SUBADVISORY AGREEMENT
BETWEEN
WINDOWPANE ADVISORS, L.L.C.
AND XXXXXXX, XXXXXX MANAGEMENT COMPANY, INC.
AGREEMENT made as of the 24th day of January, 2005, by and between
Windowpane Advisors, L.L.C., a Delaware limited liability company with its
principal office and place of business at 000 Xxxx Xxxxxxxx, Xxxxx 0000, Xxx
Xxxxx, Xxxxxxxxxx 00000 (the "Adviser") and Xxxxxxx, Xxxxxx Management Company,
Inc., a Delaware corporation with its principal office and place of business at
00 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Subadviser").
WHEREAS, Adviser has entered into an Investment Advisory Agreement dated
the 24th day of January, 2005 ("Advisory Agreement") with Forum Funds, a
Delaware statutory 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, 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 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, 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
the 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 current Prospectuses
and Statements of Additional Information for the Fund (collectively, as
currently in effect and as amended or supplemented, the "Prospectus" or
"Registration Statement") 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, (iii) 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 for
the Fund ("Service Plan"); and (iv) all procedures adopted by the Trust with
respect to the Fund (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 Fund; 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
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 and (iii) 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 the 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 Fund. In all
purchases, sales and other transactions in securities and other investments for
the Fund, the Subadviser 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.
-2-
Consistent with Section 28(e) of the Securities and Exchange Act of 1934,
as amended, the Subadviser may allocate brokerage on behalf of the Fund to
broker-dealers who provide research services. The Subadviser may aggregate sales
and purchase orders of the assets of the Fund 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 the 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 the Fund since the
prior report, and will also keep the Board informed of important developments
affecting the Trust, the Fund 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 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
Subadviser will also furnish the Board with such statistical and analytical
information with respect to investments of the Fund 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 Fund, 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 Fund.
(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.
-3-
(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 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 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 Subadviser 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 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 Fund's 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 the 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 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
-4-
occurs. Upon the termination of this Agreement with respect to the Fund, the
Adviser shall pay to the Subadviser such compensation as shall be payable prior
to the effective date of termination.
(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 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.
(b) 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 the 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.
(d) The parties hereto acknowledge and agree that the Trust is a
third-party beneficiary as to the covenants, obligations, representations and
warranties undertaken by the Subadviser under this Agreement and as to the
rights and privileges to which the Adviser is entitled pursuant to this
Agreement, and that the Trust is entitled to all of the rights and privileges
associated with such third-party-beneficiary status.
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
-5-
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 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 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 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 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.
Furthermore, it is understood that the Subadviser performs investment
advisory services for various clients including the Subadviser's principals. The
Adviser agrees that the Subadviser may give advice and take action with respect
to any of its other clients, including the principals , which may differ from
advice given or the timing or nature of action taken with respect to the Fund.
It is understood that the Subadviser shall not have any obligation to purchase
or sell, or to recommend for purchase or sale, for the Fund any security which
Subadviser, its principals, affiliates or employees may purchase or sell for its
or their own accounts or for the account of any client, if in the opinion of the
Subadviser such transaction or investment appears unsuitable, impractical or
undesirable for the Fund.
SECTION 8. REPRESENTATIONS OF SUBADVISER.
The Subadviser represents and warrants to the Adviser that:
(a) 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;
-6-
(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
adviser 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 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 Fund.
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
Adviser and
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Subadviser 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 Subadviser shall be liable at law or in equity for the Subadviser'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 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.
WINDOWPANE ADVISORS.L.L.C.
/s/ Xxxxxxx Xxxxxx
--------------------------------------
Name:Xxxxxxx Xxxxxx
Title: Managing Partner
XXXXXXX, XXXXXX MANAGEMENT CO., INC.
/s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
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SUBADVISORY AGREEMENT
BETWEEN
WINDOWPANE ADVISORS, L.L.C.
AND XXXXXXX, XXXXXX MANAGEMENT COMPANY, INC.
APPENDIX A
SERIES OF THE TRUST:
Jordan Opportunity Fund
A-1
SUBADVISORY AGREEMENT
BETWEEN
WINDOWPANE ADVISORS, L.L.C.
AND XXXXXXX, XXXXXX MANAGEMENT COMPANY, INC.
APPENDIX B
FEES AND EXPENSES
0.50% of the Fund's average daily net assets up to $100 million, plus 0.60% of
assets between $100 million and $250 million plus 0.75% of assets over $250
million.
B-1
