EXHIBIT (D)(27)
FORM OF SUBADVISORY AGREEMENT
BETWEEN
LIBERTY STREET ADVISORS, INC.
AND HORIZON ASSET MANAGEMENT, INC.
AGREEMENT made as of the __ day of April, 2007, by and between Liberty
Street Advisors, Inc., a New York corporation with its principal office and
place of business at 00 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000 (the
"Adviser") and Horizon Asset Management, Inc., a New York corporation with its
principal office and place of business at 000 Xxxx Xxxxxx Xxxxx, 0xx Xxxxx
Xxxxx, Xxx Xxxx, XX 00000 (the "Subadviser").
WHEREAS, Adviser has entered into an Investment Advisory Agreement dated the
__ day of April, 2007 ("Advisory Agreement") with Forum Funds, a Delaware
statutory trust, with its principal office and place of business at Xxx
Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx 00000, (the "Trust");
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended, (the "1940 Act"), as an open-end, management investment company and
may issue its shares of beneficial interest, no par value, in separate series;
WHEREAS, pursuant to the Advisory Agreement, and subject to the direction
and control of the Board of Trustees of the Trust (the "Board"), the Adviser
acts as investment adviser for the series of the Trust listed on Schedule A
hereto (the "Fund");
WHEREAS, the Advisory Agreement permits the Adviser, subject to the
supervision of the Board, to delegate certain of its duties under the Advisory
Agreement to other registered investment advisers subject to the requirements
of the 1940 Act;
WHEREAS, it is intended that the Trust be a third-party beneficiary under this
Agreement; and
WHEREAS, Adviser desires to retain the Subadviser to furnish investment
advisory services for the Fund and Subadviser is willing to provide those
services on the terms and conditions set forth in this Agreement;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Adviser and the Subadviser hereby agree as
follows:
SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) The Adviser hereby appoints and employs Subadviser, subject to the
direction and control of the Board, to manage the investment and reinvestment
of the assets in the Fund and, without limiting the generality of the
foregoing, to provide other services as specified herein.
The Subadviser accepts this employment and agrees to render its services for
the compensation set forth herein.
(b) In connection therewith, the Adviser has delivered to the Subadviser
copies of (i) the Trust's Trust Instrument and Bylaws (collectively, as amended
from time to time, "Organic Documents"), (ii) the Trust's current Prospectuses
and Statements of Additional Information for the Fund (collectively, as
currently in effect and as amended or supplemented, the "Prospectus" or
"Registration Statement") filed with the U.S. Securities and Exchange
Commission ("SEC") pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), or the 1940 Act, (iii) each plan of distribution or similar
document adopted by the Trust under Rule 12b-1 under the 1940 Act ("Plan") and
each current shareholder service plan or similar document adopted by the Trust
for the Fund ("Service Plan"); and (iv) all procedures adopted by the Trust
with respect to the Fund (i.e., repurchase agreement procedures), and shall
promptly furnish the Subadviser with all amendments of or supplements to the
foregoing. The Adviser shall deliver to the Subadviser: (x) a certified copy of
the resolution of the Board appointing the Subadviser and authorizing the
execution and delivery of this Agreement; (y) a copy of all proxy statements
and related materials relating to the Fund; and (z) any other documents,
materials or information that the Subadviser shall reasonably request to enable
it to perform its duties pursuant to this Agreement.
(c) The Subadviser has delivered to the Adviser and the Trust (i) a copy of
its Form ADV as most recently filed with the SEC; (ii) a copy of its code of
ethics complying with the requirements of Rule 17j-1 under the 1940 Act (the
"Code"); and (iii) a copy of its compliance manual pursuant to applicable
regulations, including its proxy voting policies and procedures, which will be
included in the Trust's registration statement. The Subadviser shall promptly
furnish the Adviser and Trust with all amendments of or supplements to the
foregoing at least annually.
SECTION 2. DUTIES OF THE ADVISER
In order for the Subadviser to perform the services required by this
Agreement, the Adviser (i) shall cause all service providers to the Trust to
furnish information to the Subadviser and assist the Subadviser as may be
required and (ii) shall ensure that the Subadviser has reasonable access to all
records and documents maintained by the Trust, the Adviser or any service
provider to the Trust and (iii) shall deliver to the Subadviser all material it
provides to the Board in accordance with the Advisory Agreement.
SECTION 3. DUTIES OF THE SUBADVISER
(a) The Subadviser will make decisions with respect to all purchases and
sales of securities and other investment assets in the Fund to the extent such
authority is delegated by the Adviser. To carry out such decisions, the
Subadviser is hereby authorized, as agent and attorney-in-fact for the Trust,
for the account of, at the risk of and in the name of the Trust, to place
orders and issue instructions with respect to those transactions of the Fund.
In all purchases, sales and other transactions in securities and other
investments for the Fund, the Subadviser is authorized to exercise full
discretion and act for the Trust in the same manner and with the same force and
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effect as the Trust might or could do with respect to such purchases, sales or
other transactions, as well as with respect to all other things necessary or
incidental to the furtherance or conduct of such purchases, sales or other
transactions, including voting of proxies with respect to securities owned by
the Fund, subject to such proxy voting policies as approved by the Board.
Consistent with Section 28(e) of the Securities and Exchange Act of 1934, as
amended, the Subadviser may allocate brokerage on behalf of the Fund to
broker-dealers who provide brokerage or research services. The Subadviser may
aggregate sales and purchase orders of the assets of the Fund with similar
orders being made simultaneously for other accounts advised by the Subadviser
or its affiliates. Whenever the Subadviser simultaneously places orders to
purchase or sell the same asset on behalf of the Fund and one or more other
accounts advised by the Subadviser, the Subadviser will allocate the order as
to price and amount among all such accounts in a manner believed to be
equitable over time to each account.
(b) The Subadviser will report to the Board at each meeting thereof as
requested by the Adviser or the Board all material changes in the Fund since
the prior report, and will also keep the Board and the Adviser informed of
important developments affecting the Trust, the Fund and the Subadviser, and on
its own initiative, will furnish the Board from time to time with such
information as the Subadviser may believe appropriate for this purpose, whether
concerning the individual companies whose securities are included in the Fund's
holdings, the industries in which they engage, the economic, social or
political conditions prevailing in each country in which the Fund maintains
investments, or otherwise. The Subadviser will also furnish the Board and the
Adviser with such statistical and analytical information with respect to
investments of the Fund as the Subadviser may believe appropriate or as the
Board reasonably may request. In making purchases and sales of securities and
other investment assets for the Fund, the Subadviser will bear in mind the
policies and procedures set from time to time by the Board as well as the
limitations imposed by the Organic Documents and Registration Statement, the
limitations in the 1940 Act, the Securities Act, the Internal Revenue Code of
1986, as amended, and other applicable laws and the investment objectives,
policies and restrictions of the Fund.
(c) The Subadviser will from time to time employ or associate with such
persons as the Subadviser believes to be particularly fitted to assist in the
execution of the Subadviser's duties hereunder, the cost of performance of such
duties to be borne and paid by the Subadviser. No obligation may be incurred on
the Trust's or Adviser's behalf in any such respect.
(d) The Subadviser will report to the Board and the Adviser all material
matters related to the Subadviser. On an annual basis, the Subadviser shall
report on its compliance with its Code and its compliance policies and
procedures to the Adviser and to the Board and upon the written request of the
Adviser or the Trust, the Subadviser shall permit the Adviser and the Trust, or
their respective representatives to examine the reports required to be made to
the Subadviser under the Code and its compliance policies and procedures. The
Subadviser will notify the Adviser and the Trust of any change of control of
the Subadviser and any changes in the key personnel who are either the
portfolio manager(s) of the Fund or senior management of the Subadviser, in
each case prior to or promptly after such change.
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(e) The Subadviser will maintain records relating to its portfolio
transactions and placing and allocation of brokerage orders as are required to
be maintained by the Trust under the 1940 Act. The Subadviser shall prepare and
maintain, or cause to be prepared and maintained, in such form, for such
periods and in such locations as may be required by applicable law, all
documents and records relating to the services provided by the Subadviser
pursuant to this Agreement required to be prepared and maintained by the
Subadviser or the Trust pursuant to applicable law. To the extent required by
law, the books and records pertaining to the Trust, which are in possession of
the Subadviser, shall be the property of the Trust. The Adviser and the Trust,
or their respective representatives, shall have access to such books and
records at all times during the Subadviser's normal business hours. Upon the
reasonable request of the Adviser or the Trust, copies of any such books and
records shall be provided promptly by the Subadviser to the Adviser and the
Trust, or their respective representatives.
(f) The Subadviser will cooperate with the Fund's independent public
accountants and shall take reasonable action to make all necessary information
available to the accountants for the performance of the accountants' duties.
(g) The Subadviser will provide the Fund's custodian and fund accountant on
each business day with such information relating to all transactions concerning
the Fund's assets under the Subadviser's control as the custodian and fund
accountant may reasonably require. In accordance with procedures adopted by the
Board, the Subadviser is responsible for assisting in the fair valuation of all
Fund assets and will use its reasonable efforts to arrange for the provision of
prices from a parties who are not affiliated persons of the Subadviser for each
asset for which the Fund's fund accountant does not obtain prices in the
ordinary course of business.
(h) The Subadviser shall authorize and permit any of its directors, officers
and employees who may be elected as Trustees or officers of the Trust to serve
in the capacities in which they are elected.
(i) The Subadviser shall have no duties or obligations pursuant to this
Agreement (other than the continuation of its preexisting duties and
obligations) during any period in which the Fund invests all (or substantially
all) of its investment assets in a registered, open-end management investment
company, or separate series thereof, in accordance with Section 12(d)(1)(E)
under the 1940 Act.
SECTION 4. COMPENSATION; EXPENSES
(a) In consideration of the foregoing, the Adviser shall pay the Subadviser,
with respect to the Fund, a fee at an annual rate as listed in Appendix B
hereto. Such fees shall be accrued by the Adviser daily and shall be payable
monthly in arrears on the first business day of each calendar month for
services performed hereunder during the prior calendar month. If fees begin to
accrue in the middle of a month or if this Agreement terminates before the end
of any month, all fees for the period from that date to the end of that month
or from the beginning of that month to the date of termination, as the case may
be, shall be prorated according to the proportion that the period bears to the
full month in which the effectiveness or termination
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occurs. Upon the termination of this Agreement with respect to the Fund, the
Adviser shall pay to the Subadviser such compensation as shall be payable prior
to the effective date of termination.
(b) During the term of this Agreement, Subadviser will pay all expenses
incurred by it in connection with its activities under this Agreement other
than the cost of securities and other investments (including brokerage
commissions and other transaction charges, if any) purchased for a Fund. The
Subadviser shall, at its sole expense, employ or associate itself with such
persons as it reasonably believe to be particularly fitted to assist it in the
execution of its duties under the Agreement. The Subadviser shall not be
responsible for the Trust's, a Fund's or the Adviser's expenses, including any
extraordinary and non-recurring expenses.
(c) No fee shall be payable hereunder with respect to the Fund during any
period in which the Fund invests all (or substantially all) of its investment
assets in a registered, open-end, management investment company, or separate
series thereof, in accordance with Section 12(d)(1)(E) under the 1940 Act.
SECTION 5. STANDARD OF CARE
(a) The Adviser shall expect of the Subadviser, and the Subadviser will give
the Adviser the benefit of, the Subadviser's best judgment and efforts in
rendering its services hereunder. The Subadviser shall not be liable to the
Adviser or the Trust hereunder for any mistake of judgment or in any event
whatsoever, except for lack of good faith, provided that nothing herein shall
be deemed to protect, or purport to protect, the Subadviser against any
liability to the Adviser or the Trust to which the Subadviser would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of the Subadviser's duties hereunder, or by reason of the
Subadviser's reckless disregard of its obligations and duties hereunder.
(b) The Subadviser shall not be liable to the Adviser or the Trust for any
action taken or failure to act in good faith reliance upon: (i) information,
instructions or requests, whether oral or written, with respect to the Fund
made to the Subadviser by a duly authorized officer of the Adviser or the
Trust; (ii) the advice of counsel to the Trust; and (iii) any written
instruction or certified copy of any resolution of the Board.
(c) The Subadviser shall not be responsible or liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control
including, without limitation, acts of civil or military authority, national
emergencies, labor difficulties (other than those related to the Subadviser's
employees), fire, mechanical breakdowns, flood or catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation, communication
or power supply.
(d) The parties hereto acknowledge and agree that the Trust is a third-party
beneficiary as to the covenants, obligations, representations and warranties
undertaken by the
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Subadviser under this Agreement and as to the rights and privileges to which
the Adviser is entitled pursuant to this Agreement, and that the Trust is
entitled to all of the rights and privileges associated with such
third-party-beneficiary status.
SECTION 6. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to the Fund
immediately upon the later of approval by a majority of the Trust's Trustees
who are not parties to this Agreement or interested persons of any such party
(other than as trustees of the Trust) and, if required by applicable law, by a
vote of a majority of the outstanding voting securities of the Fund.
(b) This Agreement shall remain in effect with respect to the Fund for a
period of two years from the date of its effectiveness and shall continue in
effect for successive annual periods with respect to the Fund; provided that
such continuance is specifically approved at least annually (i) by the Board or
by the vote of a majority of the outstanding voting securities of the Fund,
and, in either case, (ii) by a majority of the Trust's Trustees who are not
parties to this Agreement or interested persons of any such party (other than
as trustees of the Trust); provided further, however, that if the continuation
of this Agreement is not approved as to the Fund, the Subadviser may continue
to render to that Fund the services described herein in the manner and to the
extent permitted by the 1940 Act and the rules and regulations thereunder.
(c) This Agreement may be terminated with respect to the Fund at any time,
without the payment of any penalty, (i) by the Board, by a vote of a majority
of the outstanding voting securities of the Fund or by the Adviser on 60 days'
written notice to the Subadviser or (ii) by the Subadviser on 60 days' written
notice to the Trust. This Agreement shall terminate immediately (x) upon its
assignment or (y) upon termination of the Advisory Agreement.
SECTION 7. ACTIVITIES OF THE SUBADVISER
Except to the extent necessary to perform its obligations hereunder, nothing
herein shall be deemed to limit or restrict the Subadviser's right, or the
right of any of the Subadviser's directors, officers or employees to engage in
any other business or to devote time and attention to the management or other
aspects of any other business, whether of a similar or dissimilar nature, or to
render services of any kind to any other corporation, trust, firm, individual
or association.
SECTION 8. REPRESENTATIONS OF SUBADVISER.
The Subadviser represents and warrants to the Adviser that:
(a) It is either registered as an investment adviser under the Investment
Advisers Act of 1940, as amended ("Advisers Act") (and will continue to be so
registered for so long as this Agreement remains in effect) or exempt from
registration under the Advisers Act;
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(b) It is not prohibited by the 1940 Act or the Advisers Act from performing
the services contemplated by this Agreement;
(c) It has met, and will seek to continue to meet for so long as this
Agreement remains in effect, any other applicable federal or state
requirements, or the applicable requirements of any self-regulatory agency,
necessary to be met in order to perform the services contemplated by this
Agreement and
(d) It will promptly notify the Adviser and the Trust of the occurrence of
any event that would disqualify the Subadviser from serving as an investment
adviser of an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise.
SECTION 9. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the shareholders of the Fund shall not be
liable for any obligations of the Trust or of the Fund under this Agreement,
and the Subadviser agrees that, in asserting any rights or claims under this
Agreement, it shall look only to the assets and property of the Trust or the
Fund to which the Subadviser's rights or claims relate in settlement of such
rights or claims, and not to the Trustees of the Trust or the shareholders of
the Fund.
SECTION 10. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any manner
except by a written agreement properly authorized and executed by both parties
hereto and approved by the Trust in the manner set forth in Section 6(b) hereof.
(b) Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement.
(c) This Agreement shall be governed by, and the provisions of this
Agreement shall be construed and interpreted under and in accordance with, the
laws of the State of Delaware.
(d) This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof, whether oral or written.
(e) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of the counterparts taken together shall be deemed to
constitute one and the same instrument.
(f) If any part, term or provision of this Agreement is held to be illegal,
in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid. This Agreement shall be construed as if drafted jointly by both the
Adviser and
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Subadviser and no presumptions shall arise favoring any party by virtue of
authorship of any provision of this Agreement.
(g) Section headings in this Agreement are included for convenience only and
are not to be used to construe or interpret this Agreement.
(h) Notices, requests, instructions and communications received by the
parties at their respective principal places of business, or at such other
address as a party may have designated in writing, shall be deemed to have been
properly given.
(i) No affiliated person, employee, agent, director, officer or manager of
the Subadviser shall be liable at law or in equity for the Subadviser's
obligations under this Agreement.
(j) The terms "vote of a majority of the outstanding voting securities",
"interested person", "affiliated person," "control" and "assignment" shall have
the meanings ascribed thereto in the 1940 Act.
(k) Each of the undersigned warrants and represents that they have full
power and authority to sign this Agreement on behalf of the party indicated and
that their signature will bind the party indicated to the terms hereof and each
party hereto warrants and represents that this Agreement, when executed and
delivered, will constitute a legal, valid and binding obligation of the party,
enforceable against the party in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed all as of the day and year first above written.
LIBERTY STREET ADVISORS, INC.
------------------------------
Name:
Title:
HORIZON ASSET MANAGEMENT, INC.
------------------------------
Name:
Title:
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FORM OF
SUBADVISORY AGREEMENT
BETWEEN
LIBERTY STREET ADVISORS, INC.
AND HORIZON ASSET MANAGEMENT, INC.
APPENDIX A
SERIES OF THE TRUST:
Liberty Street Horizon Fund
A-1
FORM OF
SUBADVISORY AGREEMENT
BETWEEN
LIBERTY STREET ADVISORS, INC.
AND HORIZON ASSET MANAGEMENT, INC.
APPENDIX B
FEES AND EXPENSES
0.50% of the Fund's average daily net assets
B-1
