SAMPLE INVESTMENT MANAGEMENT AGREEMENT
(Appendix to Sec. 415 on Minimum documentary requirements)
IMA No. (prenumbered)
INVESTMENT MANAGEMENT AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:
(Here in after referred to as the “PRINCIPAL”)
_____________________________________________, a banking corporation authorized to perform trust functions, organized and existing under and by virtue of the laws of the Philippines, with principal office and place of business at _______, , Philippines.
(Hereinafter referred to as the “INVESTMENT MANAGER”)
WITNESSETH: THAT –
(1) Delivery of the Fund – Upon execution of this Agreement, the Principal shall deliver to the Investment Manager the amount of PHILIPPINE PESOS: ________________________(P______).
(2) Composition – The cash which the Principal has delivered to the Investment Manager as well as such securities in which said sums are invested, the proceeds, interest, dividends and income or profits realized from the management, investment and reinvestment thereof, shall constitute the managed funds and shall hereafter be designated and referred to as the Portfolio. For purposes of this Agreement, the term securities shall be deemed to include commercial papers, shares of stock and other financial instruments.
(3) Delivery of Additional Funds – At any time hereafter and from time to time at the discretion of the Principal, the latter may deliver additional funds to the Investment Manager who shall form part of the Portfolio and shall be subject to the same terms and conditions of this Agreement. No formalities other than a letter from the principal and physical delivery to the Investment Manager of cash will be required for any addition to the Portfolio.
(4) Nature of Agreement – THIS AGREEMENT IS AN AGENCY AND NOT A TRUST AGREEMENT. AS SUCH, THE CLIENT SHALL AT ALL TIMES RETAIN LEGAL TITLE TO FUNDS AND PROPERTIES SUBJECT OF THIS ARRANGEMENT.
(5) Powers of the Investment Manager – The Investment Manager is hereby conferred the following powers:
a. To invest or reinvest the Portfolio in
(1) Evidences of indebtedness of the Republic of the Philippines and of the Bangko Sentral ng Pilipinas, and any other evidences of indebtedness or obligations the servicing and repayment of which are fully guaranteed by the Republic of the Philippines or loans against such government securities;
(2) Loans fully guaranteed by the government as to the payment of principal and interest;
(3) Loans fully secured by hold-out on, assignment or pledge of deposits or of deposit substitutes, or mortgage and chattel mortgage bonds;
(4) Loans fully secured by real estate and chattels in accordance with Section 78 of R.A. No. 337, as amended, and subject to the requirements of Sections 75, 76 and 77 of R.A. No. 337, as amended; and
(5) Such other investments or loans as may be directed or authorized by the Principal in a separate written instrument which shall form part of this Agreement: Provided, That said written instrument shall contain the following minimum information:
(a) The transaction to be entered into;
(b) The amount involved; and
(c) The name of the issuer, in case of securities and/or the name of the borrower and nature of security, in the case of loans;
b. To endorse, sign or execute any and all securities, documents or contracts necessary for or connected with the exercise of the powers hereby conferred or the performance of the acts hereby authorized;
c. To cause any property of the Portfolio to be issued, held, or registered in the name of the Principal or of the Investment Manager: Provided, That in case of the latter, the instrument shall indicate that the Investment Manager is acting in a representative capacity and that the Principal’s name is disclosed thereat;
d. To open and maintain savings and/or checking accounts as may be considered necessary from time to time in the performance of the agency and the authority herein conferred upon the Investment Manager;
e. To collect and receive matured securities, dividends, profits, interest and all other sums accruing to or due to the Portfolio;
f. To pay such taxes as may be due in respect of or on account of the Portfolio or in respect of any profit, income or gains derived from the sale or disposition of securities or other properties constituting part of the Portfolio;
g. To pay out of the Portfolio all costs, charges and expenses incurred in connection with the investments or the administration and management of the Portfolio including the compensation of the Investment Manager for its services relative to the Portfolio; and
h. To perform such other acts or make, execute and deliver all instruments necessary or proper for the exercise of any of the powers conferred herein, or to accomplish any of the purposes hereof.
LIABILITY OF INVESTMENT MANAGER
(6) Exemption from Liability – In the absence of fraud, bad faith, or gross or willful negligence on the part of the Investment Manager or any person acting in its behalf, the Investment Manager shall not be liable for any loss or damage to the Portfolio arising out of or in connection with any act done or performed or caused to be done or performed by the Investment Manager pursuant to the terms and conditions herein agreed, to carry out the powers, duties and purposes for which this Agreement is executed.
ACCOUNTING AND REPORTING
(7) The Investment Manager shall keep and maintain books of accounts and other accounting records as required by law. The Principal or the authorized representative of the Principal shall have access to and may inspect such books of accounts and all other records related to the Portfolio, including the securities held in custody by the Investment Manager for the Portfolio.
(8) Reporting Requirements – The Investment Manager shall prepare and submit to the Principal the following reports within :
(a) Balance Sheet;
(b) Income Statement;
(c) Schedule of Earning Assets;
(d) Investment Activity Report; and
(e) (such other reports as may be required by the Principal).
INVESTMENT MANAGER’S FEE
(9) Investment Fee – The Investment Manager, in addition to the reimbursement of its expenses and disbursements in the administration and management of the Portfolio including counsel fees, shall be entitled to receive as compensation for its services a management fee of __ (Specify amount or rate)___.
WITHDRAWALS FROM THE PORTFOLIO
(10) Withdrawal of Income/Principal – Subject to availability of funds and the non-diminution of the Portfolio below P1 million, the Principal may withdraw the income/principal of the Portfolio or portion thereof upon written instruction or order given to the Investment Manager. The Investment Manager shall not be required to see as to the application of the income/principal so withdrawn from the Portfolio. Any income of the Portfolio not withdrawn shall be accumulated and added to the principal of the Portfolio for further investment and reinvestment.
(11) Non-alienation of Encumbrance of the Portfolio or Income – During the effectivity of this Agreement, the Principal shall not assign or encumber the Portfolio or its income or any portion thereof in any manner whatsoever to any person without the prior written consent of the Investment Manager.
EFFECTIVITY AND TERMINATION
(12) Term – This Agreement shall take effect from the date of signing hereof and shall be in full force and effect until terminated by either party by giving written notice thereof to the other at least _______( ) days prior to the termination date.
(13) Powers upon Liquidation – The powers, duties and discretion conferred upon the Investment Manager by virtue of this Agreement shall continue for the purpose of liquidation and return of the Portfolio, after the notice of termination of this Agreement has been served in writing, until final delivery of the Portfolio to the Principal.
(14) Accounting of Transaction – Within________( ) days after the termination of this Agreement, the Investment Manager shall submit to the Principal an accounting of all transactions effected by it since the last report up to the date of termination. Upon the expiration of the _________( ) days from the date of submission, the Investment Manager shall forever be released and discharged from all liability and accountability to anyone with respect to the Portfolio or to the propriety of its acts and transactions shown in such accounting, except with respect to those objected to in writing by the Principal within the_________( ) day period.
(15) Remittance of Net Assets of the Portfolio – Upon termination of the Agreement, the Investment Manager shall turn over all assets of the Portfolio which may or may not be in cash to the Principal less the payment of the fees provided in this Agreement in carrying out its functions or in the exercise of its powers and authorities.
|SIGNED IN THE PRESENCE OF:|