AMENDED AND RESTATED FORUM FUNDS MANAGEMENT AGREEMENT WITH AUXIER ASSET MANAGEMENT LLC
AMENDED
AND RESTATED FORUM FUNDS
WITH
XXXXXX
ASSET MANAGEMENT LLC
AGREEMENT made as of January
1, 2010, 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 Xxxxxx Asset Management LLC, with its
principal office and place of business at 0000 X.X. Xxxxxxx Xxxx, Xxxxx 000,
Xxxx Xxxxxx, Xxxxxx 00000-0000 (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 a 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 (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:
1. ADVISORY
SERVICES
The
Adviser will regularly provide the Fund with such investment advice as the
Adviser in its discretion deems advisable and will furnish a continuous
investment program for the Fund consistent with the Fund’s investment objectives
and policies. The Adviser will determine the securities to be purchased for the
Fund, the portfolio securities to be held or sold by the Fund and the portion of
the Fund’s assets to be held uninvested, subject always to the Fund’s investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect, and subject further to such policies and instructions as the
Board of Trustees for the Trust (the “Board”) may from time to time establish.
The Adviser will advise and assist the officers of the Trust in taking such
steps as are necessary or appropriate to carry out the decisions of the Board
and the appropriate committees of the Board regarding the conduct of the
business of the Fund. The Adviser is also authorized to vote proxies
with respect to securities owned by the Fund, subject to such proxy voting
policies as approved by the Board.
2. ALLOCATION OF CHARGES AND
EXPENSES
The
Adviser will pay all operating expenses of the Fund, including the compensation
and expenses of any employees of the Fund and of any other persons rendering any
services to the Fund; clerical and shareholder service staff salaries; office
space and other office expenses; fees and expenses incurred by the Fund in
connection with membership in investment company organizations; legal, auditing
and accounting expenses; expenses of registering shares under federal and state
securities laws, including expenses incurred by the Fund in connection with the
organization and initial registration of shares of the Fund; fees and expenses
incurred indirectly by the Fund as a result of investment in shares of any
company in which the Fund invests that (A) is an investment company or (B) would
be an investment company under section 3(a) of the 1940 Act but for the
exceptions to that definition provided for in sections 3(c)(1) and 3(c)(7) of
the 1940 Act; insurance expenses; fees and expenses of the custodian, transfer
agent, dividend disbursing agent, shareholder service agent, plan agent,
administrator, accounting and pricing services agent and underwriter of the
Fund; expenses, including clerical expenses, of issue, sale, redemption or
repurchase of shares of the Fund; the cost of preparing
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and
distributing reports and notices to shareholders, the cost of printing or
preparing prospectuses and statements of additional information for delivery to
the Fund’s current and prospective shareholders; the cost of printing or
preparing stock certificates or any other documents, statements or reports to
shareholders; expenses of shareholders’ meetings and proxy solicitations;
advertising, promotion and other expenses incurred directly or indirectly in
connection with the sale or distribution of the Fund’s shares excluding expenses
which the Fund is authorized to pay pursuant to Rule 12b-l under the the 1940
Act; and all other operating expenses not specifically assumed by the
Fund.
The Fund
will pay all brokerage fees and commissions, taxes, borrowing costs (such as (a)
interest and (b) dividend expenses on securities sold short), fees and expenses
of the non-interested person trustees and such extraordinary or non-recurring
expenses as may arise, including litigation to which the Fund may be a party and
indemnification of the Trustees and officers with respect thereto. The Fund will
also pay expenses which it is authorized to pay pursuant to Rule 12b-1 under the
1940 Act. You may obtain reimbursement from the Fund, at such time or times as
you may determine in your sole discretion, for any of the expenses advanced by
you, which the Fund is obligated to pay, and such reimbursement shall not be
considered to be part of your compensation pursuant to this
Agreement.
3. COMPENSATION OF THE
ADVISER
For all
of the services to be rendered and payments to be made as provided in this
Agreement, as of the last business day of each month, the Fund will pay the
Adviser a fee at the annual rate of 1.25% of the average value of its daily net
assets.
The
average value of the daily net assets of the Fund shall be determined pursuant
to the applicable provisions of the Trust Instrument or a resolution of the
Board, if required. If, pursuant to such provisions, the determination of net
asset value of the Fund is suspended for any particular business day, then for
the purposes of this paragraph, the value of the net assets of the Fund as last
determined shall be deemed to be the value of the net assets as of the close of
the business day, or as of such other time as the value of the Fund’s net assets
may lawfully be determined, on that day. If the determination of the
net asset value of the Fund has been suspended for a period including such
month, the Adviser’s compensation payable at the end of such month shall be
computed on the basis of the value of the net assets of the Fund as last
determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND
SALE ORDERS
In
connection with purchases or sales of portfolio securities for the account of
the Fund, it is understood that the Adviser will arrange for the placing of all
orders for the purchase and sale of portfolio securities for the Fund with
brokers or dealers selected by the Adviser, subject to review of this selection
by the Board from time to time. The Adviser will be responsible for
the negotiation and the allocation of principal business and portfolio
brokerage. In the selection of brokers or dealers and placing of
orders, the Adviser is directed at all times to seek for the Fund the best
qualitative execution, taking into account such factors as price (including the
applicable brokerage commission or dealer spread), the execution capability,
financial responsibility and responsiveness of the broker or dealer and the
brokerage and research services provided by the broker or dealer.
The
Adviser should generally seek favorable prices and commission rates that are
reasonable in relation to the benefits received. In seeking best
qualitative execution, the Adviser is authorized to select brokers or dealers
who also provide brokerage and research services to the Fund and/or the other
accounts over which the Adviser exercises investment discretion. The Adviser is
authorized to pay a broker or dealer who provides such brokerage and research
services a commission for executing a Fund portfolio transaction which is in
excess of the amount of commission another broker or dealer
would
2
have
charged for effecting that transaction if the Adviser determines in good faith
that the amount of the commission is reasonable in relation to the va1ue of the
brokerage and research services provided by the executing broker or
dealer. The determination may be viewed in terms of either a
particular transaction or the Adviser’s overall responsibilities with respect to
the Fund and to accounts over which the Adviser exercises investment
discretion. The Fund and the Adviser understand and acknowledge that,
although the information may be useful to the Fund and the Adviser, it is not
possible to place a dollar value on such information. The Board shall
periodically review the commissions paid by the Fund to determine if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Fund.
Subject
to the provisions of the 1940 Act, and other applicable law, the Adviser, any of
its affiliates or any affiliate of its affiliates may retain compensation in
connection with effecting the Fund’s portfolio transactions, including
transactions effected through others. If any occasion should arise in
which the Adviser gives any advice to its clients concerning shares of the Fund,
the Adviser will act solely as investment counsel for such client and not in any
way on behalf of the Fund. The Adviser’s services to the Fund
pursuant to this Agreement are not to be deemed to be exclusive, and it is
understood that the Adviser may render investment advice, management and other
services to others, including other registered investment
companies.
5. LIMITATION OF LIABILITY OF
ADVISER
The Adviser may rely on information
reasonably believed by the Adviser to be accurate and reliable. Except as may
otherwise be required by the 1940 Act or the rules thereunder, neither the
Adviser nor its shareholders, members, officers, directors, employees, agents,
control persons or affiliates of any thereof shall be subject to any liability
for, or any damages, expenses or losses incurred by the Trust in connection
with, any error of judgment, mistake of law, any act or omission connected with
or arising out of any services rendered under, or payments made pursuant to,
this Agreement or any other matter to which this Agreement relates, except by
reason of willful misfeasance, bad faith or gross negligence on the part of any
such persons in the performance of the Adviser’s duties under this Agreement, or
by reason of reckless disregard by any of such persons of the Adviser’s
obligations and duties under this Agreement.
Any person, even though also a
director, officer, employee, member, shareholder or agent of the Adviser, who
may be or become an officer, director, trustee, employee or agent of the Trust,
shall be deemed, when rendering services to the Trust or acting on any business
of the Trust (other than services or business in connection with the Adviser’s
duties hereunder), to be rendering such services to or acting solely for the
Trust and not as a director, officer, employee, member, shareholder or agent of
the Adviser, or one under the Adviser’s control or direction, even though paid
by the Adviser.
6. DURATION AND TERMINATION OF
THIS AGREEMENT
This Agreement shall take effect on the
date of its execution, and shall remain in force for a period of two (2) years
from the date of its execution, and from year to year thereafter, subject to
annual approval by (i) the Board or (ii) a vote of a majority of the outstanding
voting securities of the Fund, provided that in either event continuance is also
approved by a majority of the Trustees who are not interested persons of the
Adviser or the Trust, by a vote cast in person at a meeting called for the
purpose of voting such approval.
If the shareholders of the Fund fail to
approve the Agreement in the manner set forth above, upon request of the Board,
the Adviser will continue to serve or act in such capacity for the Fund for the
period of time pending required approval of the Agreement, of a new agreement
with the Adviser or a
3
different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to the Adviser for its services to and payments on behalf of the Fund
will be equal to the lesser of the Adviser’s actual costs incurred in furnishing
such services and payments or the amount the Adviser would have received under
this Agreement for furnishing such services and payments.
This Agreement may, on sixty days
written notice, be terminated with respect to the Fund, at any time without the
payment of any penalty, by the Board, by a vote of a majority of the outstanding
voting securities of the Fund, or by the Adviser. This Agreement shall
automatica1ly terminate in the event of its assignment.
7. USE OF
NAME
The Trust and the Adviser acknowledge
that all rights to the name “Xxxxxx” or any variation thereof belong to the
Adviser, and that the Trust is being granted a limited license to use such words
in its Fund name or in any class name. In the event the Adviser
ceases to be the adviser to the Fund, the Trust’s right to the use of the name
“Xxxxxx” shall automatically cease on the ninetieth day following the
termination of this Agreement. The right to the name may also be withdrawn by
the Adviser during the term of this Agreement upon ninety (90) days’ written
notice to the Trust. Nothing contained herein shall impair or
diminish in any respect, the Adviser’s right to use the name “Xxxxxx” in the
name of, or in connection with, any other business enterprises with which the
Adviser is or may become associated. There is no charge to the Trust
for the right to use this name.
8. AMENDMENT OF THIS
AGREEMENT
No provision of this Agreement may be
changed, waived, discharged or terminated orally, and no amendment of this
Agreement shall be effective until approved by the Board, including a majority
of the Trustees who are not interested persons of the Adviser or of the Trust,
cast in person at a meeting called for the purpose of voting on such approval,
and (if required under interpretations of the 1940 Act by the Securities and
Exchange Commission or its staff) by vote of the holders of a majority of the
outstanding voting securities of the series to which the amendment
relates.
9. LIMITATION OF LIABILITY TO
TRUST PROPERTY
The term “Trustees” means and refers to
the Forum Funds trustees from time to time servicing under the Trust’s Trust
Instrument as the same may be amended from time to time. It is expressly agreed
that the obligations of the Trust hereunder shall not be binding upon any of the
trustees, shareholders, nominees, officers, agents or employees of the Trust
personally, but bind only the trust property of the Trust, as provided in the
Trust Instrument. The execution and delivery of this Agreement have
been authorized by the Trustees and shareholders of the Trust and signed by
officers of the Trust, acting as such, and neither such authorization by such
Trustees and shareholders nor such execution and delivery by such officers shall
be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
the Trust as provided in its Trust Instrument. A copy of the Trust
Instrument is retained at the office of the Trust.
10. SEVERABILITY
In the event any provision of this
Agreement is determined to be void or unenforceable, such determination shall
not affect the remainder of this Agreement, which shall continue to be in
force.
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11. QUESTIONS OF
INTERPRETATION
(a) This Agreement shall be governed by
the laws of the State of New York.
(b) For the purpose of this Agreement,
the terms “majority of the outstanding voting
securities”,
“control” and “interested person” shall have their respective meanings as
defined in the 1940 Act and rules and regulations thereunder, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
under the 1940 Act; and the term “brokerage and research services” shall have
the meaning given in the Securities Exchange Act of 1934, as
amended.
(c) Any question of interpretation of
any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by reference
to such term or provision of the 1940 Act and to interpretation thereof, if any,
by the United States courts or in the absence of any controlling decision of any
such court, by the Securities and Exchange Commission or its staff. In addition,
where the effect of a requirement of the 1940 Act, reflected in any provision of
this Agreement, is revised by rule, regulation, order or interpretation of the
Securities and Exchange Commission or its staff, such provision shall be deemed
to incorporate the effect of such rule, regulation, order or
interpretation.
12. NOTICES
Any notices under this Agreement shall
be in writing, addressed and delivered or mailed postage paid to the other party
at such address as such other party may designate for the receipt of such
notice. Until further notice to the other party, it is agreed that the address
of the Trust is Three Xxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxx 00000 and the
Adviser’s address for this purpose shall be 0000 X.X. Xxxxxxx Xxxx, Xxxxx 000,
Xxxx Xxxxxx, XX 00000-0000.
13. COUNTERPARTS
This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
14. BINDING
EFFECT
Each of
the undersigned expressly warrants and represents that he has the full power and
authority to sign this Agreement on behalf of the party indicated, and that his
signature will operate to bind the party indicated to the foregoing
terms.
15. CAPTIONS
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.
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IN WITNESS WHEREOF, the
parties hereto have caused this agreement to be duly executed all as of the day
and year first above written.
/s/ Xxxxxx X.
Xxxx
By:
Xxxxxx X. Xxxx
Title:
President
XXXXXX
ASSET MANAGEMENT LLC
/s/ J. Xxxxxxx
Xxxxxx
By: X. Xxxxxxx
Auxier____________________
Title:
President
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AMENDED
AND RESTATED FORUM FUNDS
WITH
XXXXXX
ASSET MANAGEMENT LLC
Appendix
A
Funds
of the
Trust Fee
as a % of the Annual Average
Daily Net Assets of the Fund
Xxxxxx
Focus
Fund 1.25%
