EXHIBIT 5(d)
QUADRA CAPITAL PARTNERS, L.P.
SUB-ADVISORY AGREEMENT
AGREEMENT made the 18th day of October, 1996, between Quadra Capital
Partners, L.P. ("Quadra"), a limited partnership organized under the laws of
the State of Delaware with its principal place of business at 000 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, and Anhalt/X'Xxxxxxx, Inc. (the
"Sub-Adviser "), a Corporation organized under the laws of the State of
California with its principal place of business at 000 Xxxxxxxx Xx., #000,
Xxx Xxxxxxx, Xxxxxxxxxx 00000.
WHEREAS, Quadra has entered into an Investment Advisory Agreement dated as
of the 20th day of December, 1996 ("Advisory Agreement") with Forum Funds (the
"Trust"), a business trust organized under the laws of the State of Delaware
with its principal place of business at Xxx Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx
00000; and,
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended, (the "Act") as an open-end management investment company and is
authorized to issue its shares in separate series and classes;
WHEREAS, pursuant to the Advisory Agreement, and subject to the direction
and control of the Board of Trustees of the Trust ("Board"), Quadra manages the
investment and reinvestment of the assets of the investment portfolio or
portfolios of the Trust listed on Schedule A hereto (the "Fund" or "Funds"),
each a separate series of the Trust and provides certain management and other
services specified in the Advisory Agreement; and,
WHEREAS, Sub-Adviser is engaged in the business of rendering investment
advice and is registered as an investment adviser under the Investment Advisers
Act of 1940, as amended ("Adviser Act"); and
WHEREAS, Quadra desires to retain Sub-Adviser to perform investment
advisory services for the Fund and Sub-Adviser is willing to provide those
services on the terms and conditions set forth in this Agreement;
NOW THEREFORE, Quadra and Sub-Adviser agree as follows:
SECTION 1. APPOINTMENT AND DELIVERY OF DOCUMENTS
(a) Adviser hereby appoints Sub-Adviser as investment sub-adviser for the
Funds for the period and on the terms set forth in this Agreement. Sub-Adviser
accepts this appointment and agrees to render its services as investment sub-
adviser for the compensation set forth herein.
(b) The Adviser has delivered copies of each of the following documents
and will from time to time furnish Sub-Adviser with any supplements or
amendments to such documents:
(i) the Trust Instrument of the Trust, as filed with the Secretary of
State of the State of Delaware, as in effect on the date hereof and as amended
from time to time ("Trust Instrument");
(ii) the Bylaws of the Trust as in effect on the date hereof and as
amended from time to time ("Bylaws");
(iii) the Registration Statement under the Act and, if applicable, the
Securities Act of 1933 (the "Securities Act"), as filed with the Securities and
Exchange Commission (the "Commission"), relating to the Fund and its shares and
all amendments thereto ("Registration Statement");
-1-
(iv) the prospectus and statement of additional information relating
to the Fund ("Prospectus"); and,
(v) all proxy statements, reports to shareholders, advertising or
other materials prepared for distribution to shareholders of the Fund or the
public, that refer to Sub-Adviser or its clients.
The Adviser shall furnish Sub-Adviser with any further documents, materials
or information that Sub-Adviser may reasonably request to enable it to perform
its duties pursuant to this Agreement.
SECTION 2. DUTIES OF SUB-ADVISER
(a) Subject to the direction, control and supervision of the Board and
Quadra, Sub-Adviser shall direct the investments of the Funds and shall make
decisions with respect to all purchases and sales of securities and other
investment assets in the Funds. To carry out such decisions, Sub-Adviser is
hereby authorized, as agent and attorney-in-fact for the Trust, for the account
of, and in the name of the Trust, to place orders and issue instructions with
respect to those transactions of the Funds. In all purchases, sales and other
transactions in securities for the Funds, Sub-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.
(b) Sub-Adviser will provide to the Board, Quadra, or both, as
appropriate, such information, reports, evaluations, analyses and opinions prior
to or at each meeting of the Board and as the parties may mutually agree upon
from time to time. On its own initiative, Sub-Adviser shall provide the Board,
Quadra, or both, from time to time information that Sub-Adviser believes
appropriate, including, but not limited to, information concerning the
individual companies whose securities are included in the Funds' holdings, the
industries in which they engage, or the economic, social or political conditions
prevailing in each country in which the Funds maintain investments. Sub-Adviser
shall also advise the Board, Quadra, or both, as appropriate, of important
developments affecting the Trust, the Fund and Sub-Adviser.
(c) In making purchases and sales of securities for the Funds, and
otherwise performing its duties hereunder, Sub-Adviser will comply with the Act
and the rules and regulations thereunder, all other applicable Federal and state
laws and regulations, the policies set from time to time by the Board as well as
the limitations imposed by the Trust Instrument, Bylaws, Registration Statement,
prospectus, and the Internal Revenue Code of 1986, as amended, in respect of
regulated investment companies and the investment objectives, policies and
restrictions of the Funds. Without limiting the foregoing, Sub-Adviser agrees
that, in placing orders with broker-dealers for the purchase or sales of
portfolio securities, it shall attempt to obtain quality execution at favorable
security prices; provided that, consistent with section 28(e) of the Securities
and Exchange Act, the exercise of Sub-Adviser fiduciary duties under its
Investment Advisory agreement with the Trust, and any other applicable law, Sub-
Adviser may allocate brokerage on behalf of the Trust to broker-dealers who
provide research services and may cause the Fund to pay these broker-dealers a
higher amount of commission than may be charged by other broker-dealers.
(d) Sub-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 Sub-Adviser pursuant to this Agreement required to be prepared and
maintained by the Trust pursuant to the Act and the rules and regulations
thereunder, the rules and regulations of any national, state, or local
government entity with jurisdiction over the Trust, including the Commission and
the Internal Revenue Service, including but not limited to, records relating to
Fund transactions and the placing and allocation of brokerage orders.
(e) The books and records pertaining to the Trust that are in possession
of Sub-Adviser shall be the property of the Trust. The Trust, or the Trust's
authorized representatives, shall have access to such books and records at all
times during Sub-Adviser's normal business hours. Upon the reasonable request
of
-2-
the Trust, copies of any such books and records shall be provided promptly by
Sub-Adviser to the Trust, its officers, or such other persons as are authorized
in writing by the Trust to obtain its books and records.
(f) Sub-Adviser shall provide the Funds' custodian and fund accountant on
each business day with such information relating to all transactions concerning
the Funds' assets as the custodian and fund accountant may reasonably require.
(g) Sub-Adviser may from time to time employ or associate with such
persons as Sub-Adviser believes to be particularly fitted to assist in the
execution of Sub-Adviser's duties hereunder, the cost of performance of such
duties to be borne and paid by Sub-Adviser. No obligation may be incurred on
the Trust's behalf in any such respect.
(h) Sub-Adviser shall authorize and permit any of its trustees, officers
and employees who may be elected as trustees or officers of the Trust to serve
in the capacities in which they are elected.
SECTION 3. EXPENSES
Subject to any expense reimbursement arrangements between Quadra or others
and the Trust, the Trust shall be responsible and shall assume the obligation
for payment of all of the Trust's expenses. Sub-Adviser shall pay for
maintaining its staff and personnel necessary to perform its obligations under
this Agreement and shall, at its own expense, maintain the office space,
facilities, equipment and personnel that are reasonably necessary to carry out
its obligations hereunder.
SECTION 4. STANDARD OF CARE
Sub-Adviser shall use its best judgment and efforts in rendering the
services described in this Agreement. Sub-Adviser shall not be liable to the
Trust or Quadra for any action or inaction of the Sub-Advisor in the absence of
bad faith, willful misconduct or gross negligence or based upon information,
instructions or requests with respect to a Fund made to the Sub-Advisor by a
duly authorized officer of the Trust or Quadra. Sub-Adviser shall not be
responsible or liable for any failure or delay in performance of its obligations
under this Agreement caused by circumstances beyond its reasonable control.
SECTION 5. COMPENSATION
In consideration of the foregoing, Quadra shall pay Sub-Adviser, with
respect to the Fund, a fee at an annual rate as listed in Schedule A to this
Agreement. These fees shall be accrued daily and payable monthly in arrears on
the ______ day of each calendar month for services performed hereunder during
the prior calendar month.
SECTION 6. EFFECTIVENESS, DURATION AND TERMINATION
(a) With respect to the Fund, this Agreement shall become effective upon
the date first written above; provided that it shall not take effect until
approved by (i) a majority of the Trust's Trustees, including a majority of the
Trustees who are not interested persons of the Trust, and (ii) to the extent
required under section 15(a) of the Act, a majority of the outstanding voting
securities of each Fund to which this Agreement pertains, voting separately by
class.
(b) This Agreement shall remain in effect for a period of twenty four
months from the date of its effectiveness and shall continue in effect for
successive twelve-month periods (computed from each anniversary date of
approval) or for such shorter period as may be specified by the Board in giving
its approval as provided below; 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 this Agreement or the
-3-
continuation of this Agreement is not approved, Sub-Adviser may continue to
render the services described herein in the manner and to the extent permitted
by the Act and the rules and regulations thereunder. The annual approvals
provided for herein shall be effective to continue this Agreement from year to
year (or such shorter period referred to above) if given within a period
beginning not more than sixty (60) days prior to such anniversary,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
(c) This Agreement may be terminated at any time, without the payment of
any penalty, (i) by Quadra, upon approval of the Board, by the Board, or by a
vote of a majority of the outstanding voting securities of the Fund on 30 days'
written notice to Sub-Adviser or (ii) by Sub-Adviser on 90 days' written notice
to the Trust, with copies to each of the Trust's Trustees at their respective
addresses set forth in the Trust's Registration Statement or at such other
address as such persons may specify to Sub-Adviser and to legal counsel to the
Trust. This agreement shall terminate automatically and immediately upon
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 Sub-Adviser's right, or the
right of any of Sub-Adviser's officers, directors or employees who may also be a
Trustee, officer or employee of the Trust, or persons otherwise affiliated with
the Trust 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 SUB-ADVISER
The Sub-Adviser represents, warrants and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment adviser under the
Investment Advisers Act of 1940 ("Advisers Act") and will continue to be so
registered for so long as this Agreement remains in effect; (ii) is not
prohibited by the 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 regulatory
or industry self-regulatory agency, necessary to be met in order to perform the
services contemplated by this Agreement; (iv) has the authority to enter into
and perform the services contemplated by this Agreement; and (v) will promptly
notify the Advisers of the occurrence of any event that would disqualify the
Sub-Adviser from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the Act or otherwise.
(b) The Sub-Adviser will adopt within 45 days a written code of ethics
complying with the requirements of Rule 17j-l under the Act and will provide
the Adviser and the Board with a copy of such code of ethics, together with
evidence of its adoption. Within fifteen days of the end of the last calendar
quarter of each year that this agreement is in effect, the president or a
vice-president of the Sub-Adviser has complied with the requirements of Rule
17j-l during the previous year and that there has been no violation of the
Sub-Adviser's code of ethics or, if such a violation had occurred, that
appropriate action was taken in response to such violation. Upon the written
request of the Adviser, the Sub-Adviser shall permit the Adviser, its employees
or its agents of the appropriate regulatory authority to examine the reports
required to be made to the Sub-Adviser by Rule 17j-l (c) (l) and all other
records relevant to the Sub-Adviser's code of ethics.
(c) The Sub-Adviser has provided the Adviser with a copy of its Form ADV
as most recently filed with the Securities and Exchange Commission ("SEC") and
promptly will furnish a copy of all amendments to the Adviser at least annually.
(d) The Sub-Adviser will notify the Adviser of any change of control of
the Sub-Adviser, including any change of its general partners of 25%
shareholders, as applicable, and any changes in the key personnel who are
either the portfolio manager(s) of the Fund or senior management of the
Sub-Adviser, in each case prior to or promptly after such change.
SECTION 9. NOTICES
Any notice or other communication required to be given pursuant to this
Agreement shall be in writing or by telex and shall be effective upon receipt.
Notices and communications shall be given, if to Quadra, at:
Quadra Capital Partners, L.P.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
and if to Sub-Adviser, at:
Anhalt/X'Xxxxxxx, Inc.
000 Xxxxxxxx Xx., #000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. X'Xxxxxxx
SECTION 10. MISCELLANEOUS
(a) No provisions of this Agreement with respect to the Fund 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 Act, by a
vote of a majority of the outstanding voting securities of the Fund.
(b) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(c) This Agreement shall be governed by and shall be construed in
accordance with the laws of the State of New York.
(d) The terms "vote of a majority of the outstanding voting securities,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act.
-4-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
QUADRA CAPITAL PARTNERS, L.P.
/s/ Xxxxxx X. Xxxx
------------------------
Xxxxxx X. Xxxx
Managing Director
LM Capital Management, Inc.
/s/ Xxxxxxx X. X'Xxxxxxx
------------------------
Xxxxxxx X. X'Xxxxxxx
Managing Director
-5-
QUADRA CAPITAL PARTNERS, L.P.
SUB-ADVISORY AGREEMENT
SCHEDULE A
Fee as a % of
the Annual Average Daily
Fund of the Trust Net Assets of the Fund ("ADNA")
------------------------------ -------------------------------
Limited Maturity Treasury Fund 0.22%
-6-
