EXHIBIT EX-99.D4
FORM OF:
INVESTMENT ADVISORY AGREEMENT
Investment Advisory Agreement (the "Agreement") dated this 1st day of
October, 2008 by and between the World Funds Trust, a Delaware statutory trust
(herein called the "Trust"), and Commonwealth Capital Management, LLC, a
Virginia 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 Frantzen Small Cap Growth Fund, Frantzen
Large Cap Growth Fund, Frantzen Growth and Income Fund, each 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. 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.
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.
The Trust will instruct each of its agents and contractors to cooperate in
the conduct of the business of each Fund.
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.
3. Sub-Advisers. It is understood that the Adviser may from time to time employ
or associate itself with such person or persons as the Adviser may believe to be
particularly fitted to assist in the performance of this Agreement; provided,
however, that the compensation of such person or persons shall be paid by the
Adviser and that the Adviser shall be as fully responsible to the Trust for the
acts and omissions of any sub-adviser as it is for its own acts and omissions.
Without limiting the generality or the foregoing, it is agreed that investment
advisory services to each Fund may be provided by a sub-adviser acceptable to
the Trust and the Adviser and approved in accordance with the provisions of the
1940 Act. In the event that any sub-adviser appointed hereunder is terminated,
the Adviser may provide investment advisory services pursuant to this Agreement
to each Fund without further shareholder approval.
4. Fund Transactions. 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.
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.
5. Compensation of the Adviser. 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.
All rights of compensation under this Agreement for services performed as
of the termination date shall survive the termination of this Agreement.
6. 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;
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;
k. The advisory fee payable to the Adviser, as provided in paragraph 5
herein;
l. Costs of recordkeeping (other than investment records required to be
maintained by the Adviser) and daily pricing;
m. Distribution expenses in accordance with any Distribution Plan as and
if approved by the shareholders of each Fund; and
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.
7. 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.
8. 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.
9. 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.
10. 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).
11. 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.
12. 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).
13. 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).
14. 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: 0000 Xxxxx Xxxxx Xxxxxxx Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
15. 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.
16. 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.
17. Entire Agreement. This Agreement consists of the entire agreement of the
parties with respect to the subject matter hereof and supercedes all prior
writings and understandings related thereto.
18. 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.
COMMONWEALTH CAPITAL MANAGEMENT, LLC
BY: __________________________
Xxxx Xxxxx, III
Chairman
WORLD FUNDS TRUST
BY: __________________________
Xxxxxxxx X. Xxxxx, III
Chairman
SCHEDULE A TO
ADVISORY AGREEMENT
BY AND BETWEEN
COMMONWEALTH CAPITAL MANAGEMENT, LLC
AND WORLD FUNDS TRUST
For the services to be rendered by the Advisor under this Agreement, each Fund
shall pay to the Advisor, and the Advisor 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:
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Fund Annual Rate
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Frantzen Small Cap Growth 1.10%
Fund
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Frantzen Large Cap Growth 0.90%
Fund
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Frantzen Growth and Income 0.90%
Fund
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