FORM OF SUBADVISORY AGREEMENT
BETWEEN
▇▇▇▇▇ INVESTMENT ADVISORY INCORPORATED
AND PHILADELPHIA INTERNATIONAL ADVISORS, LP
AGREEMENT made as of the ___ day of _________, 200_, by and between
▇▇▇▇▇ Investment Advisory Incorporated, a Maryland corporation, with its
principal office and place of business at Furness House, ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (the "Adviser") and
Philadelphia International Advisors, LP, a limited partnership with its
principal office and place of business at One Liberty Place, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Subadviser").
WHEREAS, Adviser has entered into an Investment Advisory Agreement
dated the ___ day of _____________, 200_, ("Advisory Agreement") with Forum
Funds, a Delaware business trust, with its principal office and place of
business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, (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
Adviser acts as investment adviser for each series of the Trust listed on
Schedule A hereto (each, a "Fund" and, collectively, the "Funds");
WHEREAS, it is intended that the Trust be a third-party beneficiary
under this Agreement; and
WHEREAS, Adviser desires to retain the Subadviser to perform investment
advisory services for the Fund and Subadviser 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 Adviser and the Subadviser hereby agree as
follows:
SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) The Adviser hereby employs Subadviser, subject to the direction and
control of the Board, to manage the investment and reinvestment of the assets in
each Fund and, without limiting the generality of the foregoing, to provide
other services as specified herein. The Subadviser accepts this employment and
agrees to render its services for the compensation set forth herein.
(b) In connection therewith, the Adviser has delivered to the
Subadviser 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
of each 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 Funds (i.e., repurchase agreement procedures), and shall promptly furnish
the Subadviser with all amendments of or supplements to the foregoing. The
Adviser shall deliver to the Subadviser: (x) a certified copy of the resolution
of the Board appointing the Subadviser and authorizing the execution and
delivery of this Agreement; (y) a copy of all proxy statements and related
materials relating to the Funds; and (z) any other documents, materials or
information that the Subadviser shall reasonably request to enable it to perform
its duties pursuant to this Agreement.
(c) The Subadviser has delivered to the Adviser 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 Subadviser shall promptly furnish the Adviser and Trust with
all amendments of or supplements to the foregoing at least annually.
SECTION 2. DUTIES OF THE ADVISER
(a) In order for the Subadviser to perform the services required by
this Agreement, the Adviser (i) shall cause all service providers to the Trust
to furnish information to the Subadviser and assist the Subadviser as may be
required and (ii) shall ensure that the Subadviser has reasonable access to all
records and documents maintained by the Trust, the Adviser or any service
provider to the Trust.
(b) In order for the Subadviser to perform the services required by
this Agreement, the Adviser shall deliver to the Subadviser all material it
provides to the Board in accordance with the Advisory Agreement.
SECTION 3. DUTIES OF THE SUBADVISER
(a) The Subadviser will make decisions with respect to all purchases
and sales of securities and other investment assets in each Fund to the extent
such authority is delegated by the Adviser. To carry out such decisions, the
Subadviser 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 Funds. In all
purchases, sales and other transactions in securities and other investments for
the Funds, the Subadviser is authorized to exercise full discretion and act for
the Trust in the same manner and
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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.
Consistent with Section 28(e) of the Securities and Exchange Act of
1934, as amended, the Subadviser may allocate brokerage on behalf of the Funds
to broker-dealers who provide research services. The Subadviser may aggregate
sales and purchase orders of the assets of the Funds with similar orders being
made simultaneously for other accounts advised by the Subadviser or its
affiliates. Whenever the Subadviser simultaneously places orders to purchase or
sell the same asset on behalf of a Fund and one or more other accounts advised
by the Subadviser, the Subadviser 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 Subadviser will report to the Board at each meeting thereof as
requested by the Adviser or the Board all material changes in each Fund since
the prior report, and will also keep the Board informed of important
developments affecting the Trust, the Funds and the Subadviser, and on its own
initiative, will furnish the Board from time to time with such information as
the Subadviser may believe appropriate for this purpose, whether concerning the
individual companies whose securities are included in the Funds' holdings, the
industries in which they engage, the economic, social or political conditions
prevailing in each country in which the Funds maintain investments, or
otherwise. The Subadviser will also furnish the Board with such statistical and
analytical information with respect to investments of the Funds as the
Subadviser may believe appropriate or as the Board reasonably may request. In
making purchases and sales of securities and other investment assets for the
Funds, the Subadviser 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 Funds.
(c) The Subadviser will from time to time employ or associate with such
persons as the Subadviser believes to be particularly fitted to assist in the
execution of the Subadviser's duties hereunder, the cost of performance of such
duties to be borne and paid by the Subadviser. No obligation may be incurred on
the Trust's or Adviser's behalf in any such respect.
(d) The Subadviser will report to the Board all material matters
related to the Subadviser. On an annual basis, the Subadviser shall report on
its compliance with its Code to the Adviser and to the Board and upon the
written request of the Adviser or the Trust, the Subadviser shall permit the
Adviser and the Trust, or their respective representatives to examine the
reports required to be made to the Subadviser under the Code. The Subadviser
will notify the Adviser and the Trust of any change of control of the Subadviser
and any changes in the key personnel who are either the portfolio manager(s) of
the Fund or senior management of the Subadviser, in each case prior to or
promptly after such change.
(e) The Subadviser 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
-3-
1940 Act. The Subadviser 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 Subadviser pursuant to this Agreement required to be prepared
and maintained by the Subadviser 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 Subadviser shall be the property of the Trust. The Adviser
and the Trust, or their respective representatives, shall have access to such
books and records at all times during the Subadviser's normal business hours.
Upon the reasonable request of the Adviser or the Trust, copies of any such
books and records shall be provided promptly by the Subadviser to the Adviser
and the Trust, or their respective representatives.
(f) The Subadviser will cooperate with each 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 Subadviser will provide the Funds' custodian and fund
accountant on each business day with such information relating to all
transactions concerning the Funds' assets under the Subadviser's control as the
custodian and fund accountant may reasonably require. In accordance with
procedures adopted by the Board, the Subadviser 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 Subadviser for each asset for which the Funds' fund accountant
does not obtain prices in the ordinary course of business.
(h) The Subadviser 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 Subadviser 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 Adviser shall pay the
Subadviser, with respect to each Fund, a fee at an annual rate as listed in
Appendix B hereto. Such fees shall be accrued by the Adviser 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 a Fund, the Adviser shall pay to the Subadviser
such compensation as shall be payable prior to the effective date of
termination.
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(b) The Subadviser shall reimburse the Adviser for the expenses of each
Fund or waive its fees. The Subadviser's reimbursement of expenses shall be
estimated and paid to the Adviser monthly in arrears, at the same time as the
Adviser's payment to the Subadviser for such month.
(c) No fee shall be payable hereunder with respect to a 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 Adviser shall expect of the Subadviser, and the Subadviser will
give the Adviser the benefit of, the Subadviser's best judgment and efforts in
rendering its services hereunder. The Subadviser shall not be liable to the
Adviser 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 Subadviser against any liability
to the Adviser or the Trust to which the Subadviser would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of the Subadviser's duties hereunder, or by reason of the
Subadviser's reckless disregard of its obligations and duties hereunder.
(d) The Subadviser shall not be liable to the Adviser 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 a Fund made
to the Subadviser by a duly authorized officer of the Adviser 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 Subadviser 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
Subadviser'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 a 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 a Fund for a
period of two years from the date of its effectiveness and shall continue in
effect for successive annual periods
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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 a Fund, the Subadviser 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 a 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 Adviser on
60 days' written notice to the Subadviser or (ii) by the Subadviser 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 SUBADVISER
Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict the Subadviser's right, or
the right of any of the Subadviser'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 SUBADVISER.
The Subadviser represents and warrants to the Adviser that:
(a) It is either registered as an investment Subadviser 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;
(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 Adviser and the Trust of the occurrence
of any event that would disqualify the Subadviser from serving as an investment
Subadviser of an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise.
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SECTION 9. LIMITATION OF SHAREHOLDER AND [TRUSTEE] [DIRECTOR] 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 Subadviser 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 Subadviser'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 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) No amendment to this Agreement or the termination of this Agreement
with respect to a Fund shall effect 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 Delaware.
(e) 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.
(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. This Agreement shall be construed as if drafted jointly by both the
Adviser and Subadviser and no presumptions shall arise favoring any party by
virtue of authorship of any provision of this Agreement.
(h) Section headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
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(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 each 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 Subadviser shall be liable at law or in equity for the Subadviser'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.
▇▇▇▇▇ INVESTMENT ADVISORY INCORPORATED
----------------------------------------
[OFFICER NAME]
[TITLE]
PHILADELPHIA INVESTMENT ADVISORS LP
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[OFFICER NAME]
[TITLE]
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FORM OF SUBADVISORY AGREEMENT
BETWEEN
▇▇▇▇▇ INVESTMENT ADVISORY INCORPORATED
AND PHILADELPHIA INTERNATIONAL ADVISORS, LP
APPENDIX A
FUNDS OF THE TRUST:
▇▇▇▇▇ Advisory International Fund
▇▇▇▇▇ INVESTMENT ADVISORY INCORPORATED
By:
-------------------------------------
[Officer name]
[Title]
PHILADELPHIA INTERNATIONAL ADVISORS, LP
----------------------------------------
[Officer name]
[Title]
▇-▇
▇-▇
FORM OF SUBADVISORY AGREEMENT
BETWEEN
▇▇▇▇▇ INVESTMENT ADVISORY INCORPORATED
AND PHILADELPHIA INTERNATIONAL ADVISORS, LP
APPENDIX B
FEES AND EXPENSES
0.40% of the Fund's average daily net assets
B-1