Exhibit (d)(28)
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
XXXXX INVESTMENT ADVISORY INCORPORATED
AND XXXXXX XXXXX & PARTNERS LIMITED
AGREEMENT made as of the 14 day of September, 2004, by and between Xxxxx
Investment Advisory Incorporated, a Maryland corporation, with its principal
office and place of business at 000 X. Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxx 00000, (the "Advisor") and Xxxxxx Xxxxx & Partners Limited, a
corporation with its principal office and place of business at Xxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx/XX XX0 0XX (the "Subadvisor").
WHEREAS, Advisor has entered into an Investment Advisory Agreement dated the
27th day of January, 2003, ("Advisory Agreement") with Forum Funds, a Delaware
business trust, with its principal office and place of business at Xxx Xxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxx 00000, (the "Trust");
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;
WHEREAS, pursuant to the Advisory Agreement, and subject to the direction and
control of the Board of Trustees of the Trust (the "Board"), the Advisor acts as
investment advisor for the series of the Trust listed on Schedule A hereto (the
"Fund");
WHEREAS, it is intended that the Trust be a third-party beneficiary under
this Agreement; and
WHEREAS, Advisor desires to retain the Subadvisor to perform investment
advisory services for the Fund and Subadvisor 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 Advisor and the Subadvisor hereby agree as
follows:
SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) The Advisor hereby employs Subadvisor, 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 Subadvisor accepts this employment and agrees
to render its services for the compensation set forth herein.
(b) In connection therewith, the Advisor has delivered, or has arranged for
the delivery, to the Subadvisor 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 filed with the U.S. Securities and Exchange
Commission ("SEC") pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), or the 1940 Act (the "Registration Statement"), (iii) the
Trust's current Prospectuses and Statements of Additional Information for the
Fund (collectively, as currently in effect and as amended or supplemented, the
"Prospectus"), (iv) each plan of distribution or similar document adopted by the
Trust under Rule 12b-1 under the 1940 Act ("Plan") and each current shareholder
service plan or similar document adopted by the Trust ("Service Plan"); and (v)
all procedures adopted by the Trust with respect to the Fund (i.e., repurchase
agreement procedures), and shall promptly furnish the Subadvisor with all
amendments of or supplements to the foregoing. The Advisor shall deliver to the
Subadvisor: (x) a certified copy of the resolution of the Board appointing the
Subadvisor and authorizing the execution and delivery of 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 Subadvisor shall
reasonably request to enable it to perform its duties pursuant to this
Agreement.
(c) The Subadvisor has delivered to the Advisor and the Trust (i) a copy of
its Form ADV as most recently filed with the SEC and (ii) a copy of its code of
ethics complying with the requirements of Rule 17j-1 under the 1940 Act (the
"Code"). The Subadvisor shall promptly furnish the Advisor and Trust with all
amendments of or supplements to the foregoing at least annually.
SECTION 2. DUTIES OF THE ADVISOR
In order for the Subadvisor to perform the services required by this
Agreement, the Advisor (i) shall cause all service providers to the Trust to
furnish information to the Subadvisor and assist the Subadvisor as may be
required and (ii) shall ensure that the Subadvisor has reasonable access to all
records and documents maintained by the Trust, the Advisor or any service
provider to the Trust and (iii) shall deliver to the Subadvisor all material it
provides to the Board in accordance with the Advisory Agreement.
SECTION 3. DUTIES OF THE SUBADVISOR
(a) Subject to the control and supervision of the Board and the Advisor, the
Subadvisor, at its own expense, will make decisions with respect to purchases
and sales of securities and other investment assets by the Fund with respect to
all or a portion of the Fund's assets allocated to the Subadvisor by the Advisor
for investment management purposes. The Subadvisor shall effect purchases and
sales of securities and other investment assets in behalf of the Fund consistent
with the Fund's investment objective, policies and restrictions. To carry out
such decisions, the Subadvisor 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 Subadvisor 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
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such purchases, sales or other transactions, including voting of proxies with
respect to securities owned by the Fund. The Subadvisor is also responsible for
monitoring significant events that could affect the value of securities held in
that portion of the Fund's portfolio it manages and recommending fair value
pricing for affected securities in a manner consistent with the Trust's
Portfolio Securities Valuation Procedures.
Consistent with Section 28(e) of the Securities and Exchange Act of 1934, as
amended, the Subadvisor may allocate brokerage on behalf of the Funds to
broker-dealers who provide research services. The Subadvisor may aggregate sales
and purchase orders of the assets of the Fund with similar orders being made
simultaneously for other accounts advised by the Subadvisor or its affiliates.
Whenever the Subadvisor simultaneously places orders to purchase or sell the
same asset on behalf of the Fund and one or more other accounts advised by the
Subadvisor, the Subadvisor will allocate the order as to price and amount among
all such accounts in a manner believed to be equitable over time to each
account.
(b) The Subadvisor will report to the Board at each meeting thereof as
requested by the Advisor or 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 Subadvisor, and on its own initiative,
will furnish the Board from time to time with such information as the Subadvisor
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 maintains investments, or otherwise. The
Subadvisor will also furnish the Board with such statistical and analytical
information with respect to investments of the Fund as the Subadvisor 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 Subadvisor
will bear in mind the policies 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 and the investment objectives,
policies and restrictions of the Fund.
(c) The Subadvisor will from time to time employ or associate with such
persons as the Subadvisor believes to be particularly fitted to assist in the
execution of the Subadvisor's duties hereunder, the cost of performance of such
duties to be borne and paid by the Subadvisor. No obligation may be incurred on
the Trust's or Advisor's behalf in any such respect.
(d) The Subadvisor will report to the Board all material matters related to
the Subadvisor. On an annual basis, the Subadvisor shall report on its
compliance with its Code to the Advisor and to the Board and upon the written
request of the Advisor or the Trust, the Subadvisor shall permit the Advisor and
the Trust, or their respective representatives to examine the reports required
to be made to the Subadvisor under the Code. The Subadvisor will notify the
Advisor and the Trust of any change of control of the Subadvisor and any changes
in the key personnel who are either the portfolio manager(s) of the Fund or
senior management of the Subadvisor, in each case prior to or promptly after
such change.
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(e) The Subadvisor 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 Subadvisor 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 Subadvisor pursuant to this
Agreement required to be prepared and maintained by the Subadvisor 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 Subadvisor, shall be the
property of the Trust. The Advisor and the Trust, or their respective
representatives, shall have access to such books and records at all times during
the Subadvisor's normal business hours. Upon the reasonable request of the
Advisor or the Trust, copies of any such books and records shall be provided
promptly by the Subadvisor to the Advisor and the Trust, or their respective
representatives.
(f) The Subadvisor will cooperate with the Fund's independent public
accountants and shall take reasonable action to make all necessary information
available to the accountants for the performance of the accountants' duties.
(g) The Subadvisor 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 under the Subadvisor's control as the custodian and fund
accountant may reasonably require. In accordance with procedures adopted by the
Board, the Subadvisor is responsible for assisting in the fair valuation of all
Fund assets and will use its reasonable efforts to arrange for the provision of
prices from a parties who are not affiliated persons of the Subadvisor for each
asset for which the Fund's fund accountant does not obtain prices in the
ordinary course of business.
(h) The Subadvisor shall authorize and permit any of its directors, officers
and employees who may be elected as Trustees or officers of the Trust to serve
in the capacities in which they are elected.
(i) The Subadvisor 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 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.
SECTION 4. COMPENSATION; EXPENSES
(a) In consideration of the foregoing, the Advisor shall pay the Subadvisor,
with respect to the Fund, a fee at an annual rate as listed in Appendix B
hereto. Such fees shall be accrued by the Advisor 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. 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 Advisor shall pay to the Subadvisor
such compensation as shall be payable prior to the effective date of
termination.
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(b) 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.
SECTION 5. STANDARD OF CARE
(a) The Advisor shall expect of the Subadvisor, and the Subadvisor will give
the Advisor and the Fund the benefit of, the Subadvisor's judgment and best
efforts in rendering its services hereunder. The Subadvisor shall not be liable
to the Advisor or the Trust 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, the Subadvisor against any
liability to the Advisor or the Trust to which the Subadvisor would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of the Subadvisor's duties hereunder, or by reason of the
Subadvisor's reckless disregard of its obligations and duties hereunder.
(b) The Subadvisor shall not be liable to the Advisor or the Trust for any
action taken or failure to act in good faith reliance upon: (i) information,
instructions or requests, whether oral or written, with respect to the Fund made
to the Subadvisor by a duly authorized officer of the Advisor or the Trust; (ii)
the advice of counsel to the Trust; and (iii) any written instruction or
certified copy of any resolution of the Board.
(c) The Subadvisor 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 Subadvisor's
employees), fire, mechanical breakdowns, flood or catastrophe, acts of God,
insurrection, war, riots 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
immediately upon the later of approval 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) and, if required by applicable law, by a vote of
a majority of the outstanding voting securities of the Fund.
(b) This Agreement shall remain in effect with respect to the Fund for a
period of one year 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
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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 Subadvisor may continue to render to that 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, by a vote of a majority of
the outstanding voting securities of the Fund or by the Advisor on 60 days'
written notice to the Subadvisor or (ii) by the Subadvisor on 60 days' written
notice to the Trust. This Agreement shall terminate immediately (x) upon its
assignment or (y) upon termination of the Advisory Agreement.
SECTION 7. ACTIVITIES OF THE SUBADVISOR
Except to the extent necessary to perform its obligations hereunder, nothing
herein shall be deemed to limit or restrict the Subadvisor's right, or the right
of any of the Subadvisor'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 SUBADVISOR.
The Subadvisor represents and warrants to the Advisor that:
(a) It is registered as an investment advisor 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);
(b) It is not prohibited by the 1940 Act or the Advisers Act from performing
the services contemplated by this Agreement;
(c) It 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
(d) It will promptly notify the Advisor and the Trust of the occurrence of
any event that would disqualify the Subadvisor from serving as an investment
advisor of an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise.
SECTION 9. 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 the Fund under this Agreement, and
the Subadvisor agrees that, in asserting any rights or claims under this
Agreement, it shall look only to the assets and property of the Trust or the
Fund to which the Subadvisor's rights or claims relate in settlement of such
rights or claims, and not to the Trustees of the Trust or the shareholders of
the Fund.
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SECTION 10. 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 approved by the Trust in the manner set forth in Section 6(b) hereof.
(b) Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement.
(c) 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 Delaware.
(d) This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof, whether oral or written.
(e) 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.
(f) 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. This Agreement shall be construed as if drafted jointly by both the
Advisor and Subadvisor and no presumptions shall arise favoring any party by
virtue of authorship of any provision of this Agreement.
(g) Section headings in this Agreement are included for convenience only and
are not to be used to construe or interpret this Agreement.
(h) 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.
(i) No affiliated person, employee, agent, director, officer or manager of
the Subadvisor shall be liable at law or in equity for the Subadvisor's
obligations under this Agreement.
(j) 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.
(k) 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
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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.
(l) Subadvisor warrants and represents and Advisor acknowledges that
Subadvisor is authorized and regulated in the conduct of its investment business
in the United Kingdom by the Financial Services Authority ("FSA") and that under
the regulations of the FSA Subadvisor shall classify Advisor as an "Intermediate
Customer."
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed all as of the day and year first above written.
XXXXX INVESTMENT ADVISORY
INCORPORATED
-------------------------------------
Name:. Xxxxxxx X. Xxxxxx
Title: President
XXXXXX XXXXX & PARTNERS LIMITED
-------------------------------------
Name:. Xxxx XxXxxxxxx
Title: Managing Director
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FORM OF
SUBADVISORY AGREEMENT
BETWEEN
XXXXX INVESTMENT ADVISORY INCORPORATED
AND XXXXXX XXXXX & PARTNERS LIMITED
APPENDIX A
SERIES OF THE TRUST:
Xxxxx Advisory International Fund
A-1
SUBADVISORY AGREEMENT
BETWEEN
XXXXX INVESTMENT ADVISORY INCORPORATED
AND XXXXXX XXXXX & PARTNERS LIMITED
APPENDIX B
FEE AS A %OF THE ANNUAL
AVERAGE DAILY NET ASSETS OF FUND UNDER
FUNDS OF THE TRUST MANAGEMENT BY SUBADVISOR
------------------ ----------------------------------------------------
Xxxxx Advisory 0.60% of first $100 million, 0.50% of
International Fund amount thereafter
B-1
