EXHIBIT 5
THE ▇▇▇▇▇▇ TRUST
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 31st day of December, 1992, between The ▇▇▇▇▇▇ Trust
(the "Trust"), a business trust organized under the laws of the State of
Delaware with its principal place of business at ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, and ▇▇▇▇▇▇ & Company, Inc. (the "Adviser"), a corporation organized under
the laws of State of California with its principal place of business at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇.
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; and
WHEREAS, the Trust desires that the Adviser perform investment advisory
services for the ▇▇▇▇▇▇ Equity Income Fund, the ▇▇▇▇▇▇ Approved List Equity Fund
and the ▇▇▇▇▇▇ Government Fund, three separate investment portfolios of the
Trust (each a "Fund" and, collectively, the "Funds"), and the Adviser is willing
to provide those services on the terms and conditions set forth in this
Agreement;
NOW THEREFORE, the Trust and the Adviser agree as follows:
SECTION 1. APPOINTMENT
The Trust hereby appoints the Adviser, and the Adviser hereby agrees, to
act as investment adviser to each Fund for the period and on the terms set forth
in this Agreement. In connection therewith, (i) the Trust has delivered to the
Adviser copies of its Trust Instrument and Bylaws, the Trust's Registration
Statement and all amendments thereto filed pursuant to the Act or the Securities
Act of 1933, as amended, with the Securities and Exchange Commission (the
"Registration Statement") and the current Prospectus and Statement of Additional
Information of the Funds (collectively, as currently in effect and as amended or
supplemented, the "Prospectus") and, shall promptly furnish the Adviser with all
amendments of or supplements to the foregoing and (ii) the Adviser has delivered
to the Trust's secretary copies of its entire Form ADV and all amendments
thereto as amended to date and will from time to time furnish the Trust's
secretary with all amendments of or supplements to the Adviser's Form ADV.
SECTION 2. INVESTMENT ADVISORY DUTIES
Subject to the direction and control of the Trust's Board of Trustees (the
"Board"), the Adviser shall manage the investment and reinvestment of the assets
of the Funds, and, without limiting the generality of the foregoing, shall
provide the management and other services specified below, all in such manner
and to such extent as may be authorized by the Board.
(a) The Adviser shall make decisions with respect to all purchases, sales
and other transactions of securities and other
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investment assets of the Funds, including the selection of brokers, dealers and
other persons to introduce or execute those transactions. To carry out such
decisions, the Adviser is 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 Funds.
In all purchases, sales and other transactions in securities or other investment
assets for the Funds, 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, subject to paragraph (b) below.
(b) In making decisions with respect to all purchases, sales and other
transactions of securities and other investment assets of the Funds the Adviser
shall follow and comply with the policies set forth from time to time by the
Board (to the extent communicated to the Adviser in writing or at a Board
meeting attended by a representative of the Adviser) as well as the limitations
imposed by the Trust's Trust Instrument and Bylaws, the Trust's Registration
Statement and the Funds' Prospectuses (in each case, to the extent copies
thereof are furnished to the Adviser) and the limitations in the Act and the
requirements of subchapter M of the Internal Revenue Code of 1986, as amended,
in respect of investment companies.
(c) The Adviser shall monitor the performance of brokers, dealers and
other persons who introduce or execute purchases, sales and other transactions
of securities and other investment assets of the Funds.
(d) The Adviser shall maintain records relating to portfolio transactions
and the placing and allocation of brokerage orders as are required to be
maintained by the Trust under the Act, including those required by paragraphs
(b)(5), (6) and (9) of Rule 31a-1 promulgated under the 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 Trust pursuant
to the rules and regulations of any national, state, or local government entity
with jurisdiction over the Trust, including the Securities and Exchange
Commission and the Internal Revenue Service. The books and records pertaining
to the Trust that are in possession of the 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 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 the Trust's
authorized representatives.
(e) The Adviser shall determine in its sole discretion the propriety of
(i) honoring requests for orders to purchase Fund shares "in kind" for
consideration consisting of securities determined to be
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suitable to purchase, (ii) honoring requests by shareholders for proceeds upon
redemption of Fund shares to be paid "in kind" by delivery of portfolio
securities, and (iii) paying redemption proceeds "in kind" even though not
requested by a Fund shareholder.
(f) The Adviser shall provide to the Board at each regularly scheduled
meeting thereof (or such other meetings as may be requested by the Trust) a
report containing an appropriate summary of all changes in the Funds' investment
portfolios since the prior report, will inform the Board of important
developments affecting the Funds, and on its own initiative will furnish the
Board from time to time with such information as it believes appropriate for
this purpose, whether concerning the individual issuers whose securities are
included in the Funds' investment portfolios, the industries in which these
issuers engage, or the economic, social or political conditions prevailing in
each country in which the Funds' maintain investments. The Adviser also shall
provide the Board with such statistical and analytical information with respect
to securities in the Funds' investment portfolios as the Adviser believes
appropriate or as the Trust reasonably may request. The Adviser shall provide
other persons, in such forms and at such times as the Trust's authorized
representatives shall reasonably request, information about portfolio
transactions and prices or yield quotations of portfolio securities.
(g) The Adviser shall from time to time employ or associate with such
persons as it believes to be particularly fitted to assist it in the execution
of its duties under this Agreement, the cost of performance of such duties to be
borne and paid by the Adviser. No obligation may be incurred on behalf of the
Trust in any such respect.
SECTION 3. EXPENSES
(a) The Adviser shall be responsible for the portion of the net expenses
of each Fund (except interest, taxes, brokerage fees, distribution fees and
organization and extraordinary expenses, all to the extent such exclusions are
permitted by applicable state law) during any fiscal year (or portion thereof)
in which this Agreement is in effect which, as to a Fund, exceeds the limits
applicable to the Fund under the laws of any state in which the Fund's shares
are qualified for sale. The Adviser is not, however, required to bear expenses
of the Trust or any Fund to an extent that would result in a Fund not qualifying
under provisions of the Internal Revenue Code of 1986, as amended, as a
regulated investment company.
(b) Subject to the above and to any other agreement by the Adviser or
other person to reimburse any expenses of the Trust that relate to the Funds,
the Trust shall be responsible for and assumes the obligation for payment of all
of its other expenses, including: (i) the fee payable under Section 5 hereof;
(ii) the fees payable to Forum Financial Services, Inc. ("Forum") under an
agreement between Forum 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, interest charges and expenses of
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third parties, including the Trust's 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 maintaining the
Trust's existence; (xiii) costs of preparing and printing the Fund's
Prospectuses, subscription application forms and shareholder reports and
delivering them to existing shareholders; (xiv) expenses of meetings of
shareholders and proxy solicitations therefore; (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 of the Trust and of
preparing tax returns; (xvi) costs of reproduction, stationery and supplies;
(xvii) fees and expenses of the Trust's trustees; (xviii) compensation of the
Trust's officers and employees who are not officers of the Adviser or Forum or
their respective affiliated persons; (xix) costs of other personnel who may be
employees of the Adviser, Forum or their respective affiliated persons
performing services for the Trust; (xx) costs of Trustee meetings; (xxi)
Securities and Exchange Commission registration fees and related expenses; and
(xxii) state or foreign securities laws registration fees and related expenses.
SECTION 4. STANDARD OF CARE
(a) The Adviser shall give the Trust the benefit of its best judgment and
efforts in rendering its services to the Trust and shall not be liable for error
of judgment or mistake of law, for any loss arising out of any investment, or in
any event whatsoever, provided that nothing herein shall be deemed to protect,
or purports to protect, the Adviser against any liability to the Trust or to the
security holders of the Trust to which it would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder, or by reason of reckless disregard of its obligations and
duties hereunder.
(b) The Adviser shall not be held responsible for any loss incurred by
reason of any act or omission of any dealer, broker or custodian; provided that
such loss is not the result of the Adviser's willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or the result of
the Adviser's reckless disregard of its obligations and duties hereunder.
(c) This Section shall survive the termination of this Agreement and shall
be binding upon the Trust's and the Adviser's successors and personal
representatives.
SECTION 5. COMPENSATION
(a) For the services provided by the Adviser pursuant to this Agreement,
the Trust shall pay the Adviser, with respect to each of the Funds, a fee at an
annual rate equal to the amount set forth in Schedule A hereto. Such fees shall
be accrued by the Trust daily and shall be payable monthly in arrears on the
first day of each calendar month for
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services performed under this Agreement during the prior calendar month. Upon
the termination of this Agreement, the Trust shall pay to the Adviser such
compensation as shall be payable prior to the effective date of such
termination.
(b) Notwithstanding anything in this Agreement to the contrary, the
Adviser and its affiliated persons, if any, may receive compensation or
reimbursement from the Trust with respect to (i) the provision of shareholder
support or other services or (ii) service as a Trustee or officer of the Trust.
SECTION 6. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to a Fund on the
latter of the date on which the Trust's Registration Statement relating to the
shares of the Fund becomes effective and date of its approval by a vote of a
majority of the outstanding voting securities of the Fund. Upon the
effectiveness of this Agreement, it shall supersede all previous agreements
between the Trust and the Adviser covering the subject matter hereof.
(b) This Agreement shall continue in effect with respect to a Fund for
twelve months and, thereafter, shall continue in effect for successive twelve-
month periods, provided that such continuance is specifically approved at least
annually (i) by the Board or by a vote of a majority of the outstanding voting
securities of the Fund and (ii) by a vote of a majority of Trustees of the Trust
who are not parties to this Agreement or interested persons of any such party
cast in person at a meeting called for the purpose of voting on such approval.
If the continuation of this Agreement is not approved as to a Fund, the Adviser
may continue to render to the Fund the services described herein in the manner
and to the extent permitted by the Act.
(c) This Agreement may be terminated with respect to a 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 automatically terminate in the event of its assignment.
SECTION 7. ACTIVITIES OF THE ADVISER
(a) Except to the extent necessary to perform its obligations under this
Agreement, nothing herein shall be deemed to limit or restrict the Adviser's
right, or the right of any of its officers, directors or employees (whether or
not they are a trustee, officer, employee or other affiliated person of 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.
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(b) The Adviser represents that it is currently registered, and during the
entire period this Agreement is in effect will be registered, as an investment
adviser under the Investment Advisers Act of 1940.
SECTION 8. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the shareholders of each Fund shall not be
liable for any obligations of the Trust or of the Funds 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 the
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 the
Funds.
SECTION 9. "▇▇▇▇▇▇" NAME
If the Adviser ceases to act as investment adviser to the Trust or any Fund
whose name includes the word "▇▇▇▇▇▇," 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 word "▇▇▇▇▇▇." 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
words "▇▇▇▇▇▇" or any variation thereof, as the Adviser deems appropriate. Upon
the Adviser's request in writing, the Trust shall cease to use any such ▇▇▇▇ or
symbol at any time. The Trust acknowledges that any rights in or to the words
"▇▇▇▇▇▇" 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 word "▇▇▇▇▇▇" in their
names without the consent of the Trust. The Trust shall not use the word
"▇▇▇▇▇▇" in conducting any business other than that of an investment company
registered under the Act without the permission of the Adviser.
SECTION 10. REPRESENTATION OF THE TRUST
The Trust represents and agrees that shares of the Funds will be offered
and sold only to bona fide investment management clients of the Adviser
(customers who have a signed investment counsel agreement with the Adviser).
SECTION 11. 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 Act, by a vote of a majority of the
outstanding voting securities of any Fund thereby affected.
(b) 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
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enforced as if the Agreement did no contain the particular part, term or
provision held to be illegal or invalid.
(c) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(d) 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.
(e) This Agreement shall be governed by and shall be construed in
accordance with the laws of the State of New York.
(f) 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
THE ▇▇▇▇▇▇ TRUST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
President
▇▇▇▇▇▇ & COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman
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THE ▇▇▇▇▇▇ TRUST
INVESTMENT ADVISORY AGREEMENT
SCHEDULE A
ADVISORY FEES
Fee as a % of
the Annual Average Daily
Fund Net Assets of the Fund
---- ----------------------
▇▇▇▇▇▇ Equity Income Fund 0.50%
▇▇▇▇▇▇ Approved List Equity Fund 0.50%
▇▇▇▇▇▇ Government Fund 0.25%
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