FORUM FUNDS INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of October
9, 2009, by and between Forum Funds, a Delaware statutory trust, with its
principal office and place of business at Three Xxxxx Xxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxx 00000 (the “Trust”), and Tocqueville Asset Management L.P. a
Delaware limited partnership, with its principal office and place of business at
00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000 (the “Adviser”).
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 (the “Shares”), in separate series;
and
WHEREAS, the Trust desires
that the Adviser perform investment advisory services for each series of the
Trust listed in Appendix A hereto, as may be amended from time to time, (the
“Fund”), and the Adviser 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 Trust
and the Adviser hereby agree as follows:
SECTION 1. APPOINTMENT;
DELIVERY OF DOCUMENTS
(a) The
Trust hereby employs the Adviser, subject to the supervision of the Board of
Trustees of the Trust (“Board”), to manage the investment and reinvestment of
the assets in the Fund and to provide other services as specified
herein. The Adviser accepts this employment and agrees to render its
services for the compensation set forth herein.
(b) In
connection therewith, the Trust shall deliver to the Adviser copies
of: (i) the Trust’s Trust Instrument and Bylaws (collectively, as
amended from time to time, “Organic Documents”); (ii) the Trust’s Registration
Statement and all amendments thereto with respect to the Fund 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 (the “Registration
Statement”); (iii) the Trust’s current Prospectuses and Statements of Additional
Information of the Fund (collectively, as currently in effect and as amended or
supplemented, the “Prospectus”); (iv) each plan of distribution or similar
documents adopted by the Trust on behalf of the Fund under Rule 12b-1 of the
1940 Act and each current shareholder service plan or similar document adopted
by the Trust on behalf of the Fund; and (v) all written policies and procedures
adopted by the Trust with respect to the Fund that are relevant to the services
provided by the Adviser (e.g., repurchase agreement procedures, Rule 17a-7
Procedures and Rule 17e-1 Procedures), and shall promptly furnish the Adviser
with all amendments of or supplements to the foregoing (collectively the
“Procedures”). The Trust shall deliver to the Adviser: (v)
a certified copy of the resolution of the Board, including a majority of the
Trustees who are not interested persons (as defined in the 1940 Act), appointing
the Adviser and any subadviser and approving this Agreement and any subadvisory
agreement; (w) a certified copy of the resolution of the Fund’s shareholder(s),
if applicable, appointing the Adviser and each subadviser; (x) a copy of all
proxy
statements
and related materials relating to the Fund; and (y) a certified copy of the
resolution of the Trust electing the officers of the Trust; and (z) any other
documents, materials or information that the Adviser shall reasonably request to
enable it to perform its duties pursuant to this Agreement.
(c) The
Adviser shall deliver to the Trust a copy of its code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act (the “Code”) and its written
compliance program. The Adviser shall promptly furnish the Trust with
all amendments of or supplements to the foregoing.
SECTION 2. DUTIES OF THE
TRUST
In order for the Adviser to perform the
services required by this Agreement, the Trust: (i) shall cause
all service providers to the Trust to furnish information to the Adviser and to
assist the Adviser as may be required; and (ii) shall ensure that the Adviser
has reasonable access to all records and documents maintained by the Trust or
any service provider to the Trust.
SECTION 3. DUTIES OF THE
ADVISER
Subject to the delegation of any of the
following duties to one or more persons as permitted by Section 9 of this
Agreement, the Adviser, at its own expense, shall render the following services
to the Trust:
(a) The
Adviser will make decisions with respect to all purchases and sales of
securities and other investment assets on behalf of the Fund consistent with the
Fund’s investment objectives, policies and restrictions. To carry out
such decisions, the Adviser 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 Adviser is authorized to exercise full
discretion and act for the Trust in the same manner and with the same force and
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. The Adviser shall keep confidential the Fund’s holdings in
accordance with the Fund’s policy concerning the disclosure of such
holdings.
Consistent with Section 28(e) of the
Securities Exchange Act of 1934, as amended (the “1934 Act”) and applicable
regulations and interpretations, the Adviser may allocate brokerage on behalf of
the Fund to a broker-dealer who provide research services. Subject to
compliance with Section 28(e), the Adviser may cause Fund to pay to any
broker-dealer who provides research services a commission that exceeds the
commission the Fund might have paid to a different broker-dealer for the same
transaction if the Adviser determines, in good faith, that such amount of
commission is reasonable in relationship to the value of such brokerage or
research services provided viewed in terms of that particular transaction or the
Adviser’s overall responsibilities to
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the Fund
or its other advisory clients. The Adviser may aggregate sales and
purchase orders of the assets of the Fund with similar orders being made
simultaneously for other accounts advised by the Adviser or its
affiliates. Whenever the Adviser simultaneously places orders to
purchase or sell the same asset on behalf of a Fund and one or more other
accounts advised by the Adviser, the orders will be allocated as to price and
amount among all such accounts in a manner believed to be equitable over time to
each account.
(b) The
Adviser will report to the Board at each meeting thereof as requested by the
Board all material changes in the Fund since the prior report, and will also
keep the Board informed of important developments affecting the Trust, the Fund
and the Adviser, and on its own initiative, or as requested by the Board, will
furnish the Board from time to time with such information as the Adviser 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 maintain investments, or
otherwise. The Adviser will also furnish the Board with such
statistical and analytical information with respect to investments of the Fund
as the Adviser 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 Adviser shall comply with the directions and
policies set from time to time by the Board as well as the limitations imposed
by the Trust’s or the Fund’s policies and procedures, the Registration
Statement, the 1940 Act, the Securities Act, the 1934 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
Adviser will from time to time employ or associate with such persons as the
Adviser believes to be particularly fitted to assist in the execution of the
Adviser’s duties hereunder, the cost of performance of such duties to be borne
and paid by the Adviser. No obligation may be incurred on the Trust’s
behalf in any such respect.
(d) The
Adviser will report to the Board all matters related to the Adviser that are
material to Adviser’s performance of this Agreement. The Adviser will
notify the Trust as soon as reasonably practicable and, where possible, in
advance of any change of control of the Adviser and any changes in the key
personnel who are either the portfolio manager(s) of a Fund or senior management
of the Adviser.
(e) The
Adviser shall maintain policies and procedures relating to the services it
provides to the Trust that are reasonably designed to prevent violations of the
federal securities laws as they relate to the Trust, and shall employ personnel
to administer the policies and procedures who have the requisite level of skill
and competence required to effectively discharge its
responsibilities. The Adviser also shall provide, upon reasonable
request, the Trust’s chief compliance officer with periodic reports regarding
its compliance with the federal securities laws, and shall promptly provide
special reports in the event of any material violation of the federal securities
laws. Upon the written request of the Trust, the Adviser shall permit
the Trust or its representatives to examine the reports required to be made to
the Adviser under the Code.
(f) The
Adviser 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 0000
-0-
Xxx. The
Adviser 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 Adviser pursuant to this Agreement required to be prepared and maintained by
the Adviser 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 Adviser shall be the property of the Trust. The
Trust, or its representatives, shall have access to such books and records at
all times during the Adviser’s normal business hours. Upon the
reasonable request of the Trust, copies of any such books and records shall be
provided promptly by the Adviser to the Trust or its
representatives.
(g) The
Adviser will cooperate with the Fund’s independent public accountants and shall
take reasonable action to make all necessary information available to those
accountants for the performance of the accountants’ duties.
(h) The
Adviser will provide the Fund and the Fund’s custodian and fund accountant on
each business day with such information relating to all transactions concerning
the Fund’s assets as the Fund or the Fund’s custodian and fund accountant may
reasonably require, including but not limited to information required to be
provided under the Trust’s Portfolio Securities Valuation Procedures, provided,
however, the Adviser shall not be deemed to be the pricing agent for the
Fund.
SECTION 4. COMPENSATION;
EXPENSES
(a) In
consideration of the foregoing, the Trust shall pay the Adviser, with respect to
the Fund, a fee at an annual rate as listed in Appendix A
hereto. Such fees shall be accrued by the Trust 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
occurs. Upon the termination of this Agreement with respect to a
Fund, the Trust shall pay to the Adviser such compensation as shall be payable
prior to the effective date of termination.
(b) The
Adviser shall reimburse expenses of the Fund or waive its fees to the extent
necessary to maintain a Fund’s expense ratio at an agreed-upon amount for a
period of time specified in a separate letter of agreement. The
Adviser’s reimbursement of a Fund’s expenses shall be estimated and paid to the
Trust monthly in arrears, at the same time as the Trust’s payment to the Adviser
for such month.
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(c) No
fee shall be payable hereunder with respect to that portion of Fund assets which
are invested in registered, open-end management investment companies for which
the Adviser serves as investment adviser or subadviser and for which the Adviser
already receives an advisory fee.
(d) The
Trust shall be responsible for and assumes the obligation for payment of all of
its expenses not specifically waived, assumed or agreed to be paid by the
Adviser, including but not limited to: (i) the fee payable under this Agreement;
(ii) the fees payable to each administrator under an agreement between the
administrator and the Trust; (iii) expenses of issue, repurchase and redemption
of Shares; (iv) interest charges, taxes, brokerage fees and commissions, and
dividends on short sales; (v) premiums of insurance for the Trust, its trustees
and officers, and fidelity bond premiums; (vi) fees and expenses of third
parties, including the Trust’s independent public accountant, custodian,
transfer agent, dividend disbursing agent and fund accountant; (vii) fees of
pricing, interest, dividend, credit and other reporting services; (viii) costs
of membership in trade associations; (ix) telecommunications expenses; (x)
funds’ transmission expenses; (xi) auditing, legal and compliance expenses;
(xii) costs of forming the Trust and maintaining its existence; (xiii) costs of
preparing, filing and printing the Trust’s Prospectuses, subscription
application forms and shareholder reports and other communications and
delivering them to existing shareholders, whether of record or beneficial; (xiv)
expenses of meetings of shareholders and proxy solicitations therefor; (xv)
costs of maintaining books of original entry for portfolio and fund accounting
and other required books and accounts, of calculating the net asset value of
Shares and of preparing tax returns; (xvi) costs of reproduction, stationery,
supplies and postage; (xvii) fees and expenses of the Trust’s trustees and
officers; (xviii) the costs of personnel (who may be employees of the Adviser,
an administrator or their respective affiliated persons) performing services for
the Trust; (xix) costs of Board, Board committee and other corporate meetings;
(xx) SEC registration fees and related expenses; (xxi) state, territory or
foreign securities laws registration fees and related expenses; and (xxii) all
fees and expenses paid by the Trust in accordance with any distribution or
service plan or agreement related to similar matters, unless the Adviser agrees
otherwise to pay for such expense.
SECTION 5. STANDARD OF
CARE
(a) The
Trust shall expect of the Adviser, and the Adviser will give the Trust the
benefit of, the Adviser’s best judgment and efforts in rendering its services to
the Trust. The Adviser shall not be liable hereunder for any mistake
of judgment or mistake of law or for any loss arising out of any investment or
for any act or omission taken or in any event whatsoever with respect to the
Trust, the Fund or any of the Fund’s shareholders in the absence of bad faith,
willful misfeasance or gross negligence in the performance of the Adviser’s
duties or obligations under this Agreement or by reason of the Adviser’s
reckless disregard of its duties and obligations under this
Agreement.
.
(b) Adviser
shall not be liable for the errors of other service providers to the Trust,
including the errors of pricing services, administrator, fund accountant,
custodian or transfer agent to the Trust. The Adviser shall not be
liable to the Trust for any action taken or failure to act in good faith
reliance upon: (i) information, instructions or requests, whether oral or
written,
-5-
with
respect to the Fund made to the Adviser by a duly authorized officer of the
Trust; (ii) the advice of counsel to the Trust; and (iii) any written
instruction or certified copy of any resolution of the Board or any agent of the
Board.
(c) The
Adviser 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 Adviser’s
employees), fire, mechanical breakdowns, flood or catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation, communication
or power supply.
SECTION
6. EFFECTIVENESS, DURATION AND TERMINATION
(a) This
Agreement shall become effective with respect to a Fund as of the date first
written above; provided, that with respect to any Fund created after the initial
date of this Agreement, this Agreement shall take effect as of the date
specified in Appendix A to this Agreement following approval (i) by a vote of
the majority of those trustees of the Trust who are not parties to this
Agreement or interested persons of such party, and (ii) if required by the 1940
Act or applicable staff interpretations thereof, by vote of a majority of that
Fund's outstanding voting securities. or, if a particular Fund is not in
existence on that date, on the date specified in the amendment to Appendix A to
this Agreement relating to such Fund or, if no date is specified, the date on
which such amendment is executed) after approval by (1) a majority of the
outstanding voting securities of that Fund and (2) a majority of the Board who
are not interested parties of the Trust
(b) This
Agreement shall, with respect to a Fund, if not earlier terminated as provided
herein, terminate upon the earlier of (i) 150 days from the date of its
effectiveness or (ii) approval by Fund shareholders of a separate advisory
agreement between the Adviser and the Trust on behalf of the Fund.
(c) This
Agreement may be terminated with respect to a Fund at any time, without the
payment of any penalty: (i) by the Board or by a vote of a majority
of the outstanding voting securities of the Fund on 60 days’ written notice to
the Adviser; or (ii) by the Adviser on 60 days’ written notice to the Trust;
provided however that the Board may terminate this Agreement without prior
written notice where the Board reasonably determines that the Adviser can not or
is not expected to render reasonable quality of services. This
Agreement shall terminate immediately upon its assignment.
SECTION
7. ACTIVITIES OF THE ADVISER
Except to the extent necessary to
perform its obligations hereunder, nothing herein shall be deemed to limit or
restrict the Adviser’s right, or the right of any of the Adviser’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
entity.
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SECTION 8. REPRESENTATIONS
OF ADVISER.
The Adviser represents and warrants
that: (i) it is registered as an investment adviser under the
Advisers Act (and will continue to be so registered for so long as this
Agreement remains in effect); (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement; (iii)
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 (iv) will promptly
notify the Trust of the occurrence of any event that would disqualify the
Adviser from serving as an investment adviser of an investment company pursuant
to Section 9(a) of the 1940 Act or otherwise.
SECTION
9. SUBADVISERS
At its own expense, the Adviser may
carry out any of its obligations under this Agreement by employing, subject to
the direction and control of the Board, one or more persons who are registered
as investment advisers pursuant to the Advisers Act or who are exempt from
registration thereunder (“Subadvisers”). Each Subadviser’s employment
will be evidenced by a separate written agreement approved by the Board and, if
required, by the shareholders of the applicable Fund. The Adviser
shall not be liable hereunder for any act or omission of any Subadviser, except
to exercise good faith in the employment of the Subadviser and except with
respect to matters as to which the Adviser assumes responsibility in
writing.
SECTION
10. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the
shareholders of the Fund shall not be personally liable for any obligations of
the Trust or of any Fund under this Agreement, and the Adviser agrees that, in
asserting any rights or claims under this Agreement, it shall look only to the
assets and property of the Trust or Fund to which the Adviser’s rights or claims
relate in settlement of such rights or claims, and not to the Trustees of the
Trust or the shareholders of any Fund.
SECTION 11. RIGHTS TO
NAME
If the Adviser ceases to act as
investment adviser to the Trust or any Fund whose name includes the term
“Tocqueville” (the “Xxxx”) or if the Adviser requests in writing, the Trust
shall take prompt action to change the name of the Trust or any such Fund to a
name that does not include the Xxxx. The Adviser may from time to
time make available without charge to the Trust for the Trust’s use any marks or
symbols owned by the Adviser, including marks or symbols containing the Xxxx or
any variation thereof, as the Adviser deems appropriate. Upon the
Adviser’s request in writing, the Trust shall cease to use any such xxxx or
symbol at any time. The Trust acknowledges that any rights in or to
the Xxxx and any such marks or symbols which may exist on the date of this
Agreement or arise hereafter are, and under any and all circumstances shall
continue to be, the sole property of the Adviser. The Adviser may
permit other parties, including other investment companies, to use the Xxxx in
their names without the
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consent
of the Trust. The Trust shall not use the Xxxx in conducting any
business other than that of an investment company registered under the 1940 Act
without the permission of the Adviser.
SECTION
12. 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,
if required by the 1940 Act, by a vote of a majority of the outstanding voting
securities of any Fund thereby affected.
(b) No
amendment to this Agreement or the termination of this Agreement with respect to
a Fund shall affect this Agreement as it pertains to any other Fund, nor shall
any such amendment require the vote of the shareholders of any other
Fund.
(c) Neither
party to this Agreement shall be liable to the other party for consequential
damages under any provision of this Agreement.
(d) 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.
(e) This
Agreement constitutes the entire agreement between the parties hereto and
supersedes any prior agreement between those parties with respect to the subject
matter hereof, whether oral or written.
(f) 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.
(g) 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.
(h) Section
headings in this Agreement are included for convenience only and are not to be
used to construe or interpret this Agreement.
(i) Notices,
requests, instructions and communications received by the parties at their
respective principal places of business, as indicated above, or at such other
address as a party may have designated in writing, shall be deemed to have been
properly given.
(j) Notwithstanding
any other provision of this Agreement, the parties agree that the assets and
liabilities of the Fund of the Trust are separate and distinct from the assets
and liabilities of each other Fund and that no Fund shall be liable or shall be
charged for any debt, obligation or liability of any other Fund, whether arising
under this Agreement or otherwise.
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(k) No
affiliated person, employee, agent, director, officer or manager of the Adviser
shall be liable at law or in equity for the Adviser’s obligations under this
Agreement.
(l) 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. Where the effect of a requirement
of the 1940 Act reflected in any provision of this Agreement is altered by a
rule, regulation or order of the SEC, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
(m) 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.
(n) The
Adviser shall not use the name of the Trust or any Fund on any checks, bank
drafts, bank statements or forms for other than internal use in a manner not
approved by the Trust prior thereto in writing; provided however, that the
approval of the Trust shall not be required for the use of the Trust’s or Fund’s
name which merely refers in accurate and factual terms to the Trust or Fund in
connection with Adviser’s role hereunder or which is required by any appropriate
regulatory, governmental or judicial authority; and further provided that in no
event shall such approval be unreasonably withheld or delayed.
(o) The
provisions of Sections 5, 6, 10 and 12 shall survive any termination of this
Agreement.
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed all as of the day
and year first above written.
______________________________________
Xxxxxx X. Xxxx
President
TOCQUEVILLE
ASSET MANAGEMENT L.P.
______________________________________
By:
Title:
-9-Appendix
A
|
Funds
of the Trust
|
Fee
as a % of the Annual
Average
Daily Net Assets of the Fund
|
|
Tocqueville
Long/Short Sector Fund or such other name as determined by the officers of
the Trust, with the advice of Trust Counsel, such determination being
conclusively evidenced by an appropriate filing with the U.S. Securities
and Exchange Commission.
|
1.00
|
A-1
