably likely to materially affect, such controls.

Forward-looking statements

     This report includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. In addition, the Corporation may make other written and oral communication from time to time that contain such statements. All statements regarding the Corporation’s expected financial position, strategies and growth prospects and general economic conditions expected to exist in the future are forward-looking statements. The words, “anticipates,” “believes,” “feels,” “expects,” “estimates,” “seeks,” “strives,” “plans,” “intends,” “outlook,” “forecast,” “position,” “target,” “mission,” “assume,” “achievable,” “potential,” “strategy,” “goal,” “aspiration,” “outcome,” “continue,” “remain,” “maintain,” “trend,” “objective,” and variations of such words and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions as they relate to the Corporation or its management, are intended to identify forward-looking statements.

     The Corporation cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date the statement is made, and the Corporation does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

     In addition to factors mentioned elsewhere in this report or previously disclosed in the Corporation’s SEC reports (accessible on the SEC’s website at www.sec.gov or on the Corporation’s website at www.comerica.com), the following factors, among others, could cause actual results to differ materially from forward-looking statements and future results could differ materially from historical performance. The Corporation cautions that these factors are not exclusive.

• general political, economic or industry conditions, either domestically or internationally, may be less favorable than expected;

• developments concerning credit quality in various industry sectors may result in an increase in the level of the Corporation’s provision for credit losses, nonperforming assets, net charge-offs and reserve for credit losses;

• industries in which the Corporation has lending concentrations, including, but not limited to, the automotive production industry, could suffer a significant decline which could adversely affect the Corporation;

• demand for commercial loans and investment advisory products may not accelerate as expected;

• the mix of interest rates and maturities of the Corporation’s interest earning assets and interest-bearing liabilities (primarily loans and deposits) may be less favorable than expected;

• interest rate margin changes may be greater than expected;

42

• there could be fluctuations in inflation or interest rates;

• there could be changes in trade, monetary and fiscal policies, including, but not limited to, the interest rate policies of the Board of Governors of the Federal Reserve System;

• customer borrowing, repayment, investment and deposit practices generally may be different than anticipated;

• management’s ability to maintain and expand customer relationships may differ from expectations;

• management’s ability to retain key officers and employees may change;

• the introductions, withdrawal, success and timing of business initiatives and strategies, including, but not limited to the opening of new branches or private banking offices, and plans to grow personal financial services and wealth management, may be less successful or may be different than anticipated;

• competitive product and pricing pressures among financial institutions within the Corporation’s markets may change;

• legal and regulatory proceedings and related matters with respect to the financial services industry, including those directly involving the Corporation and its subsidiaries, could adversely affect the Corporation or the financial services industry in general;

• instruments, systems and strategies used to hedge or otherwise manage exposure to various types of credit, market and liquidity, operational, compliance and business risks and enterprise-wide risk could be less effective than anticipated, and the Corporation may not be able to effectively mitigate its risk exposures in particular market environments or against particular types of risk;

• there could be terrorist activities or other hostilities, which may adversely affect the general economy, financial and capital markets, specific industries, and the Corporation;

• there could be natural disasters, including, but not limited to, hurricanes, tornadoes, earthquakes and floods, which may adversely affect the general economy, financial and capital markets, specific industries, and the Corporation;

• there could be changes in applicable laws and regulations, including, but not limited to, those concerning taxes, banking, securities, and insurance; and

• there could be adverse conditions in the stock market.

43

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

     The Corporation and certain of its subsidiaries are subject to various pending or threatened legal proceedings arising out of the normal course of business or operations. In view of the inherent difficulty of predicting the outcome of such matters, the Corporation cannot state what the eventual outcome of these matters will be. However, based on current knowledge and after consultation with legal counsel, management believes that current reserves, determined in accordance with SFAS No. 5, “Accounting for Contingencies,” are adequate and the amount of any incremental liability arising from these matters is not expected to have a material adverse effect on the Corporation’s consolidated financial condition or results of operations.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

     On March 23, 2004, the Board of Directors of the Corporation (the “Board”) authorized the purchase of up to 10 million shares of Comerica Incorporated outstanding common stock. On July 26, 2005, the Board authorized the purchase of up to an additional 10 million shares of Comerica Incorporated outstanding common stock. Substantially all shares purchased as part of the Corporation’s publicly announced repurchase program were transacted in the open market and were within the scope of Rule 10b-18, which provides a safe harbor for purchases in a given day if an issuer of equity securities satisfies the manner, timing, price and volume conditions of the rule when purchasing its own common shares in the open market. There is no expiration date for the Corporation’s share repurchase program. The following table summarizes the Corporation’s share repurchase activity for the nine months ended September 30, 2005.

					Total Number of Shares
	Total Number				Purchased as Part of Publicly		Remaining Share
(shares in millions)	of Shares		Average Price		Announced Repurchase Plans		Repurchase
Month Ended	Repurchased		Paid Per Share		or Programs		Authorization (1)
January 31, 2005		0.2	$	57.11		0.2		8.1
February 28, 2005		0.7		57.90		0.7		7.4
March 31, 2005		1.2		55.91		1.2		6.2
April 30, 2005		0.2		56.25		0.2		6.0
May 31, 2005		0.9		56.70		0.9		5.1
June 30, 2005		0.9		57.43		0.9		4.2
July 31, 2005 (2)		—		62.39		—		14.1
August 31, 2005		0.8		60.10		0.8		13.3
September 30, 2005		1.6		60.17		1.6		11.7
Total		6.5	$	58.09		6.5		11.7

(1)	Maximum number of shares that may yet be purchased under the plans or programs.
(2)	Remaining share repurchase authorization includes the July 26, 2005, Board resolution for the repurchase of an additional 10 million shares.

44

ITEM 6. Exhibits

Exhibits

(10.1)	Comerica Incorporated Amended and Restated Incentive Plan for Non-Employee Directors (as corrected)
(10.2)	Form of Employment Agreement (Executive Vice President version), as entered into between the Corporation and certain executive officers of the Corporation, and a schedule of the executive officers of the Corporation having such an agreement with the Corporation
(10.3)	Form of Employment Agreement (Senior Vice President version), as entered into between the Corporation and certain executive officers of the Corporation, and a schedule of the executive officers of the Corporation having such an agreement with the Corporation
(10.4)	Implementation Agreement dated July 28, 2005 between Framlington Holdings Limited, Guarantors as named in the Agreement and AXA Investment Managers SA (restated to reflect amendments on September 7, 2005)
(10.5)	Second Amendment Agreement dated October 31, 2005 in relation to an Implementation Agreement dated July 28, 2005 (as amended on September 7, 2005)
(10.6)	Cash Offer dated July 27, 2005 by AXA Investment Managers S.A. for the Entire Issued Share Capital of Framlington Group Limited
(10.7)	Form of Acceptance relating to the Cash Offer by AXA Investment Managers S.A. for the Entire Issued Share Capital of Framlington Group Limited
(11)	Statement re: Computation of Net Income Per Common Share
(31.1)	Chairman, President and CEO Rule 13a-14(a)/15d-14(a) Certification of Periodic Report (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)
(31.2)	Executive Vice President and CFO Rule 13a-14(a)/15d-14(a) Certification of Periodic Report (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)
(32)	Section 1350 Certification of Periodic Report (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

45

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

COMERICA INCORPORATED
(Registrant)

/s/ Elizabeth S. Acton

Elizabeth S. Acton
Executive Vice President and
Chief Financial Officer

/s/ Marvin J. Elenbaas

Marvin J. Elenbaas
Senior Vice President and Controller
(Principal Accounting Officer)

Date: November 3, 2005

46

EXHIBIT INDEX

Exhibit
No.	Description
10.1	Comerica Incorporated Amended and Restated Incentive Plan for Non-Employee Directors (as corrected)
10.2	Form of Employment Agreement (Executive Vice President version), as entered into between the Corporation and certain executive officers of the Corporation, and a schedule of the executive officers of the Corporation having such an agreement with the Corporation
10.3	Form of Employment Agreement (Senior Vice President version), as entered into between the Corporation and certain executive officers of the Corporation, and a schedule of the executive officers of the Corporation having such an agreement with the Corporation
10.4	Implementation Agreement dated July 28, 2005 between Framlington Holdings Limited, Guarantors as named in the Agreement and AXA Investment Managers SA (restated to reflect amendments on September 7, 2005)
10.5	Second Amendment Agreement dated October 31, 2005 in relation to an Implementation Agreement dated July 28, 2005 (as amended on September 7, 2005)
10.6	Cash Offer dated July 27, 2005 by AXA Investment Managers S.A. for the Entire Issued Share Capital of Framlington Group Limited
10.7	Form of Acceptance relating to the Cash Offer by AXA Investment Managers S.A. for the Entire Issued Share Capital of Framlington Group Limited
11	Statement re: Computation of Net Income Per Common Share
31.1	Chairman, President and CEO Rule 13a-14(a)/15d-14(a) Certification of Periodic Report (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)
31.2	Executive Vice President and CFO Rule 13a-14(a)/15d-14(a) Certification of Periodic Report (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)
32	Section 1350 Certification of Periodic Report (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

EX-10.1

                                                                    EXHIBIT 10.1

- -     Original Plan approved by the Corporate Governance and Nominating
      Committee on March 23, 2004, by the Board of Directors on March 23, 2004
      and by the Stockholders on May 18, 2004

- -     This Amended and Restated Plan approved by the Corporate Governance and
      Nominating Committee on July 26, 2005 and by the Board of Directors on
      July 26, 2005

                              COMERICA INCORPORATED

                       AMENDED AND RESTATED INCENTIVE PLAN

                                       FOR

                             NON-EMPLOYEE DIRECTORS

                                       1


                              COMERICA INCORPORATED
         AMENDED AND RESTATED INCENTIVE PLAN FOR NON-EMPLOYEE DIRECTORS

                                TABLE OF CONTENTS

                                                                
SECTION I - PURPOSE..............................................   1
SECTION II - DEFINITIONS........................................    1
SECTION III - ADMINISTRATION....................................    3
SECTION IV - COMMON STOCK SUBJECT TO PLAN.......................    4
SECTION V - AWARDS..............................................    5
SECTION VI - CHANGE OF CONTROL PROVISIONS.......................   11
SECTION VII - TERMINATION AND AMENDMENT.........................   12
SECTION VIII - UNFUNDED STATUS OF PLAN..........................   13
SECTION IX - GENERAL PROVISIONS.................................   13
SECTION X - EFFECTIVE DATE OF PLAN..............................   15



                                       2


                              COMERICA INCORPORATED
                       AMENDED AND RESTATED INCENTIVE PLAN
                           FOR NON-EMPLOYEE DIRECTORS

SECTION I - PURPOSE

      The purpose of this Comerica Incorporated Amended and Restated Incentive
Plan for Non-Employee Directors is to promote the continued prosperity of
Comerica Incorporated by aligning the financial interests of the recipients of
awards hereunder with those of the stockholders of Comerica Incorporated, to
provide an additional incentive for such individuals to remain as directors, and
to provide a means through which Comerica Incorporated may attract
well-qualified individuals to serve as directors.

      This Plan is amended and restated to comply with the new Internal Revenue
Code ("Code") Section 409A and any interpretive authorities promulgated
thereunder. Such compliance extends to any Awards granted on or after January 1,
2005.

SECTION II - DEFINITIONS

      For purposes of this Comerica Incorporated Amended and Restated Incentive
Plan for Non-Employee Directors, the following terms are defined as set forth
below:

      A. "Affiliate" means (i) any entity that is controlled by the Corporation,
whether directly or indirectly, or (ii) any entity in which the Corporation has
a significant equity interest, as determined by the Committee.

      B. "Award" means an Option Award, a Stock Appreciation Right Award, a
Restricted Stock Award, a Restricted Stock Unit Award or any Other Equity-Based
Award.

      C. "Award Agreement" means a written document setting forth the terms and
conditions of an Award.

      D. "Beneficiary Designation Form" means the form used to designate the
Participant's beneficiary(ies) to whom any amounts payable in the event of the
Participant's death are to be paid and by whom any rights of the Participant,
after the Participant's death, may be exercised, as such form may be modified by
the Committee from time to time.

      E. "Board" means the Board of Directors of the Corporation.

      F. "Change of Control" means a change in the ownership or effective
control of the corporation, or in the ownership of a substantial portion of the
assets of the corporation, as defined in Code Section 409A and any interpretive
authorities promulgated thereunder.

                                       3


      G. "Code" means the Internal Revenue Code of 1986, as amended, including
Regulations promulgated thereunder.

      H. "Committee" means the Corporate Governance and Nominating Committee or
such other committee of the Board as the Board may from time to time designate.

      I. "Common Stock" means common stock, par value $5.00 per share, of the
Corporation.

      J. "Corporation" means Comerica Incorporated, a Delaware corporation.

      K. "Disability" means any medically determinable physical or mental
impairment of any person(s) who is unable to engage in any substantial gainful
activity which can be expected to result in death or can be expected to last for
a continuous period of not less than 12 months.

      L. "Eligible Director" means any individual serving as a member of the
Board who is not an employee of the Corporation or any of its Subsidiaries or
Affiliates.

      M. "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.

      N. "Fair Market Value" means, as of any given date, the closing price of
Common Stock on the New York Stock Exchange, Inc. on that date, or if the Common
Stock was not traded on the New York Stock Exchange, Inc. on such date, then on
the last preceding date on which the Common Stock was traded. If Fair Market
Value for any date in question cannot be determined as provided above, then Fair
Market Value shall be determined by the Committee, provided that the Committee
uses a reasonable valuation method.

      O. "Option" means a right to purchase a specified number of shares of
Common Stock during a specified period pursuant to such terms as are determined
by the Committee and as may be set forth in the applicable Award Agreement.

      P. "Option Award" means an Award granted under Section V(A)(1).

      Q. "Other Equity-Based Award" means an Award granted under Section
V(A)(5).

      R. "Participant" means any individual who has received an Award.

      S. "Plan" means the Comerica Incorporated Amended and Restated Incentive
Plan for Non-Employee Directors, as set forth herein and as hereinafter amended
and/or restated from time to time.

                                       4


      T. "Restricted Stock" means shares of Common Stock that are subject to
certain conditions and restrictions, as determined by the Committee and as may
be set forth in the applicable Award Agreement.

      U. "Restricted Stock Award" means an Award granted under Section V(A)(3).

      V. "Restricted Stock Unit" or "Unit" means a unit equivalent to a share of
Common Stock that is subject to certain conditions and restrictions, as
determined by the Committee and as may be set forth in the applicable Award
Agreement.

      W. "Restricted Stock Unit Award" means an Award granted under Section
V(A)(4).

      X. "Retirement" means the date of the next annual shareholder's meeting of
the Corporation immediately following the Director's 70th birthday.

      Y. "Section" means, unless otherwise specified, a Section of the Plan.

      Z. "Stock Appreciation Right" means a right to receive payment in shares
of Common Stock equal to the excess of the Fair Market Value of a specified
number of shares of Common Stock on the date the Stock Appreciation Right is
exercised (or, if the Committee shall so determine, at any time during a
specified period before or after the date of exercise) over the grant price of
the Stock Appreciation Right as specified by the Committee, which price shall
not be less than the Fair Market Value of the same number of shares of Common
Stock on the date(s) of grant of the Stock Appreciation Right.

      AA. "Stock Appreciation Right Award" means an Award granted under Section
V(A)(2).

      BB. "Subsidiary" means any corporation, partnership or other entity, a
majority of whose stock or interest is owned, directly or indirectly, by the
Corporation.

SECTION III - ADMINISTRATION

      A. The Plan shall be administered by the Committee; provided, that the
Board shall have the authority to exercise any and all duties and
responsibilities assigned to the Committee under the Plan. Among other things,
the Committee shall have the authority, subject to the terms of the Plan, to
determine the type or types of Award(s), if any, to be granted to an Eligible
Director, to grant Awards to Eligible Directors, to determine the number of
shares of Common Stock or Units to be covered by each such Award and otherwise
to determine the terms and conditions thereof, and to amend such terms and
conditions at any time and from time to time. Awards may be granted singly or in
any combination; however, no combination of Awards may be given if such
combination would constitute a tandem arrangement as defined in Code Section

                                       5


409A and any interpretive authorities promulgated thereunder. Awards granted
under the Plan shall be evidenced by Award Agreements that set forth the terms
and conditions for the respective Award, which may include, among other things,
the provisions applicable in the event the Participant's membership on the Board
terminates. The Committee may, but need not, require the execution by a
Participant of any such Award Agreement. Acceptance of the Award by the
respective Participant shall constitute acceptance of the terms and conditions
of the Award, including, without limitation, those set forth in the Award
Agreement and the Plan.

      B. The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any Award Agreement relating
thereto) and to otherwise supervise the administration of the Plan. This
includes the power and authority to comply with the withholding and reporting
requirements of Code Section 409A and any interpretive authorities promulgated
thereunder.

      C. Determinations of the Committee shall be made by a majority vote of its
members at a meeting at which a quorum is present or pursuant to a unanimous
written consent of its members.

      D. The Committee may delegate all or any portion of its responsibilities
and powers to any one or more of its members and may delegate all or any part of
its responsibilities and powers to any person or persons selected by it;
provided, that no such delegation may be made that would cause Awards or other
transactions under the Plan to cease to be exempt from Section 16(b) of the
Exchange Act or that is prohibited by applicable law or the applicable rules of
the New York Stock Exchange, Inc. (or the applicable rules of such other
securities exchange as may at the time of the delegation be the principal market
for the Common Stock). Any such delegation may be revoked by the Committee at
any time.

      E. Any determination made by the Committee or pursuant to delegated
authority under the provisions of the Plan with respect to any Award shall be
made in the sole and absolute discretion of the Committee or its delegate at the
time of the grant of the Award or, unless in contravention of an express term of
the Plan, at any time thereafter. All decisions made by the Committee or any
appropriate delegate pursuant to the provisions of the Plan shall be final and
binding on all persons, including the Corporation, Participants, beneficiaries
and other interested parties.

SECTION IV - COMMON STOCK SUBJECT TO THE PLAN

      A. The maximum number of shares of Common Stock that may be delivered
under the Plan shall be 500,000. Shares issued pursuant to the Plan may be
authorized and unissued shares, treasury shares, shares purchased in the open
market or in private transactions, or any combination of the foregoing.

                                       6


      B. If an Award is forfeited or cancelled, an Option or Stock Appreciation
Right terminates, expires or lapses without being exercised or an Award is
settled in cash rather than shares of Common Stock, the shares of Common Stock
that had been subject thereto shall again be available for distribution in
connection with Awards under the Plan. Notwithstanding anything in this Section
IV(B) to the contrary, Options, Restricted Stock and Stock Appreciation Right
Awards must be settled in Common Stock.

      C. In the event the number of outstanding shares of Common Stock changes
as a result of any stock split, stock dividend, recapitalization, merger,
consolidation, reorganization, combination, or exchange of shares, split-up,
split-off, spin-off, liquidation or other similar change in capitalization, or
any distribution made to holders of Common Stock other than cash dividends, the
number or kind of shares that may be issued under the Plan, and the number or
kind of shares subject to, or the exercise price per share under, any
outstanding Award, shall be automatically adjusted, and the Committee shall be
authorized to make such other equitable adjustments of any Award or shares of
Common Stock issuable pursuant thereto so that the value of the interest of the
individual shall not be decreased by reason of the occurrence of such event. Any
such adjustment shall be deemed conclusive and binding on the Corporation, each
Participant, their beneficiaries and all other interested parties.

SECTION V - AWARDS

      A. TYPES OF AWARDS

            1. OPTION AWARDS. The Committee may grant Option Awards to Eligible
Directors in accordance with the provisions of this subsection, subject to such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall determine to be appropriate. Options granted under
the Plan shall be non-qualified stock options.

                  a. Exercise Price. The exercise price per share of Common
      Stock of an Option shall not be less than the Fair Market Value of a share
      of Common Stock on the date of grant.

                  b. Option Term. The term of an Option shall not exceed ten
      years from the date of grant.

                  c. Methods of Exercise. Subject to the provisions of the
      applicable Award Agreement, an Option may be exercised, in whole or in
      part, by giving written notice of exercise to the Corporation specifying
      the number of shares of Common Stock subject to the Option to be
      purchased, subject to such procedures as established by the Committee from
      time to time. Prior to

                                       7


      settlement of any such exercise, the exercise price shall be satisfied in
      full in accordance with Section V(C).

                  d. Rights upon Exercise. A Participant shall have all of the
      rights of a stockholder with respect to the shares purchased upon exercise
      of an Option when the Participant has given written notice of exercise,
      has paid in full for such shares and, if requested, has given the
      representation described in Section VIII(A).

            2. STOCK APPRECIATION RIGHT AWARDS. The Committee may grant Stock
Appreciation Right Awards to Eligible Directors, subject to such terms and
conditions, not inconsistent with the provisions of the Plan, as the Committee
shall determine to be appropriate, including, without limitation, the term,
manner of exercise, dates of exercise, and the grant price; provided, however,
that such grant price may never be less than the Fair Market Value of Common
Stock on the date the right is granted. Notwithstanding any contrary provision
in the Plan, upon exercise, the settlement of a Stock Appreciation Right may
only occur by payment of Common Stock; Stock Appreciation Rights cannot be
settled with cash or any other form of payment.

            3. RESTRICTED STOCK AWARDS. The Committee may grant Restricted Stock
Awards to Eligible Directors in accordance with the provisions of this
subsection, subject to such additional terms and conditions, not inconsistent
with the provisions of the Plan, as the Committee shall determine to be
appropriate.

                  a. Awards and Certificates. Shares of Restricted Stock shall
      be evidenced in such manner as the Committee may deem appropriate,
      including book-entry registration or the issuance of one or more stock
      certificates. Any certificate issued in respect of shares of Restricted
      Stock shall be registered in the name of such Participant and shall bear
      an appropriate legend referring to the terms, conditions, and restrictions
      applicable to such Award, substantially in the following form:

            THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK
            REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS
            (INCLUDING FORFEITURE) OF THE COMERICA INCORPORATED AMENDED AND
            RESTATED INCENTIVE PLAN FOR NON-EMPLOYEE DIRECTORS AND AN AWARD
            AGREEMENT. COPIES OF SUCH PLAN AND THE APPLICABLE AWARD AGREEMENT
            ARE ON FILE AT THE OFFICES OF COMERICA INCORPORATED AT 500 WOODWARD
            AVENUE, MC 3391, DETROIT, MICHIGAN 48226.

      The Committee may require that the certificates evidencing such shares be
      held in custody by the Corporation until the restrictions thereon shall
      have lapsed and that, as a condition of any Restricted Stock Award, the
      Participant shall have

                                       8


      delivered a stock power, endorsed in blank, relating to the Common Stock
      covered by such Award.

                  b. Rights of Holder of Restricted Stock. Except as provided in
      this Section V(A)(3) and the applicable Award Agreement, a Participant to
      whom Restricted Stock is granted shall have all of the rights of a
      stockholder of the Corporation with respect to the Common Stock subject to
      the Restricted Stock Award, including, if applicable, the right to vote
      the shares and the right to receive any dividends and other distributions.

            4. RESTRICTED STOCK UNIT AWARDS. The Committee may grant Restricted
Stock Unit Awards to Eligible Directors, subject to such terms and conditions,
not inconsistent with the provisions of the Plan, as the Committee shall
determine to be appropriate including, without limitation, the time or times at
which Restricted Stock Units will be granted, the number of shares to be
represented by each such grant, the conditions for vesting thereof, the time or
times within which Restricted Stock Units may be subject to forfeiture, the time
or times at which Restricted Stock Units will be settled and the form of such
settlement (i.e., cash or shares of Common Stock).

                  a. Restricted Stock Units. A Restricted Stock Unit shall
      represent an unfunded, unsecured right to receive one share of the
      Corporation's Common Stock.

                  b. Rights of Holder of Restricted Stock Units. A Participant
      to whom Restricted Stock Units are granted shall not have any rights of a
      stockholder of the Corporation with respect to the Common Stock
      represented by the Restricted Stock Unit Award. If so determined by the
      Committee, in its sole and absolute discretion, Restricted Stock Units may
      include a dividend equivalent right, pursuant to which the Participant
      will either receive cash amounts (either paid currently or on a contingent
      basis) equivalent to the dividends and other distributions payable with
      respect to the number of shares of Common Stock represented by the
      Restricted Stock Units, or additional Restricted Stock Units representing
      such dividends and other distributions.

      5. OTHER EQUITY-BASED AWARDS. The Committee may grant Other Equity-Based
Awards to Eligible Directors in accordance with the provisions of this Section
V(A) and subject to such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee shall determine. Other Equity-Based
Awards may be denominated or payable in, valued in whole or in part by reference
to, or otherwise based on or related to, Common Stock (including, without
limitation, securities convertible into Common Stock), as are deemed by the
Committee to be consistent with the purpose of the Plan; provided, however, that
such grants and settlements of such Awards must comply with applicable law,
including Code Section 409A and any interpretive authority promulgated
thereunder. Other Equity-Based Awards may be granted either alone or in
conjunction with other Awards granted under the Plan; however, no Other Equity
Based Award may be granted in conjunction with an

                                       9


another Award if such combination would constitute a tandem arrangement as
defined in Code Section 409A and any interpretive authorities promulgated
thereunder

      B. DEFERRING AWARDS. Under no circumstances may a Participant elect to
defer, until a time or times later than the exercise of an Option or a Stock
Appreciation Right or the settlement or distribution of shares in respect of
other Awards, receipt of all or a portion of the shares of Common Stock subject
to such Award, or dividends payable thereon, and/or to receive cash at such
later time or times in lieu of such deferred shares.

      C. FORMS OF PAYMENT BY PARTICIPANTS. Subject to the terms of the Plan and
of any applicable Award Agreement, payments to be made by a Participant upon the
exercise or vesting of an Award may be made in such form or forms as the
Committee shall determine, provided that Stock Appreciation Right Awards must
always be paid out in Common Stock.

      D. LIMITS ON TRANSFER OF AWARDS. Unless otherwise determined by the
Committee, no Award and no right under any such Award shall be transferable by a
Participant otherwise than by will or by the laws of intestacy; provided,
however, that a Participant may, in accordance with Section VIII(E) and in the
manner established by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any property payable or distributable
with respect to any Award upon the death of the Participant. Each Award or right
under any Award shall be exercisable during the Participant's lifetime only by
the Participant or, if permissible under applicable law, by the Participant's
guardian or legal representative. Unless otherwise determined by the Committee,
no Award or right under any such Award may be pledged, alienated, attached or
otherwise encumbered, and any purported pledge, alienation, attachment or
encumbrance thereof shall be void and unenforceable against the Corporation or
any Subsidiary or Affiliate.

      E. TERM OF AWARDS. Subject to any specific provisions of the Plan, the
term of each Award shall be for such period as may be determined by the
Committee.

      F. SECURITIES LAW RESTRICTIONS. All certificates for shares of Common
Stock or other securities delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such restrictions as the Committee may deem
advisable under the Plan, or the rules, regulations and other requirements of
the Securities and Exchange Commission, the New York Stock Exchange, Inc., any
other exchange on which shares of Common Stock may be eligible to be traded or
any applicable federal or state securities laws, and the Committee may cause a
legend or legends to be placed on any such certificates to make appropriate
reference to such restrictions.

      G. TERMINATION OF BOARD SERVICE AS A RESULT OF DEATH, DISABILITY OR
RETIREMENT. Unless otherwise determined by the Committee, if a

                                       10


Participant's membership on the Board is terminated by the Participant's death,
Disability or Retirement, then on the date the Participant's membership is so
terminated:

            1.    Any Options and Stock Appreciation Rights granted to such
                  Participant that are outstanding as of the date the
                  Participant's membership is so terminated and which are not
                  then exercisable and vested, shall become fully vested and
                  shall be exercisable for the remainder of the original Option
                  or Stock Appreciation Right term.

            2.    The restrictions and deferral limitations applicable to any
                  Restricted Stock granted to such Participant shall lapse, and
                  such Restricted Stock shall become free of all restrictions
                  and become fully vested and transferable to the full extent of
                  the original grant.

            3.    All Restricted Stock Units granted to such Participant shall
                  be considered to be fully vested, any deferral or other
                  restriction shall lapse and such Restricted Stock Units shall
                  be settled in cash as promptly as is practicable.

            4.    All Other Equity-Based Awards granted to such Participant
                  shall vest and be exercisable, or shall vest and be settled in
                  cash as promptly as is practicable, but only to the extent
                  that settlement occurs in accordance with Code Section 409A
                  and any interpretive authority promulgated thereunder.

      H. OTHER TERMINATION OF BOARD SERVICE. Unless otherwise determined by the
Committee, and in accordance with Code Section 409A and any interpretive
authority promulgated thereunder, if a Participant's membership on the Board is
terminated for any reason other than death, Disability or Retirement, as
provided in Section V(G), any outstanding Awards held by the Participant that
are unvested on such date of termination shall be immediately forfeited and
cancelled, and any outstanding Option or Stock Appreciation Right held by the
Participant that is vested but unexercised as of the date of termination shall
be exercisable for a period of ninety days after such termination or until the
expiration date of the Option or Stock Appreciation Right, as the case may be,
whichever date occurs earlier.

VI -- CHANGE OF CONTROL PROVISIONS

Notwithstanding any other provision of the Plan to the contrary, in the event
of a Change of Control:

            1.    Any Options and Stock Appreciation Rights outstanding as of
                  the date such Change of Control is determined to have
                  occurred, and which are not then exercisable and vested, shall
                  become fully

                                       11


                  vested and shall be exercisable for the remainder of the
                  original Option or Stock Appreciation Right term.

            2.    The restrictions and deferral limitations applicable to any
                  Restricted Stock shall lapse, and such Restricted Stock shall
                  become free of all restrictions and become fully vested and
                  transferable to the full extent of the original grant.

            3.    All Restricted Stock Units shall be considered to be fully
                  vested, and any deferral or other restriction shall lapse and
                  such Restricted Stock Units shall be settled in cash as
                  promptly as is practicable.

            4.    All Other Equity-Based Awards shall vest and be exercisable,
                  or shall vest and be settled in cash as promptly as is
                  practicable, as applicable, but only to the extent that
                  settlement occurs in accordance with Code Section 409A and any
                  interpretive authority promulgated thereunder.

            5.    The Committee may also make additional adjustments and/or
                  settlements of outstanding Awards as it deems appropriate and
                  consistent with the Plan's purposes, but only to the extent
                  that such adjustments and/or settlements occur in accordance
                  with Code Section 409A and any interpretive authority
                  promulgated thereunder.

VII - TERMINATION AND AMENDMENT

      A. The Plan will terminate on the tenth anniversary of the effective date
of the Plan. Under the Plan, Awards outstanding as of such date shall not be
affected or impaired by the termination of the Plan.

      B. The Committee or the Board may amend, alter, or discontinue the Plan,
but no amendment, alteration or discontinuation shall be made which would
adversely impact the rights of a Participant under any Award theretofore granted
without the Participant's consent, except such an amendment made to comply with
applicable law, including Code Section 409A and any interpretive authorities
promulgated thereunder, stock exchange rules or accounting rules. In addition,
no such amendment shall be made without the approval of the Corporation's
stockholders to the extent such approval is required by applicable law or the
applicable rules of the New York Stock Exchange, Inc. (or the applicable rules
of such other securities exchange as may at the time be the principal market for
the Common Stock).

      C. The Committee may amend the terms of any Option or other Award
theretofore granted, prospectively or retroactively; provided, however, that no
such amendment shall adversely impact the rights of any Participant without the
Participant's

                                       12


consent except such an amendment made to cause the Plan or Award to comply with
applicable law, including Code Section 409A and any interpretive authorities
promulgated thereunder, stock exchange rules or accounting rules; and provided,
further, that in no event may an Option or other Award be repriced without the
approval of the stockholders of the Corporation except due to an adjustment
pursuant to Section IV(C).

      D. Subject to the above provisions and unless prohibited by applicable
law, including Code Section 409A and any interpretive authorities promulgated
thereunder, or the applicable rules of the New York Stock Exchange, Inc. (or the
applicable rules of such other securities exchange as may at the time be the
principal market for the Common Stock), the Committee or the Board shall have
authority to amend the Plan to take into account changes in law and tax and
accounting rules, as well as other developments, and to grant Awards which
qualify for beneficial treatment under such rules without stockholder approval.

SECTION VIII - UNFUNDED STATUS OF PLAN

It is presently intended that the Plan will constitute an "unfunded" plan. The
Committee may authorize the creation of rabbi trusts or other arrangements to
meet the obligations created under the Plan to deliver Common Stock or make
payments; provided, however, that unless the Committee otherwise determines, the
existence of such rabbi trusts or other arrangements is consistent with the
"unfunded" status of the Plan.

SECTION IX - GENERAL PROVISIONS

      A. The Committee may require each person purchasing or receiving shares
pursuant to an Award to represent to and agree with the Corporation in writing
that such person is acquiring the shares without a view to the distribution
thereof. The certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer.

      B. Notwithstanding any other provision of the Plan or any Award Agreements
made pursuant thereto, the Corporation shall not be required to evidence
book-entry registration of shares of Common Stock under the Plan or issue or
deliver any certificate or certificates for shares of Common Stock under the
Plan prior to fulfillment of all of the following conditions:

            1.    Listing or approval for listing upon notice of issuance, of
                  such shares on the New York Stock Exchange, Inc., or such
                  other securities exchange as may at the time be the principal
                  market for the Common Stock;

            2.    Any registration or other qualification of such shares of the
                  Corporation under any state or federal law or regulation, or
                  the maintaining in effect of any such registration or other
                  qualification

                                       13


                  which the Committee shall, in its sole and absolute discretion
                  upon the advice of counsel, deem necessary or advisable; and

            3.    Obtaining any other consent, approval, or permit from any
                  state or federal governmental agency which the Committee
                  shall, in its sole and absolute discretion after receiving the
                  advice of counsel, determine to be necessary or advisable.

      C. Nothing contained in the Plan shall prevent the Corporation or any
Subsidiary or Affiliate from adopting other or additional compensation
arrangements for its directors.

      D. Adoption of the Plan shall not confer upon any Eligible Director any
right to continued service on the Board.

      E. Upon becoming a Participant of the Plan, each Eligible Director shall
submit to Comerica Incorporated, Human Resources - Compensation, 411 West
Lafayette, MC 3122, Detroit, MI 48226 (or to such other unit or person as
designated by the Committee from time to time) a Beneficiary Designation Form
designating one or more beneficiaries to whom any Awards payable or
distributable in the event of the Participant's death are to be paid or
distributed, or by whom any rights of the Participant, after the Participant's
death, may be exercised. A Beneficiary Designation Form will be effective only
if it is signed by the Participant and submitted before the Participant's death.
Any subsequent Beneficiary Designation Form properly submitted will supersede
any previous Beneficiary Designation Form so submitted. If a Participant
designates a spouse as a beneficiary, such designation shall automatically
terminate and be of no effect following the divorce of the Participant and such
individual, unless ratified in writing post-divorce.

      If the primary beneficiary shall predecease the Participant or the primary
beneficiary and the Participant die in a common disaster under such
circumstances that it is impossible to determine who survived the other, the
Participant's Awards remaining at the time of the Participant's death shall be
paid or distributed to the alternate beneficiary(ies) who survive(s) the
Participant in accordance with this Plan and the applicable Award Agreement. If
there are no alternate beneficiaries living or in existence at the date of the
Participant's death, or if the Participant has not submitted a valid Beneficiary
Designation Form to the Corporation, the remaining Awards shall be distributed
or paid in accordance with the terms of the Plan and the Award Agreement to the
legal representative for the benefit of the Participant's estate.

      F. The Plan and all Awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware,

                                       14


unless preempted by federal law, and also in accordance with Code Section 409A
and any interpretive authorities promulgated thereunder.

SECTION X -- EFFECTIVE DATE OF PLAN

This Plan is effective as of May 18, 2004.

                                       15

EX-10.2

                                                                    Exhibit 10.2

                        EMPLOYMENT AGREEMENT (EXEC. OFF.)

     AGREEMENT, dated as of the ________ day of _______, ____, by and between
COMERICA INCORPORATED, a Delaware corporation (the "Company"), and [FIELD](name
(caps))(the "Executive") who resides at [FIELD](street),
[FIELD](city/state/zip).

     The Board of Directors of the Company (the "Board"), has determined that it
is in the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     1. Certain Definitions. (a) The "Effective Date" shall mean the first date
during the Agreement Period (as defined in Section 1(b)) on which a Change of
Control(as defined in Section 2) occurs. Anything in this Agreement to the
contrary notwithstanding, if a Change of Control occurs and if the Executive's
employment with the Company is terminated prior to the date on which the Change
of Control occurs, and if it is reasonably demonstrated by the Executive that
such termination of employment (i) was at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control or (ii)
otherwise arose in connection with or anticipation of a Change of Control, then
for all purposes of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment.

     (b) The "Agreement Period" shall mean the period commencing on the date
hereof and ending on the third anniversary of the date hereof; provided,
however, that commencing on the date one year after the date hereof, and on each
annual anniversary of such date (such date and each annual anniversary thereof
shall be hereinafter referred to as the "Renewal Date"), unless previously
terminated, the Agreement Period shall be automatically extended so as to
terminate three years from such Renewal Date, unless at least 60 days prior to
the Renewal Date the Company shall give notice to the Executive that the
Agreement Period shall not be so extended.

     2. Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean:

     (a) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the


                                       -1-

then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (iv)
any acquisition by any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or

     (b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

     (c) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination, and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

     (d) Approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.

     3. Employment Period. The Company hereby agrees to continue the Executive
in its employ, and the Executive hereby agrees to remain in the employ of the
Company subject to the


                                       -2-

terms and conditions of this Agreement, for the period commencing on the
Effective Date and ending on the last day of the thirtieth consecutive month
following such date (the "Employment Period").

     4. Terms of Employment. (a) Position and Duties. (i) During the Employment
Period, (A) the Executive's position (including status, offices, titles and
reporting requirements), authority, duties and responsibilities shall be at
least commensurate in all material respects with the most significant of those
held, exercised and assigned at any time during the 120-day period immediately
preceding the Effective Date and (B) the Executive's services shall be performed
at the location where the Executive was employed immediately preceding the
Effective Date or any office or location less than 60 miles from such location.

          (ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company.

     (b) Compensation. (i) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary"), which
shall be paid at a monthly rate, at least equal to twelve times the highest
monthly base salary paid or payable, including any base salary which has been
earned but deferred, to the Executive by the Company and its affiliated
companies in respect of the twelve-month period immediately preceding the month
in which the Effective Date occurs. During the Employment Period, the Annual
Base Salary shall be reviewed no more than 12 months after the last salary
increase awarded to the Executive prior to the Effective Date and thereafter at
least annually. Any increase in Annual Base Salary shall not serve to limit or
reduce any other obligation to the Executive under this Agreement. Annual Base
Salary shall not be reduced after any such increase and the term Annual Base
Salary as utilized in this Agreement shall refer to Annual Base Salary as so
increased. As used in this Agreement, the term "affiliated companies" shall
include any company controlled by, controlling or under common control with the
Company.

          (ii) Annual Bonus. In addition to Annual Base Salary, the Executive
shall be awarded, for each fiscal year ending during the Employment Period, an
annual bonus (the "Annual Bonus") in cash at least equal to the Executive's
highest bonus under the Company's Management Incentive Plan, Long-Term Incentive
Plan and/or business unit incentive plan (or any predecessor or successor plan
to any thereof) as applicable, for the last three full fiscal years prior to the
Effective Date (annualized in the event that the Executive was not employed by
the Company for the whole


                                       -3-

of such fiscal year) (the "Recent Annual Bonus"). Each such Annual Bonus shall
be paid no later than the end of the third month of the fiscal year next
following the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual Bonus.

          (iii) Incentive, Savings and Retirement Plans. During the Employment
Period, the Executive shall be entitled to participate in all incentive, savings
and retirement plans, practices, policies and programs applicable generally to
other peer executives of the Company and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide the Executive
with incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in each
case, less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the Executive under
such plans, practices, policies and programs as in effect at any time during the
120-day period immediately preceding the Effective Date or if more favorable to
the Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies.

          (iv) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other peer
executives of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive with benefits
which are less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.

          (v) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in accordance with the most favorable policies, practices and
procedures of the Company and its affiliated companies in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and its
affiliated companies.

          (vi) Fringe Benefits. During the Employment Period, the Executive
shall be entitled to fringe benefits, including, without limitation, tax and
financial planning services, payment of club dues, and, if applicable, use of an
automobile and payment of related expenses, in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.


                                       -4-

          (vii) Office and Support Staff. During the Employment Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing provided
to the Executive by the Company and its affiliated companies at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and its affiliated companies.

          (viii) Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the most favorable plans, policies,
programs and practices of the Company and its affiliated companies as in effect
for the Executive at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies.

     5. Termination of Employment. (a) Death or Disability. The Executive's
employment shall terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive written
notice in accordance with Section 12(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive (the "Disability Effective Date"), provided that, within
the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative.

     (b) Cause. The Company may terminate the Executive's employment during the
Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean:

          (i) the willful and continued failure of the Executive to perform
     substantially the Executive's duties with the Company or one of its
     affiliated companies (other than any such failure resulting from incapacity
     due to physical or mental illness), after a written demand for substantial
     performance is delivered to the Executive by the Board or the Chief
     Executive Officer of the Company which specifically identifies the manner
     in which the Board or Chief Executive Officer believes that the Executive
     has not substantially performed the Executive's duties, or

          (ii) the willful engaging by the Executive in illegal conduct or gross
     misconduct which is materially and demonstrably injurious to the Company.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company.


                                       -5-

Any act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chief Executive
Officer or a senior officer of the Company or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of the Company.
The cessation of employment of the Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in clauses (i) or (ii) above, and specifying the
particulars thereof in detail.

     (c) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean:

          (i) the assignment to the Executive of any duties inconsistent in any
     respect with the Executive's position (including status, offices, titles
     and reporting requirements), authority, duties or responsibilities as
     contemplated by Section 4(a) of this Agreement, or any other action by the
     Company which results in a diminution in such position, authority, duties
     or responsibilities, excluding for this purpose an isolated, insubstantial
     and inadvertent action not taken in bad faith and which is remedied by the
     Company promptly after receipt of notice thereof given by the Executive;

          (ii) any failure by the Company to comply with any of the provisions
     of Section 4(b) of this Agreement, other than an isolated, insubstantial
     and inadvertent failure not occurring in bad faith and which is remedied by
     the Company promptly after receipt of notice thereof given by the
     Executive;

          (iii) the Company's requiring the Executive to be based at any office
     or location other than as provided in Section 4(a)(i)(B) hereof or the
     Company's requiring the Executive to travel on Company business to a
     substantially greater extent than required immediately prior to the
     Effective Date;

          (iv) any purported termination by the Company of the Executive's
     employment otherwise than as expressly permitted by this Agreement; or

          (v) any failure by the Company to comply with and satisfy Section
     11(c) of this Agreement.

For purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive. Anything in this Agreement to the
contrary notwithstanding, a termination by the Executive for any reason during
the 30-day period immediately following the first anniversary of the Effective
Date shall be deemed to be a termination for Good Reason for all purposes of
this Agreement.


                                       -6-

     (d) Notice of Termination. Any termination by the Company for Cause, or by
the Executive for Good Reason, shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 12(b) of this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days after the
giving of such notice). The failure by the Executive or the Company to set forth
in the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or
the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.

     (e) Date of Termination. "Date of Termination" means (i) if the Executive's
employment is terminated by the Company for Cause, or by the Executive for Good
Reason, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if the Executive's employment is
terminated by the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies the Executive of
such termination and (iii) if the Executive's employment is terminated by reason
of death or Disability, the Date of Termination shall be the date of death of
the Executive or the Disability Effective Date, as the case may be.

     6. Obligations of the Company upon Termination. (a) Good Reason; Other Than
for Cause, Death or Disability. If, during the Employment Period, the Company
shall terminate the Executive's employment other than for Cause or Disability or
the Executive shall terminate employment for Good Reason:

          (i) the Company shall pay to the Executive in a lump sum in cash
     within 30 days after the Date of Termination the aggregate of the following
     amounts:

               A. the sum of (1) the Executive's Annual Base Salary through the
          Date of Termination to the extent not theretofore paid, (2) the
          product of (x) the higher of (I) the Recent Annual Bonus and (II) the
          Annual Bonus paid or payable, including any bonus or portion thereof
          which has been earned but deferred (and annualized for any fiscal year
          consisting of less than twelve full months or during which the
          Executive was employed for less than twelve full months), for the most
          recently completed fiscal year during the Employment Period, if any
          (such higher amount being referred to as the "Highest Annual Bonus")
          and (y) a fraction, the numerator of which is the number of days in
          the current fiscal year through the Date of Termination, and the
          denominator of which is 365 and (3) any compensation previously
          deferred by the Executive (together with any accrued interest or
          earnings thereon) and any accrued vacation pay, in each case to the
          extent not theretofore paid (the sum of the amounts described in
          clauses (1), (2), and (3) shall be hereinafter referred to as the
          "Accrued Obligations"); and


                                       -7-

               B. the amount equal to the product of (1) three and (2) the sum
          of (x) the Executive's Annual Base Salary and (y) the Highest Annual
          Bonus; and

               C. an amount equal to the excess of (a) the actuarial equivalent
          of the benefit under the Company's qualified defined benefit
          retirement plan (the "Retirement Plan") (utilizing actuarial
          assumptions no less favorable to the Executive than those in effect
          under the Company's Retirement Plan immediately prior to the Effective
          Date), and any excess or supplemental retirement plan in which the
          Executive participates (together, the "SERP") which the Executive
          would receive if the Executive's employment continued for three years
          after the Date of Termination assuming for this purpose that (x) all
          accrued benefits are fully vested, (y) the Executive is three years
          older and (z) the Executive is credited with three more years of
          service, and, assuming that the Executive's compensation in each of
          the three years is that required by Section 4(b)(i) and Section
          4(b)(ii), over (b) the actuarial equivalent of the Executive's actual
          benefit (paid or payable), if any, under the Retirement Plan and the
          SERP as of the Date of Termination;

          (ii) for three years after the Executive's Date of Termination, or
     such longer period as may be provided by the terms of the appropriate plan,
     program, practice or policy, the Company shall continue benefits to the
     Executive and/or the Executive's family at least equal to those which would
     have been provided to them in accordance with the plans, programs,
     practices and policies described in Section 4(b)(iv) of this Agreement if
     the Executive's employment had not been terminated or, if more favorable to
     the Executive, as in effect generally at any time thereafter with respect
     to other peer executives of the Company and its affiliated companies and
     their families, provided, however, that if the Executive becomes reemployed
     with another employer and is eligible to receive medical or other welfare
     benefits under another employer provided plan, the medical and other
     welfare benefits described herein shall be secondary to those provided
     under such other plan during such applicable period of eligibility. For
     purposes of determining eligibility (but not the time of commencement of
     benefits) of the Executive for retiree benefits pursuant to such plans,
     practices, programs and policies, the Executive shall be considered to have
     remained employed until three years after the Date of Termination and to
     have retired on the last day of such period;

          (iii) the Company shall, at its sole expense as incurred, provide the
     Executive with outplacement services the scope and provider of which shall
     be selected by the Executive in his sole discretion; and

          (iv) to the extent not theretofore paid or provided, the Company shall
     timely pay or provide to the Executive any other amounts or benefits
     required to be paid or provided or which the Executive is eligible to
     receive under any plan, program, policy or practice or contract or
     agreement of the Company and its affiliated companies (such other amounts
     and benefits shall be hereinafter referred to as the "Other Benefits").

     (b) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive's legal representatives under this
Agreement, other than for payment of Accrued


                                       -8-

Obligations and the timely payment or provision of Other Benefits. Accrued
Obligations shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination.
With respect to the provision of Other Benefits, the term Other Benefits as
utilized in this Section 6(b) shall include, without limitation, and the
Executive's estate and/or beneficiaries shall be entitled to receive, benefits
at least equal to the most favorable benefits provided by the Company and
affiliated companies to the estates and beneficiaries of peer executives of the
Company and such affiliated companies under such plans, programs, practices and
policies relating to death benefits, if any, as in effect with respect to other
peer executives and their beneficiaries at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive's estate and/or the Executive's beneficiaries, as in effect on the
date of the Executive's death with respect to other peer executives of the
Company and its affiliated companies and their beneficiaries.

     (c) Disability. If the Executive's employment is terminated by reason of
the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(c) shall
include, and the Executive shall be entitled after the Disability Effective Date
to receive, disability and other benefits at least equal to the most favorable
of those generally provided by the Company and its affiliated companies to
disabled executives and/or their families in accordance with such plans,
programs, practices and policies relating to disability, if any, as in effect
generally with respect to other peer executives and their families at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive and/or the Executive's family, as in effect at any
time thereafter generally with respect to other peer executives of the Company
and its affiliated companies and their families.

     (d) Cause, Etc.; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the obligation
to pay to the Executive (x) his Annual Base Salary through the Date of
Termination, (y) the amount of any compensation previously deferred by the
Executive, and (z) Other Benefits, in each case to the extent theretofore
unpaid. If the Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement shall terminate
without further obligations to the Executive, other than for Accrued Obligations
and the timely payment or provision of Other Benefits. In such case, all Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination.

     7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor, subject to Section 12(f), shall
anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with such


                                       -9-

plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.

     8. Full Settlement. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and such amounts shall
not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus, in each case, interest on any delayed payment at the
applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal
Revenue Code of 1986, as amended (the "Code").

     9. Certain Additional Payments by the Company.

     (a) Anything in this Agreement to the contrary notwithstanding and except
as set forth below, in the event it shall be determined that any payment or
distribution by the Company to or for the benefit of the Executive (whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 9) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing
provisions of this Section 9(a), if it shall be determined that the Executive is
entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of the
greatest amount (the "Reduced Amount") that could be paid to the Executive such
that the receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Executive and the Payments, in the
aggregate, shall be reduced to the Reduced Amount.

     (b) Subject to the provisions of Section 9(c), all determinations required
to be made under this Section 9, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Ernst & Young LLP
or such other certified public accounting firm as may be designated by the
Executive (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. In


                                      -10-

the event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Executive shall
appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 9, shall be paid by the Company to the Executive within five days
of the receipt of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

     (c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:

          (i) give the Company any information reasonably requested by the
     Company relating to such claim,

          (ii) take such action in connection with contesting such claim as the
     Company shall reasonably request in writing from time to time, including,
     without limitation, accepting legal representation with respect to such
     claim by an attorney reasonably selected by the Company,

          (iii) cooperate with the Company in good faith in order effectively to
     contest such claim, and

          (iv) permit the Company to participate in any proceedings relating to
     such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 9(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive


                                      -11-

to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

     (d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 9(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 9(c)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 9(c), a determination is made that
the Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

     10. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 10 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.

     11. Successors. (a) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.


                                      -12-

     (b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.

     (c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

     12. Miscellaneous. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.

     (b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

          If to the Executive:

          [FIELD](name)
          [FIELD](street)
          [FIELD](city/state/zip)

          If to the Company:

          Comerica Incorporated
          Comerica Tower at Detroit Center
          500 Woodward Avenue, 31st Floor
          Detroit, Michigan 48226
          Attention: Executive Vice President

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

     (c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.

     (d) The Company may withhold from any amounts payable under this Agreement
such Federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.


                                      -13-

     (e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.

     (f) The Executive and the Company acknowledge that, except as may otherwise
be provided under any other written agreement between the Executive and the
Company, the employment of the Executive by the Company is "at will" and,
subject to Section 1(a) hereof, prior to the Effective Date, the Executive's
employment and/or this Agreement may be terminated by either the Executive or
the Company at any time prior to the Effective Date, in which case the Executive
shall have no further rights under this Agreement. From and after the Effective
Date this Agreement shall supersede any other agreement between the parties with
respect to the subject matter hereof.

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.


- -------------------------------------   ----------------------------------------
             Date Signed                           [FIELD](Name(caps))

                                        COMERICA INCORPORATED


                                        By
                                           -------------------------------------


                                      -14-


                                    SCHEDULE
            EMPLOYMENT AGREEMENTS (EXECUTIVE VICE PRESIDENT VERSION)


Each of the executive officers of the Corporation named below executed an
Employment Agreement on the date set forth across from his or her name in
substantially the form attached hereto.



EXECUTIVE OFFICER                                    DATE OF AGREEMENT
                                                  
Elizabeth S. Acton                                   May 18, 2002
Ralph W. Babb, Jr.                                   May 29, 1997
Mary Constance Beck                                  November 3, 2004
Joseph J. Buttigieg III                              May 28, 1997
John R. Beran                                        May 28, 1997
Jon W. Bilstrom                                      January 17, 2003
J. Michael Fulton                                    May 28, 1997
Dale E. Greene                                       May 28, 1997
Charles L. Gummer                                    May 28, 1997
John D. Lewis                                        May 28, 1997
Dennis J. Mooradian                                  November 4, 2003

EX-10.3

                                                                    Exhibit 10.3

                           EMPLOYMENT AGREEMENT (SVP)

     AGREEMENT, dated as of the [FIELD](Day) day of [FIELD](Month), ____, by and
between COMERICA INCORPORATED, a Delaware corporation (the "Company") and
[FIELD](Name (caps)) (the "Executive") who resides at [FIELD](SVP Street),
[FIELD](SVP City/State/Zip).

     The Board of Directors of the Company (the "Board"), has determined that it
is in the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     1. Certain Definitions. (a) The "Effective Date" shall mean the first date
during the Agreement Period (as defined in Section 1(b)) on which a Change of
Control(as defined in Section 2) occurs. Anything in this Agreement to the
contrary notwithstanding, if a Change of Control occurs and if the Executive's
employment with the Company is terminated prior to the date on which the Change
of Control occurs, and if it is reasonably demonstrated by the Executive that
such termination of employment (i) was at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control or (ii)
otherwise arose in connection with or anticipation of a Change of Control, then
for all purposes of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment.

     (b) The "Agreement Period" shall mean the period commencing on the date
hereof and ending on the third anniversary of the date hereof; provided,
however, that commencing on the date one year after the date hereof, and on each
annual anniversary of such date (such date and each annual anniversary thereof
shall be hereinafter referred to as the "Renewal Date"), unless previously
terminated, the Agreement Period shall be automatically extended so as to
terminate three years from such Renewal Date, unless at least 60 days prior to
the Renewal Date the Company shall give notice to the Executive that the
Agreement Period shall not be so extended.

     2. Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean:

     (a) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the


                                      -1-

then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (iv)
any acquisition by any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or

     (b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

     (c) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination, and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

     (d) Approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.

     3. Employment Period. The Company hereby agrees to continue the Executive
in its employ, and the Executive hereby agrees to remain in the employ of the
Company subject to the


                                      -2-

terms and conditions of this Agreement, for the period commencing on the
Effective Date and ending on the last day of the thirtieth consecutive month
following such date (the "Employment Period").

     4. Terms of Employment. (a) Position and Duties. (i) During the Employment
Period, (A) the Executive's position (including status, offices, titles and
reporting requirements), authority, duties and responsibilities shall be at
least commensurate in all material respects with the most significant of those
held, exercised and assigned at any time during the 120-day period immediately
preceding the Effective Date and (B) the Executive's services shall be performed
at the location where the Executive was employed immediately preceding the
Effective Date or any office or location less than 60 miles from such location.

          (ii) During the Employment Period, and excluding any periods of
     vacation and sick leave to which the Executive is entitled, the Executive
     agrees to devote reasonable attention and time during normal business hours
     to the business and affairs of the Company and, to the extent necessary to
     discharge the responsibilities assigned to the Executive hereunder, to use
     the Executive's reasonable best efforts to perform faithfully and
     efficiently such responsibilities. During the Employment Period it shall
     not be a violation of this Agreement for the Executive to (A) serve on
     corporate, civic or charitable boards or committees, (B) deliver lectures,
     fulfill speaking engagements or teach at educational institutions and (C)
     manage personal investments, so long as such activities do not
     significantly interfere with the performance of the Executive's
     responsibilities as an employee of the Company in accordance with this
     Agreement. It is expressly understood and agreed that to the extent that
     any such activities have been conducted by the Executive prior to the
     Effective Date, the continued conduct of such activities (or the conduct of
     activities similar in nature and scope thereto) subsequent to the Effective
     Date shall not thereafter be deemed to interfere with the performance of
     the Executive's responsibilities to the Company.

     (b) Compensation. (i) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary"), which
shall be paid at a monthly rate, at least equal to twelve times the highest
monthly base salary paid or payable, including any base salary which has been
earned but deferred, to the Executive by the Company and its affiliated
companies in respect of the twelve-month period immediately preceding the month
in which the Effective Date occurs. During the Employment Period, the Annual
Base Salary shall be reviewed no more than 12 months after the last salary
increase awarded to the Executive prior to the Effective Date and thereafter at
least annually. Any increase in Annual Base Salary shall not serve to limit or
reduce any other obligation to the Executive under this Agreement. Annual Base
Salary shall not be reduced after any such increase and the term Annual Base
Salary as utilized in this Agreement shall refer to Annual Base Salary as so
increased. As used in this Agreement, the term "affiliated companies" shall
include any company controlled by, controlling or under common control with the
Company.

          (ii) Annual Bonus. In addition to Annual Base Salary, the Executive
     shall be awarded, for each fiscal year ending during the Employment Period,
     an annual bonus (the "Annual Bonus") in cash at least equal to the
     Executive's highest bonus under the Company's Management Incentive Plan,
     Long-Term Incentive Plan and/or business unit incentive plan (or any
     predecessor or successor plan to any thereof) as applicable, for the last
     three full fiscal years prior to the Effective Date (annualized in the
     event that the Executive was not


                                      -3-

     employed by the Company for the whole of such fiscal year) (the "Recent
     Annual Bonus"). Each such Annual Bonus shall be paid no later than the end
     of the third month of the fiscal year next following the fiscal year for
     which the Annual Bonus is awarded, unless the Executive shall elect to
     defer the receipt of such Annual Bonus.

          (iii) Incentive, Savings and Retirement Plans. During the Employment
     Period, the Executive shall be entitled to participate in all incentive,
     savings and retirement plans, practices, policies and programs applicable
     generally to other peer executives of the Company and its affiliated
     companies, but in no event shall such plans, practices, policies and
     programs provide the Executive with incentive opportunities (measured with
     respect to both regular and special incentive opportunities, to the extent,
     if any, that such distinction is applicable), savings opportunities and
     retirement benefit opportunities, in each case, less favorable, in the
     aggregate, than the most favorable of those provided by the Company and its
     affiliated companies for the Executive under such plans, practices,
     policies and programs as in effect at any time during the 120-day period
     immediately preceding the Effective Date or if more favorable to the
     Executive, those provided generally at any time after the Effective Date to
     other peer executives of the Company and its affiliated companies.

          (iv) Welfare Benefit Plans. During the Employment Period, the
     Executive and/or the Executive's family, as the case may be, shall be
     eligible for participation in and shall receive all benefits under welfare
     benefit plans, practices, policies and programs provided by the Company and
     its affiliated companies (including, without limitation, medical,
     prescription, dental, disability, employee life, group life, accidental
     death and travel accident insurance plans and programs) to the extent
     applicable generally to other peer executives of the Company and its
     affiliated companies, but in no event shall such plans, practices, policies
     and programs provide the Executive with benefits which are less favorable,
     in the aggregate, than the most favorable of such plans, practices,
     policies and programs in effect for the Executive at any time during the
     120-day period immediately preceding the Effective Date or, if more
     favorable to the Executive, those provided generally at any time after the
     Effective Date to other peer executives of the Company and its affiliated
     companies.

          (v) Expenses. During the Employment Period, the Executive shall be
     entitled to receive prompt reimbursement for all reasonable expenses
     incurred by the Executive in accordance with the most favorable policies,
     practices and procedures of the Company and its affiliated companies in
     effect for the Executive at any time during the 120-day period immediately
     preceding the Effective Date or, if more favorable to the Executive, as in
     effect generally at any time thereafter with respect to other peer
     executives of the Company and its affiliated companies.

          (vi) Fringe Benefits. During the Employment Period, the Executive
     shall be entitled to fringe benefits, including, without limitation, tax
     and financial planning services, payment of club dues, and, if applicable,
     use of an automobile and payment of related expenses, in accordance with
     the most favorable plans, practices, programs and policies of the Company
     and its affiliated companies in effect for the Executive at any time during
     the 120-day period immediately preceding the Effective Date or, if more
     favorable to the Executive, as in effect generally at any time thereafter
     with respect to other peer executives of the Company and its affiliated
     companies.


                                      -4-

          (vii) Office and Support Staff. During the Employment Period, the
     Executive shall be entitled to an office or offices of a size and with
     furnishings and other appointments, and to exclusive personal secretarial
     and other assistance, at least equal to the most favorable of the foregoing
     provided to the Executive by the Company and its affiliated companies at
     any time during the 120-day period immediately preceding the Effective Date
     or, if more favorable to the Executive, as provided generally at any time
     thereafter with respect to other peer executives of the Company and its
     affiliated companies.

          (viii) Vacation. During the Employment Period, the Executive shall be
     entitled to paid vacation in accordance with the most favorable plans,
     policies, programs and practices of the Company and its affiliated
     companies as in effect for the Executive at any time during the 120-day
     period immediately preceding the Effective Date or, if more favorable to
     the Executive, as in effect generally at any time thereafter with respect
     to other peer executives of the Company and its affiliated companies.

     5. Termination of Employment. (a) Death or Disability. The Executive's
employment shall terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive written
notice in accordance with Section 12(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive (the "Disability Effective Date"), provided that, within
the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative.

     (b) Cause. The Company may terminate the Executive's employment during the
Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean:

          (i) the willful and continued failure of the Executive to perform
     substantially the Executive's duties with the Company or one of its
     affiliated companies (other than any such failure resulting from incapacity
     due to physical or mental illness), after a written demand for substantial
     performance is delivered to the Executive by the Board or the Chief
     Executive Officer of the Company which specifically identifies the manner
     in which the Board or Chief Executive Officer believes that the Executive
     has not substantially performed the Executive's duties, or

          (ii) the willful engaging by the Executive in illegal conduct or gross
     misconduct which is materially and demonstrably injurious to the Company.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the


                                      -5-

Board or upon the instructions of the Chief Executive Officer or a senior
officer of the Company or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation of employment
of the Executive shall not be deemed to be for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership
of the Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, the Executive is guilty of the conduct
described in clauses (i) or (ii) above, and specifying the particulars thereof
in detail.

     (c) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean:

          (i) the assignment to the Executive of any duties inconsistent in any
     respect with the Executive's position (including status, offices, titles
     and reporting requirements), authority, duties or responsibilities as
     contemplated by Section 4(a) of this Agreement, or any other action by the
     Company which results in a diminution in such position, authority, duties
     or responsibilities, excluding for this purpose an isolated, insubstantial
     and inadvertent action not taken in bad faith and which is remedied by the
     Company promptly after receipt of notice thereof given by the Executive;

          (ii) any failure by the Company to comply with any of the provisions
     of Section 4(b) of this Agreement, other than an isolated, insubstantial
     and inadvertent failure not occurring in bad faith and which is remedied by
     the Company promptly after receipt of notice thereof given by the
     Executive;

          (iii) the Company's requiring the Executive to be based at any office
     or location other than as provided in Section 4(a)(i)(B) hereof or the
     Company's requiring the Executive to travel on Company business to a
     substantially greater extent than required immediately prior to the
     Effective Date;

          (iv) any purported termination by the Company of the Executive's
     employment otherwise than as expressly permitted by this Agreement; or

          (v) any failure by the Company to comply with and satisfy Section
     11(c) of this Agreement.

For purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.

     (d) Notice of Termination. Any termination by the Company for Cause, or by
the Executive for Good Reason, shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 12(b) of this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail


                                      -6-

the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than thirty days
after the giving of such notice). The failure by the Executive or the Company to
set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.

     (e) Date of Termination. "Date of Termination" means (i) if the Executive's
employment is terminated by the Company for Cause, or by the Executive for Good
Reason, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if the Executive's employment is
terminated by the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies the Executive of
such termination and (iii) if the Executive's employment is terminated by reason
of death or Disability, the Date of Termination shall be the date of death of
the Executive or the Disability Effective Date, as the case may be.

     6. Obligations of the Company upon Termination. (a) Good Reason; Other Than
for Cause, Death or Disability. If, during the Employment Period, the Company
shall terminate the Executive's employment other than for Cause or Disability or
the Executive shall terminate employment for Good Reason:

          (i) the Company shall pay to the Executive in a lump sum in cash
     within 30 days after the Date of Termination the aggregate of the following
     amounts:

               A. the sum of (1) the Executive's Annual Base Salary through the
          Date of Termination to the extent not theretofore paid, (2) the
          product of (x) the higher of (I) the Recent Annual Bonus and (II) the
          Annual Bonus paid or payable, including any bonus or portion thereof
          which has been earned but deferred (and annualized for any fiscal year
          consisting of less than twelve full months or during which the
          Executive was employed for less than twelve full months), for the most
          recently completed fiscal year during the Employment Period, if any
          (such higher amount being referred to as the "Highest Annual Bonus")
          and (y) a fraction, the numerator of which is the number of days in
          the current fiscal year through the Date of Termination, and the
          denominator of which is 365 and (3) any compensation previously
          deferred by the Executive (together with any accrued interest or
          earnings thereon) and any accrued vacation pay, in each case to the
          extent not theretofore paid (the sum of the amounts described in
          clauses (1), (2), and (3) shall be hereinafter referred to as the
          "Accrued Obligations"); and

               B. the amount equal to the product of (1) two and (2) the sum of
          (x) the Executive's Annual Base Salary and (y) the Highest Annual
          Bonus; and

               C. an amount equal to the excess of (a) the actuarial equivalent
          of the benefit under the Company's qualified defined benefit
          retirement plan (the "Retirement Plan")


                                      -7-

          (utilizing actuarial assumptions no less favorable to the Executive
          than those in effect under the Company's Retirement Plan immediately
          prior to the Effective Date), and any excess or supplemental
          retirement plan in which the Executive participates (together, the
          "SERP") which the Executive would receive if the Executive's
          employment continued for two years after the Date of Termination
          assuming for this purpose that (x) all accrued benefits are fully
          vested, (y) the Executive is two years older and (z) the Executive is
          credited with two more years of service, and, assuming that the
          Executive's compensation in each of the two years is that required by
          Section 4(b)(i) and Section 4(b)(ii), over (b) the actuarial
          equivalent of the Executive's actual benefit (paid or payable), if
          any, under the Retirement Plan and the SERP as of the Date of
          Termination;

          (ii) for two years after the Executive's Date of Termination, or such
     longer period as may be provided by the terms of the appropriate plan,
     program, practice or policy, the Company shall continue benefits to the
     Executive and/or the Executive's family at least equal to those which would
     have been provided to them in accordance with the plans, programs,
     practices and policies described in Section 4(b)(iv) of this Agreement if
     the Executive's employment had not been terminated or, if more favorable to
     the Executive, as in effect generally at any time thereafter with respect
     to other peer executives of the Company and its affiliated companies and
     their families, provided, however, that if the Executive becomes reemployed
     with another employer and is eligible to receive medical or other welfare
     benefits under another employer provided plan, the medical and other
     welfare benefits described herein shall be secondary to those provided
     under such other plan during such applicable period of eligibility. For
     purposes of determining eligibility (but not the time of commencement of
     benefits) of the Executive for retiree benefits pursuant to such plans,
     practices, programs and policies, the Executive shall be considered to have
     remained employed until two years after the Date of Termination and to have
     retired on the last day of such period;

          (iii) the Company shall, at its sole expense as incurred, provide the
     Executive with outplacement services the scope and provider of which shall
     be selected by the Executive in his sole discretion; and

          (iv) to the extent not theretofore paid or provided, the Company shall
     timely pay or provide to the Executive any other amounts or benefits
     required to be paid or provided or which the Executive is eligible to
     receive under any plan, program, policy or practice or contract or
     agreement of the Company and its affiliated companies (such other amounts
     and benefits shall be hereinafter referred to as the "Other Benefits").

     (b) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive's legal representatives under this
Agreement, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits. Accrued Obligations shall be paid to the
Executive's estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(b) shall
include, without limitation, and the Executive's estate and/or beneficiaries
shall be entitled to receive, benefits at least equal to the most favorable
benefits


                                      -8-

provided by the Company and affiliated companies to the estates and
beneficiaries of peer executives of the Company and such affiliated companies
under such plans, programs, practices and policies relating to death benefits,
if any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive's estate and/or the
Executive's beneficiaries, as in effect on the date of the Executive's death
with respect to other peer executives of the Company and its affiliated
companies and their beneficiaries.

     (c) Disability. If the Executive's employment is terminated by reason of
the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(c) shall
include, and the Executive shall be entitled after the Disability Effective Date
to receive, disability and other benefits at least equal to the most favorable
of those generally provided by the Company and its affiliated companies to
disabled executives and/or their families in accordance with such plans,
programs, practices and policies relating to disability, if any, as in effect
generally with respect to other peer executives and their families at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive and/or the Executive's family, as in effect at any
time thereafter generally with respect to other peer executives of the Company
and its affiliated companies and their families.

     (d) Cause, Etc.; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the obligation
to pay to the Executive (x) his Annual Base Salary through the Date of
Termination, (y) the amount of any compensation previously deferred by the
Executive, and (z) Other Benefits, in each case to the extent theretofore
unpaid. If the Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement shall terminate
without further obligations to the Executive, other than for Accrued Obligations
and the timely payment or provision of Other Benefits. In such case, all Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination.

     7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor, subject to Section 12(f), shall
anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.

     8. Full Settlement. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off,


                                      -9-

counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and such amounts shall not be reduced whether or
not the Executive obtains other employment. The Company agrees to pay as
incurred, to the full extent permitted by law, all legal fees and expenses which
the Executive may reasonably incur as a result of any contest (regardless of the
outcome thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement), plus, in
each case, interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as
amended (the "Code").

     9. Certain Additional Payments by the Company.

     (a) Anything in this Agreement to the contrary notwithstanding and except
as set forth below, in the event it shall be determined that any payment or
distribution by the Company to or for the benefit of the Executive (whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 9) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing
provisions of this Section 9(a), if it shall be determined that the Executive is
entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of the
greatest amount (the "Reduced Amount") that could be paid to the Executive such
that the receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Executive and the Payments, in the
aggregate, shall be reduced to the Reduced Amount.

     (b) Subject to the provisions of Section 9(c), all determinations required
to be made under this Section 9, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Ernst & Young LLP
or such other certified public accounting firm as may be designated by the
Executive (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group
effecting the Change of Control, the Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Section 9,


                                      -10-

shall be paid by the Company to the Executive within five days of the receipt of
the Accounting Firm's determination. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

     (c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:

          (i) give the Company any information reasonably requested by the
     Company relating to such claim,

          (ii) take such action in connection with contesting such claim as the
     Company shall reasonably request in writing from time to time, including,
     without limitation, accepting legal representation with respect to such
     claim by an attorney reasonably selected by the Company,

          (iii) cooperate with the Company in good faith in order effectively to
     contest such claim, and

          (iv) permit the Company to participate in any proceedings relating to
     such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 9(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such


                                      -11-

advance or with respect to any imputed income with respect to such advance; and
further provided that any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

     (d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 9(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 9(c)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 9(c), a determination is made that
the Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

     10. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 10 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.

     11. Successors. (a) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.

     (b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.

     (c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.


                                      -12-

     12. Miscellaneous. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.

     (b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

          If to the Executive:

          [FIELD](SVP Full Name)
          [FIELD](SVP Street)
          [FIELD](SVP City/State/Zip)

          If to the Company:

          Comerica Incorporated
          Comerica Tower at Detroit Center
          500 Woodward Avenue, 31st Floor
          Detroit, Michigan 48226
          Attention: Executive Vice President

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

     (c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.

     (d) The Company may withhold from any amounts payable under this Agreement
such Federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

     (e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.

     (f) The Executive and the Company acknowledge that, except as may otherwise
be provided under any other written agreement between the Executive and the
Company, the employment of the Executive by the Company is "at will" and,
subject to Section 1(a) hereof, prior to the Effective Date, the Executive's
employment and/or this Agreement may be terminated by either the Executive or
the Company at any time prior to the Effective Date, in which case the Executive
shall have no further rights under this Agreement. From and after the Effective
Date this Agreement shall supersede any other agreement between the parties with
respect to the subject matter hereof.


                                      -13-

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.


- -------------------------------------   ----------------------------------------
             Date Signed                          [FIELD](Name (caps))

                                        COMERICA INCORPORATED


                                        By
                                           -------------------------------------


                                      -14-


                                    SCHEDULE
              EMPLOYMENT AGREEMENTS (SENIOR VICE PRESIDENT VERSION)


Each of the executive officers of the Corporation named below executed an
Employment Agreement on the date set forth across from his name in substantially
the form attached hereto.



EXECUTIVE OFFICER                                    DATE OF AGREEMENT
- -----------------                                    -----------------
                                                  
Marvin J. Elenbaas                                   November 21, 1997
Michael H. Michalak                                  December 1, 1997

EX-10.4

                                                                    EXHIBIT 10.4

                                                                  CONFORMED COPY

Private & Confidential

                               DATED 28 JULY 2005

                        FRAMLINGTON HOLDINGS LIMITED (1)

                  THE GUARANTORS AS NAMED IN THIS AGREEMENT (2)

                                       AND

                         AXA INVESTMENT MANAGERS SA (3)

                                   ----------

                            IMPLEMENTATION AGREEMENT

                                   ----------

                                                              [NORTON ROSE LOGO]

                                                                  CONFORMED COPY

                                    CONTENTS



CLAUSE                                                                      PAGE
- ------                                                                      ----
                                                                      
1        Definitions and interpretation..................................      3
2        Conditions precedent............................................     13
3        Pre-Completion Matters..........................................     14
4        Completion......................................................     17
5        The Warranties..................................................     19
6        Claims against the Seller and the Guarantors....................     21
7        Non-competition provisions and use of names.....................     22
8        Covenants and Other Undertakings................................     23
9        Pensions........................................................     25
10       Release and indemnity for outstanding Guarantees and LTIP
            obligations..................................................     26
11       Guarantee of Seller's obligations...............................     27
12       Intellectual property and other matters.........................     28
13       Entire agreement................................................     29
14       Effect of Completion............................................     30
15       Remedies........................................................     30
16       Payments........................................................     31
17       Further assurances..............................................     32
18       Announcements and confidentiality...............................     32
19       Records.........................................................     33
20       Severability and set-off........................................     34
21       Miscellaneous...................................................     34
22       Notices.........................................................     34



                                        1

                                                                  CONFORMED COPY

                                                                        
23       Assignment......................................................     35
24       Buyer's Agent for service.......................................     36
25       Agent for service...............................................     36
26       Agent for service...............................................     37
27       Governing law and submission to jurisdiction....................     37

Schedule 1 Part A - The Seller...........................................     38
      Part B - The Guarantors............................................     38

Schedule 2 Information about the Group...................................     39
      Part A - The Company...............................................     39
      Part B - The Subsidiaries..........................................     40
      Part C - African Companies.........................................     46
      Part D - Dormant Companies.........................................     48

Schedule 3 Part A - The Warranties.......................................     64

Schedule 4 Actuary's Letter..............................................     94

Schedule 5 The Properties................................................     95

Schedule 6 Limitations on the liability of the Seller and the
   Guarantors............................................................     96

Schedule 7 Part A - The preparation of the Completion Accounts...........    103
      Part B - Form of Completion Accounts...............................    106
      Part C - Agreed accounting policies and principles.................    107

Schedule 8 Pre-Completion Undertakings...................................    108



AGREED FORM DOCUMENTS

Power of Attorney
Taxation Deed
Disclosure Letter
Schedule of Deeds
Shareholder Resolution


                                        2

                                                                  CONFORMED COPY

THIS AGREEMENT is dated 28th July 2005 and is made BETWEEN:

(1)  Framlington Holdings Limited, a company incorporated in England and Wales
     (registered number 02314914), whose registered office is at 155
     Bishopsgate, London, EC2M 3XJ (the "SELLER");

(2)  The persons whose names and addresses are stated in Part B of Schedule 1
     (together, the "GUARANTORS"); and

(3)  AXA INVESTMENT MANAGERS, societe anonyme whose registered office is at
     Coeur La Defense, Tour B, La Defense 4, 100 Esplanade du General de Gaulle
     - 92932 Paris La Defense, France, registered at the registre du commerce et
     des societes de Nanterre with the number RCS 393 051 826 (the "BUYER").

NOW IT IS HEREBY AGREED AS FOLLOWS:

1    DEFINITIONS AND INTERPRETATION

1.1  In this Agreement, unless the context requires otherwise:

     "ACCOUNTANTS" shall have the meaning given to it in paragraph 1 of Schedule
     7;

     "ACCOUNTS" means the consolidated accounts of the Company, including the
     balance sheet, profit and loss statement, cash flow statement, notes to
     those accounts and the associated directors' and auditors' reports, for
     each of the last two financial years the last of which ended on the
     Accounts Date;

     "ACCOUNTING STANDARDS" means the Financial Reporting Standards and
     Statements of Standard Accounting Practice issued and/or adopted by the
     Accounting Standards Board and Abstracts issued by the Urgent Issues Task
     Force of the Accounting Standards Board;

     "ACCOUNTS DATE" means 31st December 2004;

     "ACTUAL NET ASSET VALUE" means the amount shown opposite the heading "Net
     Assets excluding pension deficit" as shown in the Completion Accounts as
     prepared in accordance with Schedule 7;

     "ACTUAL TAXATION LIABILITY" has the meaning given to that expression in the
     Taxation Deed;

     "ACTUARIAL ASSUMPTIONS" means the assumptions in the agreed form;

     "AFRICAN COMPANIES" means the companies set out in Part C of Schedule 2;

     "AFRICAN EXIT PLAN" means the plan in relation to the African Companies set
     out in Schedule 10;


                                       3

                                                                  CONFORMED COPY

     "AFRICAN FUNDS" has the meaning given in paragraph 4 of Schedule 10;

     "ARTICLES OF ASSOCIATION" means the articles of association of the Company
     as amended from time to time;

     "AUDITORS" means the auditors of the Company, namely PricewaterhouseCoopers
     LLP, Chartered Accountants, of Southwark Towers, 32 London Bridge Street,
     London SE1 9SY;

     "AUM STATEMENT" shall have the meaning given to it in Schedule 9;

     "AWARDS" has the meaning given in the LTIP Rules save that the term shall
     exclude Options (also as defined in the LTIP Rules);

     "BOARD" means the board of directors of the Company;

     "BOOKS AND RECORDS" has its common law meaning and includes, without
     limitation, all notices, correspondence, orders, inquiries, drawings,
     plans, books of account and other documents and all computer disks or tapes
     or other machine legible programs or other records;

     "BUSINESS" means the business of the Group;

     "BUSINESS DAY" means a day other than a Saturday or Sunday or other public
     or bank holiday on which banks are ordinarily open for the transaction of
     normal banking business in London, other than solely for the settlement and
     clearing of euro;

     "BUSINESS INFORMATION" means all information, know-how and records (whether
     or not confidential and in whatever form held) including (without
     limitation) all formulae, data, manuals and instructions and all customer
     lists, sales information, business plans and forecasts, and all technical
     or other expertise and all accounting and Taxation records, correspondence,
     orders and inquiries;

     "BUYER'S ACCOUNTANTS" means KPMG, Chartered Accountants;

     "BUYER'S ACTUARY" means the person nominated by the Buyer from time to time
     in relation to this Agreement;

     "BUYER'S GROUP" means the Buyer and each company which is from time to time
     a Related Company of the Buyer;

     "BUYER'S SOLICITORS" means Slaughter and May, of One Bunhill Row, London
     EC1Y 8YY;

     "BUYER'S WARRANTIES" means the warranties set out in Part B of Schedule 3
     to be given by the Buyer to the Seller and the Guarantors;

     "CA 1985" means the Companies Act 1985;


                                       4

                                                                  CONFORMED COPY

     "COMPANY" means Framlington Group Limited, a company incorporated in
     England and Wales (registered number 01237167), whose registered office is
     at 155 Bishopsgate, London EC2M 3XJ, further details of which are set out
     in Part A of Schedule 2;

     "COMPLETION" means the performance by the parties of their respective
     obligations under clause 5.1;

     "COMPLETION ACCOUNTS" means the consolidated pro forma net asset statement
     of the Company as at the Completion Date to be prepared in accordance with
     Schedule 7;

     "COMPLETION DATE" means, subject to the proviso to clause 3.4, the last
     Business Day in the calendar month in which a Completion Month Reference
     Date falls, save that, without prejudice to clause 2.8, if there is a
     Completion Month Reference Date in any following month, the Completion Date
     shall be the last Business Day of that calendar month;

     "COMPLETION MONTH REFERENCE DATE" means the date falling seven days after
     the later of:

     (i)  the FSA Approval Date;

     (ii) the expiry of any PCU Cure Period where such expiry occurs after the
          FSA Approval Date; and

     (iii) the expiry of any Warranty Cure Period where such expiry occurs after
          the FSA Approval Date;

     "CONDITIONS" means the conditions specified in clause 2.1, and "CONDITION"
     shall mean any one of them;

     "CONNECTED PERSON" means, in relation to each Guarantor and the Seller, any
     company which is for the time being a Related Company of that Guarantor or
     the Seller other than any Group Company;

     "DATA ROOM" means all correspondence, documents and other information made
     available by the Seller for inspection by the Buyer and its advisers by any
     means and which is listed in the Data Room Index;

     "DATA ROOM INDEX" means the index detailing the contents of the Data Room,
     in the agreed form;

     "DISCLOSURE LETTER" means the letter of the same date as this Agreement
     from the Seller to the Buyer disclosing certain matters in relation to the
     Warranties, together with all documents attached to it;

     "DORMANT COMPANIES" means the companies listed in Part D of Schedule 2;


                                       5

                                                                  CONFORMED COPY

     "EGM" has the meaning given in clause 3.2;

     "ENCUMBRANCE" means any mortgage, charge, pledge, lien, option,
     restriction, right of first refusal, right of pre-emption, claim, right,
     interest or preference granted to any third party, or any other encumbrance
     or security interest of any kind (or an agreement or commitment to create
     any of the same);

     "FSA" means the Financial Services Authority;

     "FSA APPROVAL DATE" means the date on which the Condition in clause 2.1(a)
     is satisfied;

     "FSA SETTLEMENT" means the settlement and contribution agreement between,
     inter alia, Framlington Investment Management Limited and the FSA dated
     24th December 2004;

     "FSMA" means the Financial Services and Markets Act 2000;

     "FUNDAMENTAL BREACH OF THE PRE-COMPLETION UNDERTAKINGS" means one or more
     matter(s), event(s) or circumstance(s) constituting a breach or breaches of
     the Pre-Completion Undertakings which give(s) rise to, or is or are (as the
     case may be) reasonably likely to give rise to, a reduction in the market
     value of the equity share capital of the Company in excess of L78.4
     million or the equivalent in any other currency;

     "FUNDAMENTAL BREACH OF THE WARRANTIES" means one or more matter(s),
     event(s) or circumstance(s) constituting a breach or breaches of the
     Warranties which give(s) rise to, or is or are (as the case may be)
     reasonably likely to give rise to, a reduction in the market value of the
     equity share capital of the Company in excess of L78.4 million or the
     equivalent in any other currency;

     "FUNDING AGREEMENT" means the letter dated 21st July 2003 between the
     Company and the trustee of the LTIP Trust pursuant to which the Company
     agreed to contribute a percentage of its profits to the LTIP Trust and to
     procure the delivery of ordinary shares in the Company to participants in
     the LTIP;

     "FUNDS" means those investment trusts, OEICs and unit trusts and other
     collective investment schemes of which any Group Company is the operator,
     manager (including fund manager and sub-fund manager), investment adviser,
     sub-investment adviser or authorised corporate director at any time prior
     to Completion;

     "GOVERNMENT ENTITY" means, in relation to anywhere in the world, any
     supra-national, national, state, municipal or local government, any
     sub-division, court, administrative agency or commission or other authority
     thereof, or any quasi-governmental or private body exercising any
     regulatory, importing or other governmental or quasi-governmental authority
     or any Taxation Authority;


                                       6

                                                                  CONFORMED COPY

     "GROUP" means the Company and the Subsidiaries, details of which are set
     out in Parts A, B and C of Schedule 2, and "GROUP COMPANY" means any of
     them;

     "GROUP PERSONAL PENSION SCHEME" means the Framlington Group Personal
     Pension Scheme;

     "GUARANTEE" means any guarantee, indemnity, suretyship, letter of comfort
     or other assurance, security or right of set off given or undertaken by a
     person (other than a Group Company) to secure or support the obligations
     (actual or contingent) of the Business or any Group Company and whether
     given directly or by way of counter indemnity to any other person who has
     provided any of the foregoing;

     "HMRC" means HM Revenue and Customs;

     "HOLDING COMPANY" means a holding company (as defined by sections 736 and
     736A CA 1985) or a parent undertaking (as defined by section 258 CA 1985);

     "ICTA 1988" means the Income and Corporation Taxes Act 1988;

     "IMPLEMENTATION DOCUMENTS" has the meaning given in Clause 15.1;

     "INFLOW AMOUNT" shall have the meaning given to it in Schedule 9;

     "INSTALMENT PAYMENTS REGULATIONS" means the Corporation Tax (Instalment
     Payment Regulations) 1998;

     "INTERNAL MARKET" means the rules of the internal market established in
     connection with the LTIP;

     "INTELLECTUAL PROPERTY RIGHTS" means all or any copyrights, patents, trade
     marks, trade names, service marks, design rights and database rights
     (whether or not any of these is registered and including applications for
     registration of any such thing) and all other rights or forms of protection
     of a similar nature or having equivalent or similar effect to any of these
     which may subsist anywhere in the world;

     "INVESTMENT TRUST" means any company listed as an investment trust company
     on the Official List of the London Stock Exchange;

     "KEY EMPLOYEES" means George Luckraft, Nigel Thomas, Roger Whiteoak,
     Richard Peirson, Deane Donnigan and Brian Watson and "KEY EMPLOYEE" shall
     mean any of them;

     "LIBOR" means the display rate per annum of the offered quotation for
     deposits in sterling for a period of one month which appears on Telerate
     3750 (or such other page as the parties may agree) at or about 11.00 a.m.
     London time on the due date;

     "LONGSTOP DATE" means 30th November 2005;


                                       7

                                                                  CONFORMED COPY

     "LOSSES" means actions, proceedings, losses, reasonable costs, claims,
     damages, liabilities and reasonable expenses;

     "LTIP" means the Framlington Group Long Term Incentive Plan as adopted by
     the Board on 20th March 2003;

     "LTIP RULES" means the rules of the LTIP as amended from time to time;

     "LTIP TRUST" means the trust created pursuant to the trust deed dated 6th
     March 2003 made between The Company and the LTIP Trustee;

     "LTIP TRUSTEE" means Ogier Employee Benefit Trustee Limited;

     "MANAGEMENT ACCOUNTS" means the unaudited management accounts of the Group,
     including a profit and loss account and balance sheet and selected
     information on funds under management in the format included in the Data
     Room;

     "NET OUTFLOW AMOUNT" means the difference between the Outflow Amount and
     the Inflow Amount provided that if the Inflow Amount exceeds the Outflow
     Amount, the Net Outflow Amount shall be nil;

     "OFFER DOCUMENTS" means the offer document dated 27th July 2005 containing
     the terms of the offer made by the Buyer for the entire issued share
     capital of the Company and the accompanying form of acceptance;

     "ON RISK TIME" means a moment in time which is the same amount of time
     after a Completion Month Reference Date as it is before the last Business
     Day of the month in which such Completion Month Reference Date falls, save
     that:

          (i)  if the proviso to clause 3.4 applies then the On Risk Time shall
               be the moment in time which is the same amount of time after the
               Completion Month Reference Date which has then occurred as it is
               before 31st October 2005; and

          (ii) in any event, if the relevant Completion Month Reference Date is
               the last Business Day of a month then the On Risk Time shall be
               deemed to be 12.00 noon (London time) on that day.

     "OPTION" has the meaning given in the LTIP Rules;

     "OUTFLOW AMOUNT" shall have the meaning given to it in Schedule 9;

     "PCU CURE PERIOD" has the meaning given in clause 4.4;

     "PENSION SCHEME" means the Framlington Group Pension Plan which is
     currently governed by the Second Definitive Trust Deed dated 26th August
     1999;


                                       8

                                                                  CONFORMED COPY

     "PENSION SCHEME MEMBERS" means the directors, employees, past employees and
     past directors of the Company who are entitled to benefits under the
     Pension Scheme and all those persons who are entitled to claim through
     them;

     "PHANTOM OPTION AGREEMENTS" means phantom option agreements made between
     the Seller and certain employees of the Group Companies at any time before
     the Completion Date;

     "PRE-COMPLETION UNDERTAKINGS" means the undertakings given by the Seller
     and the Guarantors as set out in Schedule 8;

     "PRE-SALE DIVIDEND" means a dividend of an amount to be determined and to
     be declared by the Company prior to Completion;

     "PROCEEDINGS" means any proceeding, suit or action arising out of or in
     connection with this Agreement;

     "PROPERTIES" means the properties, details of which are set out in Schedule
     5 and "PROPERTY" shall be construed accordingly;

     "PROVISIONAL NET ASSET VALUE" means the sum of L22,360,000;

     "RECOGNISED INVESTMENT EXCHANGE" shall have the meaning given to it in
     section 285(1) of FSMA;

     "RECORD DATE" has the meaning given in clause 3.4.7;

     "REGULATORY AUTHORITY" means any relevant Government Entity (other than any
     Taxation Authority) or other authority, in any jurisdiction, which is
     responsible for authorising, supervising or otherwise regulating any part
     of the Business or has any other regulatory, investigative, administrative
     or quasi-judicial jurisdiction, power or other similar function in relation
     to any part of the Business, including, without limitation, the FSA, the
     Financial Ombudsman Service and the SEC;

     "RELATED COMPANY" means, in relation to any company, any subsidiary or
     holding company of that company or any subsidiary of that holding company;

     "RELEVANT CLAIM" means a claim by the Buyer against the Seller under clause
     7.1 or clause 7.2 (other than a claim under the Taxation Warranties);

     "RELEVANT EMPLOYEE" means an employee or director for the time being of, or
     a former employee or director of, any Group Company;


                                       9

                                                                  CONFORMED COPY

     "RELIEF" means any loss, relief, allowance, exemption, set-off, deduction,
     credit or other relief relating to any Taxation or to the computation of
     income, profits or gains for the purposes of any Taxation;

     "RESPECTIVE PERCENTAGE" means in relation to each Guarantor, the respective
     percentage shown in column 3 of Part B of Schedule 1 opposite its name;

     "RETAIL FUNDS" means Absolute Growth Fund, American Growth Fund, Biotech
     Fund, Blue Chip Fund, Emerging Markets Fund, Equity Income Fund, European
     Fund, Financial Fund, Gilt Fund, Health Fund, Japan Fund, Managed Balanced
     Fund, Managed Distribution Fund, Managed Growth Fund, Managed Income Fund,
     Managed Portfolio Fund, Monthly Income Fund, Nasdaq Fund, NetNet Fund, New
     Leaders Fund, Pan Euro Bond Fund, UK Growth Fund, UK Select Opportunities
     Fund and UK Smaller Companies Fund;

     "SALE SHARES" means 63,431,552 issued ordinary shares of 5p each in the
     capital of the Company;

     "SELLER'S ACCOUNTANTS" means Deloitte, Chartered Accountants;

     "SELLER'S ACTUARY" means the person nominated by the Seller from time to
     time in relation to this Agreement;

     "SELLER INSURANCE POLICIES" means the directors and officers liability
     insurance (policy number 072790U) and financial institutions professional
     indemnity civil liability insurance (policy numbers PI01763OU, PI01762OU
     and PI 04607 O U) in the name of the Seller and "SELLER INSURANCE POLICY"
     shall mean any of them;

     "SERVICE DOCUMENT" means a claim form, application notice, order, judgement
     or other document relating to any Proceedings;

     SENIOR EMPLOYEE" means a director or employee of any Group Company whose
     basic salary (including for this purpose applicable bonuses but, for the
     avoidance of doubt, excluding any other benefits or emoluments) exceeds
     L100,000 per annum;

     "SHAREHOLDER RESOLUTION" means the resolution of the members of the Company
     in the agreed form;

     "SHARES" means ordinary shares of 5 pence each in the capital of the
     Company;

     "SIGNING AUM" means L3,747,292,091;

     "SUBSIDIARIES" means the companies and undertakings specified in Parts B
     and C of Schedule 2 and "SUBSIDIARY" means any of them;


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                                                                  CONFORMED COPY

     "SUBSIDIARY" means a subsidiary (as defined by sections 736 and 736A CA
     1985) or a subsidiary undertaking (as defined by section 258 CA 1985);

     "TAXATION" or "TAX" means:

          (b)  all forms of tax, levy, duty, contribution, charge, impost,
               deduction, withholding or other amount whenever created or
               imposed and whether of the United Kingdom or elsewhere, payable
               to or imposed by any Taxation Authority;

          (c)  without limitation all employment taxes including contributions;
               and

          (d)  all charges, interest, penalties, costs and fines incidental or
               relating to any Taxation falling within paragraphs (a) or (b)
               above or which arise as a result of the failure to pay any
               Taxation on the due date or to comply with any obligation
               relating to Tax;

     "TAXATION AUTHORITY" means HMRC or any other revenue, customs, fiscal,
     governmental, statutory, state or provincial authority, body or person,
     whether of the United Kingdom or elsewhere;

     "TAX CLAIM" means a claim under the Tax Deed;

     "TAXATION DEED" means the taxation deed in the agreed form entered, or to
     be entered, into between the Seller (1), the Guarantors (2) and the Buyer
     (3);

     "TAXATION WARRANTIES" means the Warranties contained in paragraph 22 of
     Part A of Schedule 3;

     "VAT" means value added tax as provided for in the Sixth Directive of the
     European Community, charged by the provisions of the Value Added Tax Act
     1994 ("VATA 1994"), any regulation promulgated thereunder or any tax of a
     similar nature;

     "WARRANTIES" means the warranties set out in Part A of Schedule 3 to this
     Agreement;

     "WARRANTY CURE PERIOD" has the meaning given in clause 5.4; and

     "WORKING HOURS" means, in any place, the period 9.30 a.m. to 5.30 p.m. by
     day which is a Business Day in that place.

1.2  In this Agreement, unless the context requires otherwise:

          (a)  a document expressed to be in the "AGREED FORM" means a document
               in a form which has been agreed by the parties on or before the
               execution of this Agreement and signed or initialled by them or
               on their behalf for the purposes of identification;


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                                                                  CONFORMED COPY

          (b)  references to a clause or Schedule are to a clause of, or a
               Schedule to, this Agreement, references to this Agreement include
               its Schedules, and references to a Part or paragraph are to a
               Part or paragraph of a Schedule to this Agreement;

          (c)  references to this Agreement or any other document or to any
               specified provision of this Agreement or any other document are
               to this Agreement, that document or that provision as in force
               for the time being and as amended from time to time in accordance
               with the terms of this Agreement or that document or, as the case
               may be, with the agreement of the relevant parties;

          (d)  references to any English legal term for any action, remedy,
               method of judicial proceeding, legal document, legal status,
               court, official or any legal concept or thing shall, in respect
               of any jurisdiction other than England, be deemed to include what
               most nearly approximates in that jurisdiction to the English
               legal term;

          (e)  references to time are to London time;

          (f)  words importing the singular include the plural and vice versa,
               words importing a gender include every gender, and references to
               persons include corporations, partnerships and other
               unincorporated associations or bodies of persons;

          (g)  the contents table and the headings to clauses, Schedules, Parts
               and paragraphs are inserted for convenience only and shall be
               ignored in interpreting this Agreement;

          (h)  the words and phrases "other", "including" and "in particular"
               shall not limit the generality of any preceding words or be
               construed as being limited to the same class as the preceding
               words where a wider construction is possible; and

          (i)  reference to a person having control of another person, or being
               controlled by another person, or being under common control with
               another person shall be construed as referring to control within
               the meaning of any of sections 416, 767B and 840 ICTA 1988.

1.3  In this Agreement, unless the context requires otherwise, a reference to
     any statute or statutory provision (whether of the United Kingdom or
     elsewhere) shall be construed as a reference to the same as it may have
     been amended, modified or re-enacted except, where such amendment,
     modification or re-enactment is made after the date of this Agreement, to
     the extent that it would increase the liability of any party to this
     Agreement.

1.4  The undertakings and promises given in this Agreement are given by each
     party in consideration for the undertakings and promises given by each
     other party.


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2    CONDITIONS PRECEDENT

2.1  Completion is conditional on:

          (a)  either

               (i)  the FSA indicating (in accordance with Part XII FSMA) that
                    it approves the acquisition of control by the Buyer and all
                    other persons who would become controllers (within the
                    meaning of section 422 of FSMA) of the Group Companies that
                    are authorised by the FSA provided such approval has not
                    been made subject to any conditions imposed by the FSA that
                    would have a material adverse effect on the ability of the
                    Buyer or the Group to carry on the Business after Completion
                    in substantially the same manner as the Business is carried
                    on as at Completion, unless such conditions have been varied
                    or removed before Completion; or

               (ii) such approval being deemed as having been given pursuant to
                    section 184(2) of FSMA;

          (b)  the Shareholder Resolution having been passed; and

          (c)  a Structural Event (as defined in the Articles of Association)
               having occurred and the Seller having transferred to the LTIP
               Trustee or to participants in the LTIP for no consideration
               5,146,241 Shares.

2.2  The Buyer undertakes:

2.2.1 to use all reasonable endeavours to ensure that the Condition referred to
     in clause 2.1(a) is fulfilled as soon as possible after the date of this
     Agreement and in any event by no later than the Longstop Date; and

2.2.2 as soon as reasonably practicable and in any event within 10 Business Days
     following the date of this Agreement, to submit to the FSA an application
     pursuant to section 178 of FSMA in relation to the proposed change of
     control of the relevant Group Companies.

2.3  Without prejudice to the provisions of clause 2.2, pending Completion, the
     Buyer, the Seller and each Guarantor undertake to co-operate with each
     other by:

2.3.1 providing to the Company or each other (as the case may require) and any
     Regulatory Authority as promptly as reasonably practicable upon request and
     in good faith any information and documents reasonably required for the
     purpose of making any submissions, filings and notifications to any such
     Regulatory Authority in relation to the transactions provided for by this
     Agreement; and


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                                                                  CONFORMED COPY

2.3.2 promptly disclosing to each other all correspondence received from any
     Regulatory Authority and keeping each other promptly informed of any other
     communications in whatever form with any Regulatory Authority, in relation
     to or affecting the approval contemplated in clause 2.1(a).

2.4  The Buyer may in its absolute discretion waive in whole or in part the
     Conditions (other than the Condition contained in clause 2.1(a)).

2.5  If at any time the Seller or any Guarantor becomes aware of a fact or
     circumstance which might prevent or materially delay the Conditions or any
     of them being satisfied (including, without limitation, any proceedings or
     possible proceedings intimating that the FSA's approval referred to in
     clause 2.1(a) may not be granted), immediately it comes to the notice of
     any of them, it shall promptly notify the Buyer.

2.6  If at any time the Buyer becomes aware of a fact or circumstance which
     might prevent or materially delay the Conditions or any of them being
     satisfied (including, without limitation, any proceedings or possible
     proceedings intimating that the FSA's approval referred to in clause 2.1(a)
     may not be granted), immediately it comes to the Buyer, it shall promptly
     notify the Seller and the Guarantors.

2.7  The Buyer and the Seller (as the case may be) shall each give notice to the
     other of the satisfaction of any Condition, as soon as reasonably
     practicable following it becoming aware of such satisfaction.

2.8  If Completion has not taken place on or before the Longstop Date, then this
     Agreement shall terminate with immediate effect.

3    PRE-COMPLETION STEPS

3.1  The Seller undertakes to effect or to use reasonable endeavours to effect
     (as the case may be) the following steps in the order, and at the times,
     contemplated in this clause 3.

3.2  The Seller undertakes to the Buyer that it will convene an extraordinary
     general meeting (the "EGM") of the Company to be held as soon as
     practicable after the date of this Agreement at which the Shareholder
     Resolution is proposed.

3.3  The Seller shall procure that the Shareholder Resolution is passed at the
     EGM or any valid adjournment thereof.

3.4  On the Business Day following receipt by the Seller from the Buyer of
     confirmation pursuant to clause 2.7 that the Condition in clause 2.1(a) has
     been satisfied or, if later, the expiry of a PCU Cure Period or a Warranty
     Cure Period, the Seller shall procure that the following events shall occur
     in the following order:


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                                                                  CONFORMED COPY

3.4.1 the Board shall resolve, pursuant to the Articles of Association, that no
     Shares held (either at that time or in the future) by the LTIP Trust shall
     be converted into deferred shares in accordance with the Articles of
     Association until such time as the Board may determine;

3.4.2 a Structural Event (as defined the Articles of Association) shall occur;

3.4.3 a letter (in a form approved by the Buyer) is sent to the participants in
     the LTIP informing them of the occurrence of the Structural Event;

3.4.4 5,146,241 Shares are transferred for no consideration to the holders of
     Awards or, at the Buyer's option, to the LTIP Trust;

3.4.5 the transfers referred to in clauses 3.4.4 are validly registered in the
     register of members and the register of transfers of the Company;

3.4.6 the Board declares and the Seller approves the Pre-Sale Dividend in
     respect of holders of Shares on the register of members of the Company at
     5.00pm on the Business Day immediately preceding the Completion Date (the
     "RECORD DATE")

     PROVIDED THAT if compliance with this clause 3.4 would result in the
     Structural Event occurring in the period from 20th September 2005 to 30th
     September 2005 inclusive, then the Seller shall procure that the events set
     out in this clause shall occur on the first Business Day in October 2005
     and, subject to the other provisions of this Agreement, the Completion Date
     shall be deferred until 31st October 2005.

3.5  Following the occurrence of the events contemplated by clause 3.4.3 to
     clause 3.4.4 (inclusive), the Seller undertakes to use reasonable
     endeavours to procure each holder of Options who determines to exercise his
     Options after the occurrence of the Structural Event but before the Record
     Date has transferred to him the Shares to which such Options relate and
     that his name is placed is on the register of members of the Company on or
     before the Record Date.

3.6  The Seller undertakes that the declaration and payment of the Pre-Sale
     Dividend shall comply with applicable law and will not give rise to any
     breach of any applicable regulatory capital requirements of a Regulatory
     Authority on the part of any Group Company at the dates of declaration and
     payment of the Pre-Sale Dividend.

3.7  The Seller undertakes to request the consent of the LTIP Trustee to
     amendments to the terms of the Internal Market to allow participants in the
     LTIP to sell Shares at or after Completion to the Buyer or the LTIP Trustee
     without regard to the valuation mechanism therein. The Seller agrees to
     provide its consent to such amendments and shall use its reasonable
     endeavours to procure that the remuneration committee of the board of the
     Company shall also approve such amendments. In lieu of the obligations
     above, the Buyer may request the Seller to use reasonable endeavours to
     suspend the operation of the Internal Market in the period between the


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                                                                  CONFORMED COPY

     date of this Agreement and Completion, in which case the Seller shall be
     obliged to use reasonable endeavours to do so.

4    PENDING COMPLETION

4.1  Pending Completion, the Seller shall procure that the Pre-Completion
     Undertakings are complied with in all respects.

4.2  For the purposes of determining the Net Outflow Amount, the provisions of
     Schedule 9 shall apply.

4.3  The Seller and the Buyer each undertake, in respect of the period from and
     including the time of signing of this Agreement to and including the
     Completion Date, to disclose in writing to the other anything of which it
     becomes aware which is or is reasonably likely to constitute a material
     breach of any of the Pre-Completion Undertakings at or at any time before
     Completion as soon as reasonably practicable after becoming aware of such
     thing. The Seller undertakes to use reasonable endeavours to procure that
     the Company discloses to the Buyer and Seller in writing anything of which
     it becomes aware which is or is reasonably likely to constitute a material
     breach of any of the Pre-Completion Undertakings at or at any time before
     Completion as soon as reasonably practicable after becoming aware of such
     thing.

4.4  If, at any time prior to Completion, the Buyer or the Seller becomes aware
     (whether pursuant to clause 4.3 or otherwise) that there is or has been a
     Fundamental Breach of the Pre-Completion Undertakings, the Seller or the
     Buyer (as the case may be) shall, within 2 Business Days of becoming so
     aware, serve notice (a "PCU BREACH NOTICE") on the other pursuant to this
     clause 4.4. The Seller and the Guarantors shall have a period of up to 20
     Business Days from the receipt or giving (as the case may be) of the PCU
     Breach Notice to remedy the Fundamental Breach of the Pre-Completion
     Undertakings, which period shall expire if and when this effective remedy
     is achieved (the "PCU CURE PERIOD") If, at the expiry of the 20 Business
     Day period from the receipt or giving of the PCU Breach Notice, such
     Fundamental Breach of the Pre-Completion Undertakings has not been
     effectively remedied in whole or in part such that the relevant matter(s),
     event(s) or circumstance(s) constituting a breach of the Pre-Completion
     Undertakings no longer constitute(s) a Fundamental Breach of the
     Pre-Completion Undertakings, the Buyer shall be entitled (but not obliged)
     to terminate this Agreement with immediate effect by written notice to the
     other parties. For the purposes of this clause 4.4, a remedy shall be
     deemed not to be effective if it is only in the short term interest of the
     Group or involves the introduction of new business to the Group in the form
     of investment management mandates or distribution agreements from the
     Guarantors or any of their respective Connected Persons. Nothing in this
     clause 4.4 shall constitute a waiver of, or prejudice, comprise or affect,
     the Buyer's rights under any other provision of this Agreement (including,
     without limitation, clause 4.1).


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5    COMPLETION

5.1  Completion shall take place at the London offices of Norton Rose or at such
     other place as the parties may agree on the Completion Date when all (but
     not part only unless the parties otherwise agree in writing) of the
     following business referred to in this Clause 5.1 shall be transacted:

5.1.1 the Seller shall deliver to the Buyer or (as the case may be) procure that
     the following shall be effected:

          (a)  certified copies of the minutes recording the resolution of the
               board of directors of the Seller and the Guarantors authorising
               the transactions contemplated by this Agreement;

          (b)  duly executed transfers (in favour of such person or persons as
               the Buyer may direct or have directed) of all shares in the
               Subsidiaries not registered in the name of any Group Company,
               together with the certificates for those shares;

          (c)  the Taxation Deed duly executed by each of the parties to it
               other than the Buyer;

          (d)  confirmation in the agreed form that the Funding Agreement has
               been terminated;

          (e)  those persons nominated by the Buyer to the Seller are validly
               appointed as additional directors provided that such nominations
               are provided to the Seller not less than 2 Business Days prior to
               Completion;

          (f)  David Burnett, Alain Dromer, Dennis Mooradian and Enrique Chang
               cease to be directors of each Group Company and deliver to the
               Buyer letters (executed as deeds) from all such persons so
               resigning acknowledging that they have no claim outstanding for
               compensation for loss of office or otherwise howsoever, including
               redundancy and unfair dismissal; and

          (g)  confirmation in the agreed form from the Seller that all of the
               rights under the Phantom Option Agreements have been satisfied by
               the payment of the cash amounts contemplated by those agreements
               to the relevant employees.

5.1.2 the Seller shall:

          (a)  cause the transfers of all Shares to which the Buyer or the LTIP
               Trustee is entitled at that time to be resolved to be registered
               (subject only to their being duly stamped); and

          (b)  make available at the Company's registered office (as agents for
               each Group Company) all its statutory and minute books, its
               common seal (if any), certificate of incorporation, any
               certificate or certificates of incorporation or of change of name
               and other documents and records including copies of its
               memorandum and articles of association; and


                                       17

                                                                  CONFORMED COPY

          (c)  make available at the Company's registered office the deeds and
               documents of title relating to the Properties in accordance with
               a schedule in the agreed form.

5.1.3 the Buyer shall deliver to the Seller the Taxation Deed duly executed by
     the Buyer; and

5.1.4 the parties shall:

          (a)  join in procuring that all bank mandates in force for each Group
               Company shall be altered (in the manner which the Buyer requires)
               to reflect the resignations and appointments referred to above;
               and

          (b)  deliver certified copies of the minutes recording the resolution
               of their respective board of directors authorising the
               transactions contemplated by this Agreement.

5.2  If the obligations of the Seller under clause 5.1.1 are not complied with
     on the Completion Date, the Buyer may:

          (a)  defer Completion for a period of 2 Business Days (so that the
               provisions of this clause 5 shall apply to Completion as so
               deferred); and

          (b)  in respect of a failure by the Seller to comply with its
               obligations under clause 5.1.1 at any Completion which has been
               deferred pursuant to clause 5.2(a), to terminate this Agreement
               with immediate effect by notice in writing to the Seller.

5.3  If the obligations of the Buyer under clause 5.1.3 are not complied with on
     the Completion Date the Seller may:

          (a)  defer Completion for a period of 2 Business Days (so that the
               provisions of this clause 5 shall apply to Completion as so
               deferred); and

          (b)  in respect of a failure by the Buyer to comply with its
               obligations under clause 5.1.3 at any Completion which has been
               deferred pursuant to clause 5.3(a), to terminate this Agreement
               with immediate effect by notice in writing to the Buyer.

5.4  If, immediately before an On Risk Time, either the Buyer or the Seller
     becomes aware that there exists a Fundamental Breach of the Warranties if
     the Warranties were to be repeated by reference to the facts and
     circumstances then subsisting (such that all express or implied references
     to the date of this Agreement are deemed to be references to the date of
     such repetition), the Buyer or the Seller (as the case may be) shall, serve
     notice thereof (a "WARRANTY BREACH NOTICE") on the other party whereupon
     the Seller and the Guarantors shall be afforded a period of up to 20
     Business Days in which to remedy such Fundamental Breach of the Warranties,
     which period shall expire if and when an effective remedy is achieved (the
     "WARRANTY CURE PERIOD"). If, at the expiry of the Warranty Cure Period,
     such Fundamental Breach of the


                                       18

                                                                  CONFORMED COPY

     Warranties has not been remedied effectively in whole or in part such that
     the relevant matter(s), event(s) or circumstance(s) constituting a breach
     of the Warranties no longer constitute(s) a Fundamental Breach of the
     Warranties, the Buyer shall be entitled (but not obliged) to terminate this
     Agreement with immediate effect by written notice to the other parties. For
     the purposes of this clause 5.4, a remedy shall be deemed not to be
     effective if it is only in the short term interests of the Group or
     involves the introduction of new business to the Group in the form of
     investment management mandates or distribution agreements from the
     Guarantors or any of their respective Connected Persons. Nothing in this
     clause 5.4 shall constitute a waiver of, or prejudice, comprise or affect,
     the Buyer's rights under any other provision of this Agreement (including
     without limitation clause 7.1).

5.5  If there is a Net Outflow Amount at an On Risk Time which is greater than
     24 per cent. of the Signing AUM the Buyer may terminate this Agreement with
     immediate effect by notice in writing to the Seller on the date on which
     the On Risk Time is reached, save that where such date is not a Business
     Day such notice may be given to the Seller on the next Business Day.

6    ACTUAL NET ASSET VALUE

6.1  If the Actual Net Asset Value is:

          (a)  a positive sum which is less than the Provisional Net Asset
               Value, the Seller shall pay to the Buyer in accordance with
               clause 6.2 a sum equal to the difference;

          (b)  a negative sum, the Seller shall pay to the Buyer in accordance
               with clause 6.2 a sum equal to the aggregate of the Provisional
               Net Asset Value and the amount by which the Actual Net Asset
               Value is less than zero; or

          (c)  equal to the Provisional Net Asset Value, no payment or further
               payment from the Seller to the Buyer shall be made pursuant to
               this clause 6.2.

6.2  Any sum payable as referred to under clause 6.1 or pursuant to the terms of
     the Net Asset Adjustment set out in the Offer Documents shall be paid:

          (a)  within 3 Business Days after the agreement or determination of
               the Actual Net Asset Value pursuant to Schedule 7;

          (b)  together with interest thereon at the rate of LIBOR as determined
               at the Completion Date which shall accrue from day to day and
               shall be calculated on the basis of a year of 365 days from the
               Completion Date up to and including the date of payment (unless
               such interest has already been paid pursuant to the Offer
               Documents); and

          (c)  by electronic funds transfer for same day value to a bank account
               nominated by the Buyer or (as the case may be) in accordance with
               the Offer Documents.


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                                                                  CONFORMED COPY

6.3  For the purposes of determining the Actual Net Asset Value, the provisions
     of Part A of Schedule 7 shall apply.

7    THE WARRANTIES

7.1  The Seller warrants to the Buyer that:

7.1.1 each of the Warranties is true and accurate as at the date of this
     Agreement; and

7.1.2 each of the following Warranties shall be true and accurate immediately
     prior to Completion as if repeated immediately before Completion by
     reference to the facts and circumstances subsisting at that time on the
     basis that any reference in the Warranties, whether express or implied, to
     the date of this Agreement is substituted by a reference to the Completion
     Date: 1.1 to 1.6 (inclusive), 2.1 to 2.3 (inclusive), 3.1 to 3.5
     (inclusive), 4.1, 4.4, 4.5, 4.7, 4.12 to 4.15 (inclusive), 5.1 to 5.3
     (inclusive), 6.3 to 6.4 (inclusive), 9.3 (second sentence only) to 9.4
     (inclusive), 10.1, first sentence of 10.3, 10.4, 10.5, 11.3, all of
     paragraph 12 (other than 12.3, 12.4, 12.5, 12.8), 13.5 (second sentence
     only) to 13.10 (inclusive), 13.13, all of paragraph 14 (other than 14.2,
     14.3 and 14.9), 15.1, 15.3, 16.2, 16.3 (second sentence), 16.4, 16.5, 16.6,
     16.8, 16.9, 16.12, 16.13, 16.15, 17, 19.1, 19.2, 20.4, 20.5, 20.7 to 20.11
     (inclusive) and all of 21, 22.1, 22.2, 22.5, 22.6, 22.13, 22.16,
     22.19-22.21 and the first sentence of 22.23, 22.24-22.27, 22.30, 22.32,
     22.33, 22.34, 22.36, 22.40 and 22.42.

7.2  For the purposes of Schedule 3, "SO FAR AS THE SELLER IS AWARE" or any
     similar phrase refers to the actual knowledge of David Burnett, Alain
     Dromer, Enrique Chang and Dennis Mooradian having made reasonable enquiries
     of (but only of) Ian Barnetson, (Chief Operating Officer) Eleanor Cranmer
     (Company Secretary) (in respect of Warranties 3, 5, 6, 7, 12 and 15),
     Andrew Dysch (Financial Controller) (in respect of Warranties 6, 7, 8, 9,
     15, 21 and 22), Jonathan Eadie (Head of Compliance) (in respect of
     Warranties 4, 5, 9, 16 and 20), Josie Tubbs (Head of Legal) (in respect of
     Warranties 4, 5, 7, 9, 12, 14, 16, 17, 18, 19 and 20), Nick Hodgson (Sales
     and Marketing Director) (in respect of Warranties 4, 9, 10 and 11), Paul
     Armatage (Head of IT) (in respect of Warranties 9 and 16), Una Devine (Head
     of Facilities and Personnel) (in respect of Warranties 12 to 14) and Jeremy
     Lodwick (Chief Investment Officer) (in respect of Warranties 4 and 9). Each
     of the Guarantors and the Seller undertakes to procure that each of David
     Burnett, Alain Dromer, Enrique Chang and Dennis Mooradian make reasonable
     enquiries of each such person (or, in each case, such other person who at
     the relevant time holds the relevant position in the Group) in respect of
     each Warranty set out next to his name before signing of this Agreement
     and, in respect only of those Warranties qualified by the Seller's
     awareness, before Completion

7.3  The Buyer warrants to the Seller and the Guarantors that each of the
     Buyer's Warranties is true and accurate as at the date of this Agreement
     and shall be true and accurate on the Completion


                                       20

                                                                  CONFORMED COPY

     Date as if repeated immediately before Completion by reference to the facts
     and circumstances subsisting at that time.

7.4  The Warranties are qualified by those facts, matters, events or
     circumstances fairly disclosed in the Disclosure Letter and the Data Room
     and for this purpose "FAIRLY DISCLOSED" means disclosed in such manner and
     in sufficient detail as to enable a reasonable buyer to make a reasonable
     assessment and evaluation of the implications thereof including without
     limitation the nature and scale of the facts, matters, events or
     circumstances concerned. No warranty or representation is given as to the
     accuracy or completeness of any statements (including any statements of
     opinion) contained in the Disclosure Letter or the Data Room.

7.5  Save for bona fide claims for fraud, wilful concealment with intent to
     mislead or a wilful misrepresentation with intent to mislead, the Seller
     undertakes not to, and the Guarantors undertake not to and to procure that
     none of their Connected Persons, make or makes any claim against any
     director or employee of any Group Company on whom any of them may have
     relied before agreeing to any terms of the Implementation Documents or
     authorising any statement in the Disclosure Letter. The provisions of this
     clause 7.5 shall be enforceable by each director or employee of any such
     Group Company.

7.6  Each of the paragraphs in Schedule 3 shall be construed as a separate and
     independent warranty and (except where expressly provided to the contrary)
     shall not be limited or restricted by reference to or inference from the
     terms of any other Warranty or any other term of this Agreement.

8    CLAIMS AGAINST THE SELLER AND THE GUARANTORS

8.1  The liability of the Guarantors under the Implementation Documents shall be
     several and not joint.

8.2  The provisions of Schedule 6 shall apply in accordance with their terms.

8.3  Each of the Guarantors acknowledge and undertake that the Seller's
     obligations, liabilities and responsibilities under and in respect of the
     Implementation Documents shall remain in full force and effect, and shall
     not be affected, compromised or prejudiced, in the event that the Seller
     enters into a voluntary or involuntary liquidation or similar process.

8.4  Without prejudice in any respect to the Buyer's rights under clause 13.4,
     the Buyer undertakes that, to the extent the consent of the Buyer or any
     member of the Group is requested by the Seller or the Guarantors following
     Completion in order to implement or effect a voluntary liquidation or a
     reduction of capital of the Seller, the Buyer shall (or shall procure that
     the relevant member of the Group shall) promptly give its unconditional
     consent.


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9    NON-COMPETITION PROVISIONS AND USE OF NAMES

9.1  Each of the Seller and the Guarantors undertakes with the Buyer that it
     shall not, and shall procure that its respective Connected Persons shall
     not, without the prior written consent of the Buyer, for a period
     commencing on the date of this Agreement and ending on the second
     anniversary of the Completion Date, solicit or entice away or endeavour to
     solicit or entice away from any Group Company any Senior Employee (other
     than a Key Employee or Nick Hodgson), whether or not that person would
     commit any breach of their contract of employment by reason of leaving the
     service of that Group Company, provided always that nothing in this clause
     9.1 shall prevent the Seller or the Guarantors or any of them from
     employing a Senior Employee (other than a Key Employee or Nick Hodgson) of
     any Group Company (from time to time) pursuant to a general advertisement
     to the public or pursuant to a recruitment campaign which is not directed
     specifically at the employees of Group Companies.

9.2  Each of the Seller and the Guarantors undertakes with the Buyer that it
     shall not, and shall procure that its respective Connected Persons shall
     not, without the prior written consent of the Buyer, for a period
     commencing on the date of this Agreement and ending on the third
     anniversary of the Completion Date, solicit or entice away or endeavour to
     solicit or entice away from any Group Company any Key Employee or Nick
     Hodgson, whether or not that person would commit any breach of their
     contract of employment by reason of leaving the service of that Group
     Company.

9.3  The Buyer undertakes to procure that neither it, the Company, any Related
     Company to the Buyer nor any member of the Group shall at any time after
     Completion represent itself or hold itself out as being in any way
     connected with the Seller, any Guarantor or any Connected Person, and each
     of the Seller and the Guarantors undertakes to procure that neither it nor
     any Connected Person shall at any time after Completion represent itself or
     hold itself out as being in any way connected with the Buyer, any Related
     Company to the Buyer or any member of the Group.

9.4  Each of the Guarantors and the Seller agrees with the Company and the Buyer
     that the restrictive covenants in this clause 9 are reasonable and
     necessary for the protection of the value of the Sale Shares and the
     Company and that having regard to that fact that those covenants do not
     work harshly on it. While the restriction is considered by the parties to
     be reasonable in all the circumstances, it is agreed that if the
     restriction is adjudged to go beyond what is reasonable in all the
     circumstances for the protection of the legitimate interests of the Buyer
     but would be adjudged reasonable if part of its wording were deleted or
     amended or qualified, or if the period referred to were reduced, then the
     relevant restriction or restrictions shall apply with such modification or
     modifications as may be necessary to make it or them valid and effective.


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10   COVENANTS AND OTHER UNDERTAKINGS

10.1 The Seller (for itself and its nominees) hereby irrevocably waives any
     rights of pre-emption conferred on them by the Articles of Association or
     otherwise over any of the Sale Shares.

10.2 The Seller covenant with the Buyer that the Seller or the Guarantors will
     pay to the Buyer or such person as the Buyer may direct an amount equal to
     the aggregate of:

          (a)  any un-extinguished Losses (and excluding, for the avoidance of
               doubt, any contribution made to Funds Distribution Limited
               pursuant to the FSA Settlement) suffered or incurred by the Buyer
               (provided that such Losses would not have arisen but for the
               acquisition of the Group) or any Group Company arising out of or
               in connection with the involvement of any Group Company, or any
               Relevant Employee acting as such, in split capital investment
               trusts (whether as manager or otherwise) including without
               limitation:

               (i)  any further call for funds made by the FSA or Funds
                    Distribution Limited (other than the contribution made
                    pursuant to the FSA Settlement); and

               (ii) any other settlement in connection therewith otherwise
                    agreed with any claimant; and

          (b)  any obligation on any Group Company to compensate any of the
               Funds for amounts charged to the Funds by a Group Company on or
               prior to Completion in respect of VAT on supplies made by that
               Group Company to the Funds, where such obligation arises as a
               result of the eventual decision in the test case brought by the
               Association of Investment Trust Companies and JPMorgan Fleming
               Claverhouse Investment Trust plc;

          (c)  any Losses suffered or incurred by any member of the Buyer's
               Group or any Group Company arising out of or in connection with:

               (i)  any claim made by Deutsche Bank AG or any of its Connected
                    Persons in connection with the contractual option
                    arrangements involving, inter alia, Framlington NetNet PLC,
                    LCF Rothschild (CI) Limited and the Framlington Health &
                    Income Fund; and

               (ii) any claim made in connection with a breach of any mandate
                    agreed with Stagecoach PLC or any of its Connected Persons
                    where such claim arises as a result of a breach by any Group
                    Company of restrictions on holdings of AIM listed
                    securities;

          (d)  any Losses suffered or incurred by any member of the Buyer's
               Group or any Group Company arising in respect of, or in
               connection with, the ownership or disposal of the Dormant
               Companies;


                                       23

                                                                  CONFORMED COPY

          (e)  any Losses suffered or incurred by any member of the Buyer's
               Group or any Group Company arising in respect of, or in
               connection with, the African Companies or the African Funds
               PROVIDED THAT this covenant shall not apply to Losses to the
               extent that such Losses result from the failure of a Group
               Company to comply with the African Exit Plan.

10.3 The Group shall, at the Seller's cost, purchase a run-off policy in the
     name of, and on terms reasonably satisfactory to, the Company in respect of
     each Seller Insurance Policy. Each such run-off policy shall come to come
     into effect from Completion and shall have a term of not less than 2 years.
     For the avoidance of doubt, the Seller shall be responsible for the
     premiums payable over the life of such run-off policies.

10.4 In the event that the Seller has the right to a claim under any Seller
     Insurance Policy in respect of an event or circumstance relating to a Group
     Company and arising prior to Completion in respect of which a Group Company
     suffers a loss or liability and which claim cannot be made or brought
     directly by a Group Company, if requested by the Buyer or any Group Company
     at any time after Completion, the Seller shall, as soon as reasonably
     practicable, take reasonable steps to procure that a claim (in a form
     reasonably satisfactory to the Company) is made under the relevant Seller
     Insurance Policy in respect of the relevant event or circumstance and in
     this regard:

          (a)  the Seller undertakes to comply with any reasonable request made
               by any Group Company in respect of the conduct of such claim; and

          (b)  the parties undertake to co-operate with each other by providing
               to each other and any insurer as promptly as reasonably
               practicable upon request and in good faith any necessary
               information and documents for the purpose of making any claims
               under the Insurance Polices of any of them and disclosing to each
               other all correspondence received from any relevant insurer and
               keeping each other informed of any other communications in
               whatever form with any such insurer.

     Subject to clause 10.5, the Seller undertakes and acknowledges that the
     proceeds (after taking into account any deductions, and less any tax
     suffered on the proceeds suffered by the Seller) of any successful claim
     made pursuant to this clause 10.4 shall be held on trust for the relevant
     Group Company and that it shall procure that such proceeds are paid to the
     relevant Group Company as soon as practicable. Any proceeds so received
     shall reduce to the same extent any entitlement to make a Relevant Claim or
     a Tax Claim in respect of the loss, damage or destruction which is the
     subject of the relevant insurance claim. The Buyer undertakes and confirms
     that it shall be responsible for the Seller's reasonable costs and expenses
     incurred as a result of complying with their obligations under this clause
     10.4.


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                                                                  CONFORMED COPY

10.5 Nothing in clause 10.4 shall require the Seller or the Guarantors to
     undertake or threaten litigation or incur any expenditure or liability
     without being put in funds by the Buyer prior to incurring any such
     expenditure or liability.

11   PENSIONS

11.1 The Seller covenants with the Buyer to pay to the Buyer within 30 days of
     the determination of the Shortfall (if any) an amount in cash equal to the
     Shortfall (the "SHORTFALL PAYMENT").

11.2 For the purpose of this clause 11, the "SHORTFALL" means the amount (if
     any) by which as at close of business on the day of Completion the value of
     the assets of the Pension Scheme is exceeded by the value of the benefits
     (valued in accordance with the Actuarial Assumptions), payable (whether
     immediately, prospectively or contingently) under the Pension Scheme,
     taking no account of service after 31st December 2003 but making proper
     allowance (on the basis set out in the Actuarial Assumptions) for future
     increases in pay and discretionary increases to pensions, both while in
     payment and in deferment.

11.3 The Seller and the Buyer will use their reasonable endeavours to procure
     that the Buyer's Actuary and the Seller's Actuary shall calculate and agree
     the Shortfall as soon as practicable after Completion, and, in any event no
     later than 31st December 2005. To this end:

          (a)  Within 30 business days of Completion the Seller and the Buyer
               shall provide or shall procure to be provided to the Seller's
               Actuary and to the Buyer's Actuary all such information as the
               Seller's Actuary and the Buyer's Actuary may reasonably require
               in order to calculate the Shortfall in accordance with the
               Actuarial Assumptions.

          (b)  Within 30 business days of the date of receipt of the information
               referred to in (a) above, the Seller's Actuary shall calculate
               the Shortfall (the "SELLER'S ESTIMATE") and provide the Seller's
               Estimate to the Buyer's Actuary.

          (c)  The Buyer's Actuary shall review the Seller's Estimate, and shall
               endeavour to reach agreement with the Seller's Actuary on the
               amount of the Shortfall within 30 Business Days of receipt of the
               Seller's Estimate.

          (d)  If the amount of the Shortfall has not been agreed between the
               Buyer's Actuary and the Seller's Actuary within 30 Business Days
               of receipt of the Sellers' Estimate, the matter will be referred
               to the independent actuary for determination pursuant to clause
               11.4, unless the Buyer and Seller agree otherwise.

11.4 Any dispute between the Seller's Actuary and the Buyer's Actuary concerning
     the determination or agreement of any matter to be determined or agreed by
     them for the purposes of this clause 11 shall, in the absence of agreement
     between them, be referred to an independent actuary to be nominated jointly
     by the Seller and the Buyer or, failing such nomination, to be nominated by
     the President for the time being of the Institute of Actuaries at the
     instance of the party first applying to him. The actuary so appointed shall
     act as an expert and not as an arbitrator; his decision


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                                                                  CONFORMED COPY

     shall be final and binding and his costs shall be borne between the Seller
     and the Buyer as the Actuary may direct (or equally between the Seller and
     the Buyer if the Actuary makes no direction).

11.5 The Buyer covenants with the Seller that as soon as reasonably practicable
     after receipt of the Shortfall Payment from the Seller, it will procure
     that the Company pays into the Pension Scheme an amount (as a single
     payment) equal to the Shortfall Payment.

11.6 If the Buyer or the Company or any member of the Buyer's group (for the
     purposes of this clause 11.6, the "RELIEVED PERSON") either receives, from
     a Taxation Authority a payment (whether attributable to a relief or
     otherwise) or obtains relief arising in consequence of the payment by the
     Company of an amount equal to the Shortfall Payment pursuant to clause 11.5
     above (and the Buyer will use its reasonable endeavours to obtain such
     payment or relief), then:

          (a)  the Buyer shall notify the Seller of that fact as soon as
               possible;

          (b)  subject to the Shortfall Payment having been made by the Seller,
               if any Relieved Person receives or obtains such a payment or
               relief, then the Buyer shall, by way of refund of amounts payable
               under clause 11.1 and, as such (so far as possible) by way of
               re-adjustment to the consideration payable under this Agreement,
               pay to the Seller the amount received from the Taxation Authority
               or the amount that the relevant Relieved Person will save by
               virtue of the relief, as the case may be.

11.7 Any payment required to be made by the Buyer pursuant to clause 11.6 shall
     be made:

          (a)  in a case where a Relieved Person receives a payment, within 30
               days of the receipt of that payment, and

          (b)  in a case where a Relieved Person obtains a relief, within 30
               days of the date on which tax would have become recoverable but
               for the use of such relief or if later the date such relief is
               confirmed as applying by the appropriate Taxation Authority.

11.8 For the purposes of clauses 11.6 and 11.7, "RELIEF" includes, unless the
     context otherwise requires, any allowance, credit, deduction, exemption or
     set-off in respect of any Tax or relevant to the computation of any income,
     profits or gains for the purposes of any Tax, or any right to repayment of
     Tax.

12   RELEASE AND INDEMNITY FOR OUTSTANDING GUARANTEES

12.1 The Buyer shall:

          (a)  use all reasonable endeavours to secure with effect from
               Completion the release of the Seller or any Guarantors from any
               Guarantees (including, if required, offering its own Guarantee or
               liability on the same terms as and in substitution for the
               existing Guarantee or other liability of the Seller or the
               Guarantors); and


                                       26

                                                                  CONFORMED COPY

          (b)  pending release of any Guarantees, indemnify and keep indemnified
               the Seller and the Guarantors (which take the benefit of this
               indemnity for themselves and as trustees for each Connected
               Person) against all Losses arising after Completion which it or
               any Connected Person may suffer or incur in respect of any claim,
               made under or in respect of any of the Guarantees.

12.2 The Seller covenants with the Buyer that the Seller will pay to the Buyer
     or such person as the Buyer may direct an amount equal to the aggregate of
     all Losses suffered or incurred by any Group Company in carrying out its
     obligations under clause 12.1(a) in respect of any Guarantee which was not
     fairly disclosed to the Buyer prior to the date of this Agreement.

13   GUARANTEE OF SELLER'S OBLIGATIONS

13.1 In consideration of the Buyer entering into this Agreement with the Seller,
     each of the Guarantors irrevocably and unconditionally:

          (a)  guarantees to the Buyer the full, prompt and complete performance
               by the Seller of all its obligations under the Implementation
               Documents and Offer Documents and the due and punctual payment on
               demand of all sums now or subsequently due and payable by the
               Seller to the Buyer under or pursuant to the Implementation
               Documents and Offer Documents; and

          (b)  agrees as primary obligor to indemnify the Buyer on demand from
               and against any loss incurred by the Buyer as a result of any of
               the obligations of the Seller under or pursuant to the
               Implementation Documents and Offer Documents being or becoming
               void, voidable, unenforceable or ineffective as against the
               Seller for any reason whatsoever (including without limitation
               for the reason that the Seller has commenced a voluntary or
               involuntary liquidation or similar proces), whether or not known
               to the Buyer, the amount of such loss being the amount which the
               Buyer would otherwise have been entitled to recover from the
               Seller.

13.2 The guarantees contained in this clause are continuing guarantees and shall
     remain in force until all the obligations of the Seller under the
     Implementation Documents and Offer Documents have been fully performed and
     all sums payable by the Seller have been fully paid and notwithstanding the
     winding-up, liquidation, dissolution or other incapacity of the Seller or
     any change in the status, control or ownership of the Seller.

13.3 The obligations of the Guarantors under this clause 13 shall not be
     affected by any act, omission, matter or thing which, but for this
     provision, might operate to release or otherwise exonerate either of the
     Guarantors from its obligations or affect such obligations, including
     without limitation and whether or not known by either of the Guarantors:


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                                                                  CONFORMED COPY

          (a)  any variation of any Implementation Document or Offer Documents
               or any time, indulgence, waiver or consent at any time given to
               the Seller or any other person;

          (b)  any compromise or release, or abstention from obtaining,
               perfecting or enforcing any security or other right or remedy
               whatsoever from or against, the Seller or any other person;

          (c)  any legal limitation, disability, incapacity or other
               circumstance relating to the Seller or any other person; or

          (d)  any irregularity, unenforceability or invalidity of any
               obligations of the Seller under any Implementation Document, and
               Offer Documents or the dissolution, amalgamation, reconstruction,
               liquidation, winding up or insolvency of the Seller.

13.4 If no winding up or liquidation proceedings have been commenced in respect
     of the Seller, the guarantees contained in this clause 13 may not be
     enforced by the Buyer unless the Buyer has first taken any steps or
     proceedings against the Seller PROVIDED THAT, with effect from the date on
     which the Seller commences a voluntary or involuntary liquidation or
     similar process, the provisions of the Implementation Documents may be
     enforced against either Guarantor without the Buyer first taking any steps
     or proceedings against the Seller.

13.5 The total aggregate liability of the Guarantors together in respect of all
     claims under this Agreement shall not exceed the total aggregate liability
     of the Seller under the Agreement.

14   INTELLECTUAL PROPERTY AND OTHER MATTERS

14.1 The Seller confirms that the Dormant Companies were transferred to the
     Seller prior to the date hereof for no consideration and, at the time of
     transfer of each Dormant Company, the relevant Dormant Company had no
     material asset.

14.2 Without prejudice to clauses 14.4 and 14.5, the Seller shall, upon written
     notice from the Buyer (provided such notice is received prior to the expiry
     of the period ending on 31st May 2007), to the extent it is reasonably able
     to do so transfer for no consideration any asset used exclusively or
     primarily by any Group Company in the 24 months prior to Completion to the
     Buyer or such person as it may nominate, and to the extent it is not
     reasonably able to transfer any Intellectual Property Rights or Business
     Information, it shall procure the grant to the Buyer of a non-exclusive,
     perpetual, worldwide, assignable, royalty-free licence (with the right to
     sub-license) to use any Intellectual Property Rights or Business
     Information owned by the Seller which has been used exclusively or
     primarily in the two years prior to Completion by any Group Company.

14.3 The Seller and the Guarantors agree to procure that the Seller and any
     Connected Person (including for this purpose any Guarantor) which uses
     "Framlington" as part of its corporate name shall, as soon as reasonably
     practicable after and in any event within one month of the


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                                                                  CONFORMED COPY

     Completion Date, save in respect of Framlington Maghreb SA, change its
     corporate name to a name which does not include the word "Framlington" or
     any confusingly similar word.

14.4 The Seller and each of the Guarantors hereby transfer, and agree to procure
     that the Seller and each Connected Person of each Guarantor transfers, all
     of their respective right and title in and to the name and mark
     "Framlington", and all goodwill associated with the name "Framlington", to
     the Buyer.

14.5 Subject to clause 14.4, the Seller and each of the Guarantors hereby
     undertake, and agree to procure that the Seller and any Connected Person of
     each Guarantor undertakes, not to use the name "Framlington" in any
     business the same as or similar to the Business as carried on at the date
     of this Agreement for a period of five years from the Completion Date.

15   ENTIRE AGREEMENT

     Each of the Seller and the Guarantors agrees for itself and the Buyer
     agrees for itself and as agent for each Group Company that:

          (a)  this Agreement, the Taxation Deed and the Disclosure Letter
               (together the "IMPLEMENTATION DOCUMENTS") supersede any prior
               discussions, understandings and agreements between the parties
               concerning their subject matter (including, for the avoidance of
               doubt, the Confidentiality Agreement) and constitute the entire
               and only agreement between the parties concerning their subject
               matter; and

          (b)  none of the Implementation Documents has been entered into in
               reliance on any Pre-contractual Statement which is not expressly
               set out in an Implementation Document and each party hereby
               unconditionally and irrevocably waives any claims, rights or
               remedies arising by virtue of any Pre-contractual Statement not
               set out in an Implementation Document;

          (c)  provided always that this clause 15 shall not exclude or limit
               any liability or right which arises as a result of any fraudulent
               act, omission or statement.

     In this clause 15, "PRE-CONTRACTUAL STATEMENT" means any agreement,
     undertaking, representation, statement, warranty, promise, assurance or
     arrangement of any nature (which express or implied and whether or not in
     written or draft form) made or given by any person prior to the execution
     of this Agreement in connection with any matters dealt with in any of the
     Implementation Documents, including, without limitation, any made or given
     by virtue of the Information Memorandum prepared with regard to the Company
     as of 28 April 2005.


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                                                                  CONFORMED COPY

16   EFFECT OF COMPLETION

     Except as expressly provided in this Agreement, all provisions of this
     Agreement shall so far as they are capable of being performed or observed
     continue in full force and effect notwithstanding Completion and Completion
     shall not constitute a waiver of any of the Buyer's rights in relation to
     any Implementation Document.

17   REMEDIES

17.1 Prior to Completion, this Agreement may terminate only in accordance with
     clause 2.8, clause 4.4, clause 5.2, clause 5.3, clause 5.4 or clause 5.5 or
     with the written consent of all parties. Following Completion, no party
     shall be entitled to terminate or rescind this Agreement or the Taxation
     Deed for any reason whatsoever.

17.2 In the event of termination of this Agreement under clause 2.8, clause 4.4,
     clause 5.2, clause 5.3, clause 5.4 or clause 5.5, all the rights and
     obligations of the parties shall forthwith cease except for clause 15
     (entire agreement), clause 20 (announcements and confidentiality) and
     clauses 22 (severability and set-off) to 29 (governing law and submission
     to jurisdiction) (inclusive). Termination of this Agreement shall not
     affect any rights, liabilities or remedies arising under this Agreement
     prior to such termination.

17.3 Subject to clause 5.4, the Buyer's sole remedy in respect of a breach of
     the Warranties shall be a claim for damages which shall be made subject to
     and in accordance with the terms of this Agreement (including the
     provisions of Schedule 6) and the Buyer will not have any claim or remedy
     in respect of misrepresentation (whether negligent or otherwise) in respect
     thereof. Subject to the foregoing provisions of this clause 17.3, the Buyer
     shall be entitled to claim either before or after Completion that any of
     the Warranties or Pre-Completion Undertakings or any other provision of the
     Implementation Documents has or had been breached and, for the avoidance of
     doubt, this means that claims arising in respect of the Warranties, claims
     arising in respect of the Pre-Completion Undertakings and each other claim
     under or in respect of the Implementation Document shall survive
     Completion.

17.4 The sole remedy of the Buyer against the Seller under the Taxation Deed
     shall be a claim in accordance with the terms of the Taxation Deed.

17.5 Nothing in this Agreement shall exclude or limit any liability or right
     which arises as a result of any fraudulent act, omission or statement, in
     relation to which all remedies available under English law shall apply.

17.6 No delay or omission by any party to this Agreement in exercising any
     right, power or remedy under this Agreement or any other documents referred
     to in it shall:

          (a)  affect that right, power or remedy; or


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                                                                  CONFORMED COPY

          (b)  operate as a waiver thereof.

17.7 The single or partial exercise of any right, power or remedy provided under
     this Agreement shall not preclude any other or further exercise of it or
     the exercise of any other right, power or remedy.

17.8 The rights, powers and remedies provided in this Agreement are cumulative.

18   PAYMENTS

18.1 This clause 18 shall have no force or effect prior to Completion and shall
     come into force on Completion. No payments made pursuant to clause 6.2
     shall be subject to this clause 18.

18.2 All sums payable under this Agreement or the Taxation Deed by any of the
     Seller, the Buyer or either of the Guarantors (in each case, the "PAYER")
     to any other party (the "RECIPIENT") shall be paid free and clear of all
     deductions or withholdings whatsoever, save only as may be required by law.

18.3 If, at any time, any applicable law, regulation or regulatory requirement
     requires any payer to make any deduction or withholding from any sums
     payable to any recipient under this Agreement or the Taxation Deed then,
     except in relation to interest, the amount so due shall be increased to the
     extent necessary to ensure that, after the making of such deduction or
     withholding, the recipient receives, on the due date for such payment, a
     net sum equal to the sum which it would have received had no such deduction
     or withholding been required to be made, provided that this clause 18.3
     shall not apply if the requirement to make such deduction or withholding
     would not have arisen but for a voluntary act of the recipient.

18.4 Subject to clause 18.7, If the payer is required by law to make any
     deduction or withholding as referred to in clause 18.3, the payer shall:

18.4.1 make such deduction or withholding; and

18.4.2 pay the full amount deducted or withheld to the relevant Taxation
     Authority in accordance with applicable law, regulation or regulatory
     requirement.

18.5 If, at any time after any increased payment is made by any payer as a
     consequence of the application of clause 18.3, the recipient receives or is
     granted a credit against, relief from or repayment of any Taxation payable
     by it which it would not otherwise have received or been granted, the
     recipient shall, to the extent that it can do so without prejudicing the
     retention of the amount of such credit, relief or repayment, reimburse the
     payer with such amount as shall leave the recipient (after such
     reimbursement) in no better or no worse a position than it would have been
     in had the circumstances giving rise to the increased payment not in fact
     arisen. Such


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                                                                  CONFORMED COPY

     reimbursement shall be made not later than ten business days after the
     recipient receives or is granted such credit.

18.6 Subject to clause 18.7, if any amount paid or due to any recipient under
     this Agreement or the Taxation Deed, other than interest or the purchase
     price for the Sale Shares payable by the Buyer under the Offer Documents,
     gives rise to any Actual Taxation Liability, or would (but for the
     availability of any Relief) give rise to an Actual Taxation Liability, in
     the hands of that recipient, then the payer in question shall be under the
     same obligation to make an increased payment in relation to that Actual
     Taxation Liability as if the liability were a deduction or withholding
     required by law.

18.7 If the recipient of any payment under this Agreement or the Taxation Deed
     is subject to Taxation in any jurisdiction other than the United Kingdom,
     the payer shall be obliged to pay no more under this clause 18 than would
     have been the case had the recipient been resident for tax purposes only in
     the United Kingdom and receiving that payment for the purposes of its
     business in the United Kingdom only.

19   FURTHER ASSURANCES

     The Seller, each of the Guarantors and the Buyer shall for a period ending
     on 31 May 2007 execute or, so far as they are able, procure that any
     necessary third party shall execute all such documents and/or do or, so far
     as each is able, procure the doing of such acts and things as may be
     required by law or as may be necessary to give effect to this Agreement and
     any documents entered into pursuant to it, provided that no party shall be
     obliged to incur any expense or liability in performing their obligations
     under this clause.

20   ANNOUNCEMENTS AND CONFIDENTIALITY

20.1 Subject to clause 20.2, no announcement, circular or communication (each an
     "ANNOUNCEMENT") concerning the existence or content of this Agreement shall
     be made by any party (or any Connected Person or Related Company of the
     Buyer (including, after Completion, any (Group Company)) without the prior
     written approval of the Guarantors and the Buyer (such approval not to be
     unreasonably withheld or delayed).

20.2 Clause 20.1 does not apply to any Announcement if, and to the extent that,
     it is required to be made by the rules of any stock exchange or any
     governmental, regulatory or supervisory body or court of competent
     jurisdiction ("RELEVANT AUTHORITY") to which the party making the
     Announcement is subject, whether or not any of the same has the force of
     law, provided that any Announcement shall, so far as is practicable, be
     made after consultation with the other parties and after taking into
     account their reasonable requirements regarding the content, timing and
     manner of despatch of the Announcement in question.


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20.3 Subject to Clause 20.4, each party shall treat as strictly confidential all
     information received or obtained as a result of entering into or performing
     this Agreement which relates to:

          (a)  the subject matter and provisions of this Agreement;

          (b)  the negotiations relating to this Agreement; or

          (c)  the other parties.

20.4 A party may disclose information which would otherwise be confidential if
     and to the extent:

          (a)  the information is given to the FSA in connection with the
               application for approval contemplated by clause 2.2.2;

          (b)  required by the law of any relevant jurisdiction;

          (c)  required by existing contractual obligations;

          (d)  required by any Relevant Authority or Taxation Authority to which
               the party making the disclosure is subject, whether or not such
               requirement has the force of law;

          (e)  required to vest the full benefit of this Agreement in any party;

          (f)  disclosure is made to the professional advisers, auditors and
               bankers of any party;

          (g)  the information has come into the public domain through no fault
               of that party; or

          (h)  the other parties have given prior written approval to the
               disclosure,

     provided that any disclosure shall, so far as practicable, be made only
     after consultation with the other parties.

21   RECORDS

21.1 For a period of six years after Completion, the Seller shall maintain and
     provide copies to the Buyer (at the Buyer's request and cost) of any Books
     and Records proprietary to the Seller relating primarily (but not
     exclusively) to the business carried on by any Group Company prior to
     Completion.

21.2 For a period of six years after Completion, the Buyer shall procure that
     the Group maintains and provides copies to the Seller (at the Seller's
     request and cost) of any Books and Records proprietary to any Group Company
     relating primarily (but not exclusively) to the business carried on by the
     Seller prior to Completion.


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22   SEVERABILITY AND SET-OFF

22.1 Each provision of this Agreement is severable and distinct from the others
     and, if any provision is, or at any time becomes, to any extent or in any
     circumstances invalid, illegal or unenforceable for any reason, that
     provision shall to that extent be deemed not to form part of this Agreement
     but the validity, legality and enforceability of the remaining parts of
     this Agreement shall not be affected or impaired, it being the parties'
     intention that every provision of this Agreement shall be and remain valid
     and enforceable to the fullest extent permitted by law.

22.2 Neither the Seller or the Guarantors shall be entitled to set off any sum
     due by any of them to the Buyer against any sum due by the Buyer to the
     Seller or any of the Guarantors under or in relation to this Agreement or
     the Taxation Deed.

22.3 The Buyer shall not be entitled to set off any sum due by it to the Seller
     or the Guarantors against any sum due by the Seller or the Guarantors to
     the Buyer under or in relation to this Agreement or the Taxation Deed.

23   MISCELLANEOUS

23.1 No purported alteration of this Agreement shall be effective unless it is
     in writing, refers to this Agreement and is duly executed by the Buyer and
     each Guarantor.

23.2 This Agreement may be executed in any number of counterparts, and each of
     the executed counterparts, when duly exchanged or delivered, shall be
     deemed to be an original, but, taken together, they shall constitute one
     instrument.

23.3 Each of the parties shall be responsible for its respective legal and other
     costs incurred in relation to the negotiation, preparation and completion
     of the Implementation Documents.

23.4 This Agreement shall be binding on and shall enure for the benefit of the
     successors in title and personal representatives of each party.

23.5 Save as expressly provided in this Agreement, a person who is not a party
     to this Agreement has no right under the Contracts (Rights of Third
     Parties) Act 1999 to enforce any of its terms. Subject to clause 21.1 this
     Agreement may be varied in any way and at any time by the parties to it
     without the consent of any person who is not a party to this Agreement.

24   NOTICES

24.1 A notice or other communication given under or in connection with this
     Agreement (a "NOTICE") shall be:

          (a)  in writing;


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          (b)  in the English language; and

          (c)  sent by the Permitted Method to the Notified Address.

24.2 The Permitted Method means any of personal delivery, courier and fax
     transmission.

24.3 The Notified Addresses of each of the parties is as set out below:



NAME OF PARTY                           ADDRESS
- -------------                           -------
              
The Seller       The address set out in Part A of Schedule 1

The Guarantors   Each of the addresses set out in Part B of Schedule 1

The Buyer        The address set out on page 3


     or such other Notified Address as any of the parties may, by written notice
     to the other parties, substitute for their Notified Address set out above.

24.4 No notice given under this Agreement shall be effective until received by
     the intended recipient, save that if such a notice is so received outside
     Working Hours in the place of receipt, it shall be deemed to have been
     received at the start of the next period of Working Hours in that place.

25   ASSIGNMENT

25.1 The Buyer may assign any or all of its rights under the Implementation
     Documents to any other member of the Buyer's Group without the consent of
     any other party to this Agreement provided that the liability of the Seller
     under any of the Implementation Documents shall not be thereby increased.
     If the Buyer assigns the benefit of any of its rights under the
     Implementation Documents it shall neither cause nor permit any assignee to
     cease to be a member of the Buyer's Group unless or until that assignee
     assigns the benefit of such assigned rights to the Buyer or another member
     of the Buyer's Group.

25.2 Subject to the provisions of clause 25.1, none of the parties shall or
     shall purport to assign, transfer, charge or otherwise deal with all or any
     of its rights or obligations under this Agreement or the Taxation Deed nor
     grant, declare, create or dispose of any right or interest in this
     Agreement or the Taxation Deed without the prior written consent of the
     other parties.

25.3 Any purported assignment in contravention of this clause 25 shall be void.


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26   BUYER'S AGENT FOR SERVICE

26.1 The Buyer irrevocably appoints AXA Investment Managers Limited of 7 Newgate
     Street, London to be its agent for the receipt of service of process in
     England. It agrees that any Service Document may be effectively served on
     it in connection with Proceedings in England and Wales by service on its
     agent.

26.2 Any Service Document shall be deemed to have been duly served if marked for
     the attention of the person named in clause 26.1 at the address in that
     clause or such other address within England and Wales as may be notified to
     the party wishing to serve the Document and left at the specified address.

26.3 The Service Document will be deemed to have been duly served when it is
     left.

26.4 If the agent at any time ceases for any reason to act as such, the Buyer
     shall appoint a replacement agent having an address for service in England
     or Wales and shall notify the other parties of the name and address of the
     replacement agent. The provisions of this clause applying to service on an
     agent apply equally to service on a replacement agent.

26.5 A copy of any Service Document served on an agent shall be sent by post to
     the Buyer. Failure or delay in so doing shall not prejudice the
     effectiveness of service of the Service Document.

27   CCF'S AGENT FOR SERVICE

27.1 CCF S.A. irrevocably appoints HSBC Investment Businesses Limited of 8
     Canada Square, London E14 to be its agent for the receipt of service of
     process in England. It agrees that any Service Document may be effectively
     served on it in connection with Proceedings in England and Wales by service
     on its agent.

27.2 Any Service Document shall be deemed to have been duly served if marked for
     the attention of the person named in clause 27.1 at the address in that
     clause or such other address within England and Wales as may be notified to
     the party wishing to serve the Document and left at the specified address.

27.3 The Service Document will be deemed to have been duly served when it is
     left.

27.4 If the agent at any time ceases for any reason to act as such, CCF S.A.
     shall appoint a replacement agent having an address for service in England
     or Wales and shall notify the other parties of the name and address of the
     replacement agent. The provisions of this clause applying to service on an
     agent apply equally to service on a replacement agent.


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27.5 A copy of any Service Document served on an agent shall be sent by post to
     CCF S.A. Failure or delay in so doing shall not prejudice the effectiveness
     of service of the Service Document.

28   COMERICA'S AGENT FOR SERVICE

28.1 Comerica, Inc. irrevocably appoints Law Debenture Corporate Services
     Limited, of Fifth Floor, 100 Wood Street, London, EC2V 7EX to be its agent
     for the receipt of service of process in England for a period of 10 years
     from the date of this Agreement. It agrees that any Service Document may be
     effectively served on it in connection with Proceedings in England and
     Wales by service on its agent.

28.2 Any Service Document shall be deemed to have been duly served if marked for
     the attention of Law Debenture Corporate Services Limited at Fifth Floor,
     100 Wood Street (as aforesaid) or such other address within England and
     Wales as may be notified to the party wishing to serve the Document and
     left at the specified address.

28.3 If the agent at any time in the period referred to in clause 28.1 ceases
     for any reason to act as such, Comerica, Inc. shall appoint a replacement
     agent having an address for service in England or Wales and shall notify
     the other parties of the name and address of the replacement agent. The
     provisions of this clause applying to service on an agent apply equally to
     service on a replacement agent.

28.4 A copy of any Service Document served on an agent shall be sent by post to
     Comerica, Inc. Failure or delay in so doing shall not prejudice the
     effectiveness of service of the Service Document.

29   GOVERNING LAW AND SUBMISSION TO JURISDICTION

29.1 This Agreement shall be governed by and construed in accordance with the
     laws of England and Wales.

29.2 The parties irrevocably agree that the courts of England and Wales are to
     have exclusive jurisdiction to settle any disputes which may arise out of
     or in connection with this Agreement. The parties hereby irrevocably submit
     to the jurisdiction of such courts and waive any objection on the ground of
     venue or on the ground that the proceedings have been brought in an
     inconvenient forum provided that this clause shall be without prejudice to
     the right to bring proceedings in any other jurisdiction for the purpose of
     enforcement or execution of any judgement or other settlement in any other
     courts.

IN WITNESS of which this Agreement has been entered into on the date first above
written.


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                                   SCHEDULE 1

                               PART A - THE SELLER



                 1                                 2                        3
                NAME                  ADDRESS / REGISTERED OFFICE   SALE SHARES HELD
                ----                  ---------------------------   ----------------
                                                              
Framlington Holdings Limited (No.     155 Bishopsgate                  68,577,292
02314914)                             London EC2M 3XJ

Framlington Administration Services   155 Bishopsgate                         500
Limited                               London EC2M 3XJ

Framlington Nominees Limited          155 Bishopsgate                           1
                                      London EC2M 3XJ


                             PART B - THE GUARANTORS



          1                            2                             3
         NAME             ADDRESS / REGISTERED OFFICE    RESPECTIVE PERCENTAGE (%)
         ----             ---------------------------    -------------------------
                                                   
CCF S.A.                103 avenue des Champs-Elysees,               51
                        75008 Paris, France

Comerica Incorporated   500 Woodward Avenue                          49
                        Detroit
                        Michigan 48226
                        USA



                                       38

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                                   SCHEDULE 2
                           INFORMATION ABOUT THE GROUP

                              PART A - THE COMPANY

NAME OF COMPANY                   Framlington Group Limited

DATE AND PLACE OF INCORPORATION   11 December 1975, United Kingdom

REGISTERED NUMBER                 01237167

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          90,000,000 Ordinary Shares of 5p each

ISSUED SHARE CAPITAL              69,878,770 Ordinary Shares of 5p each

DIRECTORS                         Lord Douro
                                  I Barnetson
                                  C Bowe
                                  DH Burnett
                                  E Chang
                                  A Dromer
                                  NTA Hodgson
                                  JG Lodwick
                                  NR MacAndrew
                                  D Mooradian
                                  Lord Stewartby

SECRETARY                         Eleanor Cranmer

AUDITORS                          PricewaterhouseCoopers LLP

ACCOUNTING REFERENCE DATE         31 December

SHARE REGISTER                    68,577,292 held by Framlington Holdings
                                  Limited 500 held by Framlington Administration
                                  Services Limited 1 held by Framlington
                                  Nominees Limited 330,768 held by Ogier
                                  Employee Benefit Trustee Limited 700 held by a
                                  former employee of Framlington Group Limited
                                  969,509 held by current employees of
                                  Framlington Group Limited

                                       39

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                            PART B - THE SUBSIDIARIES

                               
NAME OF COMPANY                   Framlington Investment Management Limited

DATE AND PLACE OF INCORPORATION   26 October 1984, United Kingdom

REGISTERED NUMBER                 01858790

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          425,000 Ordinary Shares of L1 each

ISSUED SHARE CAPITAL              425,000 Ordinary Shares of L1 each

SHAREHOLDER                       424,999 held by Framlington Group Limited

                                  1 held by Framlington Investment Trust Services Limited

DIRECTORS                         I Barnetson
                                  P A Branigan
                                  NTA Hodgson
                                  JG Lodwick
                                  J L Schilling

SECRETARY                         Framlington Services Limited

AUDITORS                          PricewaterhouseCoopers LLP

ACCOUNTING REFERENCE DATE         31 December




                                       40

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NAME OF COMPANY                   Framlington Unit Management Limited

DATE AND PLACE OF INCORPORATION   3 January 1967, United Kingdom

REGISTERED NUMBER                 00895241

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          100,000 Ordinary Shares of L1 each

ISSUED SHARE CAPITAL              100,000 Ordinary Shares of L1 each

SHAREHOLDER                       99,999 held by Framlington Group Limited

                                  1 held by Framlington Administration Services Limited

DIRECTORS                         I Barnetson
                                  NTA Hodgson
                                  JG Lodwick

SECRETARY                         Framlington Services Limited

AUDITORS                          PricewaterhouseCoopers LLP

ACCOUNTING REFERENCE DATE         31 December




                                       41

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NAME OF COMPANY                   Framlington Overseas Investment Management Limited

DATE AND PLACE OF INCORPORATION   31 December 1980, United Kingdom

REGISTERED NUMBER                 01536760

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          250,000 Ordinary Shares of L1 each

ISSUED SHARE CAPITAL              100 Ordinary Shares of L1 each

SHAREHOLDER                       99 held by Framlington Investment Trust Services Limited

                                  1 held by Throgmorton Street Nominees Limited

DIRECTORS                         I Barnetson
                                  NTA Hodgson
                                  JG Lodwick
                                  JL Shilling

SECRETARY                         Framlington Services Limited

AUDITORS                          PricewaterhouseCoopers LLP

ACCOUNTING REFERENCE DATE         31 December




                                       42

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NAME OF COMPANY                   Framlington Investment Trust Services Limited

DATE AND PLACE OF INCORPORATION   16 April 1981, United Kingdom

REGISTERED NUMBER                 01556736

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          2,249,775 Ordinary Shares of 10p each

ISSUED SHARE CAPITAL              2,197,030 Ordinary Shares of 10p each

SHAREHOLDER                       1 held by Framlington Administration Services Limited

                                  2,197,029 held by Framlington Group Limited

DIRECTORS                         PA Branigan
                                  JG Lodwick

SECRETARY                         Framlington Services Limited

AUDITORS                          PricewaterhouseCoopers LLP

ACCOUNTING REFERENCE DATE         31 December




                                       43

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NAME OF COMPANY                   Framlington Administration Services Limited

DATE AND PLACE OF INCORPORATION   24 May 1978, United Kingdom

REGISTERED NUMBER                 01370370

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          100 Ordinary Shares of L1 each

ISSUED SHARE CAPITAL              100 Ordinary Shares of L1 each

SHAREHOLDER                       99 held by Framlington Group Limited

                                  1 held by Framlington Nominees Limited

DIRECTORS                         I Barnetson

SECRETARY                         Framlington Services Limited

AUDITORS                          PricewaterhouseCoopers LLP

ACCOUNTING REFERENCE DATE         31 December




                                       44

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NAME OF COMPANY                   Framlington Investment Management (Ireland)
                                  Limited

DATE AND PLACE OF INCORPORATION   10 May 1994, Ireland

REGISTERED NUMBER                 IE217071

REGISTERED OFFICE                 Europa House, Harcourt Centre, Harcourt Street, Dublin 2

AUTHORISED SHARE CAPITAL          1,000,000 Ordinary Shares of E1.27 each

ISSUED SHARE CAPITAL              100,000 Ordinary shares of E1.27 each

SHAREHOLDER                       99,999 held by Framlington Group Limited

                                  1 held by Framlington Administration Services Limited

DIRECTORS                         D McGeough
                                  D Shubotham

SECRETARY                         Management International (Dublin)

AUDITORS

ACCOUNTING REFERENCE DATE




                                       45

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                           PART C - AFRICAN COMPANIES

NAME OF COMPANY                   Framlington Asset Management West Africa SA

DATE AND PLACE OF INCORPORATION   14 April 1997, Ivory Coast

REGISTERED NUMBER                 31.78.1343

REGISTERED OFFICE                 8-10 Avenue Joseph Anoma, 01 BP 1273, Abidjan
                                  01, Ivory Coast

AUTHORISED SHARE CAPITAL          Ordinary Shares of 10,000,000 CFA Franc BCEAO

ISSUED SHARE CAPITAL              Ordinary Shares of 10,000,000 CFA Franc BCEAO

SHAREHOLDER                       Framlington Group Limited 5.08 million FCFA
                                  Proparco 1.5 million FCFA
                                  Sfi 1.5 million FCFA
                                  Michel Abrogoua 1.5 million FCFA
                                  JL Akoto 0.4 million FCFA
                                  JL Schilling 10,000 FCFA
                                  T Vallance 10,000 FCFA

DIRECTORS

SECRETARY

AUDITORS

ACCOUNTING REFERENCE DATE

                                       46

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NAME OF COMPANY                   Framlington Asset Management Central Africa SA

DATE AND PLACE OF INCORPORATION   30 July 2003, Ivory Coast

REGISTERED NUMBER

REGISTERED OFFICE

AUTHORISED SHARE CAPITAL          1,000 Ordinary Shares of 10,000 CFA Franc BCEAO

ISSUED SHARE CAPITAL              1,000 Ordinary Shares of 10,000 CFA Franc BCEAO

SHAREHOLDER                       1,000 held by Framlington Group Limited

DIRECTORS

SECRETARY

AUDITORS

ACCOUNTING REFERENCE DATE




                                       47

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                           PART D - DORMANT COMPANIES


                                       48

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NAME OF COMPANY                   Framlington Maghreb SA

DATE AND PLACE OF INCORPORATION   26 May 1994, Morocco

REGISTERED NUMBER                 118654

REGISTERED OFFICE                 Chez la Banque Commerciale du Maroc, 26 Avenue des Forces
                                  Armees Royales, Casablanca, Morocco

AUTHORISED SHARE CAPITAL          100,000 Ordinary Shares of 100 Dirhams

ISSUED SHARE CAPITAL              100,000 Ordinary Shares of 100 Dirhams

SHAREHOLDER                       51,000 held by Framlington Investment Management Limited

DIRECTORS

SECRETARY

AUDITORS

ACCOUNTING REFERENCE DATE




                                       49

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NAME OF COMPANY                   Framlington Investment Management (Bermuda)
                                  Limited

DATE AND PLACE OF INCORPORATION   9 September 1997, Bermuda

REGISTERED NUMBER                 EC23815

REGISTERED OFFICE                 Corner House, Church and Parliament Streets,
                                  Hamilton, Bermuda

AUTHORISED SHARE CAPITAL          12,000 Ordinary Shares of $1

ISSUED SHARE CAPITAL              12,000 Ordinary Shares of $1

SHAREHOLDER                       12,000 held by Framlington Group Limited

DIRECTORS                         JD Boden
                                  NK Boulton
                                  PB Hubbard

SECRETARY                         J Watlington

AUDITORS                          N/A

ACCOUNTING REFERENCE DATE         31 December

                                       50

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NAME OF COMPANY                   Framlington Portfolio Management Limited

DATE AND PLACE OF INCORPORATION   29 January 2002, United Kingdom

REGISTERED NUMBER                 04362302

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          1,000 Ordinary Shares of L1 each

ISSUED SHARE CAPITAL              1 Ordinary Share of L1 each

SHAREHOLDER                       1 held by Framlington Group Limited

DIRECTORS                         I Barnetson

SECRETARY                         Framlington Services Limited

AUDITORS                          N/A

ACCOUNTING REFERENCE DATE         31 December




                                       51

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NAME OF COMPANY                   Framlington International Holdings Limited

DATE AND PLACE OF INCORPORATION   10 June 1994, United Kingdom

REGISTERED NUMBER                 02937900

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          1,000 Ordinary Shares of L1 each

ISSUED SHARE CAPITAL              2 Ordinary Shares of L1 each

SHAREHOLDER                       1 held by Framlington Group Limited

                                  1 held by Framlington Investment Management
                                  Limited

DIRECTORS                         I Barnetson

SECRETARY                         Framlington Services Limited

AUDITORS                          N/A

ACCOUNTING REFERENCE DATE         31 December




                                       52

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NAME OF COMPANY                   Laurence Prust & Co. Limited

DATE AND PLACE OF INCORPORATION   8 July 1987, United Kingdom

REGISTERED NUMBER                 02145826

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          56,600 Ordinary Shares of L1 each

ISSUED SHARE CAPITAL              56,600 Ordinary Shares of L1 each

SHAREHOLDER                       1 held by Framlington Administration Services
                                  Limited

                                  56,599 held by Framlington Group Limited

DIRECTORS                         JG Lodwick
                                  JV Tubbs

SECRETARY                         Framlington Services Limited

AUDITORS                          N/A

ACCOUNTING REFERENCE DATE         31 December




                                       53

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NAME OF COMPANY                   Framlington Asset Management Limited

DATE AND PLACE OF INCORPORATION   25 September 1987, United Kingdom

REGISTERED NUMBER                 02169390

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          5,000 Ordinary Shares of L1 each

ISSUED SHARE CAPITAL              5,000 Ordinary Shares of L1 each

SHAREHOLDER                       4,999 held by Framlington Group Limited

                                  1 held by Framlington Administration Services
                                  Limited

DIRECTORS                         I Barnetson
                                  PA Branigan
                                  WF Calvert
                                  LD Donnigan
                                  NTA Hodgson
                                  DR Hunter
                                  SP Kelly
                                  GM Luckraft
                                  AB Milford
                                  JC Murphy
                                  R Peirson
                                  CA Rock
                                  NAD Thomas
                                  TS Vallance
                                  BR Watson
                                  REH Whiteoak

SECRETARY                         Framlington Services Limited

AUDITORS                          N/A

ACCOUNTING REFERENCE DATE         31 December




                                       54

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NAME OF COMPANY                   Framlington International Fund Management Limited

DATE AND PLACE OF INCORPORATION   14 May 1984, United Kingdom

REGISTERED NUMBER                 01815755

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          5,000 Ordinary Shares of L1 each

ISSUED SHARE CAPITAL              5,000 Ordinary Shares of L1 each

SHAREHOLDER                       4,999 held by Framlington Group Limited

                                  1 held by Framlington Administration Services Limited

DIRECTORS                         I Barnetson

SECRETARY                         Framlington Services Limited

AUDITORS                          N/A

ACCOUNTING REFERENCE DATE         31 December




                                       55

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NAME OF COMPANY                   Framlington Nominees Limited

DATE AND PLACE OF INCORPORATION   23 April 1986, United Kingdom

REGISTERED NUMBER                 02013252

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          100 Ordinary Shares of L1 each

ISSUED SHARE CAPITAL              2 Ordinary Shares of L1 each

SHAREHOLDER                       1 held by Framlington Group Limited

                                  1 held by Framlington Administration Services Limited

DIRECTORS                         JG Lodwick
                                  JV Tubbs

SECRETARY                         Framlington Services Limited

AUDITORS                          N/A

ACCOUNTING REFERENCE DATE         31 December




                                       56

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NAME OF COMPANY                   Framlington (USA) Limited

DATE AND PLACE OF INCORPORATION   12 November 1985, United Kingdom

REGISTERED NUMBER                 01957436

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          10,000 Ordinary Shares of L1 each

ISSUED SHARE CAPITAL              2 Ordinary Shares of L1 each

SHAREHOLDER                       1 held by Framlington Group Limited

                                  1 held by Framlington Administration Services Limited

DIRECTORS                         JG Lodwick
                                  JV Tubbs

SECRETARY                         Framlington Services Limited

AUDITORS                          N/A

ACCOUNTING REFERENCE DATE         31 December




                                       57

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NAME OF COMPANY                   Framlington Services Limited

DATE AND PLACE OF INCORPORATION   8 November 1988, United Kingdom

REGISTERED NUMBER                 02314696

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          10,000 Ordinary Shares of L1 each

ISSUED SHARE CAPITAL              100 Ordinary Shares of L1 each

SHAREHOLDER                       99 held by Framlington Group Limited

                                  1 held by Framlington Investment Management
                                  Limited

DIRECTORS                         I Barnetson

SECRETARY                         Eleanor Cranmer

AUDITORS                          N/A

ACCOUNTING REFERENCE DATE         31 December




                                       58

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NAME OF COMPANY                   Framlington Financial Services Limited

DATE AND PLACE OF INCORPORATION   7 August 1984, United Kingdom

REGISTERED NUMBER                 01838673

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          25,000 Ordinary Shares of L1 each

ISSUED SHARE CAPITAL              25,000 Ordinary Shares of L1 each

SHAREHOLDER                       24,999 held by Framlington Overseas Investment
                                  Management Limited

                                  1 held by Framlington Investment Trust
                                  Services Limited

DIRECTORS                         I Barnetson

SECRETARY                         Framlington Services Limited

AUDITORS                          N/A

ACCOUNTING REFERENCE DATE         31 December




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NAME OF COMPANY                   Framlington PEP Nominees Limited

DATE AND PLACE OF INCORPORATION   6 March 1989, United Kingdom

REGISTERED NUMBER                 02355432

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          1,000 Ordinary Shares of L1 each

ISSUED SHARE CAPITAL              2 Ordinary Shares of L1 each

SHAREHOLDER                       1 held by Framlington Overseas Investment
                                  Management Limited

                                  1 held by Framlington Investment Trust
                                  Services Limited

DIRECTORS                         I Barnetson

SECRETARY                         Framlington Services Limited

AUDITORS                          N/A

ACCOUNTING REFERENCE DATE         31 December




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NAME OF COMPANY                   Framlington Savings Scheme Nominees Limited

DATE AND PLACE OF INCORPORATION   2 June 1987, United Kingdom

REGISTERED NUMBER                 02136631

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          1,000 Ordinary Shares of L1 each

ISSUED SHARE CAPITAL              4 Ordinary Shares of L1 each

SHAREHOLDER                       3 held by Framlington Overseas Investment
                                  Management Limited

                                  1 held by Framlington Investment Trust
                                  Services Limited

DIRECTORS                         JG Lodwick
                                  JV Tubbs

SECRETARY                         Framlington Services Limited

AUDITORS                          N/A

ACCOUNTING REFERENCE DATE         31 December




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NAME OF COMPANY                   Throgmorton Street Nominees Limited

DATE AND PLACE OF INCORPORATION   12 July 1940, United Kingdom

REGISTERED NUMBER                 00362345

REGISTERED OFFICE                 155 Bishopsgate, London, EC2M 3XJ

AUTHORISED SHARE CAPITAL          100 Ordinary Shares of L1 each

ISSUED SHARE CAPITAL              6 Ordinary Shares of L1 each

SHAREHOLDER                       5 held by Framlington Overseas Investment
                                  Management Limited

                                  1 held by Framlington Investment Trust
                                  Services Limited

DIRECTORS                         Framlington Investment Management Limited
                                  JV Tubbs

SECRETARY                         Framlington Services Limited

AUDITORS                          N/A

ACCOUNTING REFERENCE DATE         31 December




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NAME OF COMPANY                   Framlington CET Investment Managers Limited

DATE AND PLACE OF INCORPORATION   24 November 1995, Jersey

REGISTERED NUMBER                 FC 20689

REGISTERED OFFICE                 Elizabeth House, 9 Castle Street, St. Helier,
                                  Jersey, JE4 8PN

AUTHORISED SHARE CAPITAL          12,500 Class A Shares of L1 each

                                  12,500 Class B Shares of L1 each

ISSUED SHARE CAPITAL              12,500 Class A Shares of L1 each

                                  12,500 Class B Shares of L1 each

SHAREHOLDER                       12,500 Class A Shares held by Framlington
                                  Group Limited

                                  12,500 Class B Shares held by Central Europe
                                  Trust Co. Limited

DIRECTORS                         PA Brannigan
                                  TO Lampl
                                  TS Vallance

SECRETARY                         Jersey Trust Company

AUDITORS                          PricewaterhouseCoopers LLP

ACCOUNTING REFERENCE DATE         31 December




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                                   SCHEDULE 3

                             PART A - THE WARRANTIES

1    CAPACITY AND AUTHORITY

1.1  The Seller and each of the Guarantors is duly incorporated and validly
     existing under applicable law.

1.2  The Seller and each of the Guarantors has the right, power and authority to
     execute and deliver, and to exercise its rights and perform its obligations
     under, each of the Implementation Documents to which it is a party.

1.3  Each Implementation Document to be executed by the Seller and each of the
     Guarantors will, when executed, constitute its legal, valid and binding
     obligations enforceable in accordance with their respective terms.

1.4  The execution and delivery of, and the performance of obligations under and
     compliance with the provisions of, each Implementation Document to which
     the Seller or either Guarantor is a party will not result in:

          (a)  a violation of any provision of its memorandum or articles of
               association (or equivalent document); or

          (b)  a breach of or a default under any instrument to which it is a
               party

     where, in each case, such breach would materially and adversely affect its
     ability to enter into or perform its obligations under the relevant
     Implementation Document.

1.5  Save as expressly provided for in this Agreement, no consent,
     authorisation, licence or approval of or notice to its shareholders or any
     governmental, administrative, judicial or regulatory body, authority or
     organisation is required to authorise the execution, delivery, validity,
     enforceability or admissibility in evidence of each Implementation Document
     to which the Seller or either Guarantor is a party or the performance by
     the Seller or either of the Guarantors of its obligations thereunder.

1.6  No order has been made, petition presented or meeting convened for the
     purpose of considering a resolution for the winding up of the Seller or
     either of the Guarantors or for the appointment of any provisional
     liquidator. No petition has been presented for an administration order to
     be made in relation to the Seller or either of the Guarantors, and no
     receiver (including any administrative receiver) has been appointed in
     respect of the whole or any part of any of the property, assets and/or
     undertaking of the Seller or either of the Guarantors. No events or
     circumstances analogous to any of those referred to in this paragraph 1.6
     have occurred in any jurisdiction outside England.


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2    THE SALE SHARES

2.1  The Seller is the sole legal and beneficial owner of the Sale Shares free
     from Encumbrances. The Seller has the right to transfer legal and
     beneficial title to the Sale Shares and none of the Sale Shares is subject
     to any rights of pre-emption or restrictions on transfer.

2.2  The Shares held by the Seller have been validly issued, are fully paid and
     constitute 98.14 per cent of the issued and allotted share capital of the
     Company and the Sale Shares constitute 90.77 per cent of the issued and
     allotted share capital of the Company. There is no shareholder or joint
     venture agreement to which the Seller is a party in effect in respect of
     the Shares held by the Seller.

2.3  There is no agreement or commitment to give or create any Encumbrance on or
     over the Sale Shares and no person has made any claim to be entitled to any
     right over or affecting the Sale Shares.

3    CONSTITUTION AND STRUCTURE OF THE GROUP

3.1  The information set out in Parts A, B and C of Schedule 2 is complete and
     accurate in all respects.

3.2  The Subsidiaries are the only subsidiaries of the Company (or another Group
     Company) and the share capital of each Subsidiary is wholly legally and
     beneficially owned by the Company (or another Group Company) other than as
     indicated in Schedule 2 and is free from any Encumbrances. All of the
     shares directly or indirectly held by the Company in any other Group
     Company are validly issued and allotted and are fully paid. None of the
     shares directly or indirectly held by the Company in any other Group
     Company are subject to any rights of pre-emption or restrictions on
     transfer.

3.3  No person has the right (whether exercisable now or in the future and
     whether contingent or not) to call for the issue or transfer of any
     security, share or loan capital of any Group Company under any option or
     other agreement or otherwise howsoever.

3.4  No Group Company has or has agreed to acquire an interest in any body
     corporate, partnership, joint venture or unincorporated association and no
     Group Company has or has agreed to establish any branch or place of
     business outside the United Kingdom.

3.5  Neither any Guarantor nor any Connected Person of any Guarantor (other than
     the Seller) owns or has any right, title interest or asset (other than
     Intellectual Property Rights and Information Technology, as defined in
     paragraph 16.1 of this Schedule 3) which has been used exclusively or
     primarily by any Group Company in the 24 months prior to the date of this
     Agreement.


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3.6  Copies of the memorandum and articles of association in force at the date
     of this Agreement of each Group Company are included in the Data Room.

4    FUNDS UNDER MANAGEMENT AND TRADING

4.1  So far as the Seller is aware, no investment product of any Group Company
     has any guaranteed or other minimum return feature attached to it and no
     client of any Group Company has the benefit of a legally binding promise of
     performance to a minimum standard or in line with stated benchmarks.

4.2  The information in Appendix 53 to the Disclosure Letter relating to the
     Group's funds under management is true and correct in all material
     respects. All investment management agreements and investment advisory
     agreements (save in respect of private clients where the assets under
     management are less than L10 million) to which any Group Company is a
     party are set out in paragraph 4.2 of the Disclosure Letter.

4.3  All funds under management of the Group are set out in Appendix 53 to the
     Disclosure Letter and have been valued in accordance with the normal
     practice of the Company applicable to the relevant client(s) used in order
     to determine the amount of fees due.

4.4  Each Group Company has in the 24 months prior to the date of this Agreement
     complied in all material respects with its obligations under each fund
     management or advisory agreement to which that Group Company is a party.

4.5  No Group Company has received notice in writing in the 24 months prior to
     the date of this Agreement that it is in default in any material respect
     under any subsisting fund management or advisory agreement to which that
     Group Company is a party.

4.6  No Group Company has received notice in writing in the 18 months prior to
     the date of this Agreement from a client representing more than
     L100,000 in revenue per annum terminating any subsisting fund
     management or advisory agreement to which that Group Company is a party. So
     far as the Seller is aware, no Group Company has, in the 6 months prior to
     the date of this Agreement, received notice in writing from any such client
     of any firm intention to terminate any such fund management or advisory
     agreement.

4.7  No client of any Group Company or unit holder or shareholder in any fund
     managed or operated by any Group Company, or former client, unit holder or
     shareholder, has in the 24 months prior to the date of this Agreement
     expressed an intention in writing, or has reserved a right in writing, to
     claim compensation which might exceed L100,000 from any Group Company
     on the grounds of negligence, breach of contract or breach of applicable
     investment restriction.


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4.8  Copies of all of the current prospectuses of the Funds established by any
     Group Company have been disclosed to the Buyer, are complete and accurate
     in all material respects and are contained in the Data Room.

4.9  An anonymised list of the top 50 distributors by Retail Fund assets under
     management as at 30th June 2005 is contained in the Data Room.

4.10 No client of any Group Company is presently withholding fees which are due
     and payable in an amount in excess of L10,000 in aggregate.

4.11 In the 24 months prior to the date of this Agreement, no Group Company has
     received notice in writing of a claim or complaint by a person alleging
     that any investment product of any Group Company or any investment product
     distributed by any Group Company was mis-sold to them.

4.12 In the 18 months prior to the date of this Agreement, there have been no
     significant errors in the operation of any administrative functions
     operated by or so far as the Seller is aware on behalf of any Group
     Company.

4.13 So far as the Seller is aware, in the 4 years prior to the date of this
     Agreement, no open-ended fund managed by a Group Company has been the
     subject of late trading or market timing activities.

4.14 So far as the Seller is aware, in respect of investment funds or companies
     which are managed by a Group Company which are open-ended, no liability on
     the part of any Group Company exists in respect of any pricing errors for
     the issue or redemption of units in such investment funds or companies.

4.15 The Signing AUM has been prepared in accordance with the provisions of
     paragraph 1 of Schedule 9.

4.16 No Group Company has any liability in respect of Losses arising in
     connection with any claim made by the trustee in bankruptcy of OFZ Profity.

5    COMPLIANCE WITH LEGAL REQUIREMENTS

5.1  All registers and minute books required by law to be kept by each Group
     Company:

5.1.1 contain an accurate and complete record of the matters which should by law
     be dealt with in the register of holders of securities and such registers
     have been properly written up;

5.1.2 in respect of all other matters which should by law be dealt with in such
     books, contain a accurate and complete record and have been properly
     written up, in each case in all material respects,


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     and no Group Company has in the 48 months prior to the date of this
     Agreement received any application or written request for rectification of
     its statutory registers or any other notice in writing that any of them is
     incorrect.

5.2  Each Group Company has obtained all material licences, permissions,
     consents, authorisations and other approvals (together "PERMITS") and has
     in the 3 years prior to the date of this Agreement in respect of FSMA, the
     Proceeds of Crime Act 2002, the Money Laundering Regulations 2003 and the
     Investment Advisers Act of 1940 (United States) including, in respect of
     each enactment, all subordinate legislation and the FSA Handbook (the
     "RELEVANT LAWS") and in the 18 months prior to the date of this Agreement
     in respect of all laws and legally binding regulations other than the
     Relevant Laws made all material filings, authorisations, notifications and
     registrations required for or in connection with the carrying on of its
     business in the places and in the manner in which its business is now
     carried on and no such Permits are revoked, suspended, cancelled,
     restricted or subject to any special conditions. So far as the Seller is
     aware, there are no circumstances in which any such Permits are reasonably
     likely to be revoked, suspended, cancelled or not renewed or materially
     varied or made subject to any material restriction or material condition
     (in whole or in part).

5.3  Each Group Company is conducting and has in the 3 years prior to the date
     of this Agreement in respect of the Relevant Laws and in the 24 months
     prior to the date of this Agreement in respect of all other laws and
     legally binding regulations conducted its business in all material respects
     in accordance with all applicable laws and legally binding regulations.

6    ACCOUNTS, MANAGEMENT ACCOUNTS, ASSETS AND INFORMATION

6.1  The Accounts:

          (a)  have been properly prepared in accordance with CA 1985 and all
               applicable Accounting Standards;

          (b)  were each prepared on the same basis and in accordance with the
               same accounting principles and practices, consistently applied,
               as the audited financial statements for the previous two
               financial periods prior to the accounting period to which the
               relevant Accounts relate save for changes to comply with changes
               in applicable Accounting Standards; and

          (c)  give a true and fair view of the state of affairs of the Company
               and the Group at each accounting reference date to which the
               Accounts relate and the profit and cash flows of the Company and
               the Group for the year ended on each accounting reference date to
               which the Accounts relate.


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6.2  The Management Accounts for the period from the Accounts Date to the end of
     the calendar month preceding the date of this Agreement were prepared with
     due care and attention, were prepared on the same basis and in accordance
     with the same accounting principles and practices, consistently applied, as
     the Accounts and were prepared on a basis consistent with the Management
     Accounts of the Company on the basis of the accounting bases, practices and
     policies used in the preparation of the Management Accounts in each case in
     the preceding month. Having regard to the purpose for which the Management
     Accounts were prepared, the Management Accounts show a reasonably accurate
     representation of the state of affairs of the Group (including the assets
     and liabilities of the Group) at each date to which they relate and of the
     profits and losses of the Group for each period to which they relate.

6.3  The accounting records of each Group Company are in its possession and are
     in all material respects up-to-date and have in all material respects been
     properly written up on a consistent basis and contain the information
     required by applicable law to be entered in them.

6.4  Save for assets held subject to retention of title or similar arrangements
     arising in the ordinary course of the Business, leased assets and assets
     hired or rented on hire purchase or Intellectual Property Rights or
     Information Technology used under licence in the ordinary course of the
     Business and the Properties, the Group is the absolute owner of and is in
     actual possession of all material assets used in the course of the Business
     or which are necessary for the continuation of its business as it is now
     carried on. So far as the Seller is aware, save as aforesaid, no person has
     the right to call for any payment in respect of any of those assets and no
     Group Company has created or agreed to create any Encumbrance over any part
     of its undertaking or assets (other than Encumbrances arising by the
     operation of law in the ordinary course of Business). No Group Company has
     received written notice in the 12 months prior to the date of this
     Agreement from any person claiming any such right or the benefit of any
     such Encumbrance.

7    EVENTS SINCE THE ACCOUNTS DATE

7.1  Since the Accounts Date:

          (a)  there has been no material adverse change in the business,
               assets, financial condition or operations of the Group;

          (b)  Group Companies have carried on their respective businesses in
               the ordinary course in all respects and without any material
               interruption;

          (c)  no asset of a value in excess of L250,000 has been acquired
               or disposed of on capital account or has been agreed to be
               acquired or disposed of and no contract involving expenditure by
               it on capital account in excess of L250,000 has been
               entered into by any Group Company;


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          (d)  no Group Company has resolved to change its name or to alter its
               memorandum or articles of association;

          (e)  no Group Company has allotted or issued or agreed to allot or
               issue any shares or any securities or granted or agreed to grant
               any right which confers on the holder any right to acquire any
               shares or other securities;

          (f)  no Group Company has declared, paid or made any dividend or other
               distribution;

          (g)  no Group Company has repaid, redeemed or purchased any of its
               share capital or loan capital or agreed to do so;

          (h)  no Group Company has reduced its share capital;

          (i)  no Group Company has resolved to be voluntarily wound up;

          (j)  no Group Company has passed any shareholder resolution or
               obtained any consent from any of its members;

          (k)  no Group Company has otherwise than in the ordinary course of
               business made, or agreed to make, any material change in the
               nature or extent of its business;

          (l)  no Group Company has created, or agreed to create, any
               Encumbrance over its business, undertaking or over any of its
               assets other than on the ordinary course of business;

          (m)  no Group Company has appointed new auditors;

          (n)  no Group Company has made any change in its accounting reference
               period; and

          (o)  no Group Company has made any change in its accounting policies
               or practices.

8    INDEBTEDNESS AND GUARANTEES

8.1  Except as disclosed in the Disclosure Letter:

          (a)  no Group Company is a party to any outstanding indebtedness
               (other than trading debtors in the ordinary course of business),
               overdraft, loans or other financial or borrowing facilities; and

          (b)  there is no outstanding indebtedness on any account whatever
               owing by any Group Company to the Seller or any Connected Person
               or by the Seller or any Connected Person to any Group Company.


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8.2  No Group Company has received any written notice in the 12 months prior to
     the date of this Agreement alleging that an event has occurred which
     constitutes an event of default, or otherwise gives rise to an obligation
     to repay prior to the scheduled repayment date, under any agreement entered
     into by a Group Company relating to the borrowing or indebtedness in the
     nature of borrowing.

8.3  Details of all debentures, charges, guarantees and indemnities given to
     secure such indebtedness or loans referred to in paragraph 8.1 are
     disclosed in the Disclosure Letter.

8.4  Save as otherwise contemplated by this Agreement, none of the indebtedness
     or loans referred to in paragraph 8.1 will be become repayable on or as a
     result of Completion.

9    CONTRACTS

9.1  The Seller has provided the Buyer with hard copies of all Material
     Contracts. For the purposes of this paragraph 9, "MATERIAL CONTRACT" means
     (1) a contract to which a Group Company is a party pursuant to which the
     fee income (net of applicable VAT) is expected to exceed L250,000 in
     the next 12 months and (2) a contract entered into to which a Group Company
     is a party and which as at the date of this Agreement contains outstanding
     financial liabilities (whether actual or contingent) of, or financial
     benefits (whether actual or contingent) accruing to such Group Company
     involving a single financial commitment in excess of L250,000 on a
     per incident basis or L250,000 per annum but excludes any lease,
     licence or other contract or agreement creating or relating to an interest
     in land. Each Material Contract is on arms' length terms.

9.2  There are no outstanding agreements or arrangements under which any Group
     Company is under an obligation to acquire or dispose of all or a
     substantial part of its assets or business.

9.3  No Group Company has received written notification within the last 24
     months of the termination of (otherwise than through expiry in accordance
     with the terms of the relevant contract) or any claim for breach of
     contract in respect of any Material Contracts. So far as the Seller is
     aware, there are no material breaches, invalidity, or grounds for
     determination, rescission, avoidance or repudiation of any Material
     Contract.

9.4  There are no agreements or arrangements between any Group Company and the
     Seller or any Connected Person for the supply of any goods or services
     (including without limitation administration, human resources, information
     technology, taxation, administration, custodian, outsourcing, insurances,
     premises or other services) or the use by one such party of the property,
     rights or assets of the other.

9.5  So far as the Seller is aware, no bid or tender given or made by any Group
     Company on or before the date of this Agreement and still outstanding is
     capable of giving rise to an agreement or arrangement merely by a
     unilateral act of another person.


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9.6  Other than the Material Contracts or any lease, licence or other contract
     or agreement creating or relating to an interest in land, no Group Company
     is a party to:

          (a)  so far as the Seller is aware, any contract for lease, hire, hire
               purchase, credit sale, conditional sale or purchase by
               instalments which is not accounted for in the Accounts or the
               Management Accounts (other than in relation to the Properties or
               Information Technology);

          (b)  any guarantee, indemnity other than an indemnity given in the
               ordinary course of business, surety or letter of credit;

          (c)  any joint venture agreement or arrangement, partnership rights or
               obligations or any other agreement or arrangement under which it
               participates with any other person in any business;

          (d)  so far as the Seller is aware, any contract or arrangement which
               constitutes a commercial transaction or arrangement not entirely
               on arms' length terms;

          (e)  any contract or arrangement in which any director of any Group
               Company or any person connected with any such director (within
               the meaning of section 346 Companies Act 1985) is legally or
               financially interested; and

          (f)  so far as the Seller is aware, any contract or arrangement which
               can be terminated in the event of any change in the underlying
               ownership or control of the Company or any other Group Company or
               which contains a unilateral right in favour of the counter-party
               to change the terms thereof in the event of any change in the
               underlying ownership or control of the Company or any other Group
               Company, where, in each such case, such termination or change
               would have a material impact on the Group.

9.7  No Group Company has given any covenants or is a party to any arrangements
     limiting or excluding its right to do business and/or compete in any area
     or field (whether limited by reference to a geographical area or type of
     business) as it may think fit or the ability to transfer the whole or any
     part of its business with any other person.

9.8  So far as the Seller is aware, compliance with this Agreement shall not:

          (a)  materially breach or constitute a material default under an
               agreement or arrangement to which any Group Company is a party,
               or any provision of the memorandum or articles of association of
               any Group Company, or any security interest or regulation
               applicable to any Group Company; or

          (b)  result in the creation, imposition, crystallisation or
               enforcement of any Encumbrance on any of the material assets of
               the Company.


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10   FUNDS

10.1 All of the Funds established by any Group Company have been established in
     accordance with the applicable laws and regulations in the jurisdictions in
     which they are established.

10.2 No decision has been taken to wind up or close any current Funds
     established by any Group Company.

10.3 To the extent necessary, taking into account the purposes for which it has
     been established and is marketed, each Fund established by any Group
     Company is duly authorised by the governmental or regulatory authority in
     the jurisdiction in which it is established and so far as the Seller is
     aware there are no circumstances to indicate that any such authorisation
     will be revoked in whole or part, in the ordinary course of events (whether
     as a result of the acquisition of the Sale Shares or otherwise). For each
     such authorised Fund, details of the relevant government or regulatory
     authority, the type of authorisation and any special conditions attaching
     to the Fund's authorisation are set out in the Disclosure Letter.

10.4 So far as the Seller is aware, all unlisted and unquoted investments of all
     of the Funds are and have within the last three years been valued in the
     period in which they have been under the management of a Group Company in
     accordance with applicable laws and regulations.

10.5 So far as the Seller is aware, the assets held in any Fund or any other
     portfolio under the management of a Group Company are and have in the 18
     months prior to the date of this Agreement in each case in any period in
     which they have been under the management of the Group Company been held in
     all material respects in accordance with the provisions of any applicable
     law or regulation.

11   AGENTS AND BROKERS

11.1 Details of the standard terms of trade between the Group Company and the
     twenty largest distribution agents (based on sales during the twelve month
     period prior to the date of this Agreement) to whom any Group Company pays
     or has paid commission or advanced expenses are contained in the Data Room
     and there are no other arrangements or agreements between any Group Company
     and any such agent which contain terms materially different from the
     standard terms disclosed in the Data Room.

11.2 No written indication has been received by the Seller or a Group Company
     that any distribution agents will cease carrying on business with any Group
     Company as a result of this Agreement or Completion.


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11.3 So far as the Seller is aware, no Group Company has in the 18 months prior
     to the date of this Agreement paid any commissions or other incentives to
     an agent or broker for business offered by that agent or broker to such
     Group Company where such payment was illegal.

12   THE PROPERTIES AND OTHER INTERESTS IN LAND

12.1 The Properties are all the properties owned, controlled, used or occupied
     by a Group Company or in which any Group Company has any interest or right.
     A Group Company is the legal and beneficial owner of or is otherwise
     absolutely entitled to its interest in each of the Properties. Details of
     all covenants, restrictions, easements or other matters set out or referred
     to in the deeds and documents relating to the relevant Group Company's
     interest in each of the Properties are contained in the Data Room.

12.2 No Group Company has any material liability (contingent or actual) in
     respect of any leasehold property except the Properties.

12.3 A Group Company has in its possession or under its control all the deeds
     and documents necessary to prove title to its interest in each of the
     Properties.

12.4 Each Property is held under the terms of the lease or licence applicable to
     it referred to in Schedule 5 and no material variations, collateral
     assurances or concessions have been entered into.

12.5 The relevant Group Company has paid all rent or licence fees and all other
     outgoings which have become due in respect of each of the Properties.

12.6 So far as the Seller is aware, the relevant Group Company has performed and
     observed all obligations, covenants and conditions affecting each of the
     Properties in all material respects. No Group Company has received any
     written notice alleging breach of any such covenants and conditions which
     remains outstanding.

12.7 The Seller is not aware of any dispute, claims, demands, actions, notices
     or complaints relating to any of the Properties which remains or remain
     outstanding.

12.8 A Group Company holds each of the Properties subject to the third party
     rights of occupation or possession described or contained in the Data Room
     but is otherwise in physical possession and actual occupation of each
     Property. Where a Property is sublet to a third party, the third party has
     performed and observed all obligations, covenants and conditions on its
     part contained in the relevant sublease in all material respects. All rent
     or other outgoings which have become due under the relevant sublease have
     been paid to date.


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12.9 In relation to such of the Properties as are leasehold, where the rent
     reserved by the lease or tenancy of any such Property is subject to review
     there are no disputes outstanding as to the settlement of the relevant
     level of rent.

12.10 So far as the Seller is aware, each Group Company is in compliance in all
     material respects with all applicable environmental and health and safety
     laws including without limitation, in relation to the Control of Asbestos
     at Work Regulations 2002 with respect to either the Properties or the
     carrying on of the business of the Company substantially as it is presently
     carried on. No Group Company has received any notification or claim from
     any relevant authority alleging that it has not complied in all material
     respects with all such applicable environmental and health and safety laws
     within the last three years or is under any investigation or inquiry by any
     relevant authority under any applicable environmental or health and safety
     rules.

13   EMPLOYEES

13.1 The Disclosure Letter contains or refers to details of the employees of
     each Group Company including employing company, job title, remuneration
     payable (including bonus arrangements), length of service, notice period
     and other principal benefits provided.

13.2 The Seller has disclosed to the Buyer copies of the service contracts of
     the Senior Employees and a representative sample of the contracts of
     employment between each Group Company and its employees, and none of the
     employees have contractual terms which are materially different.

13.3 To the extent not disclosed under paragraph 13.1 material details of any
     benefit received by any employee otherwise than in cash and of any benefit
     received by any employee in cash which is related to sales, profits,
     turnover or performance, or which is otherwise variable (other than normal
     overtime) are set out or discussed in the Disclosure Letter or Data Room.

13.4 Each Group Company has maintained records which are adequate and up-to-date
     in all material respects regarding the service of each of its employees and
     these records will be made available to the Buyer on Completion.

13.5 No Senior Employee has, since the Accounts Date, given notice terminating
     their contract of employment or is under notice of dismissal. No amount due
     to or in respect of any employee of any Group Company is in arrears or
     unpaid other than salary for the month current at the date of this
     Agreement.

13.6 No Group Company is involved in any material dispute or negotiation with
     any of its employees and so far as the Seller is aware there is no such
     dispute pending or threatened in writing.

13.7 Since the Accounts Date, (i) no change has been made in the emoluments or
     other terms of engagement of any Senior Employee of any Group Company or
     (ii) no material change has


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     been made in the emoluments of any category of other employees of any Group
     Company numbering 10 or more. The annual salary review takes place in
     December and no other material changes have been proposed by any Group
     Company in writing or are due to other emoluments or terms and conditions
     in the 6 months from the date of this Agreement.

13.8 Within the period of 18 months before the date of this Agreement no Group
     Company has given notice of any redundancies to the Secretary of State for
     Work and Pensions or started consultations with any independent trade union
     or unions or other employee representatives under Part XI Employment Rights
     Act 1996 and no Group Company has failed to comply with any obligation
     under such Part XI. No Group Company has in the 18 months before the date
     of this Agreement entered into any contractual enhanced redundancy
     entitlements on termination of employment. Details of any discretionary
     redundancy payments made in the last 12 months have been fairly disclosed
     to the Buyer.

13.9 No gratuitous payment or payments which individually or in the aggregate
     are material, have been made or promised by any Group Company in connection
     with the actual or proposed termination, breach, suspension or variation of
     any employment or engagement of any present or former director, officer or
     employee of that company.

13.10 No director, officer or employee of the Company or any Group Company will
     be entitled to receive any payment or right or benefit from any Group
     Company arising out of or in connection with either this Agreement or
     Completion.

13.11 The Disclosure Letter contains details of the entitlement of each employee
     of any Group Company to options or awards under the LTIP or under the
     Phantom Option Agreement. There are no other arrangements of any Group
     Company entitling any employee to any equity or option over equity or
     reward based upon notional equity. Save as contemplated by the terms of the
     Funding Agreement, no Group Company has any obligation or responsibility to
     fund the LTIP Trust. The Seller confirms that there are no performance
     conditions applicable to any outstanding Award or Option.

13.12 There are no employees of any Group Company other than as set out in the
     Disclosure Letter and no Group Company has made any offer to employ any
     person who would become a Senior Employee if such offer were accepted or to
     more than 5 persons who would become an employee who in each case is not
     listed as an employee in such schedule.

13.13 Each Group Company has in relation to each of its employees in all
     material respects in the 24 months prior to the date of this Agreement:

          (a)  Complied with all obligations imposed on it under such employees
               terms and conditions of employment and any collective agreement
               and arrangements which relate to any such employees; and


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          (b)  Complied with all obligations imposed on it by, and all orders
               and awards made under, all statutes and regulations which are
               relevant to such employees.

14   PENSIONS

     IN THIS PARAGRAPH "THE TAXES ACT" SHALL MEAN THE INCOME AND CORPORATION
     TAXES ACT 1988.

14.1 Save for the Pension Scheme and the Group Personal Pension Scheme the
     Company is not under any legal or other obligation to provide any relevant
     benefits (as defined in section 612(1) of the Taxes Act) to any of the
     employees of the Company or their dependants and has no grounds for
     believing that the Company will become so liable in future.

14.2 The Seller warrants that sufficient particulars of the Pension Scheme and
     the Group Personal Pension Scheme have been disclosed to enable the Buyer
     to determine the benefit structure of those schemes and the duties and
     obligations of the Company and, where appropriate, the trustees of those
     schemes, in relation to the Pension Scheme Members, under the provisions of
     those schemes, including without prejudice to the generality of the
     foregoing:

          (a)  the Second Definitive Trust Deed for the Pension Scheme dated 26
               August 1999 and subsequent amending deeds (which together
               constitute the trust deed);

          (b)  the 2004 version booklet for the Pension Scheme (which is the
               current booklet);

          (c)  any other relevant booklets and written announcements given to
               the Pension Scheme Members.

14.3 All employer contributions due as at the date of this Agreement in respect
     of the employees of the Company to the Group Personal Pension Scheme and
     the trustees of the Pension Scheme have been paid in accordance with the
     provisions of the Second Definitive Trust Deed and within the requirements
     of the Pensions Act 1995 and those which fall due for payment before the
     date of Completion will have been paid by that date.

14.4 The Pension Scheme is an exempt approved scheme within the meaning of Part
     XIV of the Taxes Act and so far as the Seller is aware (i) there is no
     reason why such approval should be withdrawn; and (ii) the Pension Scheme
     and the Group Personal Pension Scheme have at all times complied with and
     been duly administered in all respects in accordance with, all applicable
     laws and regulations.

14.5 The Company has at all times complied in all material respects with all
     applicable laws and regulations (including without limitation Article 141
     of the Treaty of Rome, all applicable EEC directives and all UK statutes,
     regulations and statutory instruments), and the provisions of the Pension
     Scheme, relating to the participation of the Relevant Employees in the
     Pension Scheme.


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14.6 The Group Personal Pension Scheme and the Pension Scheme are not contracted
     out of the State Second Pension.

14.7 (a)  So far as the Seller is aware, there are no outstanding complaints
          under the internal disputes resolution procedure of the Pension Scheme
          and there are no outstanding complaints by any Relevant Employee in
          relation to the the Group Personal Pension Scheme;

     (b)  There are no proceedings in the courts in relation to the Pension
          Scheme or the Group Personal Pension Scheme; and

     (c)  So far as the Seller is aware, no complaints have been made to the
          pensions ombudsman in relation to the Pension Scheme or the Group
          Personal Pension Scheme.

14.8 The Company has been duly admitted to participation in the Pension Scheme
     and no other Company has participated in the Pension Scheme, other than
     Throgmorton Investment Management between 8 December 1986 and 16 November
     1998.

14.9 The Company has no liability to make any payment to any pension scheme in
     which it formerly participated, whether pursuant to section 75 of the
     Pensions Act 1995 or otherwise.

14.10 All benefits (other than a refund of the member's contributions with
     interest where appropriate) payable under the Pension Scheme or the Group
     Personal Pension Scheme on death before normal pension age of a Relevant
     Employee while in an employment to which the Pension Scheme relates are
     fully insured with Norwich Union. As far as the Seller is aware, there are
     no circumstances that would or might result in revocation or restriction of
     cover under this policy.

14.11 No undertaking or assurance has been given to any Relevant Employee as to
     the continuance or introduction or increase or improvements of any pension
     rights or entitlements which the Buyer or the Company would be required to
     implement in accordance with good industrial relations practice whether or
     not there is any legal obligation to do so and no discretion has been
     exercised to admit to membership any Relevant Employee who would not
     otherwise have been eligible for admission to membership.

14.12 The Group Personal Pension Scheme provides only money purchase benefits
     within the meaning of Section 181(1) of the Pension Schemes Act 1993 and no
     assurance, promise or guarantee (whether written or oral) has been given to
     any Member or Relevant Employee of any particular level or amount of
     benefit (other than death in service benefits) payable to or in respect of
     him on retirement, death or leaving service.

14.13 The Seller has not received any written notice in the past 24 months from
     either the trustees of the Pension Scheme or the administrators of the
     Group Personal Pension Scheme that they have had cause to report any
     breaches of the 1995 Act nor any other breaches of law to Opra or the


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     Pensions Regulator and neither the Seller nor, to the best of the Seller's
     knowledge and awareness, the trustees have been contacted in writing by
     Opra, the Pensions Regulator or the Pensions Ombudsman in connection with
     any such breach or alleged breach.

14.14 The Seller has not received any written notice in the past 24 months that
     any professional adviser has had cause to blow the whistle in accordance
     with section 28 of the Pensions Act 1995 or section 70 of the Pensions Act
     2004 and neither the Seller nor, to the best of the Seller's knowledge and
     awareness, the trustees have been contacted in writing by Opra, the
     Pensions Regulator or the Pensions Ombudsman in connection with any such
     breach or alleged breach.

15   INSURANCE

15.1 Each Group Company has in the 18 months prior to the date of this Agreement
     maintained all insurance required by applicable regulation and statute.

15.2 Hard copy summaries of all insurance policies maintained by each Group
     Company and in force at any time in the past 24 months ("POLICIES") have
     been made available to the Buyer in the Disclosure Letter.

15.3 All premiums due on the Policies have been paid and, so far as the Seller
     is aware, all the Policies are in full force and effect. No claim exceeding
     L100,000 is outstanding either by the insurer or the insured under any of
     the Policies. No event has occurred in relation to the Group Companies
     which requires notification under any of the insurance policies maintained
     by the Group Companies that has not as at the date of this Agreement been
     so notified in accordance with the terms of such policy.

16   INTELLECTUAL PROPERTY RIGHTS AND INFORMATION TECHNOLOGY AND DATA PROTECTION

16.1 In this paragraph and in paragraph 3.5 of this Schedule 3 unless the
     context requires otherwise:

     "INFORMATION TECHNOLOGY" means information technology infrastructure
     including computer hardware, software and networks and the manuals and
     documents relating to it.

16.2 So far as the Seller is aware, no Group Company is infringing or has in the
     past 2 years infringed the Intellectual Property Rights or know-how of any
     other person nor, so far as the Seller is aware, is any third party
     infringing or has in the past 2 years infringed any Intellectual Property
     Rights owned by a Group Company.

16.3 Accurate details of all registered Intellectual Property Rights (including
     applications for registration of any such rights) and material unregistered
     Intellectual Property Rights (including rights in computer software and
     rights in and to the name "Framlington" and derivations thereof) and
     business-critical know-how owned by any Group Company are fairly disclosed
     (within the


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     meaning of clause 7.4 of this Agreement). The relevant Group Company is the
     sole legal and beneficial owner of each such right free from Encumbrances.

16.4 All renewal, application and other fees and steps required for the
     progression and maintenance of all the registered Intellectual Property
     Rights (including applications for registration of any such rights)
     disclosed in the Disclosure Letter or the Data Room have been paid or
     taken.

16.5 So far as the Seller is aware, none of the Intellectual Property Rights or
     know-how owned by any Group Company are the subject of any litigation or
     administrative proceedings.

16.6 So far as the Seller is aware, no third party uses or has in the last 2
     years used the name "Framlington", or any name which, in the Seller's
     reasonable opinion, is confusingly similar to the name "Framlington" in any
     financial services business.

16.7 Complete and accurate copies of all material written current licences and
     agreements relating to Intellectual Property Rights, know-how and
     Information Technology (including without limitation software licences,
     leases, maintenance and support agreements, development agreements,
     management agreements, outsourcing agreements, escrow agreements relating
     to the deposit of source code, security arrangements and disaster recovery
     agreements) entered into by any member of the Group are fairly disclosed
     (within the meaning of clause 7.4 of this Agreement).

16.8 Details of all material unwritten current licences and agreements relating
     to Intellectual Property Rights, know-how and Information Technology
     entered into by any member of the Group are fairly disclosed within the
     meaning of clause 7.4 of this Agreement.

16.9 So far as the Seller is aware, no Group Company is in, nor is any third
     party in, material breach of any licence or agreement required to be
     disclosed pursuant to paragraph 16.7 of this Schedule.

16.10 Each Group Company either owns or has a licence or contractual right to
     use all Intellectual Property Rights, know how and Information Technology
     necessary to carry on the business currently conducted by that member of
     the Group and, so far as the Seller is aware, none of these licences or
     contractual rights to use when material and unwritten, will be affected as
     a result of any direct or indirect change in the underlying ownership or
     control of any Group Company or otherwise by reason of the transactions
     contemplated by this Agreement.

16.11 None of the Seller, any Guarantor or any Connected Person of any Guarantor
     owns any Intellectual Property Rights or know-how or Information Technology
     which is used by any member of the Group, or is licensed to use any such
     Intellectual Property Rights or know-how or Information Technology under a
     licence the benefit of which is shared with any Group Company, and the
     Information Technology systems of the Group do not integrate to or depend
     on Information Technology systems of the Seller, any Guarantor or any
     Connected Person of any Guarantor.


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16.12 So far as the Seller is aware, no material Business Information which is
     confidential and proprietary to any member of the Group has been disclosed
     to any third party other than under an obligation of confidentiality in the
     3 years prior to the date of this Agreement.

16.13 Details of all domain names registered by any Group Company are fairly
     disclosed (within the meaning of clause 7.4 of this Agreement).

16.14 In the 12 months prior to Completion, no Group Company has experienced any
     material disruption in or to its business or operations as a result of (a)
     any security breach in relation to any Information Technology or (b) any
     failure (whether arising from any bug, virus, defect or otherwise), lack of
     capacity or other sub-standard performance of any Information Technology.

16.15 The Information Technology systems of the Group include up-to-date virus
     software and, so far as the Seller is aware, contain no virus or
     potentially harmful program codes.

16.16 Details of the disaster recovery and security arrangements in place in
     relation to the Information Technology used by the Group are fairly
     disclosed (within the meaning of clause 7.4 of this Agreement).

16.17 Each Group Company has complied with all relevant requirements of the Data
     Protection Act 1998 (including, without limitation, the data protection
     principles set out in that Act).

16.18 The Disclosure Letter sets out details of all data protection
     registrations, (or notifications, as appropriate) made by any Group Company
     and no Group Company has in the 12 months prior to the date of this
     Agreement received any written complaints, enforcement notice or
     deregistration notice from any person (including any relevant regulator)
     regarding the storage or use of any data where any of the same would have
     an adverse effect on the Group.

17   POWERS OF ATTORNEY

     No Group Company has given any power of attorney which is still outstanding
     or effective to any person to enter into any contract or commitment on its
     behalf other than to its employees to enter into routine trading contracts
     in the normal course of their duties.

18   COMPETITION AND GRANTS

18.1 No Group Company is or has been in the past two years a party to, and is
     not and has not in the past two years been concerned in, any agreement or
     arrangement, and is not conducting and has not conducted itself (whether by
     omission or otherwise) in a manner, which:

          (a)  infringes Article 81 or 82 of the EC Treaty or section 2 or
               section 18 of the Competition Act 1998 or any other anti-trust or
               similar legislation in any jurisdiction in which the


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               Group has assets or carries or intends to carry on business or
               where its activities may have an effect; or

          (b)  is unenforceable or void (whether in whole or in part) or renders
               the Company or any other Group Company liable to civil, criminal
               or administrative proceedings by virtue of any anti-trust or
               similar legislation or any undertakings given or orders made
               under such legislation in any jurisdiction in which any Group
               Company has assets or carries on or intends to carry on business
               or where its activities may have an effect.

18.2 In the past two years, no Group Company has given an undertaking to, and is
     not subject to any order of or investigation by, and has not received any
     request for information from, any court or governmental authority
     (including, without limitation, any national competition authority, the
     European Commission and any sectoral regulator) under any anti-trust or
     similar legislation in any jurisdiction in which any Group Company has
     assets or carries on or intends to carry on business or where its
     activities may have an effect.

18.3 No Group Company has applied for or received any aid (as that term is
     understood for the purposes of Articles 87 to 89 of the EC Treaty) during
     the last two years.

19   LITIGATION

19.1 No Group Company is engaged in any capacity in any litigation, arbitration,
     prosecution or other legal proceedings or in any proceedings or hearings
     before any statutory or governmental body, department, board or agency or
     other dispute resolution proceedings whether as claimant, defendant or
     otherwise and no such litigation, arbitration, prosecution or other
     proceedings are pending or threatened. So far as the Seller is aware, there
     is no fact or circumstance reasonably likely to give rise to any material
     litigation, arbitration, mediation or administrative or criminal
     proceedings.

19.2 No Group Company has received written notice of any outstanding judgment,
     order, decree, arbitral award or decision of any court, tribunal,
     arbitrator or governmental agency against any Group Company.

20   REGULATORY MATTERS

20.1 So far as the Seller is aware, all material correspondence, agreements and
     memoranda of understanding between any Group Company and any Regulatory
     Authority within the 3 years prior to this Agreement (including letters,
     reports, risk assessments, licences and other notices produced by any
     Regulatory Authority) other than any such document which is subject to an
     obligation of confidentiality legally binding on the relevant Group Company
     have been disclosed to the Buyer in part 8 of the Data Room or paragraph 20
     of the Disclosure Letter. So far as the


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     Seller is aware, there are no confidential agreements between a Group
     Company and any Regulatory Authority in existence.

20.2 No Group Company:

          (a)  has any Permit issued by any Regulatory Authority;

          (b)  has the benefit of any individual waiver of any statutory
               provision, rule or regulation granted by any Regulatory
               Authority; or

          (c)  is in the process of applying for any of the things in (a) or (b)
               above,

     other than as is disclosed in paragraph 20(a), (b) and (c) of the
     Disclosure Letter.

20.3 So far as the Seller is aware, each Group Company has reasonable procedures
     in place designed to ensure that each of its relevant directors and
     employees has complied with all applicable individual registration and
     training and competence requirements made pursuant to the rules,
     regulations and practices of any Regulatory Authority. So far as the Seller
     is aware, no such director or employee is in material breach of such
     requirements or has either been refused, or received any notice of
     intention to terminate, such registration as an approved person during the
     course of their employment with a Group Company.

20.4 No Group Company is, or has been:

          (a)  the subject of any inquiry, investigation, censure, prosecution,
               dispute, disciplinary proceedings, prohibition, restriction,
               exercise of powers of intervention, order, direction or notice,
               by any Regulatory Authority (including any exercise by the FSA of
               its powers under Part XI of FSMA); or

          (b)  engaged in or the subject of any other governmental,
               administrative, tribunal, or judicial inquiry involving a
               Regulatory Authority or other proceedings of a financial
               regulatory nature,

          in the three years prior to the date of this Agreement, and so far as
          the Seller is aware there are no particular material circumstances
          which are likely to give rise to such action in the future.

20.5 No Group Company has been informed in writing of any material outstanding
     issues with any Regulatory Authority concerning any visits made to it by
     the relevant Regulatory Authority regarding the standards of regulatory
     compliance that have applied or may still apply in the conduct of business,
     internal organisation, risk management disciplines or other relevant
     control functions in respect of any business carried on by the Group
     Company in the three years prior to the date of this Agreement.


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20.6 Each Group Company has access to, and may demand return of, any books and
     records (or copies thereof) not held by them but on their behalf by third
     parties in relation to the Business conducted by them which are required to
     be kept under applicable legal or regulatory requirements other than those
     books and records mentioned in paragraphs 5.1 and 6.5 of this Schedule 3.

20.7 So far as the Seller is aware, no Group Company (nor any of its officers,
     employees or agents) in the 24 months prior to the date of this Agreement
     has offered to or solicited offers for any securities or other products
     from any person in any jurisdiction in which such offer or solicitation is
     unlawful or where such offer or solicitation is required to be authorised
     by the appropriate governmental agency or regulatory body and has not been
     so authorised otherwise than in accordance with all applicable laws and
     regulations.

20.8 So far as the Seller is aware, no Group Company (nor any of its officers,
     employees or agents) in the 24 months prior to the date of this Agreement
     has distributed any prospectus or offering document in any jurisdiction
     where such distribution is unlawful or where such distribution is
     restricted without observing such restrictions or otherwise than in
     accordance with all applicable laws and regulations.

20.9 All regulatory breaches by any Group Company (if any) identified to the
     Company by or notified by any Group Company to (formally or informally) any
     Regulatory Authority to which any Group Company is subject in the 3 years
     prior to the date of this Agreement have been remedied to such Regulatory
     Authority's satisfaction.

20.10 All recommendations (if any) suggested by any Regulatory Authority in
     writing in the 3 years prior to the date of this Agreement to which any
     Group Company is subject have been implemented within the period
     contemplated by the recommendation to such Regulatory Authority's
     reasonable satisfaction.

20.11 Other than as disclosed at part 8 of the Data Room or paragraph 20.11 of
     the Disclosure Letter, in the 2 years prior to the date of this Agreement,
     no written complaints or claims for compensation have been made to any
     Group Companies and no complaints or claims for compensation have been
     notified to any Group Company by any Regulatory Authority.

21   INSOLVENCY

21.1 No order has been made and no resolution has been passed for the winding-up
     of any Group Company or for a liquidator to be appointed in respect of any
     Group Company and no petition has been presented and no meeting has been
     convened for the purpose of winding-up any Group Company.


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21.2 No administration order has been made, and no petition for such an order
     has been presented in respect of any Group Company.

21.3 No receiver (which expression shall include an administrative receiver) has
     been appointed in respect of any Group Company or in respect of all or any
     part of its assets.

21.4 No voluntary arrangement has been proposed under section 1 Insolvency Act
     1986 in respect of any Group Company.

21.5 No event analogous to any of the circumstances mentioned in any of the
     foregoing sub paragraphs of this paragraph 16 has occurred in relation to
     any Group Company outside England.

22   TAXATION

22.1 All returns, computations, notices, statements, reports or information
     which ought to have been made by or in respect of any Group Company for any
     Taxation purpose have been properly and punctually submitted to the
     relevant Taxation Authority; all such returns, computations, notices,
     accounts, statements, reports and information supplied to any Taxation
     Authority were, when made or supplied, up-to-date and correct in all
     material respects; none of such returns, computations, notices, accounts
     statements, reports or information is the subject of any material present
     or, so far as the Seller is aware, contemplated dispute or disagreement
     with any Taxation Authority regarding liability or potential liability to
     any Taxation recoverable from any member of the Group or regarding the
     availability of any material relief from Taxation to any member of the
     Group, and there is no fact or circumstance of which the Seller is aware
     which makes any such dispute or disagreement likely to commence.

22.2 The Company or the relevant member of the Group has sufficient records
     relating to past events, including any elections made, to calculate the
     Taxation liability or relief which would arise on any disposal or on the
     realisation of any asset owned at the Accounts Date by any member of the
     Group or acquired by any such member since that date but before Completion
     including sufficient books, documents, records and other information to
     enable any member of the Group promptly to comply in full with any notice
     served on it under regulations 10 or 11 of the Instalment Payments
     Regulations in respect of any accounting period commencing before
     Completion.

22.3 Each member of the Group has duly submitted all claims, elections,
     disclaimers or withdrawals of claims or notifications which have been
     assumed to have been made for the purposes of the Accounts and which are
     due to be made on or before Completion.

22.4 No member of the Group has received any notice from any Taxation Authority
     which required or will or may require such member to withhold tax from any
     payment made since the Accounts Date or which will or may be made after the
     date of this Agreement.


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22.5 All Taxation for which each of the Group Companies is liable, the due date
     for payment of which is (in the absence of any application to postpone) on
     or before Completion has been or will be paid on or before Completion.
     Without limitation, each Group Company has made all deductions,
     withholdings and retentions of or on account of Taxation as it was or is
     obliged or entitled to make, and has accounted to the relevant Taxation
     Authority for any such deductions and retentions for which it was obliged
     to account.

22.6 No Group Company is or has within the three years before the date of this
     Agreement been liable to pay to any Taxation Authority any penalty, fine,
     surcharge or interest in connection with any Taxation or otherwise paid any
     Taxation after its due date for payment or become liable to pay any
     Taxation the due date for payment of which has passed or become
     prospectively liable to pay any Taxation the due date for payment of which
     will arise in the 30 days after this Agreement.

22.7 The Disclosure Letter indicates that the Company and each UK resident
     member of the Group is a "large company" within the meaning of regulation 3
     of the Instalment Payments Regulations and the Disclosure Letter contains
     full details of all instalment payments required to be made by any member
     of the Group under the Instalment Payments Regulations since the Accounts
     Date.

22.8 All Taxation liabilities (including actual, deferred, contingent,
     quantified, disputed or otherwise) of each Group Company measured by
     reference to income, profits or chargeable gains earned, accrued or
     received on or before the Accounts Date, or arising in respect of an event
     occurring on or before that date, are properly provided for, or the subject
     of proper reserve made, in the Accounts.

22.9 Since the Accounts Date:

22.9.1 no Group Company has been involved in any transaction which has given or
     may give rise to a liability to Taxation on any member of the Group (or
     would have given rise to such a liability but for the availability of any
     relief) other than Taxation in respect of normal trading income or receipts
     arising from transactions entered into in the ordinary course of business;

22.9.2 no disposal has taken place or other event occurred which has the effect
     of crystallising a liability to Taxation which should have been included in
     the provision for deferred Taxation contained in the Accounts if such
     disposal or other event had been planned or predicted at the Accounts Date;
     and

22.9.3 no member of the Group has been a party to any transaction for which any
     Taxation clearance provided for by statute has been obtained.


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22.10 No action has been taken by any member of the Group before Completion such
     that the provisions of regulation 14 of the Instalment Payments Regulations
     could have effect in respect of any member of the Group at any time.

22.11 No Taxation Authority has in the last six years carried out or (so far as
     the Seller is aware) is at present conducting, any review, audit or
     investigation into any aspect of the business or affairs of any of the
     Group Companies other than of a routine nature, and there is no reason why
     any such review, audit or investigation should be initiated. HMRC has not
     given a notice of enquiry into a Taxation return of any member of the Group
     pursuant to Part IV of Schedule 18 of the Finance Act 1998.

22.12 The amount of Taxation chargeable on the Group Companies as a whole during
     any accounting period ending on or within six years before the Accounts
     Date has not, to any material extent, depended on any concession, agreement
     or other formal or informal arrangement with any Taxation Authority (being
     a concession, agreement or other arrangement which is not set out in any
     legislation or published practice of that Taxation Authority).

22.13 No member of the Group has been a party to, or a Promoter in relation to,
     any transaction forming part of notifiable arrangements (as defined for the
     purposes of Part 7 of the Finance Act 2004 (Disclosure of Tax Avoidance
     Schemes)).

22.14 No member of the Group has made any election under paragraph 6 of the Loan
     Relationship and Derivative Contracts (Disregard and Bringing into Account
     of Profits and Losses) Regulations 2004).

22.15 The Company has not been since October 1996, and, so far as the Seller is
     aware, has never been, a close company within the terms of section 414 ICTA
     1988 or a close investment holding company within the terms of section 13A
     ICTA 1988.

22.16 No member of the Group has entered into any transaction or arrangement the
     consideration for which was or will be determined otherwise than on arm's
     length terms, nor has any member of the Group agreed to do so, in
     circumstances that any Group Company's income or capital gains could be
     required to be adjusted for Taxation purposes, and the relevant member of
     the Group holds documentation (including any pricing methodology) which is
     sufficient to satisfy any requirement to demonstrate that any transaction
     to which it was a party was entered into on arm's length terms.

22.17 Particulars of all arrangements and agreements relating to intra-group
     surrender of Taxation reliefs to which any Group Company is or has been a
     party are set out in the Disclosure Letter.

22.18 Except as provided for in the Accounts, there exists no obligation on any
     Group Company to make any payment (other than to any other Group Company)
     in respect of any period ending on


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     or before the Accounts Date under the arrangements referred to in paragraph
     22.17 above nor do any circumstances exist which may give rise to such an
     obligation.

22.19 No member of the Group constitutes a permanent establishment of another
     person, business or enterprise for any Taxation purpose.

22.20 Each member of the Group is and has within the past 6 years been resident
     in the country named as its place of incorporation in Part B of Schedule 2
     (Information about the Group) for Taxation purposes.

22.21 Each member of the Group is not and within the past 6 years has not been
     treated as resident in any other jurisdiction for any Taxation purpose
     (including for the purposes of any double taxation agreement). So far as
     the Seller is aware, no member of the Group has, or has within the past six
     years had, a permanent establishment outside the country named as its place
     of incorporation in Part B of Schedule 2, (Information about the Group).

22.22 All non-UK resident Group Companies are engaged in exempt activities
     within the meaning of Part II of Schedule 25 ICTA 1988 or fall within
     section 748(1)(e) ICTA.

22.23 All documents in the possession of the Group Companies or to the
     production of which any of the Group Companies is entitled which establish
     or are necessary to establish the title of any Group Company to any asset,
     or by virtue of which any Group Company has any right, and which attract
     stamp duty in the United Kingdom or elsewhere have been duly stamped. Since
     the Accounts Date, no member of the Group has incurred any liability to
     stamp duty reserve tax or stamp duty land tax.

22.24 In relation to VAT or any equivalent in any other jurisdiction:

          (i)  details of the VAT registration (or the registration number for
               the purposes of any equivalent tax) of each Group Company are set
               out in the Disclosure Letter; and

          (ii) each Group Company has complied in all material respects with
               applicable VAT or equivalent legislation.

22.25 Each member of the Group is, and has for the last six years been, treated
     for the purposes of section 43 VATA 1994 as a member of a group of
     companies (the "VAT GROUP") of which the representative member is the
     Company (the "REPRESENTATIVE MEMBER"). No member of the Group is or has
     been registered for the purposes of VATA 1994 otherwise than as part of the
     VAT Group, no member of the Group is or has been a member of any other
     group for VAT purposes, and no company which is not a member of the Group
     is or has been a member of the VAT Group, in each of these cases, within
     the last six years.


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22.26 The Representative Member has made, given, obtained and kept full,
     complete, correct and up-to-date returns, records, invoices and other
     documents appropriate or required for the purposes of VATA 1994 and is not
     in arrears with any payments or returns due and has not been required to
     give security under paragraph 4 of Schedule 11 VATA 1994.

22.27 Details of any claim made by the Representative Member for bad debt relief
     under section 36 VATA 1994 are set out in the Disclosure Letter.

22.28 There is no land in which any member of the Group has an interest, or over
     which any member of the group has a right, or which any member of the Group
     has a licence to occupy, that is (in any such case) land in relation to
     which an election made under paragraph 2 of Schedule 10 VATA 1994
     ("election to waive exemption") has effect or will have effect so as (in
     either such case) to render any supply made by any member of the Group of,
     or in respect of, any interest in, right over or licence to occupy such
     land a supply that will be taxable at the standard rate of VAT or (as the
     case may be) a supply that would be so taxable but for any disapplication
     of such election in circumstances prescribed by relevant provisions of VATA
     1994.

22.29 No member of the Group owns any asset to which the provisions of Part XV
     of the Value Added Tax Regulations 1995 (the Capital Goods Scheme) apply:

22.30 Neither the Representative Member nor any other member of the Group has,
     at any time within the last six years, acted as agent of any person not
     resident in the United Kingdom for the purpose of section 47 VATA 1994 or
     been appointed as a VAT representative of any person for the purposes of
     section 48 VATA 1994.

22.31 On a disposal of all its assets by any member of the Group for:

          (A)  in the case of each asset owned by that member of the Group at
               the Accounts Date, a consideration equal to the value attributed
               to that asset in preparing the Accounts; or

          (B)  in the case of each asset acquired since the Accounts Date, a
               consideration equal to the consideration given for the
               acquisition

     then either:

     in respect of any asset falling within (A) above, the liability to Taxation
     (if any) which would be incurred by that member of the Group in respect of
     that asset would not exceed the amount taken into account in respect of
     that asset in computing the maximum liability to deferred Taxation as
     stated in the Accounts and no balancing charge in respect of any capital
     allowances claimed or given, or other recapture of writing down allowances,
     would arise except to the extent that such charge is fully provided for in
     the Accounts; or


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     in respect of any asset within (B) above, no Taxation liability would be
     incurred by that member of the Group in respect of that asset.

22.32 No Group Company has acquired in the past six years an asset in
     circumstances that it will be deemed under applicable Taxation legislation
     to dispose of that asset and re-acquire it by virtue of or in consequence
     of this Agreement or its performance.

22.33 Particulars of each claim under sections 152 or 153 of the Taxation of
     Chargeable Gains Act 1992 made prior to the date of this Agreement to which
     section 154 of the Taxation of Chargeable Gains Act 1992 applies and which
     affects any asset which was owned by any member of the Group on or after
     the Accounts Date have (except where the held over gain is treated as
     having accrued prior to the Accounts Date) been disclosed in the Disclosure
     Letter.

22.34 Since 6 April 1965, no member of the Group has made any repayment of share
     capital to which section 210(1) ICTA 1988 applies. No member of the Group
     has in the past ten years issued any share capital or other security as
     paid up otherwise than by the receipt of new consideration within the
     meaning of Part VI ICTA 1988.

22.35 No member of the Group has, since the Accounts Date, made any payment, nor
     is any member of the Group under any obligation to make any future payment
     (in either case being a payment in excess of L10,000 and being made other
     than as consideration for the acquisition of capital assets) which will be
     prevented by reason of a statutory provision designed to prevent or to
     limit the avoidance of Tax (including without limitation, Schedule 28AA
     ICTA 1988 and paragraphs 11 and 13 of Schedule 9 to the UK Finance Act
     1996) from being deductible for corporation tax purposes, whether as a
     deduction in computing the profits of a trade or as an expense of
     management or as a charge on income or as a non-trading debit under Chapter
     II Part IV of the Finance Act 1996.

22.36 No member of the Group has, at any time within the last six years,
     acquired any asset from any other company (including another member of the
     Group) which was, at the time of the acquisition, a member of the same
     group of companies as that member for the purposes of any Taxation.

22.37 There are no circumstances by virtue of which section 410 or 413 ICTA 1988
     would prevent each member of the Group being treated as a member of the
     same group of companies as each other such member for the purposes of
     Chapter IV Part X ICTA 1988 for any accounting period commencing on or
     before the date of this Agreement.

22.38 No member of the Group has made any surrender of or claim for (i) group
     relief or (ii) any amount of surplus advance corporation tax or (iii) a
     refund of tax within section 102 Finance Act 1989 which involves any
     company which is not a member of the Group.


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22.39 No member of the Group has received any payment in respect of a surrender
     of group relief or of surplus advance corporation tax or of a tax refund
     which could, in any circumstances, be due to be repaid to any company other
     than another member of the Group.

22.40 No member of the Group has been concerned in an exempt distribution (as
     defined in section 214(4) ICTA 1988) within the last six years.

22.41 There have been no arrangements made with HMRC under section 36 of the
     Finance Act 1998 under which provision has been made for the liability to
     corporation tax of any Group Company to be discharged by any other company.

22.42 There are no circumstances by virtue of which any Group Company is or will
     be obliged to make any payment to any person who is or has been an investor
     in any Fund by way of compensation for the failure of the Fund in question
     to satisfy the requirements for investment trust status as set out in
     Section 842 ICTA 1988.


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                         PART B - THE BUYER'S WARRANTIES

1    The Buyer is a company duly incorporated and organised and validly existing
     under the laws of England and Wales.

2    The Buyer has the right, power and authority required to enter into each of
     the Implementation Documents and perform fully its obligations under them
     in accordance with their terms.

3    Each of the Implementation Documents constitutes and the other documents to
     be executed by the Buyer which are to be delivered at Completion in
     accordance with clause 5 will, when executed, constitute legal, valid and
     binding obligations enforceable in accordance with their respective terms.

4    Neither the entry into this Agreement nor the implementation of the
     transactions contemplated by it will result in:

          (a)  a violation or breach of any provision of the memorandum and
               articles of association of the Buyer;

          (b)  a breach of, or give rise to a default under, any contract or
               other instrument to which the Buyer is a party or by which it is
               bound;

          (c)  a violation or breach of any applicable laws or regulations or of
               any order, decree or judgment of any court, governmental agency
               or regulatory authority applicable to the Buyer or any of its
               assets; or

          (d)  a requirement for the Buyer to obtain any consent or approval of,
               or give any notice to or make any registration with, any
               governmental, regulatory or other authority which has not been
               applied for, obtained or made at Completion,

     where, in each case, such breach would materially and adversely affect its
     ability to enter into or perform its obligations under the relevant
     Implementation Document.

5    No order has been made, petition presented or meeting convened for the
     purpose of considering a resolution for the winding up of the Buyer or for
     the appointment of any provisional liquidator. No petition has been
     presented for an administration order to be made in relation to the Buyer,
     and no receiver (including any administrative receiver) has been appointed
     in respect of the whole or any part of any of the property, assets and/or
     undertaking of the Buyer. No events or circumstances analogous to any of
     those referred to in this paragraph 5 have occurred in any jurisdiction
     outside England.

6    The Buyer has available cash or available loan facilities which will at
     Completion provide in immediately available funds the necessary cash
     resources to pay the purchase price for the


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                                                                  CONFORMED COPY

     Sale Shares payable by the Buyer under the Offer Documents and meet its
     other obligations under this Agreement and, in the case of loan facilities,
     they involve no material pre-conditions and the Buyer will be able to
     satisfy all conditions of drawdown to such loan facilities at or prior to
     Completion.

7    No member of the Buyer's Group is:

          (a)  subject to applicable law, regulation or other statutory or
               legislative provisions of any country or to any order, decree or
               judgment of any court, governmental agency or regulatory
               authority which is still in force; nor

          (b)  a party to any litigation, arbitration or administrative
               proceedings which are in progress or threatened or pending by or
               against or concerning it or any of its assets; nor

          (c)  the subject of any governmental, regulatory or official
               investigation or enquiry which is in progress or threatened or
               pending,

     which in any case has or could reasonably be expected to have a material
     adverse effect on the Buyer's ability to execute, deliver and perform its
     obligations under this Agreement.


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                                   SCHEDULE 4

                                ACTUARY'S LETTER


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                                   SCHEDULE 5

                                 THE PROPERTIES



                ROOT OF
                TITLE/TITLE                                          CURRENT
NO.  TENURE     NUMBER (IF ANY)   PARTIES                            OWNER /TENANT    PROPERTY ADDRESS
- ---  ---------  ----------------  ---------------------------------  ---------------  ---------------------
                                                                       
1    Leasehold  Lease dated 20    (1) Rosehaugh Stanhope (Broadgate  the Company      Level 8
                September 1989,   Phase 7) PLC                                        155 Bishopsgate
                registered under  (2) Framlington Group PLC                           London EC2M 3XJ
                title number      (3) The Throgmorton Trust PLC
                NGL646697

2    Licence    Licence dated     (1) MWB Business Exchange UK       the Company      9/10 St Andrew Square
                13 and 21         Limited                                             Edinburgh
                October 2004      (2) the Company                                     EH2 2AF

3    Leasehold  Lease dated 24    (1) The Port Employers and         the Company      Ground Floor Premises
                February 1988     Registered Dock Workers Pension                     Argosy House
                registered under  Fund Trustees Limited                               31/39 Kingston Hill
                title number      (2) Unit Trust Software Limited                     Kingston upon Thames
                SGL510074



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                                   SCHEDULE 6

          LIMITATIONS ON THE LIABILITY OF THE SELLER AND THE GUARANTORS

1    GENERAL LIMITATIONS

1.1  The total aggregate liability of the Seller and the Guarantors together in
     respect of all claims other than those claims pursuant to clauses 10.2(b)
     (Claverhouse), 10.2(d) (Dormant Companies), clause 10.2(e) (African
     Companies), clause 11.1 (Pensions) and clause 9 (Restrictive Covenants)
     under this Agreement shall be limited in aggregate to L110.4 million.

1.2  The total aggregate liability of the Guarantors together in respect of all
     claims under this Agreement shall not exceed the total aggregate liability
     of the Seller under this Agreement.

1.3  The Seller shall have no liability in respect of a Relevant Claim or a
     claim under any Taxation Warranty if the amount of such claim is equal to
     or less than L75,000; subject to paragraph 1.5, in the event that the
     amount of such claim exceeds this threshold, the Seller shall (subject to
     the other provisions of this Agreement) be liable for the whole amount of
     such claim and not merely the excess. For the purpose of this paragraph,
     any claims arising out of the same or substantially similar facts or
     circumstances shall be regarded as one claim so that the amount of such
     claim shall be the aggregate of all such individual claims.

1.4  The Seller shall not be liable in respect of a Tax Claim unless and until
     the aggregate amount of:

1.4.1 all Tax Claims exceed L500,000 in aggregate, in which case the
     Seller shall be liable for the whole amount of all such claims (subject to
     the other provisions of the Taxation Deed and this Agreement, in each case
     to the extent applicable) and not merely the amount in excess of
     L500,000; or

1.4.2 without prejudice to paragraph 1.2, all Tax Claims and all Relevant Claims
     exceed L1.5 million in aggregate (whether or not all Tax Claims exceed
     L500,000 in aggregate), in which case the Seller shall be liable for the
     whole amount of all such claims (subject to the other provisions of the
     Taxation Deed and this Agreement, in each case to the extent applicable)
     and not merely the amount in excess of L1.5 million.

1.5  Without prejudice to paragraph 1.3, the Seller shall not be liable in
     respect of a Relevant Claim or a claim under any Taxation Warranty unless
     and until the aggregate amount of all such claims and all Tax Claims (if
     any) exceed L1.5 million in aggregate (whether or not all Tax Claims exceed
     L500,000 in aggregate), in which case the Seller shall be liable for the
     whole amount of all such claims (subject to the other provisions of this
     Agreement) and not merely the amount in excess of L1.5 million.


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1.6  The total liability of each Guarantor in respect of each claim under any
     Implementation Document shall be limited to that Guarantor's Respective
     Percentage of the amount claimed.

1.7  The total aggregate liability of the Seller in respect of claims under
     clause 10.2(c)(i) and (ii) shall not exceed L10 million in aggregate. The
     Seller shall have no liability in respect of any claim under clause
     10.2(c)(i) and (ii) unless the amount of such claim is more than L15,000;
     in the event that the amount of such claim exceeds this threshold, the
     Seller shall (subject to the other provisions of this Agreement) be liable
     for the whole amount of such claim and not merely the excess.

1.8  The following provisions of Schedule 6 are applicable to all claims under
     the Agreement: paragraph 1.6, 4.1(a) and 4.1(b).

1.9  The following paragraphs of this Schedule 6 are applicable to claims under
     clause 10.2: 3.1, 4.1(c), 5, 7 and 8.

2    TIME LIMIT FOR BRINGING A CLAIM

2.1  The Seller shall not be liable for a Relevant Claim or a Claim under any
     Taxation Warranty or a Tax Claim unless the Buyer has given the Seller
     notice of that Relevant Claim or a claim under any Taxation Warranty or
     claim under the Taxation Deed, stating (if practicable) in reasonable
     detail the nature of the Relevant Claim or a claim under any Taxation
     Warranty or the claim under the Taxation Deed and the Buyer's then best
     estimate of the amount claimed:

          (a)  in the case of a Tax Claim or a claim under any Taxation
               Warranty, or a claim under clause 10.2(b) (Claverhouse - VAT),
               within 7 years after Completion;

          (b)  or, in the case of any Relevant Claim or a claim under clause
               4.1, by no later than 31 May 2007;

          (c)  in respect of claims under clause 10.2(c)(i) and (ii), by no
               later than the third anniversary of Completion.

2.2  Any Relevant Claim or a claim under any Taxation Warranty or a Tax Claim
     shall (if it has not been previously satisfied, settled or withdrawn) be
     deemed to have been waived or withdrawn on the expiry of 18 months after
     the date of the notice served pursuant to paragraph 2.1 of Schedule 6 (or
     in the case of a Tax Claim and if later the date 120 Business Days after
     the day on which any action taken by the parties pursuant to clause 5 of
     the Taxation Deed is finally determined) unless legal proceedings in
     respect of the Relevant Claim or Tax Claim have been started. For the
     purposes of this paragraph 2.2 legal proceedings shall not be deemed to
     have been started unless they have been both issued and served on the
     Seller.


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3    SPECIFIC LIMITATIONS

3.1  The Seller shall not be liable in respect of a Relevant Claim and its
     liability in respect of such claims shall not be increased to the extent
     that the matter giving rise to the claim or the increase in the amount of
     such claim:

          (a)  would not have arisen or occurred but for a voluntary act,
               omission or transaction on the part of the Buyer or any of the
               Group Companies or any of their respective directors or employees
               after Completion PROVIDED THAT the act, omission or transaction
               occurs (1) outside the ordinary course of business in
               circumstances where the Buyer or Group Company were aware that
               such act, omission or transaction would give rise to or increase
               the amount of such Relevant Claim and (2) other than as required
               by any law in force on or before Completion in each case;

          (b)  results from a change in the accounting or Taxation policies or
               practices of the Buyer or any Related Company of the Buyer or any
               Group Company (including the method of submitting taxation
               returns) introduced by the Buyer and having effect after
               Completion, save where such change is required to conform such
               policy or practice of the relevant Group Company with law,
               applicable regulation or generally accepted policies or practices
               or where such change is necessary to correct an improper practice
               or policy;

          (c)  occurs as a result of or is otherwise attributable to:

               (i)  any legislation not in force at Completion or any change of
                    law or administrative practice having retrospective effect
                    which comes into force after Completion; or

               (ii) any increase after Completion in any rate of Taxation; or

               (iii) the Buyer or any Group Company disclaiming any part of the
                    benefit of capital or other allowances against Taxation
                    properly claimed or proposed to be properly claimed on or
                    before the date of this Agreement; or

          (d)  is an amount for which any Group Company has a right of recovery
               under the terms of any insurance policy of any Group Company
               which is in force at the Completion Date (whether or not such
               policy is in force at the time of the matter giving rise to a
               Relevant Claim arising);

          (e)  arises as a result of any act or omission of the Buyer or any
               Group Company which results in the right of recovery against a
               person other than the Seller, the Guarantors or any Connected
               Person being diminished or extinguished PROVIDED THAT the act or
               omission occurs after Completion (1) outside the ordinary course
               of business in circumstances where the Buyer or Group Company (as
               the case may be) was aware


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                                                                  CONFORMED COPY

               that such act, omission or transaction would give rise to such a
               result and (2) other than as required by any law in force on or
               before Completion; or

          (f)  arises as a consequence of any act or omission in accordance with
               the terms of this Agreement or at the request of the Buyer or
               member of the Buyer's Group.

4    NO DUPLICATION OF LIABILITY

4.1  The Buyer agrees for itself and on behalf of every Group Company with the
     Seller in respect of any claim under an Implementation Document:

          (a)  it shall not be entitled to recover damages or obtain payment for
               reimbursement, resolution or indemnity more than once in respect
               of any one loss or set of circumstances which give rise to more
               than one claim under this Agreement or the Taxation Deed;

          (b)  to the extent that such liability is satisfied by way of a claim
               under this Agreement, an amount payable under the Taxation Deed
               in respect of the same matter is reduced accordingly, and vice
               versa; and

          (c)  such liability shall be determined net of any reserves, liability
               accruals or other provisions properly made in the Accounts.

5    CLAIMS AGAINST THIRD PARTIES

5.1  Nothing in this Schedule 6 shall require the Buyer to take proceedings
     against any third party prior to taking or enforcing any proceedings
     against the Seller or the Guarantors.

5.2  If the Seller pays to the Buyer or any Group Company an amount in respect
     of any Relevant Claim and the Buyer or any Group Company (as the case may
     be) subsequently recovers from a third party (including any insurer or any
     Taxation Authority) a sum which is referable to that Claim, the Buyer shall
     forthwith repay to the Seller so much of the amount paid by the Seller as
     does not exceed the sum (net of all reasonable costs, charges, and expenses
     incurred by the Buyer or the relevant Group Company in recovering such sum)
     recovered from the third party.

5.3   Nothing contained in this paragraph shall limit the Buyer's obligations at
      common law or the obligation of any Group Company to take reasonable steps
      to mitigate any loss or damage resulting from or arising as a consequence
      of any circumstances giving rise to any Relevant Claim.

5.4  Where any Group Company or the Buyer is or becomes entitled (whether under
     any insurance or by way of payment, discount, credit, set off, counterclaim
     or otherwise) to recover from any third party (other than a person who at
     the relevant time is a client of any Group Company) in


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     respect of any loss, damage or liability which is the subject of a claim
     against the Seller, the Buyer shall give notice thereof promptly to the
     Seller and, if so required by the Seller but without prejudice to the
     Buyer's right to take or enforce proceedings against the Seller, take or
     procure the relevant Group Company to take all such reasonable steps or
     proceedings as the Seller may reasonably require to enforce such recovery.

5.5  The Buyer shall procure that the Seller is provided promptly with all such
     information and reports concerning any such steps or proceedings taken by
     the Buyer or the relevant Group Company as the Seller may from time to time
     reasonably request PROVIDED THAT THE Buyer shall not be obliged to provide
     the Seller with any information if to do so would constitute a waiver of
     legal professional privilege.

5.6  If any such sum as is referred to in paragraph 5.2 of this Schedule 6 is
     recovered by the Buyer or any Group Company from the third party, any claim
     by the Buyer or any Group Company in respect of any loss, damage or
     liability to which the sum relates shall be limited (without prejudice to
     any other limitations on the liability of the Seller referred to in this
     Schedule 6) to the amount (if any) by which the amount of such loss, damage
     or liability exceeds the aggregate of:

5.6.1 the sum recovered less all reasonable costs, charges and expenses incurred
     by the Buyer or any Group Company (as the case may be) in recovering that
     sum from the third party; and

5.6.2 any sum or sums previously paid by the Seller to the Buyer or any Group
     Company in respect of such loss, damage or liability.

     If the aggregate of the sums referred to in paragraphs 5.6.1 and 5.6.2 of
     this Schedule 6 exceeds the amount of the loss, damage or liability to
     which the sum recovered relates the Buyer shall forthwith pay to the Seller
     or, as the case may be, the Guarantors the amount of the excess is an
     amount up to the amount paid under paragraph 5.6.2.

5.7  The Seller shall reimburse to the Buyer or the relevant Group Company (as
     the case may be) all reasonable costs, charges and expenses incurred by it
     in complying with its obligations under paragraphs 5.4 to 5.6 of Schedule 6
     inclusive and the Buyer shall not (and shall procure that the relevant
     Group Company shall not) accept or pay or compromise any relevant claim or
     make any submission in respect of it without the Seller's prior written
     consent (such consent not to be unreasonably withheld or delayed).

5.8  In this paragraph 5, "CLIENT" means an investor in any Fund or a client of
     a Group Company who at the time when the Buyer or relevant Group Company is
     or becomes entitled to make a claim has not given notice to terminate its
     contract with the relevant Group Company and whose contract the relevant
     Group Company has not given notice to terminate.


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6    THIRD PARTY CLAIMS

     The Buyer shall, and shall procure that each Group Company shall notify the
     Seller of any claims, potential claim, matter or event against the relevant
     Group Company which might constitute a breach of any of the Warranties
     (other than Taxation Warranties) or otherwise give rise to a Relevant Claim
     (a "THIRD PARTY CLAIM") as soon as is reasonably practicable following
     receipt of such claims. The Buyer shall conduct any negotiations,
     proceedings, settlements or appeals relating to the Third Party Claim as
     though the Buyer did not have the benefit of the Warranties contained in
     this Agreement, but shall keep the Seller reasonably informed of progress
     in relation to the Third Party Claim, shall take account of any reasonable
     request as to the conduct of the Third Party Claim (at the Seller's
     expense) and shall not settle the Third Party Claim without the prior
     consent of the Seller (not to be unreasonably withheld or delayed). If so
     required by the Seller, the Buyer shall, and shall procure that the
     relevant Group Company shall, pursue any available counterclaim, in which
     case the provisions of paragraph 5 shall apply as if the dispensation in
     respect of Clients in paragraph 5.4 was not applicable.

7    SUCCESSFUL CLAIMS CONSTITUTE REDUCTION IN PURCHASE PRICE

     The satisfaction by the Seller of either or both of the Guarantors of a
     claim under any Implementation Document shall where possible be deemed to
     constitute a reduction in the consideration payable by the Buyer for the
     purchase of the Sale Shares.

8    THIRD PARTY CLAIMS - CERTAIN INDEMNITIES

8.1  The Buyer shall, and shall procure that each other Group Company shall
     notify the Seller of any claims, potential claim, matter or event against
     the Group Company which might give rise to a claim under clause 10.3 (a
     "Third Party Claim") as soon as is reasonably practicable following receipt
     of such claims. The Buyer shall procure that the Group Company, at the
     Seller's sole expense, shall consult with the Seller in respect of the
     Third Party Claim and, if required by the Seller, shall permit the Seller
     to conduct any negotiations, proceedings, settlements or appeals relating
     to the Third Party Claim.

8.2  If the Buyer becomes aware of any Third Party Claim, the Buyer shall, and
     shall procure that each Group Company shall:

8.2.1 as soon as reasonably practicable and in any event within 14 days of
     becoming so aware give notice of such Third Party Claim to the Seller and
     consult with the Seller in respect of such Third Party Claim;

8.2.2 if so requested by the Seller by no later than 5 Business Days of being so
     notified, take all reasonable steps or proceedings as the Seller may
     reasonably consider necessary at the Seller's expense in order to mitigate,
     avoid, resist, appeal, dispute, contest, remedy,


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     compromise or defend any such Third Party Claim including permitting the
     Seller to take such reasonable steps or proceedings on its behalf and in
     its name, subject to the Group Company (as appropriate) being indemnified
     by the Seller to the Buyer's reasonable satisfaction against all costs,
     damages and expenses incurred in connection with the Third Party Claim;

8.2.3 on reasonable notice, give the Seller or its duly authorised
     representatives reasonable access to the personnel of the Group Company and
     to any premises, chattels, accounts, documents and records which are
     relevant to the Third Party Claim and are within the power, possession or
     control of Group Company ("relevant assets") to enable the Seller and its
     duly authorised representatives to investigate the claim and to examine and
     take copies or photographs of the relevant assets at the Seller's expense;

8.2.4 to the extent reasonably necessary, require the personnel of the relevant
     Group Company to provide statements and proofs of evidence, and to attend
     at any hearing to give evidence or otherwise, and to provide this
     assistance at the Seller's expense to enable the Buyer or the relevant
     Group Company to mitigate, avoid, resist, appeal, dispute, contest, remedy,
     compromise or defend any Third Party Claim (in a manner that does not
     disrupt business of the Buyer or the relevant Group Company);

8.2.5 keep the Seller informed of the progress of any Third Party Claim
     (including any proposed settlement, compromise or admission of liability)
     and provide the Seller with copies of all material correspondence relating
     to it; and

8.2.6 save with the Seller's prior written consent (such consent not to be
     unreasonably withheld or delayed) not to admit liability in respect of, or
     compromise or settle, any Third Party Claim.


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                                   SCHEDULE 7

               PART A - THE PREPARATION OF THE COMPLETION ACCOUNTS

1    The Buyer shall procure that as soon as practicable following the
     Completion Date, and in any event not later than 30 Business Days after the
     Completion Date, a Draft of the Completion Accounts ("DRAFT COMPLETION
     ACCOUNTS") shall be prepared by the Company in accordance with paragraph 2
     and delivered simultaneously to the Buyer's Accountants and the Seller's
     Accountants (together the "ACCOUNTANTS").

2    The Draft Completion Accounts shall be prepared by the Company:

2.1  in the form set out in Part B of this Schedule 7:

2.2  in accordance with the specific accounting treatments set out in Part C of
     this Schedule 7; and, subject thereto

2.3  adopting the same accounting principles, policies, treatments and
     categorisations as were used in the preparation of the Accounts for the
     year ended on the Accounts Date, as there applied, including in relation to
     the exercise of accounting discretion and judgement; and, subject thereto

2.4  in accordance with Accounting Standards relevant at the Completion Date.

     For the avoidance of doubt, paragraph 2.2 shall take precedence over
     paragraphs 2.3 and 2.4, and paragraph 2.3 shall take precedence over
     paragraph 2.4.

2.5  As soon as practicable after delivery of the Draft Completion Accounts to
     the Accountants in accordance with paragraph 1, and in any event within 20
     Business Days after such delivery (the "REVIEW PERIOD"), the Accountants
     shall review the Draft Completion Accounts and endeavour to agree what
     adjustments (if any) need to be made to them in order for them to comply
     with paragraphs 2.1 to 2.4 (inclusive).

     If the Accountants agree upon all such adjustments as are referred to in
     paragraph 2.5 within the Review Period, they shall jointly incorporate them
     into the Draft Completion Accounts and the Draft Completion Accounts as so
     adjusted shall be the "COMPLETION ACCOUNTS" for all purposes and shall,
     save in the case of manifest error, be final and binding on all parties.

2.6  If the Accountants are unable to agree within the Review Period on any
     aspect of the Completion Accounts (including as to:

2.6.1 whether adjustments need to be made to the Draft Completion Accounts;

2.6.2 the adjustments to be made thereto; or

2.6.3 the amount of the Actual Net Asset Value),


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     the Seller and the Buyer shall endeavour in good faith to agree such matter
     or matters and to incorporate them as so agreed into the Draft Completion
     Accounts by making appropriate adjustments thereto. The Draft Completion
     Accounts as so adjusted shall be the "COMPLETION ACCOUNTS" for all purposes
     and shall, save in the case of manifest error, be final and binding on all
     parties.

2.7  If the Seller and the Buyer have not resolved any such matter in dispute
     referred to in paragraph 2.6 within 10 Business Days after the end of the
     Review Period, then such matter or matters (but no other matters) shall
     thereupon be referred to such firm of independent chartered accountants as
     the Seller and the Buyer may agree within 14 days of a request by either of
     them to the other or, failing such agreement within such time, as the
     President for the time being of the Institute of Chartered Accountants in
     England and Wales may nominate on the application of the Seller or the
     Buyer (the "INDEPENDENT ACCOUNTANTS") for determination on the following
     basis:

2.7.1 the Independent Accountants shall be instructed to notify the Seller and
     the Buyer of their determination of any such matter within 30 Business Days
     of such referral;

2.7.2 the Seller and the Buyer shall be entitled to make written submissions to
     the Independent Accountants and copied to the other party's Accountants at
     the same time, but subject thereto the Independent Accountants shall have
     power to determine the procedure to be followed in relation to their
     determination;

2.7.3 any submissions to and the determination of the Independent Accountants
     shall be in the English language and any oral hearings shall be conducted
     in English in London;

2.7.4 in making such submissions the Seller and the Buyer shall state their
     respective best estimates of monetary amounts of the matters referred for
     determination;

2.7.5 in making their determination the Independent Accountants shall act as
     experts and not as arbitrators, their decision as to any matter referred to
     them for determination shall be final and binding in all respects on the
     parties and shall not be subject to question on any ground whatsoever; and

2.7.6 the fees and expenses of the Independent Accountants shall be borne and
     paid as the Independent Accountants shall determine.

2.8  Following any agreement between the Seller and the Buyer or any
     determination by the Independent Accountants, the Accountants shall jointly
     incorporate into and reflect in the Draft Completion Accounts the matters
     resolved between the Seller and the Buyer and/or determined by the
     Independent Accountants or otherwise, together with any adjustments which
     may have been agreed between the Accountants and the Draft Completion
     Accounts and the amount of the Actual Net Asset Value stated in such report
     shall be the "COMPLETION ACCOUNTS" and the


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     "ACTUAL NET ASSET VALUE" respectively for all purposes of this Agreement,
     and shall, save in the case of manifest error, be final and binding on the
     parties and shall, save as aforesaid, not be subject to question on any
     ground whatsoever.

2.9  Until the Actual Net Asset Value has been agreed and/or determined the
     Seller and the Buyer shall respectively:

2.9.1 give or procure that the Accountants and the Independent Accountants are
     given access at all reasonable times to all books and records which are in
     the possession or under the control of the Seller, the Group or the Buyer
     (as the case may be); and

2.9.2 generally provide the Accountants and the Independent Accountants with
     such other information and assistance as they may reasonably require
     (including access to and assistance at reasonable times from personnel
     employed by the Seller, the Group or the Buyer, as the case may be), in
     relation to the review, resolution or determination of the Completion
     Accounts and the determination of the Actual Net Asset Value.

2.10 The Seller and the Buyer shall use their respective reasonable endeavours
     to procure that the Seller's Accountant and the Buyer's Accountants comply
     with the requirements placed upon them under this Schedule 7 (including,
     without limitation, the provisions relating to timing).

2.11 The fees and expenses of the Buyer's Accountants and of the Seller's
     Accountants in respect of the matters to be dealt with by them under this
     Schedule 7 shall be for the account of the Buyer and the Seller
     respectively.


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                      PART B - FORM OF COMPLETION ACCOUNTS

                                    As at the
                                 Completion Date
                                      L'000

FIXED ASSETS

Tangible assets

Investments

CURRENT ASSETS

Stock of units

Debtors

Cash at bank and in hand

CREDITORS

Less: amounts falling due within one year

NET CURRENT ASSETS

Total assets less current liabilities

Less: provisions for liabilities and charges

NET ASSETS EXCLUDING PENSION DEFICIT


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               PART C - AGREED ACCOUNTING POLICIES AND PRINCIPLES

1.   The accrual for corporation tax for the period from the Accounts Date to
     the Completion Date will be calculated on the basis that the Completion
     Date is the end of an accounting period for tax purposes.

2.   No provision shall be made in the Completion Accounts for any Losses which
     are recoverable by the Buyer or any Group Company pursuant to clause 10.2.

3.   No provision shall be made in the Completion Accounts in respect of any
     shortfall in relation to the Pension Scheme.

4.   The African Companies shall not be consolidated in the Completion Accounts,
     and the investments in them shall be valued at Lnil in the Completion
     Accounts

5.   The LTIP Trust shall not be consolidated in the Completion Accounts.

6.   The cash held by the LTIP Trust immediately before Completion, plus the
     aggregate exercise price payable by the holders of the options under the
     LTIP assuming all those options were exercised in full, shall be included
     in the Completion Accounts.

7.   For the avoidance of doubt the Completion Accounts shall (a) include full
     provision for the employer's National Insurance contributions arising in
     connection with the Structural Event (as defined in the Articles of
     Association of the Company) assuming all of the options outstanding under
     the LTIP were exercised at the time the Structural Event occurred; and (b)
     not include either an asset or a liability in respect of PAYE, employees'
     National Insurance contributions, or stamp duty arising in connection with
     the Structural Event (as defined in the Company's Articles of Association)
     unless and to the extent that such amounts may not be set off against
     amounts payable to participants in the LTIP in connection with the offer
     made or to be made by the Buyer.

8.   The Completion Accounts shall include full provision for all liabilities of
     the LTIP Trust immediately prior to Completion.

9.   The Completion Accounts shall include properly calculated amounts in
     respect of all accruals and prepayments (for example, in respect of payroll
     related liabilities (subject to paragraph 7 above)) as at the Completion
     Date.


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                                   SCHEDULE 8

                           PRE-COMPLETION UNDERTAKINGS

1    Subject to paragraph 4 of this Schedule 8, pending Completion (except as
     expressly contemplated by this Agreement or with the prior written consent
     of the Buyer) no Group Company shall:

          (a)  resolve to change its name or to alter its memorandum or articles
               of association;

          (b)  create any share capital or loan capital;

          (c)  allot or issue or agree to allot or issue any shares or any
               securities or grant or agree to grant rights which confer on the
               holder any right to acquire any shares or other such interest
               (including with limitation, make any awards under the LTIP or
               grant any similar awards) unless such awards are made in
               satisfaction of an existing contractual obligation where such
               awards can be satisfied by a transfer of shares;

          (d)  declare, pay or make any dividend or other distribution other
               than the Pre-Sale Dividend;

          (e)  reduce its share capital;

          (f)  amend the FSA Settlement;

          (g)  resolve to be voluntarily wound up; or

          (h)  pass any resolution of its members.

2    Subject to paragraph 4 of this Schedule 8, the Seller shall procure that:

          (a)  each Group Company shall give to the Buyer and its authorised
               representatives:

               (i)  following a request made to the Seller (through the
                    Guarantors' professional advisers), copies of such books and
                    records of each Group Company and access to the Key
                    Employees as the Buyer and its authorised representatives
                    may reasonably request; and

               (ii) copies of all board papers, management reports and accounts,
                    and such other information relating to each Group Company as
                    the Buyer may reasonably require;

          (b)  each Group Company shall provide reasonable assistance to the
               Buyer to negotiate with any counterparty to a contractual
               arrangement to which any Group Company is a


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               party which can be terminated in the event of any change in the
               underlying ownership or control of the Company or any other Group
               Company or which contains a unilateral right in favour of the
               counter-party to change the terms thereof in the event of any
               change in the underlying ownership or control of the Company or
               any other Group Company,

          (c)  each Group Company shall maintain insurance cover substantially
               (but subject to market conditions) on the basis subsisting on the
               date hereof;

          (d)  the Group shall continue to prepare Management Accounts in
               respect of each calendar month in the period from signing to the
               Completion Date and shall provide a copy of such Management
               Accounts to the Buyer within 10 Business Days of the completion
               of the month to which the Management Accounts relate;

          (e)  inform the Buyer promptly in the event that a Senior Employee
               tenders his resignation;

          (f)  inform the Buyer promptly in the event that any Group Company
               receives notice in writing from a client representing more than
               L100,000 in revenue per annum terminating any subsisting fund
               management or advisory agreement to which that Group Company is a
               party;

          (g)  inform the Buyer promptly in the event that any client of any
               Group Company is withholding fees in excess of L10,000;

          (h)  inform the Buyer in the event that any Group Company receives
               written indication that any distribution agents will cease
               carrying on business with any Group Company as a result of this
               Agreement or Completion.

3    Subject to paragraph 4 of this Schedule 8, the Seller shall procure that
     each Group Company shall operate its business or operations in the usual
     and ordinary course in substantially the same manner consistent with past
     practice, and, without prejudice to the foregoing, no Group Company will,
     except as expressly contemplated by this Agreement or with the prior
     written consent of the Buyer (such consent not to be unreasonably withheld
     or delayed):

          (a)  dispose of, agree to dispose of, or grants or agrees to grant any
               option in respect of, any material part of its assets or acquires
               or agrees to make any material capital expenditure or acquire any
               material asset or other asset having a value in excess of
               L100,000;

          (b)  create, grant or issue, or agree to create, grant or issue, any
               Encumbrance over its assets or give or agree to give, any
               guarantees or indemnities;

          (c)  borrow any money or agree so to do except under existing
               facilities;


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          (d)  discontinue or cease to operate all or a material part of its
               business;

          (e)  save as disclosed in the Disclosure Letter, wind-up or close any
               Fund;

          (f)  without prejudice to (g) below, engages or dismisses any Senior
               Employee (other than the Key Employees (except where the
               engagement or dismissal process has already commenced) or makes
               any variation to the terms and conditions of employment of such
               Senior Employees or any of them;

          (g)  no Group Company dismisses any Key Employee (except for gross
               misconduct) or makes any variation to the terms and conditions of
               employment of such Key Employees or any of them;

          (h)  make any amendments to the pension rights of any employee;

          (i)  amend any existing sales, distribution, market, custodian or fund
               management agreement;

          (j)  enter into any Material Contract or vary any existing Material
               Contract;

          (k)  alter (other than for purely administrative changes) in any
               manner any bonus plan or scheme (including the LTIP);

          (l)  settle any existing litigation for a claim in an amount exceeding
               L100,000, or commence (as claimant) any new litigation;

          (m)  except as required by law or by applicable accounting standards,
               no Group Company shall depart from its current accounting
               practices or policies;

          (n)  without prejudice to paragraph (f) above, employ any employee on
               terms materially different to the terms of existing employees;

          (o)  acquire or agree to acquire any share, shares or other interest
               in any company, partnership, or other incorporated or
               unincorporated association or other venture; and

          (p)  enter into any covenant, agreement or arrangement limiting or
               excluding its rights to do business and/or compete in any area or
               field (whether limited by reference to a geographical area or
               type of business) as it may think fit or the ability to transfer
               the whole or any material part of its business with any other
               person.


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4    Paragraphs 1, 2 and 3 of this Schedule 8 shall not operate so as to
     restrict or prevent:

          (a)  the entering into in the ordinary course of business of any
               contract or commitment which is terminable in accordance with its
               terms by written notice of three months or less and which is not
               material in relation to the Group;

          (b)  the completion or performance of any obligations undertaken
               pursuant to any contract or arrangement entered into by any
               member of the Group prior to the date of this Agreement
               (including any contract or arrangement with any private client of
               any Group Company);

          (c)  any matter undertaken at the written request, or with the prior
               written consent, of the Buyer;

          (d)  any matters undertaken in order to comply with law or any
               regulatory requirement, including any FSA requirement;

          (e)  any matter undertaken on behalf of any of the Funds pursuant to
               an existing contractual, legal or fiduciary duty or in the
               exercise of any contractual or legal rights;

          (f)  the declaration, authorisation and payment of the Pre-Sale
               Dividend;

          (g)  the performance of any obligation or exercise of any right
               relating to the Phantom Share Option Agreements or the LTIP in
               existence as of the date of this Agreement;

          (h)  the payment of contributions by the Company to the Pension Scheme
               whether to reduce any deficit in the Pension Scheme or otherwise;
               or

          (i)  any matter reasonably undertaken by any member of the Group in an
               emergency or disaster situation in circumstances where it is not
               reasonably practicable to obtain the Buyer's prior consent with
               the intention of minimising any adverse effect thereof (and of
               which the Buyer will be promptly notified).


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                                   SCHEDULE 9

1.   SIGNING AUM

1.1  The Signing AUM shall be calculated as the aggregate value of the assets
     under management of the Retail Funds and the Investment Trusts whose assets
     are managed by the Group as at the date of this Agreement other than
     Framlington Second Dual Trust plc (the "RELEVANT INVESTMENT TRUSTS")
     calculated as at the close of business on the Business Day immediately
     prior to the date of this Agreement.

1.2  For the purpose of this paragraph 1, the assets comprising the Retail Funds
     shall be valued in accordance with the following principles: the Retail
     Funds shall each be valued on the basis of the mid-price of the applicable
     creation and cancellation prices set at 12 noon on the day immediately
     prior to the date of this Agreement calculated in accordance with FSA
     regulations and shown on the Group's records multiplied by the number of
     units in the Retail Fund as at the close of business on the date
     immediately prior to the date of this Agreement.

1.3  For the purpose of this paragraph 1, the assets comprising the Relevant
     Investment Trusts shall be valued in accordance with the following
     principles: the Relevant Investment Trusts shall each be valued at their
     gross or net asset value (determined in the ordinary course of business and
     consistently with the Management Accounts) shown on the Group's records as
     at close of business on the Business Day falling two Business Days prior to
     the date of this Agreement.

1.3.1 2. Net Outflow Amount

2.1  The Seller shall procure that the Company prepares and delivers to the
     Seller and the Buyer on the Business Day immediately prior to the date on
     which the On Risk Time falls a statement showing the Inflow Amount and the
     Outflow Amount, together with the basis of calculation as set out below
     (the "AUM STATEMENT"). The Seller undertakes to procure that the AUM
     Statement is prepared in accordance with this Schedule 9. In the absence of
     fraud or manifest error, the AUM Statement shall be conclusive and binding
     on all parties for the purpose of determining whether the termination right
     in clause 5.6 arises.

2.2  The Inflow Amount shall be calculated as the aggregate of:

2.2.1 for each Retail Fund, the gross sales amount as shown on the Group's
     records arising from the purchase by investors of new units in that Retail
     Fund during the period from the date of this Agreement until close of
     business on the Business Day falling two Business Days prior to the date on
     which the On Risk Time falls inclusive (the "AUM PERIOD");

2.2.2 for each Relevant Investment Trust, any increase in the gross or net asset
     value (consistent with the Management Accounts) of that Relevant Investment
     Trust attributable to an issue by


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     the Relevant Investment Trust of new shares during the AUM Period (provided
     that management fees are charged on such assets); and

2.2.3 the net asset value of any Investment Trust that is not a Relevant
     Investment Trust that appoints any Group Company as investment manager
     during the AUM Period, such value to be determined as at the date of such
     appointment.

For the purpose of this paragraph 2.2:

(a)  any assets which have been contractually committed to be invested in any
     Retail Fund or Investment Trust shall be treated as if they have been
     received by that Retail Fund or Investment Trust (as the case may be); and

(b)  any assets invested or which are contractually committed to be invested in
     any Retail Fund or Relevant Investment Trust by any of the Seller, the
     Guarantors or any of their respective Connected Persons shall be
     disregarded.

2.3  The Outflow Amount shall be calculated as the aggregate of:

2.3.1 for each Retail Fund, the gross redemption amount as shown on the Group's
     records arising from the sale of units in that Retail Fund during the AUM
     Period;

2.3.2 for each Relevant Investment Trust, any reduction in the net asset value
     of that Relevant Investment Trust attributable to a share buyback initiated
     by that Relevant Investment Trust during the AUM Period; and

2.3.3 for each Relevant Investment Trust, the amount of any assets in respect of
     which any Group Company's appointment as investment manager has been
     terminated during the AUM Period or in respect of which notice to terminate
     has been given and not revoked during the AUM Period.


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                                   SCHEDULE 10

                              THE AFRICAN EXIT PLAN

                     PART A - PRE-COMPLETION AND PUT OPTION

1.1  Notice to terminate

     As soon as reasonably practicable after the date of this Agreement (but in
     any event by 12 August 2005) the Seller shall procure that FIML shall give
     notice to terminate the management agreements with each of the African
     Funds.

1.2  Services Agreement

     Within 30 Business Days of the date of this Agreement the Seller shall use
     its reasonable endeavours to procure that FIML, Framlington Asset
     Management Central Africa S.A. ("FAMCA") and FAMWA (as defined below) enter
     into the Services Agreement.

1.3  Request to transfer shares in FAMWA.

1.3.1 Within 5 Business Days of the Service Agreement having been completed the
     Seller shall procure that the Company submits to the board of Framlington
     Asset Management West Africa SA ("FAMWA") a request to transfer all of the
     shares that the Company owns as at the date of this Agreement in FAMWA
     ("SALE SHARES") to the Seller, provided it can do so on the basis that if
     the board of FAMWA refuses such request the Company shall not be required
     to offer the Sale Shares to any other person.

1.3.2 If the board of FAMWA approves the request referred to in paragraph 1.3.1
     above the Company shall sell and the Seller shall purchase the Sale Shares
     and the whole of the issued share capital of FAMCA for an aggregate
     consideration of L2.

1.4  Put Option

1.4.1 In consideration of the mutual covenants contained in this Schedule 10,
     the Seller irrevocably undertakes to acquire the Sale Shares at the
     Company's first request pursuant to paragraph 1.4.2 and the whole of the
     issued share capital of FAMCA ("PUT OPTION") for L1 at any time during the
     period from the Completion Date until the first anniversary of the
     Completion Date.

1.4.2 The Put Option shall be exercised by the Company serving written notice on
     the Seller and such notice shall state the date (which shall be not more
     than 20 Business Days nor less than 10 Business Days after the date upon
     which such notice is received by the Seller) and place in the United
     Kingdom where completion of the sale and purchase of the Sale Shares shall
     take place.


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                                                                  CONFORMED COPY

1.4.3 The Seller will have to complete the purchase of the Sale Shares unless:

     (i)  it is unable lawfully to acquire the Sale Shares without having to
          offer any of such Sale Shares to any other person, whether pursuant to
          the constitutional documents of FAMWA or any other agreements between
          the shareholders;

     (ii) the Services Agreement has not been entered into by FIML, FAMWA and
          FAMCA; and

     (iii) any consents or approvals to the sale of the Sale Shares and the
          shares held by the Seller in FAMCA which are required from any
          applicable Regulatory Authority have been not obtained on terms that
          will not have a material adverse effect on the ability of either the
          Seller, FAMWA or FAMCA to carry on FAMWA's or as appropriate FAMCA's
          business in substantially the same manner as FAMCA's or FAMWA's
          business was carried out prior to completion of the Put Option.

1.4.4 Pending completion of the Put Option the provisions of paragraph 2 and 3
     of this Schedule 10 shall apply.

2.   Exit Arrangements

     Liquidation or Winding-up of the African Companies

2.1  As soon as practicable after FIML has ceased to be the manager of the
     African Funds the Buyer shall take (or procure that there are taken) all
     such reasonable steps and actions as are necessary to be taken to cause the
     Winding-up of both of the African Companies.

2.2  The Buyer shall procure that an amount equal to the aggregate amount
     returned to any shareholder of each African Company that is a member of the
     Buyer's Group upon each Winding-up shall be paid to the Seller (or as the
     Seller may direct) within 5 Business Days of payment to the relevant
     shareholder.

     Payment for successful completion

2.3  In the event that either:

          (a)  the Winding-up of the African Companies is completed and any
               payment pursuant to paragraph 2.2 has been made within 14 months
               of Completion; or

          (b)  both of the African Companies and both of the African Funds have
               been sold to one or more third parties (being a person other than
               a Connected Person) within 12 months of Completion,


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                                                                  CONFORMED COPY

     in each case in circumstances where neither the Seller nor the Guarantors
     has, subject to the terms of any sale of the African Companies or African
     Funds which it has approved, any liability or obligation to the Buyer or
     any third party arising out of the African Companies or African Funds, the
     Seller shall pay to the Buyer the sum of L204,000, save that no such
     payment need be made if the sale referred to in paragraph (b) above is (1)
     completed before Completion or (2) signed before Completion but then
     subsequently completes after Completion.

     Professional fees and expenses

2.4  The Seller shall be responsible for any and all the professional fees and
     expenses reasonably incurred by the Buyer and any Group Company in order to
     comply with its obligations under this Schedule 10.

3.   CONDUCT OF THE BUSINESS UNTIL EXIT

3.1  The Buyer shall procure that for so long as FIML remains the investment
     manager of the African Funds (or either of them) FIML shall perform its
     duties and obligations and shall exercise its rights, powers and
     authorities in accordance with the terms of the relevant investment
     management agreement(s).

3.2  The Buyer shall procure that until an Exit Event occurs:

          (a)  the Seller shall be entitled from time to time and at its sole
               expense to require the replacement of any Key African Employee
               with such other persons as it may nominate and on such terms as
               it may reasonably require, provided that such person is of
               reasonable repute; and

          (b)  FIML and the African Companies are given reasonable access during
               normal UK business hours to the Group's administrative employees,
               including (without limitation) Andrew Dysch and Eleanor Cramner
               (and anyone who from time to time may replace such employees) and
               shall receive reasonable administrative and other support from
               Group Companies; and

          (c)  it provides to the Seller such financial and other information
               relating to the African Companies and the African Funds as the
               Seller may from time to time reasonably request.

3.3  Save with the prior written consent of the Seller (such consent not to be
     unreasonably withheld or delayed) the Buyer shall procure that until an
     Exit Event occurs:


                                      116

                                                                  CONFORMED COPY

          (a)  the Company does not dispose of its shares in the African
               Companies; and

          (b)  each African Company shall operate its businesses or operations
               in the usual and ordinary course.

3.4  Until an Exit Event occurs, (provided that at such time the management
     agreements in respect of the African Funds shall have terminated), the
     Seller shall pay to the Buyer or the Buyer shall pay to the Seller (as the
     case may be) within 20 Business Days of the receipt of a Quarterly
     Statement an amount equal to the following expenses incurred during the
     Quarter to which the Quarterly Statement relates:

          (a)  the remuneration (including any related employer's cost) during
               the relevant Quarter of Messrs Vallance and Ngon (but only for
               the 12 month period expiring on the anniversary of Completion)
               and the remuneration (including any related employer's cost) of
               Mr Okoto (but only for the 6 month period expiring on the date
               which is six months after the Completion Date);

          (b)  any costs reasonably and properly incurred during the relevant
               Quarter by the relevant African Company in connection with the
               termination of the employment of Messrs Vallance, Ngon and Okoto;
               and

          (c)  the actual operating costs of the African Companies properly
               incurred during the relevant Quarter together with any costs
               incurred by the Buyer's Group in the performance of its
               obligations under this Schedule 10,

     LESS an amount equal to all fees, including performance fees, and other
     payments paid to FIML under or in connection with the relevant investment
     management agreement(s).

     Such amounts shall be paid in sterling (and original currencies shall be
     converted at the spot rate shown in the Financial Times on the last
     Business Day of the relevant Quarter).

3.5  The Buyer shall at the same time as it delivers the Quarterly Statement
     provide to the Seller such supporting data and information as is reasonably
     necessary for the Seller to calculate the net amount payable or receivable
     by it in respect of the relevant Quarter.

3.6  All VAT costs borne by the Buyer and/or the African Companies shall be
     compensated by a payment from the Seller to the Buyer and/or the African
     Companies of an equivalent amount.

4.   DEFINITIONS


                                      117

                                                                  CONFORMED COPY

In this Schedule 10 the following definitions shall apply:

"AFRICAN FUNDS" means the Central Africa Growth Fund a collective investment
Company organised under the laws of the Grand Duchy of Luxembourg as a Societe
d'Investissment a Capital Variable and whose registered office is at 13, rue
Goethe, L-2014 Luxembourg and the West Africa Growth Fund a collective
investment company organised under the laws of the Grand Duchy of Luxembourg as
a Societe d'Investissment a Capital Variable and whose registered office is at
8, avenue Marie-Therese, L-2132 Luxembourg;

"EXIT EVENT " means either (a) completion of the sale of all the shares of the
African Companies owned or (b) completion of the Winding-up of both of the
African Companies:

"FIML" means Framlington Investment Management Limited a company registered in
England under company number 01858790;

"KEY AFRICAN EMPLOYEES" means Messrs. Vallance, Ngon, Akoto and such other
employees who may from time to time replace one or more of those employees;

"QUARTERS" means the periods 1st October to 31st December, 1st January to 31st
March, 1st April to 30th June and 1st July to 30th September and "QUARTER" shall
be any one of such periods, provided that the first Quarter shall commence on
the day following the Completion Date and shall expire on the earliest of the
next following 31st December, 31st March, 30th June or 30th September;

"QUARTERLY STATEMENT" means a statement showing the amount of the expenses
incurred and income earned in respect of a particular Quarter as more
particularly set out in paragraph 2.5 of this Schedule 10;

"SERVICES AGREEMENT" means an agreement (in a form approved by the Buyer and the
Seller, such approval not to be unreasonably withheld or delayed) between FIML,
FAMCA and FAMWA for, inter alia, the provision of services to FIML;

"WINDING-UP" means the winding up, liquidation, dissolution or such other
equivalent or similar legal process in the relevant jurisdiction which results
in the dissolution of a company without further liability upon its shareholders.


                                      118

                                                                  CONFORMED COPY


SIGNED by David Burnet..............)

for and on behalf of FRAMLINGTON    )   ----------------------------------------
HOLDINGS LIMITED                    )   Duly authorised
in the presence of:                 )


- -------------------------------------
[signature and name] Elaine Williams


SIGNED by David Burnett.............)
for and on behalf of CCF S.A.       )   ----------------------------------------
                                    )   Duly authorised
in the presence of:                 )


- -------------------------------------
[signature and name] Elaine Williams


SIGNED by Mike Michalak.............)
for and on behalf of COMERICA       )
INCORPORPORATED                     )   ----------------------------------------
in the presence of:                 )   Duly authorised


- -------------------------------------
[signature and name] John Bilstrom


SIGNED by Laurent Clamagirand.......)
for and on behalf of AXA INVESTMENT )
MANAGERS S.A.                       )   ----------------------------------------
in the presence of:                 )   Duly authorised


- -------------------------------------
[signature and name] Xavier Thomin


                                      119

EX-10.5

                                                                    EXHIBIT 10.5


                             DATE 31ST OCTOBER 2005


                          FRAMLINGTON HOLDINGS LIMITED

                                       AND

                                    CCF S.A.

                                       AND

                              COMERICA INCORPORATED

                                       AND

                          AXA INVESTMENT MANAGERS S.A.


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

                           SECOND AMENDMENT AGREEMENT
         IN RELATION TO AN IMPLEMENTATION AGREEMENT DATED 28TH JULY 2005
                        (AS AMENDED ON 7 SEPTEMBER 2005)
  ----------------------------------------------------------------------------




                                SLAUGHTER AND MAY
                                 ONE BUNHILL ROW
                                     LONDON
                                    EC1Y 8YY
                                   (JCXP/SHB)
                                   CE052360014




THIS AMENDMENT AGREEMENT is made as a deed on 31st OCTOBER 2005 BETWEEN

1.      FRAMLINGTON HOLDINGS LIMITED, a company incorporated in England and
        Wales (registered number 02314914), whose registered office is at 155
        Bishopsgate, London EC2M 3XJ;

2.      CCF S.A., a French societe anonyme incorporated under number 775 670
        284, whose registered office is at 103, avenue des Champs-Elysees,
        75008, Paris, France;

3.      COMERICA INCORPORATED, a company incorporated in the State of Delaware,
        United States of America, whose principal place of business is at 500
        Woodward Avenue, Detroit, Michigan, 48226 United States of America; and

4.      AXA INVESTMENT MANAGERS S.A., a French societe anonyme incorporated
        under number B 393 051 826, whose registered office is at Coeur La
        Defense, 100 Esplanade du Generale de Gaulle, 92932 Paris La Defense
        Cedex, France.

WHEREAS:

(A)     On 28th July 2005 the parties entered into an Implementation Agreement
        (the "IMPLEMENTATION AGREEMENT") which was amended by an amendment
        agreement dated 7 September 2005 executed by all of the parties hereto.

(B)     The parties now wish to amend the Implementation Agreement on the terms
        set out in this Amendment Agreement.

NOW THIS DEED WITNESSETH as follows:

1.      DEFINITIONS AND INTERPRETATION

1.1     Terms defined in the Implementation Agreement have the same meanings in
        this Amendment Agreement.

1.2     Save as otherwise contemplated, the provisions of clauses 1.2 (c), (e),
        (f) and (g) and 1.3 of the Implementation Agreement shall apply to this
        Amendment Agreement as if each reference to "[T/t]his Agreement" in
        those clauses were a reference to "this Amendment Agreement".



                                       2


2.      AMENDMENTS TO THE IMPLEMENTATION AGREEMENT

2.1     A new clause 10.6 shall be included in the Implementation Agreement in
        the following terms: "The provisions of Schedule 10 shall apply in
        accordance with their terms."

2.2     The provisions of Schedule 10 shall be amended as set out in the
        Schedule to this Amendment Agreement.

2.3     The definition of "Completion Accounts" shall be amended by the addition
        of the following words after "as at" - "the close of business on".

2.4     Paragraph 3.1(a) and paragraph 3.1(e) of Schedule 6 to the
        Implementation Agreement shall be amended by the addition of the
        following words at the end of each such paragraph: "AND PROVIDED FURTHER
        THAT such voluntary act, omission or transaction is not required or
        permitted by the terms of this Agreement".

2.5     The following words in clause 3.1(f) of Schedule 6 to the Implementation
        Agreement shall be deleted "in accordance with the terms of this
        Agreement or".

2.6     The following new paragraph 10 shall be added to Part C of Schedule 7 of
        the Implementation Agreement: "The Completion Accounts shall exclude (1)
        any payments made by the Buyer on the Completion Date to any Group
        Company or to the LTIP Trust and (2) any payments made on the Completion
        Date by the Seller to any Group Company".

2.7     Each of the amendments to the Implementation Agreement set out in this
        clause 2 shall take effect from the time at which the Implementation
        Agreement was executed by all parties thereto (being the parties to this
        Amendment Agreement) on 28th July 2005.

3.      IMPLEMENTATION AGREEMENT

        The Implementation Agreement (as amended pursuant to this Amendment
        Agreement) shall remain in full force and effect.

4.       MISCELLANEOUS MATTERS

         The provisions of clauses 20, 23, 26 to 28 (inclusive) and 29.2 of the
         Implementation Agreement shall apply to this Amendment Agreement as if
         each reference to "[T/t]his Agreement" in those clauses were a
         reference to "this Amendment Agreement".



                                       3


5.       GOVERNING LAW AND JURISDICTION

         This Amendment Agreement is governed by, and shall be construed in
         accordance with, the laws of England and Wales.



                                       4


                         SCHEDULE TO AMENDMENT AGREEMENT
                                   SCHEDULE 10
                              THE AFRICAN EXIT PLAN
                                    PART A -

1.1     SALE TO EMP

        (A)     On 1 September 2005, the Company entered into certain
                documentation (which, as amended from time to time, shall be
                referred to as the "TRANSACTION DOCUMENTATION") pursuant to
                which it agreed, subject to certain conditions, to (amongst
                other things) (a) procure the novation of the management
                agreements between FIML and each of the African Funds; (b) sell
                the Sale Shares (as defined below) and the entire issued share
                capital of FAMCA, and (c) sell its interest in West Africa
                Growth Fund, in each case to EMP Fund Management II LP ("EMP").
                The transactions contemplated by the Transaction Documentation
                shall together be referred to as the "Transaction".

        (B)     The parties acknowledge and agree that, notwithstanding any
                other provision of this Agreement, any Losses suffered or
                incurred by any member of the Buyer's Group or any Group Company
                arising under, or in connection with, the Transaction
                Documentation shall, subject to the provisions of Schedule 6
                which are applicable to claims made under clause 10.2(e), be
                recoverable from the Seller pursuant to clause 10.2(e) PROVIDED
                THAT such Losses shall not be recoverable to the extent that
                they result from an act or omission after Completion by any
                Group Company which constitutes a breach of such Transaction
                Documentation (other than any term or provision of the
                Transaction Documentation which no reasonable seller would have
                agreed to). For the avoidance of doubt, Losses suffered or
                incurred by any member of the Buyer's Group or any Group Company
                under or in connection with any warranty, indemnity or other
                similar covenant (including any tax covenant) contained in the
                Transaction Documentation shall not, for the purposes of this
                paragraph, be considered to result from a breach by any Group
                Company of the Transaction Documentation.

        (C)     Subject to the provisions of paragraph (D) immediately below,
                the Buyer confirms that the Company will not make any material
                amendment to the Transaction Documentation from time to time
                without the prior consent of the Seller (such consent not to be
                unreasonably withheld or delayed). The Buyer shall give the
                Seller prior written notice of any proposed amendments to the
                Transaction Documentation. The Buyer shall procure that the
                Company takes




                                       5


                reasonable steps to comply with the Transaction Documentation
                (save for any term or provision of the Transaction Documentation
                which no reasonable seller would have agreed to and without
                prejudice to the Buyer's right to agree amendments to the
                Transaction Documentation with the consent of the Seller (such
                consent not to be unreasonably withheld or delayed)) and that
                the Company negotiates with EMP in good faith to complete the
                Transaction.

        (D)     For the purposes of this Schedule, the indemnity in the form
                reviewed by the Seller prior to Completion given or to be given
                by the Company to EMP in connection with any actual or potential
                dispute, claim or litigation involving Mr Ela (referred to as
                the "ELA INDEMNITY") will not be considered an amendment to the
                Transaction Documentation. The Seller undertakes to the Buyer
                that the terms of the Ela Indemnity have been agreed in
                principle with EMP prior to Completion. The Seller also
                undertakes to the Buyer that any Losses suffered or incurred by
                the Buyer or any Group Company in connection with the Ela
                Indemnity will, if given by the Company and subject to the
                provisions of Schedule 6 applicable to a claim under clause
                10.2(e), be recoverable from the Seller pursuant to clause
                10.2(e). The Buyer shall not prevent the Company from giving the
                Ela Indemnity (or an indemnity in substantially the same form)
                if the Company reasonably considers that the giving of the Ela
                Indemnity is lawful and necessary or desirable to ensure
                completion of the Transaction.

        (E)     The parties acknowledge their common desire for the Company to
                complete the Transaction as soon as reasonably practicable after
                Completion. The Seller agrees that it shall be responsible for
                any and all the professional fees and expenses, and other
                out-of-pocket costs and expenses, reasonably incurred by the
                Buyer and any Group Company in connection with the Transaction
                PROVIDED THAT the Seller shall not be responsible for any such
                costs, fees and expenses if, and only to the extent, that such
                costs, fees and expenses are specifically provided for in the
                Completion Accounts.

        (F)     It is agreed that, notwithstanding any other provision of this
                Schedule, the rights and obligations arising under or in
                connection with the provisions of paragraphs 1.2 to 2.2
                (inclusive) of this Schedule shall have no effect unless and
                until the earlier to occur of (a) the termination of the
                Transaction Documentation (subject, for the avoidance of doubt,
                to completion of the Transaction not having occurred at that
                time) and (b) 31st December 2005 (or such later date as the
                parties may agree) provided that, on that date, completion of
                the Transaction Documentation has not occurred (either event
                being referred to in this Schedule as a "FAILURE EVENT").



                                       6


1.2     NOTICE TO TERMINATE

        The Buyer will, as soon as reasonably practicable after the occurrence
        of a Failure Event (and in any event within 20 Business Days thereof)
        procure that FIML gives notice to terminate the management agreements
        with each of the African Funds. The Buyer will, after it has given
        notice to terminate such management agreements, take reasonable steps to
        ensure that subject to the completion of any required legal or
        regulatory formalities which the Buyer shall use its reasonable
        endeavours to complete, the Company resigns as sponsor or co-sponsor of
        each of the African Funds.

1.3     SERVICES AGREEMENT

        The Buyer may, at any time after the occurrence of a Failure Event,
        procure that FIML, Framlington Asset Management Central Africa S.A.
        ("FAMCA") and Framlington Asset Management West Africa SA ("FAMWA")
        submit a draft of a Services Agreement to the Buyer and the Seller for
        their approval (such approval, in each case, not to be unreasonably
        withheld or delayed). In the event that such approvals are given by the
        Buyer and the Seller, the Buyer may, at its sole option, procure that
        FIML and the African Companies enter into the Services Agreement at any
        time thereafter.


1.4     PUT OPTION

1.4.1   In consideration of the mutual covenants contained in this Schedule 10,
        the Seller irrevocably undertakes to acquire, from the Company, the
        shares which the Company owns in FAMWA (referred to as the "SALE
        Shares") and the whole of the issued share capital of FAMCA ("PUT
        OPTION") at the Buyer's first request pursuant to paragraph 1.4.2 for
        Pound Sterling1 PROVIDED THAT such request is given at any time during
        the period from the occurrence of a Failure Event until the first
        anniversary of the occurrence of that Failure Event. 1.4.2 The Put
        Option may be exercised by the Buyer serving written notice on the
        Seller and such notice shall state the date (which shall be not more
        than 20 Business Days nor less than 10 Business Days after the date upon
        which such notice is received by the Seller) and place in the United
        Kingdom where completion of the sale and purchase of the Sale Shares,
        and the completion of the sale of the entire issued share capital of
        FAMCA, shall take place. Subject only to clause 1.4.3, the parties shall
        be obliged to take all steps within their power to effect completion of
        such sales on the date nominated by the Buyer pursuant to this clause
        1.4.2.

1.4.3   The Seller will not be obliged to complete the purchase of the Sale
        Shares until such time as:



                                       7


        (a)     it is able lawfully to acquire the Sale Shares without the
                Company having to offer any of such Sale Shares to any other
                person, whether pursuant to the constitutional documents of
                FAMWA or any other agreements between the shareholders;

        (b)     the Services Agreement in the form approved by the Buyer and the
                Seller (such approval not to be unreasonably withheld or
                delayed) has been entered into by FIML, FAMWA and FAMCA; and

        (c)     any consents or approvals to the sale of the Sale Shares and the
                shares held by the Seller in FAMCA which are required from any
                applicable Regulatory Authority have been obtained on terms that
                will not have a material adverse effect on the ability of either
                the Seller, FAMWA or FAMCA to carry on FAMWA's or as appropriate
                FAMCA's business in substantially the same manner as FAMCA's or
                FAMWA's business was carried out prior to completion of the Put
                Option.

        The Seller shall, with effect from service of the relevant notice
        pursuant to clause 1.4.2, use all reasonable endeavours to promptly
        obtain the regulatory consents or approvals necessary or desirable in
        respect of any sale of the Sale Shares to it, and the shares held by the
        Company in FAMCA to it, pursuant in each case to the Put Option. The
        Buyer shall procure that the Company will provide any information and
        documents reasonably required and requested by the Seller for the
        purposes of making any submissions, filings or notifications in
        connection with such regulatory consents.

1.4.4   In consideration of the mutual covenants contained in this Schedule 10,
        the Seller irrevocably undertakes (subject to the completion of any
        required legal or regulatory formalities which the Seller shall use
        reasonable endeavours to complete) to acquire from the Company, at the
        Buyer's first request pursuant to this paragraph, the Company's interest
        in the African Funds PROVIDED THAT such request is given at any time
        during the period from the occurrence of a Failure Event until the first
        anniversary of the occurrence that Failure Event. This option shall be
        referred to as the "AFRICAN FUNDS OPTION". The Seller will acquire any
        such interest pursuant to the African Funds Option for Pound
        Sterling204,000. The African Funds Option may be exercised by the Buyer
        serving written notice on the Seller and such notice shall state the
        date (which shall not be more than 20 Business days nor less than 10
        Business Days after the date upon which such notice is received by the
        Seller) and place in the United Kingdom where completion of the sale and
        purchase of the relevant interest(s) shall take place. The parties shall
        be obliged to effect completion of the sale and purchase of the
        Company's interest in the African Funds on the date nominated by the
        Buyer pursuant to this paragraph. On such



                                       8


        completion, the Seller shall pay to the Buyer the consideration in
        immediately available funds.


2.      EXIT ARRANGEMENTS

        Liquidation or Winding-up of the African Companies

2.1     As soon as practicable after FIML has ceased to be the manager of the
        African Funds the Buyer shall (provided that an Exit Event has not
        occurred at such time), take (or procure that there are taken) all such
        reasonable steps and actions as are necessary to be taken to cause the
        Winding-up of both of the African Companies.

2.2     The Buyer shall procure that, following completion of the liquidation of
        either African Company, an amount equal to the aggregate amount returned
        to any shareholder of each African Company that is a member of the
        Buyer's Group upon each Winding-up net of any taxation payable by any
        member of the Buyer's Group in respect of such receipt shall be paid to
        the Seller (or as the Seller may direct) within 5 Business Days of
        payment to the relevant shareholder.

        Payment for successful completion

2.3     In the event that either:

                (a)     the Winding-up of the African Companies is completed and
                        any payment pursuant to paragraph 2.2 has been made
                        within 14 months of the occurrence of a Failure Event;
                        or

                (b)     the shares owned by the Company in the African Companies
                        have been sold to, and both of the management agreements
                        with the African Funds have been novated to, one or more
                        third parties (being a person other than a Connected
                        Person) within 12 months of the occurrence of a Failure
                        Event,

        then within five Business Days of receipt of notice from the Buyer
        requesting the same, the Seller shall pay to the Buyer the sum of Pound
        Sterling204,000 PROVIDED THAT upon such payment being made following the
        receipt of that notice, the indemnity in Clause 10.2(e) shall cease to
        apply other than in respect of Losses arising under or in connection
        with any contract entered into for the purpose of such sale or novation
        to which the Seller has consented PROVIDED FURTHER THAT the Buyer may
        not despatch such notice more than 20 Business Days after the completion
        of such third party sale.



                                       9


        Professional fees and expenses

2.4     The Seller shall be responsible for any and all the professional fees
        and expenses, and other out-of-pocket expenses, reasonably incurred by
        the Buyer and any Group Company in connection with carrying out the
        terms and provisions of this Schedule.

3.      CONDUCT OF THE BUSINESS UNTIL EXIT

3.1     The Buyer shall procure that, for so long as FIML remains the investment
        manager of the African Funds (or either of them) and subject to the
        terms of the Transaction Documentation, FIML shall perform its duties
        and obligations and shall exercise its rights, powers and authorities in
        accordance with the terms of the relevant investment management
        agreement(s).

3.2     The Buyer shall procure that until the earlier of (a) completion of the
        Transaction and (b) the termination of management agreements with
        respect to the African Funds:

                (a)     the Seller shall be entitled from time to time and at
                        its sole expense to require the replacement of any Key
                        African Employee with such other persons as it may
                        nominate and on such terms as it may reasonably require,
                        provided that such person is of reasonable repute
                        PROVIDED THAT the Seller shall only be entitled to
                        exercise such right with the consent of the Buyer, which
                        the Buyer may, in its absolute discretion, give or not
                        give before the occurrence of a Failure Event but which
                        it shall not unreasonably withhold or delay after a
                        Failure Event; and

                (b)     FIML and the African Companies are given reasonable
                        access during normal UK business hours to the Group's
                        administrative employees, including (without limitation)
                        Andrew Dysch, Eleanor Cramner and Josie Tubbs (and
                        anyone who from time to time may replace such employees)
                        and shall receive reasonable administrative and other
                        support from Group Companies (other than the African
                        Companies); and

                (c)     it provides, to the extent it is able to do so, to the
                        Seller such financial and other information relating to
                        the African Companies and the African Funds as the
                        Seller may from time to time reasonably request.

3.3     Save with the prior written consent of the Seller (such consent not to
        be unreasonably withheld or delayed) the Buyer shall procure that until
        the earlier to occur of (a)



                                       10


        completion of the Transaction Documentation and (b) the earlier to occur
        of termination of the management agreements with respect to the African
        Funds and an Exit Event:

                (a)     save as contemplated by the Transaction Documentation,
                        the Company does not dispose of its shares in the
                        African Companies; and

                (b)     save as contemplated by the Transaction Documentation,
                        each African Company shall operate its businesses or
                        operations in the usual and ordinary course including
                        the provision of services to FIML.

3.4     Until the earlier to occur of (a) completion of the Transaction and (b)
        the termination of the management agreements in respect of the African
        Funds, the Seller shall pay to the Buyer within 20 Business Days of the
        receipt of a Quarterly Statement an amount equal to the following
        expenses incurred during the Quarter to which the Quarterly Statement
        relates:

                (a)     the remuneration (including any related employer's
                        costs) during the relevant Quarter of Messrs Vallance
                        and Ngon (and anyone who from time to time may replace
                        such employees) (but only for the 12 month period
                        expiring on the anniversary of a Failure Event or such
                        shorter period as the Buyer and the Seller may agree)
                        and the remuneration (including any related employer's
                        cost) of Mr Okoto (and anyone who from time to time may
                        replace such employee) (but only for the 6 month period
                        expiring on the date which is six months after the
                        occurrence of a Failure Event or such shorter period as
                        the Buyer and the Seller may agree);

                (b)     any costs reasonably and properly incurred during the
                        relevant Quarter by any member of the Buyer's Group in
                        connection with the termination of the employment of
                        Messrs Vallance, Ngon and Okoto; and

                (c)     the actual operating costs of the African Companies, and
                        FIML (to the extent that they relate to the management
                        of the African Funds), properly incurred during the
                        relevant Quarter together with any costs incurred by any
                        member of the Buyer's Group in the carrying out the
                        terms and provisions of this Schedule,

        LESS an amount equal to all fees, including performance fees, and other
        payments paid to FIML under or in connection with the relevant
        investment management agreement(s).



                                       11


        Such amounts shall be paid in sterling (and original currencies shall be
        converted at the spot rate shown in the Financial Times on the last
        Business Day of the relevant Quarter).

3.5     The Buyer shall at the same time as it delivers the Quarterly Statement
        provide to the Seller such supporting data and information as is
        reasonably necessary for the Seller to calculate the net amount payable
        in respect of the relevant Quarter.

3.6     All VAT costs borne by the Buyer and/or the African Companies shall be
        compensated by a payment from the Seller to the Buyer and/or the African
        Companies of an equivalent amount.

4.      DEFINITIONS

In this Schedule 10 the following definitions shall apply:

"AFRICAN FUNDS" means the Central Africa Growth Fund a collective investment
Company currently organised under the laws of the Grand Duchy of Luxembourg as a
Societe d'Investissment a Capital Variable and whose registered office is at 13,
rue Goethe, L-2014 Luxembourg and the West Africa Growth Fund a collective
investment company currently organised under the laws of the Grand Duchy of
Luxembourg as a Societe d'Investissment a Capital Variable and whose registered
office is at 8, avenue Marie-Therese, L-2132 Luxembourg;

"EXIT EVENT " means either (a) completion of the sale of all the shares of the
African Companies owned by any Group Company or (b) completion of the Winding-up
of both of the African Companies:

"FIML" means Framlington Investment Management Limited a company registered in
England under company number 01858790;

"KEY AFRICAN EMPLOYEES" means Messrs. Vallance, Ngon, Okoto and such other
employees who may from time to time replace one or more of those employees;

"QUARTERS" means the periods 1st October to 31st December, 1st January to 31st
March, 1st April to 30th June and 1st July to 30th September and "QUARTER" shall
be any one of such periods, provided that the first Quarter shall commence on
the day following the Completion Date and shall expire on the earliest of the
next following 31st December, 31st March, 30th June or 30th September;



                                       12


"QUARTERLY STATEMENT" means a statement showing the amount of the expenses
incurred and income earned in respect of a particular Quarter as more
particularly set out in paragraph 2.5 of this Schedule 10;

"SERVICES AGREEMENT" means an agreement between FIML, FAMCA and FAMWA for, inter
alia, the provision of services to FIML;

"WINDING-UP" means the winding up, liquidation, dissolution or such other
equivalent or similar legal process in the relevant jurisdiction which results
in the dissolution of a company without further liability upon its shareholders.



                                       13



IN WITNESS WHEREOF the parties have executed and delivered this Amendment
Agreement as a deed on the date first appearing above.

                                               
Executed as a deed by                             )
AXA INVESTMENT MANAGERS S.A.                      )     /s/ Xavier Thomin
acting by a person or persons who, in             )     .......................................
accordance with the laws of the territory in      )
which AXA INVESTMENT MANAGERS S.A. is             )     Authorised signatory(ies))
incorporated, is or are acting under the          )     /s/ Jan Putnis
authority of AXA INVESTMENT MANAGERS S.A.         )     .......................................
                                                  )     Witness Jan Putnis
                                                                Solicitor
                                                                London ECZ
Executed as a deed by                             )
COMERICA INCORPORATED                             )     /s/ Michael Michalak
acting by a person or persons who, in             )     .......................................
accordance with the laws of the territory in      )
which COMERICA INCORPORATED is incorporated, is   )     (Authorised signatory(ies))
or are acting under the authority of COMERICA     )
INCORPORATED                                      )     /s/ Sunil Sharma
                                                  )     .......................................
                                                        Witness Sunil Sharma


Executed as a deed by                             )
CCF S.A.                                          )     /s/ John Botley
acting by a person or persons who, in             )     .......................................
accordance with the laws of the territory in      )
which CCF S.A. is incorporated, is or are         )     (Authorised signatory(ies))
acting under the authority of CCF S.A.            )
                                                  )     /s/ David Whear
                                                  )     .......................................
                                                        Witness David Whear

                                                    /s/ David Burnett
Executed as a deed                               )  ..............................Director
by FRAMLINGTON HOLDINGS LIMITED acting by a      )) /s/ Eleanor Cranmer
director and its secretary/two                      ..............................Secretary/
Directors                                        )                                Director

EX-10.6

                                                                    EXHIBIT 10.6

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in
any doubt about the action you should take, you are recommended immediately to
seek your own personal financial advice from a financial adviser authorised
under the Financial Services and Markets Act 2000 if you are in the United
Kingdom or, if not, from another appropriately authorised financial adviser.


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


                                   CASH OFFER

                                       BY

                          AXA INVESTMENT MANAGERS S.A.

                                     for the

                           ENTIRE ISSUED SHARE CAPITAL

                                       of

                            FRAMLINGTON GROUP LIMITED



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





Acceptances should be returned as soon as possible. The procedure for acceptance
of the Offer is set out on pages 5-6 of this document and in the accompanying
Form of Acceptance. If you have any questions as to how to complete or return
the Form of Acceptance, please contact Eleanor Cranmer (the Company Secretary of
Framlington) on telephone number 020-7330-6680.




















                                                  Contents



                                                                                                                     PAGE
                                                                                                                 
LETTER FROM THE OFFEROR

1.       INTRODUCTION.........................................................................................          3

2.       THE OFFER............................................................................................          3

3.       CONDITIONS...........................................................................................          3

4.       THE NET ASSET ADJUSTMENT.............................................................................          4

5.       TAXATION.............................................................................................          4

6.       PROCEDURE FOR ACCEPTANCE OF THE OFFER................................................................          5

7.       SETTLEMENT...........................................................................................          6

8.       SPECIAL DIVIDEND.....................................................................................          6

9.       COMPULSORY ACQUISITION...............................................................................          7

10.      ACTION TO BE TAKEN...................................................................................          7

APPENDIX 1 CONDITIONS AND FURTHER TERMS OF THE OFFER.........................................................           8

APPENDIX 2 NET ASSET ADJUSTMENT..............................................................................           13

APPENDIX 3 DEFINITIONS.......................................................................................           17



                                       2




                          AXA INVESTMENT MANAGERS S.A.

27th July 2005

To the holders of Shares and, for information only, to participants in the
Framlington Group Limited Long Term Incentive Plan

Dear Shareholder,

                OFFER FOR THE ENTIRE ISSUED SHARE CAPITAL OF FRAMLINGTON

1.       INTRODUCTION

         AXA Investment Managers S.A. (the "OFFEROR") wishes to acquire the
         entire issued share capital of Framlington pursuant to the Offer.

         This letter and the other parts of this document and the accompanying
         Form of Acceptance contain the formal terms of the Offer and set out
         the procedure for acceptance.

2.       THE OFFER

         The Offeror hereby offers to acquire, on the terms and conditions set
         out in this document and in the accompanying Form of Acceptance, all of
         the Shares on the following basis:

         FOR EACH SHARE   281 PENCE IN CASH, SUBJECT TO THE NET ASSET ADJUSTMENT

         The Shares to be acquired pursuant to the Offer are to be acquired:

         (A)    by the Offeror or the LTIP Trustee, as the Offeror may, having
                consulted the LTIP Trustee, direct; and

         (B)    fully paid, or credited as fully paid up, with full title
                guarantee and free from all liens, equities, charges, equitable
                interests, encumbrances and other third party rights and
                interests and together with all rights attaching thereto at
                Completion, including the right to receive and retain all
                dividends and other distributions declared, made or paid after
                Completion. However, provided you are a Shareholder at the
                relevant time, you will retain the right to receive the Special
                Dividend referred to in section 8 below.

         The conditions and further terms of the Offer are set out in full in
         Appendix 1 to this document and in the Form of Acceptance.

3.       CONDITIONS

         The Offer is conditional upon:

         (A)    the Offeror acquiring or having contracted to acquire not less
                than 90% of the Shares to which the Offer relates;

         (B)    an agreement between the Offeror, Holdings, CCF and Comerica
                (the "IMPLEMENTATION AGREEMENT") having been executed by all of
                the parties thereto by 11.00 a.m. on 28th July 2005 (or such
                later date as the Offeror may in its sole


                                       3




                discretion determine); and

         (C)    completion of the Implementation Agreement having taken place by
                5.30 p.m. on 30th November 2005,

         in each case as described in more detail in Part A of Appendix 1.
         Holdings has given an irrevocable undertaking to the Offeror to accept
         the Offer in respect of Shares representing approximately 90.8% of the
         Shares to which the Offer relates.

         Completion of the Implementation Agreement is subject to certain
         conditions, including:

         (A)    the Financial Services Authority having approved the acquisition
                of control of Framlington by the Offeror;

         (B)    certain amendments being made to the existing terms of the
                Articles to (amongst other things) allow holders of vested
                Awards to sell Shares which they receive in respect of those
                Awards (and in the case of Options, to sell Shares received
                following exercise) under the terms of the LTIP Rules without
                having held those Shares for at least six months and to
                introduce certain new provisions to facilitate the acquisition
                by the Offeror of the entire issued share capital of
                Framlington. The board of Framlington is to convene an
                extraordinary general meeting of Framlington to approve these
                changes to the Articles. Notice of the EGM, containing the text
                of the proposed amendments to the Articles, will be sent to all
                Shareholders in due course; and

         (C)    certain adverse changes in the value of the Group and/or of the
                Group's assets under management not having occurred.

4.       THE NET ASSET ADJUSTMENT

         There will be a Net Asset Adjustment, under which the consideration of
         Pound Sterling 2.81 per Share payable to Shareholders upon the Offer
         becoming unconditional in all respects shall be increased pro rata to
         the extent that the actual consolidated net asset value of the Group
         (including cash held by the LTIP Trustee) at Completion exceeds Pound
         Sterling 22,360,000.

         The actual consolidated net asset value of the Group on Completion will
         be calculated in accordance with the procedure set out in Appendix 2.

         The agreement of Holdings and the Offeror to the Net Asset Adjustment
         or the determination of the Net Asset Adjustment according to the
         procedure described in Appendix 2 shall be final and binding on all
         persons whose Shares the Offeror acquires under the Offer or otherwise.

         Extracts from the Implementation Agreement relating to the methodology
         by which the Net Asset Adjustment is to be calculated will be available
         for inspection during normal business hours at Framlington, 155
         Bishopsgate, London, EC2M 3XJ from 9.30 a.m. on 29th July 2005 until
         Completion.

5.       TAXATION

         The following section explains the UK taxation position for
         participants in the LTIP who accept the Offer for the Shares they
         acquire upon the vesting of their Awards or the


                                       4




         exercise of their vested Options in connection with the Offer. This
         section is intended as a general guide to the UK taxation position in
         relation to participants in the LTIP who are UK resident and ordinarily
         resident based on current law and practice. If you are in any doubt as
         to your tax position, or if you are subject to taxation in any
         jurisdiction other than the United Kingdom, you should consult an
         appropriate professional adviser.

         Participants will pay income tax and employee's national insurance
         contributions on the value of the Shares on vesting of any Awards.
         Where Options are exercised, then they will pay income tax and
         employee's national insurance contributions on the value of the Shares
         they receive less the exercise price.

         The value should be treated as equal to the price per Share payable
         under the Offer. There should be no capital gains tax implications of
         the acceptance of the Offer as income tax is expected to apply to the
         whole of the gain arising on the vesting or exercise of Awards and
         Options respectively as described above.

         Any income tax and employee national insurance contributions which are
         payable will be deducted from the consideration that would otherwise be
         payable to participants under the Offer and remitted to the appropriate
         authorities.

 6.      PROCEDURE FOR ACCEPTANCE OF THE OFFER

         SHAREHOLDERS

(a)      COMPLETING AND RETURNING THE FORM OF ACCEPTANCE

         To accept the Offer, the Form of Acceptance must be completed and then
         signed in the presence of a witness who should also sign, in accordance
         with the instructions printed on the Form of Acceptance.

         The completed and signed Form of Acceptance should then be returned by
         post or (during normal business hours) by hand to the Company Secretary
         of Framlington, with the relevant share certificate(s), as soon as
         possible. No acknowledgement of receipt of documents will be given.

(b)      SHARE CERTIFICATES NOT READILY AVAILABLE OR LOST

         If for any reason the relevant share certificate(s) is/are not readily
         available or is/are lost, you should nevertheless complete, sign and
         return the Form of Acceptance as stated above, and you should arrange
         for the relevant share certificates to be forwarded as soon as
         possible thereafter. Your completed Form of Acceptance should be
         accompanied by a letter stating that the balance will follow or that
         you have lost one or more of your share certificates. In the case of
         loss, you should then write to Framlington's Company Secretary, Eleanor
         Cranmer at Framlington, 155 Bishopsgate, London, EC2M 3XJ for a letter
         of indemnity for the lost share certificate(s) which, when completed in
         accordance with the instructions given, should be returned to that
         person at that address by post or by hand.

(c)      VALIDITY OF ACCEPTANCES

         Without prejudice to Appendix 1 of this document, the Offeror reserves
         the right to treat as valid in whole or in part any acceptance of the
         Offer which is not entirely in order or is not accompanied by the
         relevant share certificate(s). In that event, however unless the


                                       5




         relevant Shares were acquired upon vesting of Awards or the exercise of
         vested Options shortly before Completion and no share certificates have
         been issued, the consideration payable under such acceptances will not
         be despatched until after the relevant share certificate(s) and/or
         indemnities satisfactory to the Offeror have been received.

         HOLDERS OF AWARDS AND OPTIONS UNDER THE FRAMLINGTON GROUP LIMITED LONG
         TERM INCENTIVE PLAN

         HOLDINGS HAS AGREED TO PROCURE THAT ALL AWARDS AND OPTIONS WILL VEST
         BEFORE COMPLETION AND THAT HOLDERS OF AWARDS RECEIVE THE SHARES TO
         WHICH THEY ARE ENTITLED UNDER THE LTIP RULES. HOLDERS OF VESTED OPTIONS
         WILL BE GIVEN AN OPPORTUNITY TO EXERCISE THOSE OPTIONS EARLY AND TO
         RECEIVE THE SHARES TO WHICH THOSE OPTIONS RELATE. HOLDERS OF SHARES
         RESULTING FROM THE VESTING OF AWARDS AND EXERCISE OF VESTED OPTIONS
         BEFORE COMPLETION MAY THEN ACCEPT THE OFFER BY COMPLETING A FORM OF
         ACCEPTANCE.

         FURTHER DETAILS OF THE VESTING OF AWARDS WILL BE PROVIDED TO HOLDERS OF
         AWARDS IN DUE COURSE.

         THE HOLDERS OF AWARDS AND OPTIONS WILL BE GIVEN AN OPPORTUNITY TO
         DIRECT IN ADVANCE THAT THE OFFER BE ACCEPTED ON THEIR BEHALF IN RESPECT
         OF THE SHARES TO WHICH THEIR AWARDS AND OPTIONS RELATE. FURTHER DETAILS
         OF THESE ARRANGEMENTS WILL BE PROVIDED TO HOLDERS OF AWARDS AND OPTIONS
         IN DUE COURSE.

7.       SETTLEMENT

         Subject to the Offer becoming or being declared unconditional, the cash
         consideration in respect of cash due will be despatched (together with
         interest at LIBOR on the amount of the Net Asset Adjustment from the
         Completion Date until the Business Day prior to the date of despatch)
         to the holders of the Shares who have accepted the Offer (i) in the
         case of acceptances received, complete in all respects, by the date on
         which the Offer becomes unconditional, on the date on which Completion
         takes place, or (ii) in the case of acceptances of the Offer received,
         complete in all respects, after such date but while it remains open for
         acceptance, within 14 days of such receipt. All such cash payments will
         be made in pounds sterling by cheque drawn on a branch of a UK clearing
         bank or by electronic transfer to Shareholders' nominated bank
         accounts, as Shareholders may elect by completing Box 4 of the Form of
         Acceptance.

         If the Offer does not become or is not declared unconditional, share
         certificates(s) will be returned by post to the person whose name and
         address is set out in Box 3 of the Form of Acceptance or, if none is
         set out, to the Shareholder at that address.

         All documents and remittances sent by, to or from holders of the Shares
         or Awards will be sent at their own risk.

8.       SPECIAL DIVIDEND

         IT IS ANTICIPATED THAT ALL HOLDERS OF SHARES, INCLUDING SUCH HOLDERS
         WHO HAVE BECOME SO BY VIRTUE OF THE VESTING OF AWARDS OR THE EXERCISE
         OF VESTED OPTIONS, WILL, AT THE DISCRETION OF THE BOARD OF DIRECTORS OF
         FRAMLINGTON, HAVE AN OPPORTUNITY TO PARTICIPATE IN A PRE-COMPLETION
         SPECIAL DIVIDEND. FURTHER DETAILS OF THE SPECIAL DIVIDEND WILL BE


                                       6




         PROVIDED IN DUE COURSE.

9.       COMPULSORY ACQUISITION

         If sufficient acceptances of the Offer are received the Offeror intends
         to apply the provisions of sections 428 to 430F (inclusive) of the
         Companies Act to compulsorily acquire, or to direct that the LTIP
         Trustee acquires, any outstanding Shares. The Offeror will have the
         ability to do this once Holdings has accepted the Offer in accordance
         with the terms of its irrevocable undertaking to do so and the Offer
         has become unconditional in all respects.

10.      ACTION TO BE TAKEN

         FOR SHAREHOLDERS TO ACCEPT THE OFFER, THE FORM OF ACCEPTANCE MUST BE
         COMPLETED, SIGNED AND RETURNED TO THE COMPANY SECRETARY OF FRAMLINGTON
         WITH THE RELEVANT SHARE CERTIFICATES AS SOON AS POSSIBLE, AS DESCRIBED
         IN MORE DETAIL IN PARAGRAPH 6 ABOVE.

         HOLDERS OF AWARDS AND OPTIONS WILL RECEIVE FURTHER INFORMATION IN DUE
COURSE.


                                Yours faithfully,



                              for and on behalf of
                          AXA INVESTMENT MANAGERS S.A.


                                      [SIG]






                                       7







                                   APPENDIX 1
                   CONDITIONS AND FURTHER TERMS OF THE OFFER




PART A: CONDITIONS OF THE OFFER


The Offer is subject to the following conditions:

(A)      valid irrevocable acceptances having been received by not later than
         11:00 a.m on 28th July 2005 (or such later time(s) and/or date(s) as
         the Offeror may in its sole discretion decide) in respect of not less
         than 90 per cent. (or such lower percentage as the Offeror may in its
         sole discretion decide) in nominal value of the Shares to which the
         Offer relates. For the purposes of this condition, the expression "the
         Shares to which the Offer relates" shall be construed in accordance
         with sections 428 to 430F of the Companies Act;

(B)      the Implementation Agreement having been executed by all of the parties
         thereto by 11.00 a.m on 28th July 2005 (or such later time(s) and/or
         date(s) as the Offeror may at its sole discretion decide); and

(C)      Completion having occurred by 5.30 p.m. on 30th November 2005.


PART B: FURTHER TERMS OF THE OFFER

The Offer is governed by English law and is subject to the jurisdiction of the
English courts, and to the further terms set out or referred to below and in the
Form of Acceptance.

The following further terms apply to the Offer. Except where the context
otherwise requires, any reference in Parts B or C of this Appendix 1 and in the
Form of Acceptance: (i) to "the Offer", shall include any renewal thereof or
extension to the Offer; (ii) to the "acceptance condition", means the condition
set out in paragraph (A) of Part A of this Appendix 1; (iii) to "acceptances of
the Offer", shall include deemed acceptances of the Offer and any acceptances of
the Offer made pursuant to any authority granted under the terms of the Offer or
the Form of Acceptance; (iv) to execution of a Form of Acceptance, shall include
execution by an "attorney" acting as such, as described in Part C of this
Appendix 1; and (v) to the "vesting" of an Award or an Option, means vesting
under the LTIP Rules.

1.       ACCEPTANCE PERIOD

(a)      The Offer will initially be open for acceptance until the earlier of
         5.30 p.m. on the last Business Day before the Completion Date and 5.30
         p.m. on 30th November 2005. The Offeror may in its absolute discretion
         extend the period for which the Offer is open for acceptance. No
         revision to the Offer is envisaged.

(b)      If the Offer has become unconditional and it is stated that the Offer
         will remain open until further notice, then not less than 14 days'
         notice in writing will be given prior to the closing of the Offer to
         those holders of Shares who have not accepted the Offer.


                                       8




 2.     NOTIFICATION OF ACCEPTANCES

(a)      On the Business Day next following the day on which the Offer is due to
         expire or becomes unconditional or is extended, as the case may be, the
         Offeror will notify Framlington, holders of Shares and holders of
         Awards and Options of the total number (as nearly as practicable) of
         Shares for which acceptances of the Offer have been received.

(b)      In computing the number of the Shares represented by acceptances, there
         may be included or excluded for notification purposes acceptances not
         in all respects in order or subject to verification.

 3.     GENERAL

(a)      The Offer will lapse if:

         (i)    the conditions set out in paragraphs (A) and (B) of Part A of
                this Appendix 1 have not both been fulfilled by 11.00 a.m. on
                28th July 2005 or such later time(s) and date(s) as the Offeror
                may in its sole discretion decide; and/or

         (ii)   the condition set out in paragraph (C) of Part A of this
                Appendix 1 has not been fulfilled by 5.30 p.m. on 30th November
                2005; and/or

         (ii)   the Implementation Agreement terminates or is terminated.
         In such case, the Offer will cease to be capable of further acceptance
         and the Offeror and the holders of the Shares shall cease to be bound
         by prior acceptances. The Offeror shall not revoke or amend the Offer
         prior to Completion.


(b)      The terms, provisions, instructions and authorities contained in or
         deemed to be incorporated in the Form of Acceptance constitute part of
         the terms of the Offer. Words and expressions defined in this document
         have the same meanings when used in the Form of Acceptance, unless the
         context otherwise requires.

(c)      The Offer and all acceptances thereof and the relevant Form of
         Acceptance and all contracts made pursuant to any of the foregoing and
         action taken or made or deemed to be taken or made under any of the
         foregoing shall be governed by and construed in accordance with English
         law. Execution by or on behalf of a holder of the Shares of a Form of
         Acceptance will constitute his submission, in relation to all matters
         arising out of or in connection with the Offer and the Form of
         Acceptance, to the jurisdiction of the courts of England and his
         agreement that nothing shall limit the right of the Offeror to bring
         any action, suit or proceeding arising out of or in connection with the
         Offer and the Form of Acceptance in any other manner permitted by law
         or in the courts of England.

(d)      Any omission or failure to despatch this document, the Form of
         Acceptance or any notice required to be despatched under the terms of
         the Offer to, or any failure to receive the same by, any person to whom
         the Offer is made, or should be made, shall not invalidate the Offer in
         any way or create any implication that the Offer has not been made to
         any such person. The Offer extends to all holders of the Shares to whom
         this document, the Form of Acceptance and any related documents may not
         be despatched, or who may not receive such documents, including persons
         who become Shareholders by virtue of the vesting of Awards or the
         exercise of vested Options.


                                       9




(e)      Without prejudice to any other provision in this document, the Offeror
         reserves the right to treat acceptances of the Offer as valid if
         received by or on behalf of the Offeror at any place or places
         determined by the Offeror otherwise than as set out herein or in the
         Form of Acceptance.

(f)      All powers of attorney, appointments as agents and authorities on the
         terms conferred by or referred to in this Appendix 1 or in the Form of
         Acceptance are given irrevocably by way of security for the performance
         of the obligations of the holder of the Shares (as the case may be)
         concerned and are irrevocable (in respect of powers of attorney, in
         accordance with section 4 of the Powers of Attorney Act 1971).

(g)      No acknowledgement of receipt of any Form of Acceptance, communication,
         notice or share certificate will be given by or on behalf of the
         Offeror. All communications, notices, certificates, documents of title
         and remittances to be delivered by or sent to or from any holder of the
         Shares or Awards will be delivered by or sent to or from such holder of
         the Shares or Awards at his own risk.

(h)      The consideration payable pursuant to the terms of the Offer to any
         Shareholder who has accepted the Offer shall be decreased to the extent
         of any successful claim by the Offeror or any company in the Group
         under any warranty, indemnity or other commitment that such Shareholder
         has given, whether in the Implementation Agreement or otherwise.

(i)      The Offer is made on 27th July 2005 and is capable of acceptance from
         and after that time. Copies of this document and the Form of
         Acceptance are available from Framlington from that time. The Offer is
         made by means of this document.

(j)      If sufficient acceptances of the Offer are received, the Offeror
         intends to apply the provisions of sections 428-430F of the Companies
         Act to acquire compulsorily any outstanding Shares. The Offeror may
         also invoke certain provisions of the Articles (as amended) to
         compulsorily acquire certain Shares after Completion.

(k)      All references in this document to any statute or statutory provision
         shall include a statute or statutory provision which amends,
         consolidates or replaces the same (whether before or after the date
         hereof).

(l)      All references in this document to times are to London time.

PART C: FORM OF ACCEPTANCE

Each holder of Shares by whom, or on whose behalf, a Form of Acceptance is
executed irrevocably undertakes, represents, warrants and agrees to and with the
Offeror (so as to bind him, his personal representatives, heirs, successors and
assigns) to the following effect:

(a)      that the execution of the Form of Acceptance, whether or not any other
         Boxes are completed, shall constitute:

         (i)    an irrevocable acceptance of the Offer in respect of the
                relevant Shareholder's entire holding of the Shares (or such
                lesser number as may have been inserted in Box 1 of the Form of
                Acceptance), provided that, if a number is inserted in Box 1
                which exceeds such Shareholder's holding of Shares, the
                acceptance will be deemed to have been made in respect of that
                Shareholder's entire holding of the Shares; and


                                       10




         (ii)   an irrevocable undertaking to execute any further documents and
                give any further assurances which may be required to
                enable the Offeror to obtain the full benefit of this Part C
                and/or to perfect any of the authorities expressed to be given
                hereunder,

         in each case on and subject to the terms and conditions set out or
         referred to in this document and the Form of Acceptance and that each
         such acceptance shall be irrevocable;

(b)      that the execution of the Form of Acceptance constitutes, subject to
         the Offer becoming unconditional in all respects, the irrevocable
         appointment of the Offeror and its directors as such Shareholder's
         attorney and/or agent within the terms of paragraph 3(f) of Part B of
         this Appendix 1 (the "attorney") and an irrevocable instruction and
         authorisation to the attorney: (i) to complete and execute all or any
         form(s) of transfer and/or other document(s) at the discretion of the
         attorney in relation to the Shares in respect of which the Offer has
         been accepted or deemed to have been accepted in favour of the Offeror,
         the LTIP Trustee or such other person or persons as the Offeror or its
         agents may direct; (ii) to deliver such form(s) of transfer and/or
         other document(s) at the discretion of the attorney with the share
         certificate(s) relating to such the Shares for registration; and (iii)
         to do all such other acts and things as may in the opinion of the
         attorney be necessary or expedient for the purposes of, or in
         connection with, the acceptance of the Offer, and to vest absolutely in
         the Offeror, the LTIP Trustee or their respective nominees the Shares
         as aforesaid;

(c)      that the execution of the Form of Acceptance and its delivery to the
         Company Secretary of Framlington constitutes, subject to the Offer
         becoming unconditional, an irrevocable authority and request:

         (i)    to Framlington or its agents to procure the registration of the
                transfer of the Shares pursuant to the Offer and the delivery of
                the share certificate(s) in respect thereof to the Offeror, to
                the LTIP Trustee or as the Offeror may otherwise direct; and

         (ii)   to the Offeror or its agents to procure the despatch of the cash
                consideration to which an accepting holder of the Shares is
                entitled at the risk of such holder of the Shares, either by
                cheque to the person whose name and address is set out in Box 3
                of the Form of Acceptance or, if details of a valid bank account
                are included in Box 4 of the Form of Acceptance, to that bank
                account;

(d)      that, subject to the Offer becoming unconditional and pending
         registration:

         (i)    the Offeror shall be entitled to direct the exercise of any
                votes and any or all other rights and privileges (including the
                right to requisition the convening of a general or separate
                class meeting of Framlington) attaching to any Shares in respect
                of which the Offer has been accepted or is deemed to have been
                accepted; and

         (ii)   the execution of the Form of Acceptance constitutes, with regard
                to the Shares comprised in such acceptance:

                (A)   an authority to Framlington and/or its agents from the
                      holder of such Shares to send any notice, circular,
                      document or other communication which may be required to
                      be sent to him as a member of Framlington in respect of
                      such Shares to the Offeror at its registered office or
                      such other place as the Offeror may direct;



                                       11




                (B)   the irrevocable appointment of the Offeror or any of its
                      directors or agents to sign on such Shareholder's behalf
                      such documents and do such things as may in the opinion of
                      such person seem necessary or desirable in connection with
                      the exercise of any votes or other rights or privileges
                      attaching to such Shares (including, without limitation,
                      an authority to sign any consent to short notice of a
                      general or separate class meeting) as his attorney and/or
                      agent and on his behalf and/or to execute a form of proxy
                      in respect of such Shares appointing any person nominated
                      by the Offeror to attend general and separate class
                      meetings of Framlington and to exercise the votes
                      attaching to such Shares on such Shareholder's behalf,
                      such votes (where relevant) to be cast so far as possible
                      to satisfy any outstanding conditions of the Offer; and

                (C)   will also constitute the agreement of such Shareholder not
                      to exercise any such rights without the prior written
                      consent of the Offeror and the irrevocable undertaking of
                      such Shareholder not to appoint a proxy for or to attend
                      such general or separate class meeting;

(e)      that he agrees to ratify each and every act or thing which may be done
         or effected by the Offeror, Framlington or any of their respective
         directors or agents in the proper exercise of any of their respective
         powers and/or authorities hereunder;

(f)      that he shall do all such acts and things as shall be necessary or
         expedient to vest in the Offeror or its nominee(s) or the LTIP Trustee
         the Shares aforesaid;

(g)      that if any provision of Part B of this Appendix 1 or this Part C shall
         be unenforceable or invalid or shall not operate so as to afford the
         Offeror or any of its directors or agents the benefit of any authority
         expressed to be given therein, he shall with all practicable speed do
         all such acts and things and execute all such documents that may be
         required to enable the Offeror and/or its directors or agents to
         secure the full benefits of Part B of this Appendix 1 and this Part C;
         and

(h)      that the terms and conditions of the Offer contained in this document
         shall be deemed to be incorporated in, and form part of, the Form of
         Acceptance which shall be construed accordingly.

Forms of Acceptance executed by corporate Shareholders shall be valid and shall,
for all purposes of the Offer and its terms be "Forms of Acceptance"
notwithstanding that their execution provisions have been adapted accordingly.

References in this Part C to a holder of the Shares shall include references to
the person executing a Form of Acceptance.


                                       12




                                   APPENDIX 2
                              NET ASSET ADJUSTMENT

                                     PART A


For the purposes of this Appendix:

"ACCOUNTS" means the consolidated accounts of Framlington, including the balance
sheet, profit and loss statement, cash flow statement, notes to those accounts
and the associated directors' and auditors' reports for the year ended on 31st
December 2004;

"ACCOUNTING STANDARDS" means the Financial Reporting Standards and Statements
of Standard Accounting Practice issued and/or adopted by the Accounting
Standards Board and Abstracts issued by the Urgent Issues Task Force of the
Accounting Standards Board;

"ACTUAL NET ASSET VALUE" means the amount shown opposite the heading "Nat Assets
excluding pension deficit" as shown in the Completion Accounts as agreed or
determined;

"COMPLETION ACCOUNTS" means the consolidated pro forma net asset statement of
Framlington as at the Completion Date;

"HOLDINGS' ACCOUNTANTS" means KPMG, Chartered Accountants;

"OFFEROR'S ACCOUNTANTS" means Deloitte, Chartered Accountants;

1.       The Offeror shall procure that as soon as practicable following the
         Completion Date, and in any event not later than 30 Business Days
         after the Completion Date, a draft of the Completion Accounts ("DRAFT
         COMPLETION ACCOUNTS") shall be prepared by Framlington in accordance
         with paragraph 2 of this Appendix 2 and delivered simultaneously to the
         Offeror's Accountants and Holdings' Accountants (together, the
         "ACCOUNTANTS").

2.       The draft Completion Accounts shall be prepared by Framlington:

2.1      in the form set out in Part B of this Appendix 2:

2.2      in accordance with certain specific accounting treatments to be agreed
         by Holdings and the Offeror and set out in the Implementation
         Agreement; and, subject thereto

2.3      adopting the same accounting principles, policies, treatments and
         categorisations as were used in the preparation of the Accounts, as
         there applied, including in relation to the exercise of accounting
         discretion and judgement; and, subject thereto

2.4      in accordance with Accounting Standards relevant at the Completion
         Date.

         For the avoidance of doubt, paragraph 2.2 shall take precedence over
         paragraphs 2.3 and 2.4, and paragraph 2.3 shall take precedence over
         paragraph 2.4.

2.5      As soon as practicable after delivery of the draft Completion Accounts
         to the Accountants in accordance with paragraph 1, and in any event
         within 20 Business Days after such delivery (the "REVIEW PERIOD"),
         the Accountants shall review the draft Completion Accounts and
         endeavour to agree what adjustments (if any) need to be made to them in
         order for them to



                                       13



         comply with paragraphs 2.1 to 2.4 (inclusive).

2.6      If the Accountants agree upon all such adjustments as are referred to
         in paragraph 2.5 within the Review Period, they shall jointly
         incorporate them into the draft Completion Accounts and the draft
         Completion Accounts as so adjusted shall be the "Completion Accounts"
         for all purposes of the Offer and shall, save in the case of manifest
         error, be final and binding on all persons.

2.7      If the Accountants are unable to agree within the Review Period on any
         aspect of the Completion Accounts (including as to:

2.7.1    whether adjustments need to be made to the draft Completion Accounts;

2.7.2    the adjustments to be made thereto; or

2.7.3    the amount of the Actual Net Asset Value),

         Holdings and the Offeror shall endeavour in good faith to agree such
         matter or matters and to incorporate them as so agreed into the draft
         Completion Accounts by making appropriate adjustments thereto. The
         draft Completion Accounts as so adjusted shall be the "Completion
         Accounts" for all purposes of the offer and shall, save in the case of
         manifest error, be final and binding on all persons.

2.8      If Holdings and the Offeror have not resolved any such matter in
         dispute referred to in paragraph 2.7 within 10 Business Days after the
         end of the Review Period, then such matter or matters (but no other
         matters) shall thereupon be referred to such firm of independent
         chartered accountants as Holdings and the Offeror may agree within 14
         days of a request by either of them to the other or, failing such
         agreement within such time, as the President for the time being of the
         Institute of Chartered Accountants in England and Wales may nominate on
         the application of Holdings or the Offeror (the "INDEPENDENT
         ACCOUNTANTS") for determination on the following basis:

2.8.1    the Independent Accountants shall be instructed to notify Holdings and
         the Offeror of their determination of any such matter within 30
         Business Days of such referral

2.8.2    Holdings and the Offeror shall be entitled to make written submissions
         to the Independent Accountants and copied to the other party's
         Accountants at the same time but subject thereto the Independent
         Accountants shall have power to determine the procedure to be followed
         in relation to their determination;

2.8.3    any submissions to and the determination of the Independent Accountants
         shall be in the English language and any oral hearings shall be
         conducted in English in London;

2.8.4    in making such submissions Holdings and the Offeror shall state their
         respective best estimates of monetary amounts of the matters referred
         for determination;

2.8.5    in making their determination the Independent Accountants shall act as
         experts and not as arbitrators, and their decision as to any matter
         referred to them for determination shall, save in the case of manifest
         error, be final and binding in all respects on all persons and shall
         not be subject to question on any ground whatsoever; and




                                       14





2.8.6    the fees and expenses of the Independent Accountants shall be borne
         and paid as the Independent Accountants shall determine.

2.9      Following any agreement between Holdings and the Offeror or any
         determination by the Independent Accountants, the Accountants shall
         jointly incorporate into and reflect in the draft Completion Accounts
         the matters resolved between Holdings and the Offeror and/or determined
         by the Independent Accountants, together with any adjustments which may
         have been agreed between the Accountants and the draft Completion
         Accounts and the amount of the Actual Net Asset Value stated in such
         report shall be the "Completion Accounts" and the "Actual Net Asset
         Value" respectively for all purposes of the Offer, and shall, save in
         the case of manifest error, be final and binding on all persons and
         shall, save as aforesaid, not be subject to question on any ground
         whatsoever.



                                       15


                                     PART B
                          FORM OF COMPLETION ACCOUNTS


                                                           As at the
                                                           Completion Date
                                                           Pound Sterling'000
FIXED ASSETS

Tangible assets

Investments



CURRENT ASSETS

Stock of units

Debtors

Cash at bank and in hand


CREDITORS

Less: amounts falling due within one year

NET CURRENT ASSETS

Total assets less current liabilities

Less: provisions for liabilities and charges

NET ASSETS EXCLUDING PENSION DEFICIT


                                       16




                                   APPENDIX 3
                                  DEFINITIONS

 The following definitions apply throughout this document and the Form of
Acceptance unless the context otherwise requires:


"ARTICLES"                    means the articles of association of Framlington;

"AWARD"                       means an "Award" as defined in the LTIP Rules
                              (other than an Option), and references to a
                              "holder" or "holders" of Awards shall be construed
                              accordingly;

"BUSINESS DAY"                means a day other than a Saturday or Sunday or
                              other public or bank holiday on which banks are
                              ordinarily open for the transaction of normal
                              banking business in London, other than solely for
                              the settlement and clearing of euro;

"CCF"                         means CCF S.A., a French societe anonyme
                              incorporated under number 775 670 284, whose
                              registered office is at 103, avenue des
                              Champs-Elysees, 75008, Paris, France;

"COMERICA"                    means Comerica, Inc., a company incorporated in
                              the State of Michigan, United States of America,
                              whose principal place of business is at 500
                              Woodward Avenue, Detroit, Michigan, 48226 United
                              States of America;

"COMPANIES ACT"               means the Companies Act 1985, as amended;

"COMPLETION"                  means completion under the Implementation
                              Agreement;

"COMPLETION DATE"             means the date on which Completion takes place;

"EGM"                         means the extraordinary general meeting of
                              Framlington referred to in section 3 of the letter
                              from the Offeror contained in this document, or
                              any adjournment thereof;

"FORM OF ACCEPTANCE"          means the form of acceptance and authority
                              relating to the Offer which

                                       17





                              accompanies this document;

"FRAMLINGTON"                 means Framlington Group Limited, a company
                              incorporated in England and Wales (registered
                              number 01237167, whose registered office is at
                              155 Bishopsgate, London, EC2M3XJ;


"HOLDINGS"                    means Framlington Holdings Limited, a company
                              incorporated in England and Wales (registered
                              number 02314914), whose registered office is at
                              155 Bishopsgate, London, EC2M 3XJ;

"IMPLEMENTATION AGREEMENT"    means the agreement of that name to be entered
                              into between the Offeror, Holdings, CCF and
                              Comerica;

"INTERNAL MARKET"             means the internal market established under the
                              LTIP;

"LIBOR"                       means the London Inter-Ban < Offering Rate, to be
                              determined from a source agreed by the Offeror and
                              Holdings;

"LTIP"                        means the Framlington Group Limited Long Term
                              Incentive Plan, as adopted by the board of
                              Framlington on 20th March 2003;

"LTIP RULES"                  means the rules of the LTIP;

"LTIP TRUSTEE"                means the trustee of the Framlington Employee
                              Benefit Trust from time to time, being, on the
                              date of the Offer, Ogier Employee Benefit Trustee
                              Limited, a company incorporated in Jersey, whose
                              registered office is at Whiteley Chambers, Don
                              Street, St. Helier, Jersey, JE4 9WG, Channel
                              Islands;

"NET ASSET ADJUSTMENT"        means the net asset adjustment described in
                              section 4 of the letter frorm the Offeror
                              contained in this document;

"OFFER"                       means the offer being made by the Offeror to
                              acquire all of the Shares including, where the
                              context so requires, any subsequent extension or
                              renewal of such Offer;



                                       18













"OFFEROR"                     means AXA Investment Managers S.A., a French
                              societe anonyme incorporated under number B 393
                              051 826, whose registered office is at Coeur La
                              Defense, 100 Esplanade du Generale de Gaulle,
                              92932 Paris La Defense Cedex, France;

"OPTION"                      means an Award which is an "Option" as defined in
                              the LTIP Rules, and references to a "holder" or
                              "holders" of Options shall be construed
                              accordingly;

"SHARES"                      means ordinary shares of five pence each in the
                              capital of Framlington;

"SHAREHOLDERS" AND "HOLDERS"
OF SHARES                     means registered holders of Shares; and

"SPECIAL DIVIDEND"            means the pre-completion special dividend referred
                              to in section 8 of the letter from the Offeror
                              contained in this document.

All references in this document to "Pound Sterling" or "pence" are to the lawful
currency of the United Kingdom. When used in this document the word "subsidiary"
has the meaning given in sections 736 and 736A of the Companies Act.



                                       19

EX-10.7

                                                                    EXHIBIT 10.7

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in
any doubt about the action you should take, you are recommended immediately to
seek your own personal financial advice from a financial adviser authorised
under the FinanciaI Services and Markets Act 2000 if you are in the United
Kingdom or, if not, from another appropriately authorised financial adviser.

This Form of Acceptance should be read in conjunction with the accompanying
offer document (the "OFFER DOCUMENT"). Unless the context requires otherwise,
the definitions contained in the Offer Document also apply in this Fom of
Acceptance.

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


                               FORM OF ACCEPTANCE

                                 RELATING TO THE

                                   CASH OFFER

                                       BY

                          AXA INVESTMENT MANAGERS S.A.

                       FOR THE ENTIRE ISSUED SHARE CAPITAL

                                       OF

                           FRAMLINGTON GROUP LIMITED


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



By signing this Form of Acceptance, you hereby irrevocably undertake that you
will in person or by proxy cast all votes attaching to the number of Shares set
out in Box 1, or otherwise procure that all such votes shall be cast, at the
extraordinary general meeting of Framlington Group Limited, details of which are
set out in the Offer Document (the "EGM") (and at any adjournment thereof) (i)
against any resolution or proposal to adjourn the EGM, to amend any of the
resolutions proposed at the EGM, or which may impede or prevent the
passing of those resolutions and (ii) in favour of each of such resolutions.

By signing this Form of Acceptance, you also hereby irrevocably undertake,
confirm and agree that the process for the agreement or determination of the Net
Asset Adjustment described in the Offer Document is final and binding upon you
and that you have no right to challenge, intervene in or give representations to
any person in connection with, the agreement or determination of the Net Asset
Value Adjustment.





                                        2

ACTION TO BE TAKEN

- -        TO ACCEPT THE OFFER, PLEASE COMPLETE THIS FORM OF ACCEPTANCE BY
         FOLLOWING THE INSTRUCTIONS SET OUT BELOW AND THE NOTES FOR GUIDANCE
         AT THE END OF THIS FORM OF ACCEPTANCE. THE FULL TERMS AND CONDITIONS OF
         THE OFFER ARE SET OUT IN THE OFFER DOCUMENT.

- -        YOU SHOULD THEN RETURN THIS FORM OF ACCEPTANCE, DULY COMPLETED AND
         SIGNED AND ACCOMPANIED BY YOUR SHARE CERTIFICATE BY POST OR BY HAND
         (DURING NORMAL BUSINESS HOURS) TO THE COMPANY SECRETARY, FRAMLINGTON,
         155 BISHOPSGATE, LONDON, EC2M 3XJ SO AS TO BE RECEIVED AS SOON AS
         POSSIBLE.

- -        IF YOUR SHARE CERTIFICATE(S) ARE WITH YOUR BANK, STOCKBROKER OR OTHER
         AGENT, YOU SHOULD COMPLETE AND SIGN THIS FORM OF ACCEPTANCE AND ARRANGE
         FOR IT TO BE LODGED BY SUCH AGENT, TOGETHER WITH THE RELEVANT
         DOCUMENTS.

- -        IF YOU HAVE ANY QUESTIONS AS TO HOW TO COMPLETE OR RETURN THIS FORM OF
         ACCEPTANCE OR TO OBTAIN A FURTHER FORM OF ACCEPTANCE, PLEASE CONTACT
         ELEANOR CRANMER ON TELEPHONE NUMBER 020-7330-6680.

PLEASE FOLLOW THESE INSTRUCTIONS WHEN COMPLETING PAGE 3

1.       NUMBER OF SHARES
         ----------------

         To accept the Offer, insert in Box 1 the total number of Shares for
         which you wish to accept the Offer. If no number of, or a number
         greater than your registered holding of, Shares is inserted in Box 1
         and you have signed Box 2, you will be deemed to have accepted the
         Offer in respect of your entire registered holding of Shares.


         You must, in any event, also duly complete Box 2 in accordance with the
         instructions, which will constitute your acceptance of the Offer, and
         complete Box 3.

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

2.       SIGNATURES
         ----------

         TO ACCEPT THE OFFER, YOU MUST SIGN BOX 2 REGARDLESS OF WHICH OTHER
         BOX(ES) YOU COMPLETE.


         In the case of a shareholder which is a company, two directors or one
         director and the company secretary must sign Box 2. If the Form of
         Acceptance is signed under power of attorney, the power of attorney and
         share certificate should accompany this Form of Acceptance.

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

3.       FULL NAME AND ADDRESS
         ---------------------

         Complete Box 3 with the full name and registered address of the
         registered holder.

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

4.       BANK ACCOUNT DETAILS
         --------------------

         If you wish to receive your consideration by electronic transfer to a
         bank account, complete Box 4 with the relevant bank account details.







                                       3

PLEASE COMPLETE THIS PAGE AS EXPLAINED ON PAGES 2 AND 4. PLEASE USE BLOCK
CAPITALS


         Complete Boxes 1 and 3 and sign Box 2 below. If you wish to receive
         your consideration by electronic transfer to a bank account, please
         also complete Box 4.


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

1.       NUMBER OF SHARES


         Number of Shares for which you are accepting the Offer: 63,431,051
                                                                ...............


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

2.       SIGN HERE TO ACCEPT THE OFFER

         Executed as a deed on behalf of the Company named below:

                                FRAMLINGTON HOLDINGS LIMITED
                               .................................................

         Acting by:

         Name: D. H. Burnett                     Signature: /s/ David H. Burnett
              ......................                       .....................
                                                           (Director)


         Name: E. Cranmer                        Signature: /s/ Eleanor Cranmer
              ......................                       .....................
                                                           (Secretary)

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

 3.    FULL NAME(S) AND REGISTERED ADDRESS OF HOLDER

         NAME FRAMLINGTON HOLDINGS LIMITED
             ..........................................................


         Registered Address 115 BISHOPSGATE, LONDON, ECRM 3XJ
                           ....................................


         .......................................................................
         Contact and daytime telephone number in case of any query:


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

 4.      BANK ACCOUNT DETAILS

         Bank:
                              ..................................................

         Address of Bank:
                              ..................................................


         Name of Account:
                              ..................................................


         Sort Code:
                              ..................................................


         Account Number:
                              ..................................................






          ADDITIONAL INFORMATION REGARDING THE COMPLETION OF THIS FORM


In order to avoid inconvenience to yourself and/or delay, the following points
may assist you


(A)      WHERE A POWER OF ATTORNEY HAS BEEN GRANTED: If the registered holder
         has executed a power of attorney, have this Form of Acceptance signed
         by the attorney in the presence of a witness. The power of attorney (or
         a duly certified copy thereof, as provided in the Powers of Attorney
         Act 1971) must be lodged with this Form of Acceptance.

(B)      IF YOU DO NOT HOLD YOUR SHARE CERTIFICATE(s): If your share
         certificate(s) is/are with your stockbroker, bank or other agent, you
         should complete this Form of Acceptance and if the certificate(s)
         is/are readily available arrange for it/them to be returned by such
         person. If the certificate(s) is/are not readily obtainable, you should
         return this Form of Acceptance together with a note saying e.g.
         "certificates to follow", and arrange for the certificate(s) to be
         forwarded as soon as possible thereafter.

(C)      IF YOUR SHARE CERTIFICATE(s) HAS/HAVE BEEN LOST: Complete and return
         this Form of Acceptance, together with a letter of explanation and any
         certificate(s) available. At the same time, you should write to
         Framlington Group Limited's Company Secretary for a letter of indemnity
         which should be completed in accordance with the instructions given.
         When completed, the letter of indemnity should be lodged with the
         Company Secretary of Framlington. Indemnities will only be accepted at
         the discretion of the Offeror.

(D)      IF YOUR NAME OR OTHER PARTICULARS ARE SHOWN INCORRECTLY ON THE SHARE
         CERTIFICATE(s) E.G.


         (i)    INCORRECT NAME

                e.g. Name on the certificate.........................John Smythe


                Correct name..........................................John Smith


                  Complete and lodge this Form of Acceptance with the correct
                  name and accompanied by a letter from your bank, stockbroker
                  or solicitor confirming that the person described on the
                  certificate and the person who has signed this Form of
                  Acceptance are one and the same;


         (ii)   INCORRECT ADDRESS - write the correct address in Box 3 of this
                Form of Acceptance;


         (iii)  CHANGE OF NAME - lodge your marriage certificate or the deed
                poll with this Form of Acceptance for noting.

PLEASE CONTACT ELEANOR CRANMER ON TELEPHONE NUMBER 020-7330-6680 IF YOU HAVE ANY
QUESTIONS AS TO HOW TO COMPLETE OR RETURN THIS FORM.

EX-11

                                                                               .
                                                                               .
                                                                               .

EXHIBIT (11) - STATEMENT RE: COMPUTATION OF NET INCOME PER COMMON SHARE

COMPUTATION OF NET INCOME PER COMMON SHARE
Comerica Incorporated and Subsidiaries



                                                          Three Months Ended  Nine Months Ended
                                                              September 30,      September 30,
(in millions, except per share data)                      2005          2004   2005        2004
- -------------------------------------------------------- ------        -----  -----       -----
                                                                              
Basic:
   Net income applicable to common stock                 $  238        $ 196  $ 654       $ 550
                                                         ------        -----  -----       -----
   Average common shares outstanding                        166          170    168         172
                                                         ------        -----  -----       -----
   Basic net income per common share                     $ 1.43        $1.15  $3.90       $3.19
                                                         ------        -----  -----       -----

Diluted:
   Net income applicable to common stock                 $  238        $ 196  $ 654       $ 550
                                                         ------        -----  -----       -----
   Average common shares outstanding                        166          170    168         172
   Nonvested stock                                            1            1      1           1
   Common stock equivalent:
     Net effect of the assumed exercise of stock options      1            2      1           1
                                                         ------        -----  -----       -----
   Diluted average common shares                            168          173    170         174
                                                         ------        -----  -----       -----
   Diluted net income per common share                   $ 1.41        $1.13  $3.85       $3.15
                                                         ------        -----  -----       -----


      Options to purchase an average 6.0 million and 6.4 million shares of
common stock at exercise prices ranging from $60.31 - $71.58 and $59.24 - $71.58
were outstanding during the three months ended September 30, 2005 and 2004,
respectively, and options to purchase an average 6.1 million and 6.4 million
shares of common stock at exercise prices ranging from $58.20 - $71.58 and
$56.19 - $71.58 were outstanding during the nine months ended September 30, 2005
and 2004, respectively, but were not included in the computation of diluted net
income per common share because the options' exercise prices were greater than
the average market price of common shares for the period.

EX-31.1

EXHIBIT (31.1) - CHAIRMAN, PRESIDENT AND CEO RULE 13A-14(A)/15D-14(A)
CERTIFICATION OF PERIODIC REPORT (PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
ACT OF 2002)

                        CERTIFICATION OF PERIODIC REPORT

            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ralph W. Babb, Jr., Chairman, President and Chief Executive Officer of
Comerica Incorporated (the "Registrant"), certify that:

1.    I have reviewed this report on Form 10-Q of the Registrant for the
      quarterly period ended September 30, 2005;

2.    Based on my knowledge, this report does not contain any untrue statement
      of a material fact or omit to state a material fact necessary to make the
      statements made, in light of the circumstances under which such statements
      were made, not misleading with respect to the period covered by this
      report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this report, fairly present in all material
      respects the financial condition, results of operations and cash flows of
      the Registrant as of, and for, the periods presented in this report;

4.    The Registrant's other certifying officer and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
      control over financial reporting (as defined in Exchange Act Rules
      13a-15(f) and 15d-15(f)) for the Registrant and have:

            (a) Designed such disclosure controls and procedures, or caused such
            disclosure controls and procedures to be designed under our
            supervision, to ensure that material information relating to the
            Registrant, including its consolidated subsidiaries, is made known
            to us by others within those entities, particularly during the
            period in which this report is being prepared;

            (b) Designed such internal control over financial reporting, or
            caused such internal control over financial reporting to be designed
            under our supervision, to provide reasonable assurance regarding the
            reliability of financial reporting and the preparation of financial
            statements for external purposes in accordance with generally
            accepted accounting principles;

            (c) Evaluated the effectiveness of the Registrant's disclosure
            controls and procedures and presented in this report our conclusions
            about the effectiveness of the disclosure controls and procedures,
            as of the end of the period covered by this report based on such
            evaluation; and

            (d) Disclosed in this report any change in the Registrant's internal
            control over financial reporting that occurred during the
            Registrant's most recent fiscal quarter (the Registrant's fourth
            fiscal quarter in the case of an annual report) that has materially


            affected, or is reasonably likely to materially affect, the
            Registrant's internal control over financial reporting; and

5.    The Registrant's other certifying officer and I have disclosed, based on
      our most recent evaluation of internal control over financial reporting,
      to the Registrant's auditors and the audit committee of the Registrant's
      board of directors (or persons performing the equivalent functions):

            (a) All significant deficiencies and material weaknesses in the
            design or operation of internal control over financial reporting
            which are reasonably likely to adversely affect the Registrant's
            ability to record, process, summarize and report financial
            information; and

            (b) Any fraud, whether or not material, that involves management or
            other employees who have a significant role in the Registrant's
            internal control over financial reporting.

Date: November 3, 2005                       /s/ Ralph W. Babb, Jr.
                                             -----------------------------------
                                             Ralph W. Babb, Jr.
                                             Chairman, President and
                                             Chief Executive Officer

EX-31.2

EXHIBIT (31.2) - EXECUTIVE VICE PRESIDENT AND CFO RULE 13A-14(A)/15D-14(A)
CERTIFICATION OF PERIODIC REPORT (PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
ACT OF 2002)

                        CERTIFICATION OF PERIODIC REPORT

            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Elizabeth S. Acton, Executive Vice President and Chief Financial Officer of
Comerica Incorporated (the "Registrant"), certify that:

1.    I have reviewed this report on Form 10-Q of the Registrant for the
      quarterly period ended September 30, 2005;

2.    Based on my knowledge, this report does not contain any untrue statement
      of a material fact or omit to state a material fact necessary to make the
      statements made, in light of the circumstances under which such statements
      were made, not misleading with respect to the period covered by this
      report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this report, fairly present in all material
      respects the financial condition, results of operations and cash flows of
      the Registrant as of, and for, the periods presented in this report;

4.    The Registrant's other certifying officer and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
      control over financial reporting (as defined in Exchange Act Rules
      13a-15(f) and 15d-15(f)) for the Registrant and have:

            (a) Designed such disclosure controls and procedures, or caused such
            disclosure controls and procedures to be designed under our
            supervision, to ensure that material information relating to the
            Registrant, including its consolidated subsidiaries, is made known
            to us by others within those entities, particularly during the
            period in which this report is being prepared;

            (b) Designed such internal control over financial reporting, or
            caused such internal control over financial reporting to be designed
            under our supervision, to provide reasonable assurance regarding the
            reliability of financial reporting and the preparation of financial
            statements for external purposes in accordance with generally
            accepted accounting principles;

            (c) Evaluated the effectiveness of the Registrant's disclosure
            controls and procedures and presented in this report our conclusions
            about the effectiveness of the disclosure controls and procedures,
            as of the end of the period covered by this report based on such
            evaluation; and

            (d) Disclosed in this report any change in the Registrant's internal
            control over financial reporting that occurred during the
            Registrant's most recent fiscal quarter (the Registrant's fourth
            fiscal quarter in the case of an annual report) that has materially


            affected, or is reasonably likely to materially affect, the
            Registrant's internal control over financial reporting; and

5.    The Registrant's other certifying officer and I have disclosed, based on
      our most recent evaluation of internal control over financial reporting,
      to the Registrant's auditors and the audit committee of the Registrant's
      board of directors (or persons performing the equivalent functions):

            (a) All significant deficiencies and material weaknesses in the
            design or operation of internal control over financial reporting
            which are reasonably likely to adversely affect the Registrant's
            ability to record, process, summarize and report financial
            information; and

            (b) Any fraud, whether or not material, that involves management or
            other employees who have a significant role in the Registrant's
            internal control over financial reporting.

Date: November 3, 2005                     /s/ Elizabeth S. Acton
                                           -------------------------------------
                                           Elizabeth S. Acton
                                           Executive Vice President and
                                           Chief Financial Officer

EX-32

EXHIBIT (32) SECTION 1350 CERTIFICATION OF PERIODIC REPORT (PURSUANT TO SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002)

                        CERTIFICATION OF PERIODIC REPORT

            PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Ralph W. Babb, Jr., Chairman, President and Chief Executive
Officer, and Elizabeth S. Acton, Executive Vice President and Chief Financial
Officer, of Comerica Incorporated (the "Company"), certify, pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1)   The Quarterly Report on Form 10-Q of the Company for the quarterly period
      ended September 30, 2005 (the "Report") fully complies with the
      requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
      1934 (15 U.S.C. 78m or 78o(d)); and

(2)   The information contained in the Report fairly presents, in all material
      respects, the financial condition and results of operations of the
      Company.

Dated: November 3, 2005                         /s/ Ralph W. Babb, Jr.
                                                --------------------------------
                                                Ralph W. Babb, Jr.
                                                Chairman, President and
                                                Chief Executive Officer

                                                /s/ Elizabeth S. Acton
                                                --------------------------------
                                                Elizabeth S. Acton
                                                Executive Vice President and
                                                Chief Financial Officer