Sample Investment Management Agreement

Reviewed by BLG - April 21, 2010

Sample Investment Management Agreement

Notice This sample investment management agreement is intended only to provide general guidance to Portfolio Management Association of Canada ("PMAC") members and is not intended to be and should not be construed or relied upon as legal or other advice. PMAC assumes no liability by providing this sample investment management agreement to its members or any other person or entity. Sections of this investment management agreement in italics may or may not apply in any particular situation. This agreement assumes that the client is an institutional investor ? modifications will be necessary if the client is an individual. Users should carefully review the portions in italics to determine applicability. Bolded references to National Instrument 31-103 are intended as guidance only and should be removed from the final version of the Agreement.

[Date] To: Dear: Re: Investment Management Agreement (the "Agreement") between [Full legal name of PMAC

member] (the "Manager") and ______________________________ (the "Client") [? Investment Management Account No: ______]

The following are the terms under which the Client appoints the Manager as manager of the Client's account with the Manager (the "Account"). The custodian of the Account (the "Custodian") is __________________________.

1. DATE OF APPOINTMENT

1.1 This appointment is effective as of _______________________ (the "Effective Date").

2. OWNERSHIP

2.1 The Account is or will be registered in the name of:

[Note: indicate as tenants in common or joint tenancy with right of survivorship where applicable.]

Where the Account is registered in the name of more than one individual, the Manager is entitled to accept instructions from any one of such individuals or his or her legal representative without notice to, or the consent of, any other individual.

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2.2 With respect to all matters contemplated by this Agreement, the Client confirms that the Manager may receive and act on instructions from ___________[Name]___________, until the Manager is in receipt of the Client's written instructions to the contrary.

3. CONFIDENTIALITY

3.1 The Manager shall treat all information provided to it by the Client regarding the Client and the Account as confidential, and will not disclose such information to third parties unless the Client has provided written permission to the Manager to do so, or unless the Manager is, by law, required or permitted to do so. The Client shall keep confidential any information that it receives from the Manager regarding the Manager's investment strategies and trading practices, except as approved in writing by the Manager, or required by law.

4. AUTHORITY

4.1 The Manager will manage the Account with complete discretion, in accordance with the investment policy statement dated ______________, which, among other things, outlines the Client's investment needs and objectives, financial circumstances and risk tolerance, and any amendments thereto that have been acknowledged in writing by both the Manager and the Client (collectively, the "Investment Policy"). Without limiting the authority granted above, the Manager is authorized with respect to managing the Account to:

(a) invest, reinvest, maintain in cash or cash equivalents, acquire, dispose of and otherwise manage, all or any part of the assets in the Account;

(b) unless otherwise instructed by the Client, select and place orders with dealers and brokers to purchase, sell and otherwise trade in or deal with assets in the Account and negotiate the applicable terms, commissions and charges with such dealers and brokers;

(c) instruct the Custodian to settle such trades as are directed by the Manager;

(d) unless otherwise directed by the Client, instruct the Custodian (i) as to the voting of all proxies received with respect to securities of the Account and execute proxies of voting instruction forms relating to such voting all in accordance with the Manager's policies on voting proxies, and (ii) to take such actions and exercise all such rights and powers incidental or relating to ownership of securities in the Account as require the exercise of discretion and may be exercised by any owner of such securities;

(e) retain third parties, which may include affiliates of the Manager, to perform any of the duties or obligations of the Manager under this Agreement; and

(f) perform any and all other acts as may be in its judgment necessary or appropriate for the management of the Account, or are necessary to enable the Manager to

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carry out its obligations under this Agreement without obtaining the prior approval or direction of the Client.

Note: Sections 13.2 and 13.3 (NI 31-103) obligations on registrants: KYC and suitability. Advisers with managed accounts cannot ask the Client to waive suitability assessment.

5. NON-EXCLUSIVITY

5.1 The services provided by the Manager to the Client are not deemed exclusive. Nothing in this Agreement shall in any way restrict the right of the Manager to provide investment management or other services for any other person or entity [or to act for its own account], and the provision of such services for others [or for its own account] shall not violate or give rise to any duty or obligation to the Client. [The Manager will provide the Client with a copy of its personal trading policy upon request.]

6. POOLED FUNDS

6.1 [The Client understands that the [Name of Pooled Funds] (the "Pooled Funds") are investment funds that the Manager manages and that the Manager appoints the custodian for the Pooled Funds. Currently, the custodian for the Pooled Funds is . The Manager may, at its sole discretion, change such custodian of the Pooled Funds and, if it does, will notify the Client of such change. The Client acknowledges that the Pooled Funds [may or will] be used to implement all or part of the Investment Policy and consents to the Manager investing some or all of the Assets in the Account in Series units of the Pooled Funds [as the Manager deems appropriate].

Note: Section 8.6 of NI 31-103 ? the ability of a registered adviser to trade in its own pooled funds with its managed account clients without the necessity of being registered as a dealer. Note the conditions to reliance on this exemption.

7. FEES

7.1 (a) Fees for the Manager's investment management services ("Fees") will be calculated [on the following basis]: [or] [in accordance with the attached Schedule , which may be amended with days notice [or without notice].]

(b) Fees are subject to Goods and Services Tax and any other taxes which may be applicable.

(c) [In addition to fees, certain operating expenses and other costs, inclusive of Goods and Services Tax, are paid by the Pooled Funds.]

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(d) Fees will be [calculated on a quarterly basis, based on the market value of the Account at the end of each calendar quarter] or [calculated on a daily basis based on the market value of the Account on the end of each calendar quarter], and will be billed [at least quarterly], in arrears. [The Client authorizes the Manager, in its sole discretion, to direct the trustee of the Pooled Funds to redeem such number of units of the Pooled Funds, or may sell or redeem other assets in the Account in its sole discretion held in the Client's account as may be required to pay the Manager's fees and remit the proceeds of such sale or redemption to the Manager.] By providing this authorization, the Client will be deemed to have provided notice to the Manager to effect such redemption at the time the Manager so directs such redemption to be executed. The Client shall be liable to pay to the Manager any unpaid fees not satisfied by way of redemption of units or the sale or redemption of other assets, as outlined in this paragraph.

(e) [Notwithstanding paragraph 7.1(a) above, Schedule applies to the Client's accounts [with the Manager in aggregate] and will remain in effect for a period of years, commencing on the Effective Date.]

7.2 [The management fee disclosed in the [simplified prospectus or offering memorandum] for a Pooled Fund is for the management of the Pooled Fund (including the provision of portfolio advisory services in relation to the securities held by that Pooled Fund). [In the event that a Client whose Account that invests in Series of a Pooled Fund is charged a higher Fee than that charged to another Client whose account invested in Series of the same Pooled Fund, the differential is for discretionary portfolio advisory services provided by the Manager.]

8. STANDARD OF CARE

8.1 The Manager shall, in carrying out its obligations under this Agreement, act honestly, in good faith and in the best interests of the Client and in connection therewith shall exercise the degree of care, diligence and skill that a reasonably prudent portfolio manager would exercise in similar circumstances. Notwithstanding the foregoing, the Client understands and agrees that the Manager does not represent and cannot guarantee performance results for the Account [or the Pooled Funds].

8.2 The Client understands that there are risks attached to the Manager's investment of the Account in securities, including various market, currency, economic, political and business risks. The Client agrees that the Manager will not be liable to the Client for any loss that the Client may suffer as a result of the Manager's good faith decisions or actions where the Manager exercises the care, diligence and skill expected of a reasonably prudent portfolio manager.

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9. INDEMNITY

9.1 The Client will hold harmless and indemnify the Manager, its directors, officers, employees and agents against any and all claims, losses, damages, liabilities and expenses which the Manager may incur if and to the extent that such loss is caused by the Client's or the Client's designees' own actions or omissions or by any inaccuracy or breach by the Client of any of the Client's representations or warranties hereunder.

10. STATEMENTS

10.1 The Manager will provide to the Client [, and/or to such other person(s) as directed by the Client in writing,] portfolio statements which shall include the date of the transaction, the type of transaction (i.e. purchase, sale or transfer), the name and quantity of the security purchased or sold, the price per security paid or received and the total value of the transaction [and which shall/may include adjusted cost base, personal rate of return etc. or a sample of which is attached hereto] for the periods ending March 31, June 30, September 30 and December 31 of each year. [The Manager will also provide all reporting required for the preparation of income tax returns on a timely basis to the Client [and/or to such other person(s) as directed by the Client in writing].

Note: Section 14.4 of NI 31-103 prescribes the content of a portfolio statement.

11. LEVERAGE

11.1 The Manager recommends that the Client borrow money from a financial institution to make contributions to the Account and the Client has or intends to borrow money to make such contributions to the Account. Accordingly, the Client acknowledges that:

(a) using borrowed money to finance the purchase of securities, including units of the Pooled Funds, or to make contributions to the Account, involves greater risk than a purchase or a contribution using cash resources only; and

(b) the Client's responsibility to repay the loan and pay interest as required by the terms of that loan remains the same even if the value of the securities purchased, or the Account, declines.

Note: See section 13.13 of NI 31-103. This section must be included if the Manager is recommending that the Client borrow to make investments. Alternatively, this information could be provided as part of the "relationship disclosure" referred to in section 12.3 of this Agreement.

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