Exhibit 5(a)
FORUM FUNDS
INVESTMENT ADVISORY AGREEMENT
December 18, 1995
Forum Advisors, Inc.
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Dear Sirs:
We, the undersigned Forum Funds, herewith confirm our agreement with you as
follows:
1. We propose to engage in the business of investing and reinvesting our
assets in securities of the type and in accordance with the limitations
specified in Trust Instrument, By-Laws and registration statement filed with the
Securities and Exchange Commission under the Investment Company Act of 1940 (the
"Investment Company Act") and the Securities Act of 1933 (the "Securities Act"),
including any representations made in our prospectus and statement of additional
information, all in such manner and to such extent as may from time to time be
authorized by our Board of Trustees. We enclose copies of the documents listed
above and will from time to time furnish you with any amendments thereof.
2. We hereby employ you, subject to the direction and control of our
Board of Trustees, to manage the investment and reinvestment of the assets with
respect to each class or series of our shares as listed in Appendix A hereto
("Funds"), and, without limiting the generality of the foregoing, to provide
management and other services specified below.
(a) You will make decisions with respect to all purchases and sales of
securities in each Fund. To carry out such decisions, you are hereby
authorized, as our agent and attorney-in-fact, for our account and at our risk
and in our name, to place orders for the investment and reinvestment of the
assets of the Funds. In all purchases, sales and other transactions in
securities in the Funds you are authorized to exercise full discretion and act
for us in the same manner and with the same force and effect as we 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.
(b) You will report to our Board of Trustees at each meeting thereof all
changes in the Funds since the prior report, and will also keep us in touch with
important developments affecting the Funds and on your own initiative will
furnish us from time to time with such information as you may believe
appropriate for this purpose, whether concerning the individual companies whose
securities are included in the Funds, the industries in which they engage, or
the conditions prevailing in the economy generally. You will also furnish us
with such statistical and analytical information with respect to securities in
the Funds as you may believe appropriate
or as we reasonably may request. In making such purchases and sales of
securities in the Funds, you will bear in mind the policies set from time to
time by our Board of Trustees as well as the limitations imposed by our Trust
Instrument and in our Registration Statements under the Investment Company Act
and the Securities Act the limitations in the Investment Company Act and of the
Internal Revenue Code in respect of regulated investment companies and the
investment objective, policies and restrictions for the Funds.
(c) It is understood that you will from time to time employ or associate
with yourselves such persons as you believe to be particularly fitted to assist
you in the execution of your duties hereunder, the cost of performance of such
duties to be borne and paid by you. No obligation may be incurred on our behalf
in any such respect.
3. It is further agreed that you shall be responsible for the portion of
the net expenses that relate to each of the Funds (except interest, taxes,
brokerage fees and other expenses paid by us in accordance with an effective
plan pursuant to Rule 12b-1 under the Investment Company Act and organization
expenses, all to the extent such exclusions are permitted by applicable state
law and regulation) incurred by us during each of our fiscal years or portion
thereof that this agreement is in effect between us which, as to the Fund, in
any such year exceeds the limits applicable to the Fund under the laws or
regulations of any state in which our shares are qualified for sale (reduced pro
rata for any portion of less than a year). We hereby confirm that, subject to
the foregoing, we shall be responsible and hereby assume the obligation for
payment of all our other expenses, including: (a) payment of the fee payable to
you under paragraph 5 hereof and the fee payable to Forum Financial Services,
Inc. pursuant to the Management and Distribution Agreements between Forum
Financial Services, Inc. and us; (b) taxes, brokerage fees and commissions; (c)
certain insurance premiums; (d) fees, interest charges and expenses of our
custodian, transfer agent and dividend disbursing agent; (e) telecommunications
expenses; (f) auditing, legal and compliance expenses; (g) costs of forming the
corporation and maintaining corporate existence; (h) costs of preparing and
printing our Prospectuses, Statements of Additional Information, subscription
application forms and shareholder reports and their delivery to existing and
prospective shareholders; (i) costs of maintaining books of original entry for
portfolio and fund accounting and other required books and accounts and of
calculating the net asset value of our shares; (j) costs of reproduction,
stationery and supplies; (k) compensation of our trustees, officers and
employees and costs of other personnel performing services for us who are not
your officers or officers of Forum Financial Services, Inc., or your and its
respective affiliates; (l) costs of corporate meetings; (m) Securities and
Exchange Commission registration fees and related expenses; (n) state securities
laws registration fees and related expenses and (o) all fees and expenses paid
by us in accordance with any distribution plan adopted by us pursuant to Rule
12b-1 under the Investment Company Act.
4. We shall expect of you, and you will give us the benefit of, your best
judgment and efforts in rendering these services to us, and we agree as an
inducement to your undertaking these services that you shall not be liable
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, you against any liability to us or and to our security
holders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross
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negligence in the performance of your duties hereunder, or by reason of your
reckless disregard of your obligations and duties hereunder.
5. In consideration of the foregoing we will pay you, with respect to
each each Fund a fee as described in Appendix A hereto. Such fees shall be
accrued by us daily and shall be payable monthly in arrears on the first day of
each calendar month for services performed hereunder during the prior calendar
month. Your reimbursement, if any, of our expenses as provided in paragraph 3
hereof, shall be estimated and paid to us monthly in arrears, at the same time
as our payment to you for such month. Payment of the advisory fees will be
reduced or postponed, if necessary, with any adjustments made after the end of
the year.
6. This agreement shall become effective as to a Fund immediately upon
approval by a majority of the outstanding voting securities (as defined in the
Investment Company Act) of that Fund and shall remain in effect for a period of
one year from the date it first becomes effective and shall continue in effect
thereafter for successive twelve-month periods (computed from each anniversary
date of the effective date) with respect to each Fund, provided that such
continuance is specifically approved at least annually by our Board of Trustees
or by majority vote of the holders of the outstanding voting securities (as
defined) of each Fund, and, in either case, by a majority of our trustees who
are not parties to this agreement or interested persons, as defined in the
Investment Company Act, of any such party (other than as our trustees), provided
further, however, that if the continuation of this agreement is not approved as
to a Fund, you may continue to render to such Fund the services described herein
in the manner and to the extent permitted by the Act and the rules and
regulations thereunder. Upon the effectiveness of this agreement, it shall
supersede all previous agreements between us covering the subject matter hereof.
This agreement may be terminated with respect to any Fund at any time, without
the payment of any penalty, by vote of a majority of the outstanding voting
securities (as so defined) of such Fund, or by a vote of a majority of our
entire Board of Trustees on 60 days' written notice to you, or by you with
respect to the Fund on not more than 60 days' nor less than 30 days' written
notice to us.
7. This agreement may not be transferred, assigned, sold or in any manner
hypothecated or pledged by you and this agreement shall terminate automatically
in the event of any such transfer, assignment, sale, hypothecation or pledge by
you. The terms "transfer," "assignment" and "sale" as used in this paragraph
shall have the meanings ascribed thereto by governing law and any interpretation
thereof contained in rules or regulations promulgated by the Securities and
Exchange Commission thereunder.
8. Except to the extent necessary to perform your obligations hereunder,
nothing herein shall be deemed to limit or restrict your right, or the right of
any of your officers, trustees or employees who may also be a trustee, officer
or employee of ours, or persons otherwise affiliated with us (within the meaning
of the Investment Company Act) 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.
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If the foregoing is in accordance with your understanding, will you kindly
so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
FORUM FUNDS
By /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
President
FORUM ADVISORS, INC.
By /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Vice President
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FORUM FUNDS
INVESTMENT ADVISORY AGREEMENT
APPENDIX A
Advisory Fee as a % of
the Annual Average Daily
Fund Net Assets of the Fund
---- ------------------------
Daily Assets Cash Fund 0.20%
Daily Assets Treasury Fund 0.20%
Investors Bond Fund 0.40%
TaxSaver Bond Fund 0.40%
Maine Municipal Bond Fund 0.40%
New Hampshire Bond Fund 0.40%
