Exhibit (d)(16)
FORUM FUNDS
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of May 1, 2005, by and between Forum Funds, a Delaware
statutory trust, with its principal office and place of business at Two
Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx 00000 (the "Trust"), and Dover Corporate
Responsibility Management LLC, with its principal office and place of business
at 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, 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 (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 direction and
control of the Board, to manage the investment and reinvestment of the assets
in the Fund and, without limiting the generality of the foregoing, 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 has delivered 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"), and/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"); and (iv) all procedures adopted by
the Trust with respect to the Fund (e.g., repurchase agreement procedures),
(collectively the "Procedures") and shall promptly furnish the Adviser with all
amendments of or supplements to the documents described in subparagraphs
(i) through (iv.). The Trust shall deliver to the Adviser: (x) a certified copy
of the resolution of the Board of Trustees of the Trust (the "Board")
appointing the Adviser and authorizing the execution and delivery of this
Agreement and a certified copy of the minutes of the initial shareholder
meeting approving this Agreement; (y) a copy of all proxy statements and
related materials relating to the Fund; 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 has delivered, or will deliver within 45 days, to the Trust
a copy of its code of ethics complying with the requirements of Rule 17j-1
under the 1940 Act (the "Code"). The Adviser shall promptly furnish the Trust
with all amendments of or supplements to the foregoing at least annually.
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
(a) The Adviser will make decisions with respect to all purchases and sales
of securities and other investment assets in the Fund. 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.
Consistent with Section 28(e) of the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), the Adviser may allocate brokerage on behalf of
the Fund to broker-dealers who provide research services. Subject to compliance
with Section 28(e), the Adviser may cause the 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. 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, 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 set from time to time by the Board as
well as the limitations imposed by the Organic Documents and Registration
Statement, the limitations in the 1940 Act, the Securities Act, the Internal
Revenue Code of 1986, as amended, and other applicable laws. The Adviser shall
also comply with the Procedures provided that the Adviser has adequate notice
of the Procedures.
(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 material matters related to the
Adviser. On an annual basis, the Adviser shall report on its compliance with
its Code to the Board and 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. The Adviser will notify the Trust 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, in each case prior to or promptly after such change.
(e) 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 1940 Act. 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.
(f) 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
to the Fund.
(g) The Adviser will provide 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 custodian and fund accountant may reasonably require.
In accordance with the Procedures, the Adviser is responsible for assisting in
the fair valuation of all Fund assets using its reasonable efforts to arrange
for the provision of prices from parties who are not affiliated persons of the
Adviser for each asset for which a Fund's fund accountant does not obtain
prices in the ordinary course of business.
(h) The Adviser shall authorize and permit any of its directors, officers and
employees who may be duly elected as Trustees or officers of the Trust to serve
in the capacities in which they are elected.
(i) The Adviser shall have no duties or obligations pursuant to this
Agreement (other than the continuation of its preexisting duties and
obligations) during any period in which a Fund invests all (or substantially
all) of its investment assets in a registered, open-end management investment
company, or separate series thereof, in accordance with Section 12(d)(1)(E)
under the 1940 Act.
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 the 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 the 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 the Fund's expenses shall be estimated and paid to
the Trust on behalf of the Fund monthly in arrears, at the same time as the
Trust's payment to the Adviser for such month.
(c) No fee shall be payable hereunder with respect to the Fund during any
period in which the Fund invests all (or substantially all) of its investment
assets in a registered, open-end, management investment company, or separate
series thereof, in accordance with Section 12(d)(1)(E) under the 1940 Act.
(d) The Trust and, where applicable, the Fund, shall be responsible for and
assumes the obligation for payment of all of its expenses, including: (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 and
brokerage fees and commissions; (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 (including out
of pocket expenses, but not salaries) 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, shareholder 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.
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 mistake of
judgment or mistake of law or in any event whatsoever, except for lack of good
faith, provided that nothing herein shall be deemed to protect, or purport to
protect, the Adviser against any liability to the Trust or to the Trust's
security holders to which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of the
Adviser's duties hereunder, or by reason of the Adviser's reckless disregard of
its obligations and duties hereunder.
(b) 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, acts of terrorism, 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 the Fund on the
date above 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 remain in effect with respect to the Fund for a
period of two years from the date of its effectiveness and shall continue in
effect for successive annual periods with respect to the Fund; provided that
such continuance is specifically approved at least annually: (i) by the Board
or by the vote of a majority of the outstanding voting securities of the Fund,
and, in either case; (ii) by a majority of the Trust's trustees who are not
parties to this Agreement or interested persons of any such party (other than
as trustees of the Trust); provided further, however, that if the continuation
of this Agreement is not approved as to the
Fund, the Adviser may continue to render to the Fund the services described
herein in the manner and to the extent permitted by the 1940 Act and the rules
and regulations thereunder.
(c) This Agreement may be terminated with respect to the 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.
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 corporation, trust, firm, individual or
association.
SECTION 8. REPRESENTATIONS OF ADVISER.
The Adviser represents and warrants that: (i) it is either registered as an
investment adviser under the Investment Advisers Act of 1940, as amended
("Advisers Act") (and will continue to be so registered for so long as this
Agreement remains in effect) or exempt from registration under the Advisers
Act; (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 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
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 "Dover" (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 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 New York.
(e) Except as set forth in Section 4(b), 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, 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.
(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.
(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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed all as of the day and year first above written.
FORUM FUNDS
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
President
DOVER CORPORATE RESPONSIBILITY
MANAGEMENT LLC
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Title: President
FORUM FUNDS
INVESTMENT ADVISORY AGREEMENT
Appendix A
As Amended on August 21, 2007
Fee as a % of the Annual
Funds of the Trust Average Daily Net Assets of the Fund
------------------ -------------------------------------
Dover Responsibility Fund 0.89%
Dover Long/Short Sector Fund 1.00%
