WORLD FUNDS TRUST INVESTMENT ADVISORY AGREEMENT
Investment Advisory Agreement (the “Agreement”) dated this 4th day of April, 2011 by and between the World Funds Trust, a Delaware statutory trust (herein called the “Trust”), and Union Street Partners, LLC, a Delaware limited liability company (the “Adviser”) and a registered investment adviser under the Investment Advisers Act of 1940, as amended.
WHEREAS, the Trust is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), consisting of one or more series of shares, each having its own investment policies and each with one or more separate classes of shares; and
WHEREAS, the Trust desires to retain the Adviser to furnish investment advisory and management services to Union Street Partners Value Fund, a series of the Trust, subject to the control of the Trust’s Board of Trustees (the “Board” or the “Trustees”), and the Adviser is willing to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and intending to be bound, it is agreed between the parties hereto as follows:
| 1. |
Appointment. The Trust hereby appoints the Adviser to act
as the Adviser to the series of the Trust listed in Schedule A (each a "Fund") for
the period and on the terms set forth in this Agreement. The Adviser accepts such
appointment and agrees to furnish the services herein set forth, for the compensation
herein provided. |
| 2. | Duties of the Adviser. |
| a. | The Trust
employs the Adviser to manage the investments and reinvestment of the assets of
each Fund, and to continuously review, supervise, and administer the investment
program of each Fund, to determine in its discretion the securities to be purchased
or sold, to provide the Trust and Commonwealth Shareholder Services, Inc. (the Administrator”)
with records concerning the Adviser’s activities which the Trust is required
to maintain, and to render regular reports to the Trust’s officers and Board
and to the Administrator, concerning the Adviser’s discharge of the foregoing
responsibilities. |
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| b. | The Adviser
shall discharge the foregoing responsibilities subject to the control of the Board
and in compliance with such policies as the Board may from time to time establish,
and in compliance with the objectives, policies, and limitations for each Fund as
set forth in its prospectus and statement of additional information, as amended
from time to time, and applicable laws and regulations. |
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| c. | The Trust
will instruct each of its agents and contractors to cooperate in the conduct of
the business of each Fund. |
| d. | The Adviser
accepts such employment and agrees, at its own expense, to render the services and
to provide the office space, furnishings, and equipment and the personnel required
by it to perform the services on the terms and for the compensation provided herein. |
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| e. | Any of the
duties, responsibilities and obligations of the Adviser specified in this Section
2 and throughout the remainder of the Agreement with respect to the Fund may be
delegated by the Adviser, at the Adviser’s expense, to an appropriate party
(a “Sub-Adviser”), subject to such approval by the Board and the shareholders
of the Fund to the extent required by the 0000 Xxx. The Adviser shall oversee the
performance of delegated duties by any Sub-Adviser and shall furnish the Board
with periodic reports concerning the performance of the delegated responsibilities
by such Sub-Adviser. The retention of a Sub-Adviser by the Adviser pursuant to
this Paragraph (2)(e) shall in no way reduce the responsibilities and obligations
of the Adviser under this Agreement and the Adviser shall be responsible to the
Trust for all acts or omissions of any Sub-Adviser party in connection with the
performance of the Adviser’s duties under this Agreement. Insofar as the provisions
of this Agreement impose any restrictions, conditions, limitations or requirements
on the Adviser, the Adviser shall take measures through its contract with, or its
oversight of, the Sub-Adviser that attempt to impose similar (insofar as the circumstances
may require) restrictions, conditions, limitations or requirements on the Sub-Adviser. |
| 3. | Fund Transactions. |
| a. | The Adviser
is authorized to select the brokers and dealers that will execute the purchases
and sales of Fund securities for each Fund and is directed to use its best efforts
to obtain the best price and execution for each Fund’s transactions in accordance
with the policies of the Trust as set forth from time to time in each Fund’s
prospectus and statement of additional information. The Adviser will promptly communicate
to the Trust and to the Administrator such information relating to Fund transactions
as they may reasonably request. |
|
| b. | It is understood
that the Adviser will not be deemed to have acted unlawfully, or to have breached
a fiduciary duty to the Trust or be in breach of any obligation owing to the Trust
under this Agreement, or otherwise, by reason of its having directed a securities
transaction on behalf of the Trust to an unaffiliated broker-dealer in compliance
with the provisions of Section 28(e) of the Securities Exchange Act of 1934 or as
described from time to time by each Fund’s prospectus and statement of additional
information. Subject to the foregoing, the Adviser may direct any transaction of
each Fund to a broker which is affiliated with the Adviser in accordance with, and
subject to, the policies and procedures approved by the Board pursuant to Rule 17e-1 under the 1940 Act. Such brokerage services are not deemed to be provided under
this Agreement. |
| 4. | Compensation of the Adviser. |
| a. | For the services
to be rendered by the Adviser under this Agreement, each Fund shall pay to the Adviser,
and the Adviser will accept as full compensation, a fee accrued daily at the annual
rates, listed in Schedule A, on the average net assets of each Fund and paid monthly. |
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| b. | All rights
of compensation under this Agreement for services performed as of the termination
date shall survive the termination of this Agreement. |
| 5. |
Expenses. During the term of this Agreement, the Adviser
will pay all expenses incurred by it in connection with the management of each Fund.
Notwithstanding the foregoing, each Fund shall pay the expenses and costs of each
Fund for the following: |
| a. | Taxes; | |
| b. | Brokerage fees and commissions with regard to Fund transactions; | |
| c. | Interest charges, fees and expenses of the custodian of the securities; | |
| d. | Fees and expenses of the Trust’s transfer agent and the Administrator; | |
| e. | Its proportionate share of auditing and legal expenses; | |
| f. | Its proportionate share of the cost of maintenance of corporate existence; | |
| g. | Its proportionate
share of compensation of the Trustees who are not interested persons of the Adviser
as that term is defined by the 1940 Act; |
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| h. | Its proportionate share of the costs of corporate meetings; | |
| i. | Federal and
State registration fees and expenses incident to the sale of shares of each Fund; |
|
| j. | Costs of printing
and mailing prospectuses for each Fund’s shares, Fund reports and notices to
existing shareholders; |
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| k. | The advisory
fee payable to the Adviser, as provided in paragraph 5 herein; |
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| l. | Costs of recordkeeping
(other than investment records required to be maintained by the Adviser) and daily
pricing; |
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| m. | Distribution
expenses in accordance with any Distribution Plan as and if approved by the shareholders
of each Fund; and |
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| n. | Expenses and
taxes incident to the failure of each Fund to qualify as a regulated investment
company under the provisions of the Internal Revenue Code of 1986, as amended, unless
such expenses and/or taxes arise from the negligence of another party. |
| 6. |
Reports. The Trust and the Adviser agree to furnish to
each other, if applicable, current information required for the preparation by such
parties of prospectuses, statements of additional information, proxy statements,
reports to shareholders, certified copies of their financial statements, and to
furnish to each other such other information and documents with regard to their
affairs as each may reasonably request. |
| 7. |
Status of the Adviser. The services of the Adviser to the
Trust are not to be deemed exclusive, and the Adviser shall be free to render similar
services to others so long as its services to the Trust are not impaired thereby.
Pursuant to comparable agreements, the Trust may also retain the services of the
Adviser to serve as the investment adviser to other series of the Trust. |
| 8. |
Books and Records. In compliance with the requirements
of the 1940 Act, the Adviser hereby agrees that all records which it maintains for
the Trust are the property of the Trust, and further |
agrees to
surrender promptly to the Trust any of such records upon the Trust’s request.
The Adviser further agrees to preserve for the periods prescribed by the 1940 Act,
and the rules or orders thereunder, the records required to be maintained by the
1940 Act. |
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| 9. |
Limitation of Liability of Adviser. The duties of the Adviser
shall be confined to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against the Adviser hereunder. The Adviser shall not
be liable for any error of judgment or mistake of law or for any loss suffered by
the Trust in connection with the performance of this Agreement, except a loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or negligence on
the part of the Adviser in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement. (As used in this Paragraph
10, the term "Adviser" shall include Trustees, officers, employees and other agents
of the Adviser as well as the entity itself). |
| 10. |
Permissible Interests. Trustees, agents, and shareholders of the
Trust are, or may be interested in the Adviser (or any successor thereof) as Trustees,
officers, or shareholders, or otherwise; Trustees, officers, agents, and shareholders
of the Adviser are or may be interested in the Trust as Trustees, officers, shareholders
or otherwise; and the Adviser (or any successor) is or may be interested in the
Trust as a shareholder or otherwise. In addition, brokerage transactions for the
Trust may be effected through affiliates of the Adviser if approved by the Trust’s Board, subject to the rules and regulations of the U.S. Securities and Exchange
Commission, and the policies and procedures adopted by the Trust. |
| 11. |
Duration and Termination. This Agreement shall become effective
on the date first above written subject to its approval by the shareholders of each
Fund and unless sooner terminated as provided herein, shall continue in effect for
two (2) years from that date. Thereafter, this Agreement shall be renewable for
successive periods of one year each, provided such continuance is specifically approved
annually (a) by the vote of a majority of those members of the Trust’s Board
who are not parties to this Agreement or interested persons of any such party (as
that term is defined in the 1940 Act), cast in person at a meeting called for the
purpose of voting on such approval, and (b) by vote of either the Board or of a
majority of the outstanding voting securities (as that term is defined in the 0000
Xxx) of each Fund. Notwithstanding the foregoing, this Agreement may be terminated
by each Fund or by the Trust at any time on sixty (60) days’ written notice,
without the payment of any penalty, provided that termination must be authorized
either by vote of the Board or by vote of a majority of the outstanding voting securities
of each Fund or by the Adviser on sixty (60) days’ written notice. This Agreement
will automatically terminate in the event of its assignment (as that term is defined
in the 1940 Act). |
| 12. |
Amendment of this Agreement. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No material amendment of this Agreement shall
be effective until approved by vote of the holders of a majority of each Fund’s
outstanding voting securities (as defined in the 1940 Act). |
| 13. |
Notice. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other party at
the address stated below, or at such other address as either party may advise in
writing: |
| a. | To the Trust at: 0000 Xxxxx Xxxxx Xxxxxxx Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000 | |
| b. | To the Adviser at: 000 X. Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 |
| 14. |
Miscellaneous. The captions in this Agreement are included
for convenience of reference only and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of the Agreement shall not be affected thereby. This Agreement shall
be binding and shall inure to the benefit of the parties hereto and their respective
successors. |
| 15. |
Applicable Law. This Agreement shall be construed in accordance
with, and governed by, the laws of the Commonwealth of Virginia, and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the Commonwealth
of Virginia, or any of the provisions herein, conflict with the applicable provisions
of the 1940 Act, the latter shall control. |
| 16. |
Entire Agreement. This Agreement consists of the entire
agreement of the parties with respect to the subject matter hereof and supersedes
all prior writings and understandings related thereto. |
| 17. |
Counterparts. This Agreement may be executed in two or
more counterparts, each of which, when so executed, shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument. |
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.
| UNION STREET PARTNERS, LLC | |||
| BY: | __/s/ Xxxxx X. XxXxxxxxxx | ||
| Xxxxx X. XxXxxxxxxx
Managing Member |
|||
| WORLD FUNDS TRUST | |||
| BY: | _/s/ Xxxx Xxxxx, III | ||
| Xxxx Xxxxx, III | |||
| Chairman | |||
SCHEDULE A
TO
ADVISORY AGREEMENT
BY AND BETWEEN
UNION STREET PARTNERS, LLC
AND
For the services to be rendered by the Adviser under this Agreement, each Fund shall pay to the Adviser, and the Adviser will accept as full compensation, a fee accrued daily at the annual rates, listed in the table below, on the average net assets of each Fund and paid monthly:
| Fund | Annual Rate | |
| Union Street Partners Value Fund | 1.00% |
