Exhibit 23(e)
CENTURY CAPITAL MANAGEMENT TRUST
DISTRIBUTION AND SUBADMINISTRATION AGREEMENT
AGREEMENT made as of the 29th day of January, 2004, among Century
Capital Management Trust, a Massachusetts business trust with its principal
office and place of business at 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 (the "Trust"), Century Capital Management, LLC, a Delaware
limited liability company with its principal office and place of business at
000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Adviser") and
Forum Fund Services, LLC, a Delaware limited liability company with its
principal office and place of business at Xxx Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx
00000 ("Forum").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company and
may issue its shares of beneficial interest, no par value ("Shares") in
separate series and classes;
WHEREAS, Forum is registered under the Securities Exchange Act of
1934, as amended ("1934 Act"), as a broker-dealer and is engaged in the
business of selling shares of registered investment companies either directly
to purchasers or through other financial intermediaries and providing various
administrative services to those investment companies;
WHEREAS, the Trust offers shares in two separate series and may in the
future offer shares in various other series as listed in Appendix A hereto from
time to time (each such series, together with all other series subsequently
established by the Trust and made subject to this Agreement being herein
referred to as a "Fund," and collectively the "Funds"), and the Trust offers
shares of various classes of each Fund and may in the future offer other
classes as listed in Appendix A hereto from time to time (each such class
together with all other classes subsequently established by the Trust in a Fund
being herein referred to as a "Class," and collectively as the "Classes");
WHEREAS, the Adviser acts as the investment adviser and administrator
to each of its separate series of the Trust under (i) an Investment Advisory
and Management Services Agreement, or (ii) an Investment Advisory Agreement and
Administration Agreement, and may provide certain subadministration services
through its various agents and subcontractors;
WHEREAS, the Trust desires that Forum offer, as principal underwriter,
the Shares of each Fund and Class thereof to the public and Forum is willing to
provide those services on the terms and conditions set forth in this Agreement
in order to promote the growth of the Funds and facilitate the distribution of
the Shares; and
WHEREAS, the Adviser desires that Forum provide various
subadministrative services to each Fund and Class thereof at the Adviser's
expense and Forum 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 Trust, the Adviser and Forum hereby agree as
follows:
SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) The Trust hereby appoints Forum, and Forum hereby agrees, to act
as distributor of the Shares for the period and on the terms set forth in this
Agreement.
(b) The Adviser hereby appoints Forum, and Forum hereby agrees, to
provide certain subadministration services to the Adviser with respect to each
Fund for the period and on the terms set forth in this Agreement.
(c) In connection therewith, the Trust has delivered to Forum copies
of: (i) the Trust's Declaration of Trust 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
("Securities Act"), or the 1940 Act ("Registration Statement"); (iii) the
current prospectuses and statements of additional information of each Fund and
Class thereof (collectively, as currently in effect and as amended or
supplemented, the "Prospectus"); (iv) each current 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 (e.g., repurchase agreement procedures), and shall
promptly furnish Forum with all amendments of or supplements to the foregoing.
The Trust shall deliver to Forum: (x) a certified copy of the resolution of the
Board of Trustees of the Trust (the "Board") appointing Forum 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 Forum shall reasonably request to
enable it to perform its duties pursuant to this Agreement.
(d) Upon effectiveness hereof, the Adviser shall deliver to Forum a
list of the various states of the United States and other jurisdictions
("States") where each Fund's Shares are eligible to be sold.
SECTION 2. EXCLUSIVE NATURE OF DISTRIBUTION DUTIES
Forum shall be the exclusive representative of the Trust to act as
distributor of the Funds except that the rights given under this Agreement to
Forum shall not apply to: (i) Shares issued in connection with the merger,
consolidation or reorganization of any other investment company or series or
class thereof; (iii) the reinvestment in Shares by a Fund's shareholders of
dividends or other distributions; or (iv) any other offering by the Trust of
securities to its shareholders (collectively "exempt transactions"), and except
that nothing herein shall limit the right of the Adviser from time to time
directly or indirectly to perform distribution activities similar or in
addition to those heretofore performed by the Adviser.
SECTION 3. OFFERING OF SHARES
(a) Forum may act as the Trust's agent, to offer, and to solicit
offers to subscribe to, unsold Shares of the Funds as shall then be effectively
registered under the Securities Act. Forum will promptly forward all orders and
subscriptions to the Trust.
(b) Intentionally Left Blank.
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(c) The net asset value per Share of each Fund or Class thereof shall
be determined by the Trust, or its designated agent, in accordance with and at
the times indicated in the applicable Prospectus on each Fund business day in
accordance with the method set forth in the Prospectus and guidelines
established by the Board. The Trust will advise Forum of the net asset value
per Share at each time as the net asset value per Share shall have been
determined by the Trust and at such other times as Forum may reasonably
request.
(d) The Trust reserves the right to suspend the offering of Shares of
a Fund or of any Class thereof at any time in the absolute discretion of the
Board, and upon notice of such suspension Forum shall cease to offer Shares of
the Funds or Classes thereof specified in the notice.
(e) The Trust, or any agent of the Trust designated in writing to
Forum by the Trust, shall be promptly advised by Forum of all purchase orders
for Shares received by Forum and all subscriptions for Shares obtained by Forum
as agent shall be directed to the Trust for acceptance and shall not be binding
until accepted by the Trust. Any order or subscription may be rejected by the
Trust; provided, however, that the Trust will not arbitrarily or without
reasonable cause refuse to accept or confirm orders or subscriptions for the
purchase of Shares. The Trust or its designated agent will confirm orders and
subscriptions upon their receipt, will make appropriate book entries and, upon
receipt by the Trust or its designated agent of payment thereof, will issue
such Shares in certificated or uncertificated form pursuant to the instructions
of Forum. Forum agrees to cause such payment and such instructions to be
delivered promptly to the Trust or its designated agent.
SECTION 4. REPURCHASE OR REDEMPTION OF SHARES BY THE TRUST
(a) Any of the outstanding Shares of a Fund or Class thereof may be
tendered for redemption at any time, and the Trust agrees to redeem or
repurchase the Shares so tendered in accordance with its obligations as set
forth in the Organic Documents and the Prospectus relating to the Shares. The
price to be paid to redeem or repurchase the Shares of a Fund of Class thereof
shall be equal to the net asset value calculated in accordance with the
provisions of Section 3(c) hereof less, in the case of Shares for which a
deferred sales charge and/or redemption fee is assessed, a deferred sales
charge and/or redemption fee equal to a specified percentage or percentages of
the net asset value of those Shares as from time to time set forth in the
Prospectus relating to those Shares. Shares of a Fund or Class thereof for
which a deferred sales charge may be assessed and that have been outstanding
for a specified period of time may be redeemed without payment of a deferred
sales charge as from time to time set forth in the Prospectus relating to those
Shares.
(b) The Trust or its designated agent shall pay (i) the total amount
of the redemption price consisting of the redemption price less any applicable
deferred sales charge and/or redemption fee to the redeeming shareholder or its
agent and (ii) except as may be otherwise required by the Rules of Fair
Practice (the "Rules") of the National Association of Securities Dealers
Regulation, Inc. (the "NASD") and any interpretations, thereof, any applicable
deferred sales charges to Forum in accordance with Forum's instructions on or
before the fifth business
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day (or such other earlier business day as is customary in the investment
company industry) subsequent to the Trust or its agent having received the
notice of redemption in proper form.
(c) Redemption of Shares or payment therefor may be suspended at times
when the New York Stock Exchange is closed for any reason other than its
customary weekend or holiday closings, when trading thereon is restricted, when
an emergency exists as a result of which disposal by the Trust of securities
owned by a Fund is not reasonably practicable or it is not reasonably
practicable for the Trust fairly to determine the value of a Fund's net assets,
or during any other period when the SEC so requires or permits.
SECTION 5. DUTIES AND REPRESENTATIONS OF FORUM
(a) Subject to the direction and control of the Board, Forum shall:
(i) Use reasonable efforts to sell Shares of the Funds upon the terms
and conditions contained herein and in the then current Prospectus.
Forum shall devote reasonable time and effort to effect sales of
Shares but shall not be obligated to sell any specific number of
Shares. The services of Forum to the Trust hereunder are not to be
deemed exclusive, and nothing herein contained shall prevent Forum
from entering into like arrangements with other investment companies
so long as the performance of its obligations hereunder is not
impaired thereby;
(ii) In selling Shares of the Funds, use its best efforts in all
material respects duly to conform with the requirements of all federal
and state laws relating to the sale of the Shares. None of Forum, any
broker-dealer or other financial intermediary ("Dealers") or any other
person is authorized by the Trust to give any information or to make
any representations other than as is contained in a Fund's Prospectus
or any advertising materials or sales literature specifically approved
in writing by the Trust or its agents; and
(iii) Adopt and follow procedures for the confirmation of sales to
investors and Dealers, the collection of amounts payable by investors
and Dealers on such sales, and the cancellation of unsettled
transactions, as may be necessary to comply with the requirements of
the NASD.
(b) Subject to the direction and control of the Adviser, Forum shall
perform the services listed in this Section 5(b). With respect to each Fund, as
applicable, Forum shall:
(i) provide the Adviser with a summary of its review of all
advertising and sales literature for each Fund to the Adviser by the
third business day after any routine advertising or sales literature
is proposed and received by Forum's compliance department (five
business days after any extraordinary advertising or sales literature
is proposed and received);
(ii) provide the Adviser with a summary of its review of all
Prospectuses and Registration Statements prepared by a Fund by the
fifth business day any such Prospectus or Registration Statement is
proposed and received by Forum's compliance department;
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(iii) at the request of the Adviser, carry the license as a registered
representative of those persons who will service or assist in the
distribution of a Fund, who agree to comply with the policies of Forum
related to registered representatives and who, in the absolute
discretion of Forum, comply with such policies ("Adviser Reps");
(iv) attempt to maintain active sub-distribution agreements,
shareholder servicing agreements and other agreements related to the
distribution or servicing of a Fund with Dealers who, prior to Forum
entering into this Agreement, acted in similar capacities for a Fund,
and in connection with the Adviser seek to obtain additional
agreements with Dealers;
(v) at the request of the Adviser, provide a Fund with adequate
general office space;
(vi) cooperate with each Fund's independent public accountants and
take reasonable action to make all necessary information available to
the accountants for the performance of the accountants' duties;
(vii) as directed by the Adviser, prepare and file applications for
registration of a Fund's Shares (or other applicable filings) in the
various States;
(viii) provide the Adviser and the Board with periodic reports
relating to the services provided by Forum under this Agreement; and
(ix) provide the Adviser with such other administrative services and
assistance relating to the affairs of the Adviser and the Trust as the
Adviser may, from time to time, reasonably request pursuant to
mutually acceptable compensation and implementation agreements between
the Adviser and Forum.
(c) Forum shall maintain records relating to its services as are
required to be maintained under, and shall otherwise comply with, the 1934 Act
and the 1940 Act. The books and records pertaining to the Trust or the Adviser
that are in possession of Forum shall be the property of the Trust or the
Adviser, respectively. The Trust, the Adviser, or their authorized
representatives, shall have access to such books and records at all tunes
during Forum's normal business hours. Upon the reasonable request of the Trust
or the Adviser, copies of any such books and records shall be provided promptly
by Forum to the Trust, the Adviser or their authorized representatives at the
Adviser's expense. In the event a successor is designated that shall assume any
of Forum's obligations hereunder, Forum shall, at the expense and direction of
the Adviser, transfer to such successor all relevant books, records and other
data established or maintained by Forum under this Agreement.
(d) Nothing contained herein shall be construed to require Forum to
perform any service that could cause Forum to be deemed an investment adviser
for purposes of the 1940 Act or the Investment Advisers Act of 1940, as
amended, or that could cause a Fund to act in contravention of the Fund's
Prospectus or any provision of the 1940 Act. Except with respect to Forum's
duties as set forth in this Section 5 and except as otherwise specifically
provided herein, the Adviser assumes all responsibility for ensuring that each
Fund, complies with all applicable requirements of the Securities Act, the 1940
Act and any laws, rules and regulations of governmental authorities with
jurisdiction over the Adviser.
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(e) Forum represents and warrants to the Trust and to the Adviser
that:
(i) It is a limited liability company duly organized and existing and
in good standing under the laws of the State of Delaware;
(ii) It is duly qualified to carry on its business in the State of
Maine and in any other state where the failure to be so qualified
would have a material adverse effect on Forum's ability to perform its
obligations hereunder;
(iii) It is empowered under applicable laws and by its Operating
Agreement to enter into this Agreement and perform its duties under
this Agreement;
(iv) All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement;
(v) It has access to the necessary facilities, equipment and personnel
to perform its duties and obligations under this Agreement;
(vi) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of Forum, enforceable against
Forum 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;
and
(vii) It is registered under the 1934 Act with the SEC as a
broker-dealer, it is a member in good standing of the NASD, it will
abide by the rules and regulations of the NASD, and it will promptly
notify the Trust if its membership in the NASD is terminated or
suspended.
(f) Notwithstanding anything in this Agreement, including the
Appendices, to the contrary, Forum makes no warranty or representation as to
the number of Dealers with which it has entered into selling agreements, as to
the availability of any Shares to be sold through any Dealer or as to any other
matter not specifically set forth herein.
SECTION 6. DUTIES AND REPRESENTATIONS OF THE TRUST
(a) The Trust shall furnish to Forum copies of all financial
statements and other documents to be delivered to shareholders or investors at
least two Fund business days prior to such delivery and shall furnish Forum
copies of all other financial statements, documents and other papers or
information which Forum may reasonably request for use in connection with the
distribution of Shares. The Trust shall make available to Forum the number of
copies of the Funds' Prospectuses as Forum shall reasonably request.
(b) The Trust shall take, from time to time, subject to the approval
of the Board and any required approval of the shareholders of the Trust, all
action necessary to fix the number of authorized Shares (if such number is not
limited) and to register the Shares under the Securities Act, to the end that
there will be available for sale the number of Shares as reasonably may be
expected to be sold pursuant to this Agreement.
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(c) The Trust shall execute any and all documents, furnish to Forum
any and all information, otherwise use its best efforts to take all actions
that may be reasonably necessary and cooperate with Forum in taking any action
as may be necessary to register or qualify Shares for sale under the securities
laws of the various States as Forum shall designate (subject to approval by the
Trust); provided that Forum shall not be required to register as a
broker-dealer or file a consent to service of process in any State and neither
the Trust nor any Fund or Class thereof shall be required to qualify as a
foreign corporation, trust or association in any State. Any registration or
qualification may be withheld, terminated or withdrawn by the Trust at any time
in its discretion. Forum shall furnish such information and other material
relating to its affairs and activities as may be required by the Trust in
connection with such registration or qualification.
(d) The Trust represents and warrants to Forum that:
(i) It is a business trust duly organized and existing and in good
standing under the laws of The Commonwealth of Massachusetts;
(ii) It is empowered under applicable laws and by its Organic
Documents to enter into and perform this Agreement;
(iii) All proceedings required by the Organic Documents have been
taken to authorize it to enter into and perform its duties under this
Agreement;
(iv) It is an open-end management investment company registered with
the SEC under the 1940 Act;
(v) All Shares, when issued, shall be validly issued, fully paid and
non-assessable;
(vi) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of the Trust, enforceable against
the Trust 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;
(vii) The Registration Statement is currently effective and will
remain effective with respect to all Shares of the Funds and Classes
thereof being offered for sale during the term of this Agreement;
(viii) The Registration Statement and Prospectuses have been or will
be, as the case may be, carefully prepared in conformity with the
requirements of the Securities Act and the rules and regulations
thereunder;
(ix) The Registration Statement and Prospectuses contain or will
contain all statements required to be stated therein in accordance
with the Securities Act and the rules and regulations thereunder; all
statements of fact contained or to be contained in the Registration
Statement or Prospectuses are or will be true and correct at the time
indicated or on the effective date as the case may be; and neither the
Registration Statement nor any Prospectus, when they shall become
effective or be authorized for use, will include an untrue statement
of a material fact or omit to state a material fact required
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to be stated therein or necessary to make the statements therein not
misleading to a purchaser of Shares;
(x) It will from time to time file such amendment or amendments to the
Registration Statement and Prospectuses as, in the light of
then-current and then-prospective developments, shall, in the opinion
of its counsel, be necessary in order to have the Registration
Statement and Prospectuses at all times contain all material facts
required to be stated therein or necessary to make any statements
therein not misleading to a purchaser of Shares ("Required
Amendments");
(xi) It shall not file any amendment to the Registration Statement or
Prospectuses without giving Forum reasonable advance notice thereof;
provided, however, that nothing contained in this Agreement shall in
any way limit the Trust's right to file at any time such amendments to
the Registration Statement or Prospectuses, of whatever character, as
the Trust may deem advisable, such right being in all respects
absolute and unconditional; and
(xii) Any amendment to the Registration Statement or Prospectuses
hereafter filed will, when it becomes effective, contain all
statements required to be stated therein in accordance with the 1940
Act and the rules and regulations thereunder; all statements of fact
contained in the Registration Statement or Prospectuses will, when be
true and correct at the time indicated or on the effective date as the
case may be; and no such amendment, when it becomes effective, will
include an untrue statement of a material fact or will omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading to a purchaser of the Shares.
SECTION 7. DUTIES AND REPRESENTATIONS OF ADVISER
(a) In order for Forum to perform the services required under this
Agreement, the Adviser shall (i) shall cause all service providers to each Fund
to furnish any and all information to Forum, and assist Forum as may be
required and (ii) ensure that Forum has access to all records and documents
maintained by the Adviser or any service provider to each Fund and furnish to
Forum that information requested by Forum that is required for Forum to perform
its duties under this Agreement.
(b) Unless otherwise requested by Forum, the Adviser shall ensure that
Forum (solely in its capacity as distributor of each Fund) is insured on the
errors and omissions insurance policy maintained by each Fund, as from time to
time amended, or any other insurance policy intended to provide similar
coverage (regardless of the amount of coverage provided) (the "Policy") and
shall provide Forum with 30 days notice prior to any termination of Forum's
coverage under the Policy. The Adviser shall provide Forum on an ongoing basis
with (i) a copy of the Policy, (ii) information as to the premiums under the
Policy and the allocation of the premiums and (iii) documentation of approval
by the Board as to approval of the Policy and the allocation of premiums.
(c) The Adviser represents and warrants to Forum that:
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(i) It is a limited liability company duly organized and existing and
in good standing under the laws of the State of Delaware;
(ii) It is duly qualified to carry on its business in The Commonwealth
of Massachusetts and in any other state where the failure to be so
qualified would have a material adverse effect on the Adviser's
ability to perform its obligations hereunder;
(iii) It is empowered under applicable laws and by its Limited
Liability Company Agreement to enter into and perform this Agreement;
(iv) All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement;
(v) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of the Adviser, enforceable
against the Adviser 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;
(vi) The performance by the Adviser of its obligations under this
Agreement does not and will not contravene any provision of its
Limited Liability Company Agreement;
(vii) The Registration Statement is currently effective and will
remain effective with respect to all Shares of the Funds and Classes
thereof being offered for sale during the term of this Agreement;
(viii) The Registration Statement and Prospectuses have been or will
be, as the case may be, carefully prepared in conformity with the
requirements of the Securities Act;
(ix) The Registration Statement and Prospectuses contain or will
contain all statements required to be stated therein in accordance
with the Securities Act and the rules and regulations thereunder; all
statements of fact contained or to be contained in the Registration
Statement or Prospectuses are or will be true and correct at the time
indicated or on the effective date as the case may be; and neither the
Registration Statement nor any Prospectus, when they shall become
effective or be authorized for use, will include an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading to a purchaser of Shares;
(x) It shall cause each Fund to file Required Amendments;
(xi) It shall not cause a Fund to file any amendment to the
Registration Statement or Prospectuses without giving Forum reasonable
advance notice thereof; provided, however, that nothing contained in
this Agreement shall in any way limit the Trust's right to file at any
time such amendments to the Registration Statement or Prospectuses, of
whatever character, as the Trust may deem advisable, such right being
in all respects absolute and unconditional; and
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(xii) Any amendment to the Registration Statement or Prospectuses
hereafter filed will, when it becomes effective, contain all
statements required to be stated therein in accordance with the 1940
Act and the rules and regulations thereunder; all statements of fact
contained in the Registration Statement or Prospectuses will, when be
true and correct at the time indicated or on the effective date as the
case may be; and no such amendment, when it becomes effective, will
include an untrue statement of a material fact or will omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading to a purchaser of the Shares.
SECTION 8. STANDARD OF CARE
(a) Forum shall use its best judgment and reasonable efforts in
rendering services to the Trust under this Agreement but shall be under no duty
to take any action except as specifically set forth herein or as may be
specifically agreed to by Forum in writing. Except for material breaches of
this Agreement or applicable law, Forum shall not be liable to the Trust, the
Adviser or any of the Trust's shareholders for any error of judgment or mistake
of law, for any loss arising out of any investment, or for any action or
inaction of Forum in the absence of bad faith, willful misfeasance or gross
negligence in the performance of Forum's duties or obligations under this
Agreement or by reason or Forum's reckless disregard of its duties and
obligations under this Agreement.
(b) Forum Indemnitees (as defined in Section 9) shall not be liable
for any action taken or failure to act in good faith reliance upon:
(i) the advice of the Trust, the Adviser or of counsel, who may be
counsel to the Trust or the Adviser;
(ii) any oral instruction which it receives and which it reasonably
believes in good faith was transmitted by the person or persons
authorized by the Board or the Adviser to give such oral instruction
(provided that Forum has such reasonable belief, Forum shall have no
duty or obligation to make any inquiry or effort of certification of
such oral instruction);
(iii) any written instruction or certified copy of any resolution of
the Board, and Forum may rely upon the genuineness of any such
document or copy thereof reasonably believed in good faith by Forum to
have been validly executed; or
(iv) any signature, instruction, request, letter of transmittal,
certificate, opinion of counsel, statement, instrument, report,
notice, consent, order, or other document reasonably believed in good
faith by Forum to be genuine and to have been signed or presented by
the Trust or other proper party or parties;
and Forum shall not be under any duty or obligation to inquire into the
validity or invalidity or authority or lack thereof of any statement, oral or
written instruction, resolution, signature, request, letter of transmittal,
certificate, opinion of counsel, instrument, report, notice, consent, order, or
any other document or instrument which Forum reasonably believes in good faith
to be genuine.
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(c) Forum shall not be liable for the errors of other service
providers to a Fund or their systems, including the errors of pricing services
(other than to pursue all reasonable claims against the pricing service based
on the pricing services' standard contracts entered into by Forum) and errors
in information provided by an investment adviser (including prices and pricing
formulas and the untimely transmission of trade information), custodian or
transfer agent to the Fund.
SECTION 9. INDEMNIFICATION
(a) Each of the Trust and the Adviser will indemnify, defend and hold
Forum, its employees, agents, directors and officers and any person who
controls Forum within the meaning of section 15 of the Securities Act or
section 20 of the 1934 Act ("Forum Indemnitees") free and harmless from and
against any and all claims, demands, actions, suits, judgments, liabilities,
losses, damages, costs, charges, reasonable counsel fees and other expenses of
every nature and character (including the cost of investigating or defending
such claims, demands, actions, suits or liabilities and any reasonable counsel
fees incurred in connection therewith) ("Costs") which any Forum Indemnitee may
incur, under the Securities Act, or under common law or otherwise, (i) arising
out of or based upon any alleged untrue statement of a material fact contained
in the Registration Statement or the Prospectuses or arising out of or based
upon any alleged omission to state a material fact required to be stated in any
one thereof or necessary to make the statements in any one thereof not
misleading, unless such statement or omission was made in reliance upon, and in
conformity with, information furnished in writing to the Trust in connection
with the preparation of the Registration Statement or exhibits to the
Registration Statement by or on behalf of Forum and (ii) with respect to the
Adviser only, arising out of or in any way (including "Blue Sky Errors" as
defined below) related to Forum's actions taken or failures to act with respect
to a Fund that are consistent with the standard of care set forth in Section
8(a) or based, if applicable, on good faith reliance upon an item described in
Section 8(b) ("Forum Claims"); provided, however, that with respect to Blue Sky
Errors, the Adviser shall indemnify Forum and each Forum Indemnitee for all
Costs arising out of actions taken or failures to act by the Adviser, a Fund or
the Adviser's or a Fund's agents with respect to a Fund. For purposes hereof,
"Blue Sky Error" shall include (i) any oversale of Fund Shares in a particular
State or (ii) any failure of a Fund or its Shares to be properly registered in
a State in which the Adviser has indicated, in accordance with Section 1(d), a
Fund's Shares are eligible for sale.
The foregoing obligation of the Trust shall apply to any Forum Claim
arising after receipt of Forum's notice of termination under Section 14(e) only
to the extent such Claim is directly related to the matters for which Forum has
requested amendment to the Registration Statement and for which the Trust has
not filed a Required Amendment, regardless of whether any statement in or
omission from the Registration Statement was made in reliance upon, or in
conformity with, information furnished to the Trust by or on behalf of Forum.
(b) The Trust or the Adviser, as applicable, may assume the defense of
any suit brought to enforce any Forum Claim and may retain counsel of good
standing chosen by the Trust or the Adviser and approved by Forum, which
approval shall not be withheld unreasonably. The Trust or Adviser shall advise
Forum that it will assume the defense of the suit and retain counsel within ten
(10) days of receipt of the notice of the claim. If the Trust or
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Adviser assumes the defense of any such suit and retains counsel, the Forum
Indemnitees shall bear the fees and expenses of any additional counsel that
they retain. If the Trust and Adviser do not assume the defense of any such
suit, or if Forum does not approve of counsel chosen by the Trust or Adviser or
has been advised that it may have available defenses or claims that are not
available to or conflict with those available to the Trust or Adviser, the
Trust and Adviser will reimburse any Forum Indemnitee named as defendant in
such suit for the reasonable fees and expenses of any counsel that person
retains. A Forum Indemnitee shall not settle or confess any claim without the
prior written consent of the Trust or Adviser, which consent shall not be
unreasonably withheld or delayed.
(c) Forum will indemnify, defend and hold the Trust, the Adviser and
their respective several officers, Trustees, directors, employees, agents and
shareholders (collectively, the "Trust Indemnitees") free and harmless from and
against any and all claims, demands, actions, suits, judgments, liabilities,
losses, damages, costs, charges, reasonable counsel fees and other expenses of
every nature and character (including the cost of investigating or defending
such claims, demands, actions, suits or liabilities and any reasonable counsel
fees incurred in connection therewith) which any Trust Indemnitee may incur,
under the Securities Act, or under common law or otherwise, but .only to the
extent that such claims, demands, actions, suits, judgments, liabilities,
losses, damages, costs, charges, reasonable counsel fees and other expenses
result from, arise out of or are based upon:
(i) any alleged untrue statement of a material fact contained in the
Registration Statement or Prospectus or any alleged omission of a
material fact required to be stated or necessary to make the
statements therein not misleading, if such statement or omission was
made in reliance upon, and in conformity with, information furnished
to the Trust in writing in connection with the preparation of the
Registration Statement or Prospectus by or on behalf of Forum; or
(ii) any act of, or omission by, Forum or its sales representatives
that does not conform to the standard of care set forth in Section 8
of this Agreement ("Trust Claims").
(d) Forum may assume the defense of any suit brought to enforce any
Trust Claim and may retain counsel of good standing chosen by Forum and
approved by the Trust and Adviser, as applicable, which approval shall not be
withheld unreasonably. Forum shall advise the Trust and Adviser that it will
assume the defense of the suit and retain counsel within ten (10) days of
receipt of the notice of the claim. If Forum assumes the defense of any such
suit and retains counsel, the Trust Indemnitees shall bear the fees and
expenses of any additional counsel that they retain. If Forum does not assume
the defense of any such suit, or if Trust or Adviser does not approve of
counsel chosen by Forum or has been advised that it may have available defenses
or claims that are not available to or conflict with those available to Forum,
Forum will reimburse any Trust Indemnitee named as defendant in such suit for
the reasonable fees and expenses of any counsel that person retains. A Trust
Indemnitee shall not settle or confess any claim without the prior written
consent of Forum, which consent shall not be unreasonably withheld or delayed.
(e) All obligations to provide indemnification under this Section are
conditioned upon the applicable parties receiving notice of any action brought
against a Forum Indemnitee or
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Trust Indemnitee by the person against whom such action is brought within
twenty (20) days after the summons or other first legal process is served. Such
notice shall refer to the person or persons against whom the action is brought.
Notwithstanding the foregoing, the failure to provide such notice shall not
relieve the party entitled to such notice of any liability that it may have to
any Forum Indemnitee or Trust Indemnitee except to the extent that the ability
of the party entitled to such notice to defend such action has been materially
adversely affected by the failure to provide notice.
(f) The provisions of this Section and the parties' representations
and warranties in this Agreement shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Forum
Indemnitee or Trust Indemnitee and shall survive the sale and redemption of any
Shares made pursuant to subscriptions obtained by Forum. The indemnification
provisions of this Section will inure exclusively to the benefit of each person
that may be a Forum Indemnitee or Trust Indemnitee at any time and their
respective successors and assigns (it being intended that such persons be
deemed to be third party beneficiaries under this Agreement).
(g) Forum agrees promptly to notify the Trust and the Adviser, and
each of the trust and Adviser agrees promptly to notify Forum, of the
commencement of any litigation or proceeding of which it becomes aware arising
out of or in any way connected with the issuance or sale of Shares or services
provided hereunder.
(h) Nothing contained herein shall require the Trust to take any
action contrary to any provision of its Organic Documents or any applicable
statute or regulation or shall require Forum or the Adviser to take any action
contrary to any provision of its Organic Documents or any applicable statute or
regulation; provided, however, that no party may amend their Organic Documents
in any manner that would result in a violation of a representation or warranty
made in this Agreement.
(i) Nothing contained in this Section, shall be construed to protect
Forum against any liability to the Trust, the Adviser or the Trust's security
holders to which Forum would otherwise be subject by reason of its failure to
satisfy the standard of care set forth in Section 8 of this Agreement.
SECTION 10. NOTIFICATION BY THE TRUST
The Trust shall advise Forum immediately: (i) of any request by the
SEC for amendments to the Trust's Registration Statement or Prospectus or for
additional information; (ii) in the event of the issuance by the SEC of any
stop order suspending the effectiveness of the Trust's Registration Statement
or any Prospectus or the initiation of any proceedings for that purpose; (iii)
of the happening of any material event which makes untrue any statement made in
the Trust's then current Registration Statement or Prospectus or which requires
the making of a change in either thereof in order to make the statements
therein not misleading; and (iv) of all action of the SEC with respect to any
amendments to the Trust's Registration Statement or Prospectus which may from
time to time be filed with the Commission under the 1940 Act or the Securities
Act.
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SECTION 11. COMPENSATION; EXPENSES
(a) In consideration of Forum's services in connection with the
distribution of Shares of each Fund and Class thereof, Forum shall receive: (i)
any applicable sales charge assessed upon investors in connection with the
purchase of Shares; (ii) from the Trust, any applicable contingent deferred
sales charge ("CDSC") assessed upon investors in connection with the redemption
of Shares; (iii) from the Trust, the distribution service fees set forth in
Appendix A with respect to the Shares of those Classes for which a Plan is
effective (the "Distribution Fee"); and (iv) from the Trust, the shareholder
service fees set forth in Appendix A with respect to the Shares of those
Classes for which a Service Plan is effective (the "Shareholder Service Fee").
The Distribution Fee and Shareholder Service Fee shall be accrued daily by each
applicable Fund or Class thereof and shall be paid monthly as promptly as
possible after the last day of each calendar month but in any event on or
before the fifth (5th) Fund business day after month-end, at the rate or in the
amounts set forth in Appendix A.
(b) The Trust shall cause its transfer agent (the "Transfer Agent") to
withhold, from redemption proceeds payable to holders of Shares of the Funds
and the Classes thereof, all CDSCs properly payable by the shareholders in
accordance with the terms of the applicable Prospectus and shall cause the
Transfer Agent to pay such amounts over to Forum as promptly as possible after
the settlement date for each redemption of Shares.
(c) Except as specified in Sections 9 and 11(a), Forum shall be
entitled to no compensation or reimbursement of expenses from the Trust for the
services provided by Forum pursuant to this Agreement.
(d) As to Forum, the Trust shall be responsible and assumes the
obligation for payment of all the expenses of the Funds, including fees and
disbursements of its counsel and auditors, in connection with the preparation
and filing of the Registration Statement and Prospectuses (including but not
limited to the expense of setting in type the Registration Statement and
Prospectuses and printing sufficient quantities for internal compliance,
regulatory purposes and for distribution to current shareholders).
(e) The Trust shall bear the cost and expenses: (i) of the
registration of the Shares for sale under the Securities Act; (ii) of the
registration or qualification of the Shares for sale under the securities laws
of the various States; (iii) if necessary or advisable in connection therewith,
of qualifying the Trust, the Funds or the Classes thereof (but not Forum) as an
issuer or as a broker or dealer, in such States as shall be selected by the
Trust and Forum pursuant to Section 6(c) hereof; and (iv) payable to each State
for continuing registration or qualification therein until the Trust decides to
discontinue registration or qualification pursuant to Section 6(c) hereof.
Forum shall pay all expenses relating to Forum's broker-dealer qualification.
(f) In consideration of the administrative services provided by Forum
to the Adviser pursuant to this Agreement, the Adviser shall pay Forum the fees
set forth in Appendix B hereto.
(g) In connection with the administrative services provided by Forum
to the Adviser pursuant to this Agreement, the Adviser, on behalf of each Fund,
agrees to reimburse Forum for the expenses set forth in Appendix B hereto.
Reimbursements shall be payable as incurred.
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Should the Adviser exercise its right to terminate this Agreement, the Adviser,
on behalf of the applicable Fund, shall reimburse Forum for all reasonably
incurred out-of-pocket expenses and employee time (at 150% of salary)
associated with the copying and movement of records and material to any
successor person and providing assistance to any successor person in the
establishment of the accounts and records necessary to carry out the
successor's responsibilities.
SECTION 12. CONFIDENTIALITY/PRIVACY
(a) Forum agrees to treat all records and other information related to
the Trust or the Adviser as proprietary information of the Trust or Adviser
and, on behalf of itself and its employees, to keep confidential all such
information, except that Forum may:
(i) prepare or assist in the preparation of periodic reports to
shareholders and regulatory bodies such as the SEC;
(ii) provide information typically supplied in the investment company
industry to companies that track or report price, performance or other
nonconfidential information regarding investment companies; and
(iii) release such other information as approved by the Trust or
Adviser, as applicable, which approval shall not, be unreasonably
withheld and may not be withheld where Forum is advised by counsel
that it may be exposed to civil or criminal contempt proceedings for
failure to release the information (provided, however, that Forum
shall seek the approval of the Trust or Adviser, as applicable, as
promptly as possible so as to enable the Trust to pursue such legal or
other action as it may desire to prevent the release of such
information) or when so requested by the Trust or Adviser.
(b) The Trust, Forum and the Adviser agree:
(i) to comply with SEC Regulation S-P with respect to all information
and data concerning the shareholders and clients of the Trust and/or
the Adviser that they may receive from time to time; and
(ii) not to disclose or use any such information or data except as
necessary to perform its obligations hereunder.
SECTION 13. FORCE MAJEURE
Forum 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, which
may include, without limitation, acts of civil or military authority, national
emergencies, labor difficulties (other than those related to the Forum's
employees), fire, mechanical breakdowns, flood or catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation, communication
or power supply. In addition, to the extent Forum's obligations under this
Agreement are to oversee or monitor the activities of third parties, provided
that Forum has exercised reasonable care in selecting and overseeing the
activities of any such third party, Forum shall not be liable for any failure
or delay in the performance of Forum's duties caused, directly or indirectly,
by the failure or delay of
-15-
such third parties in performing their respective duties or cooperating
reasonably and in a timely manner with Forum.
SECTION 14. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to each Fund on
the later of (i) the date first above written or (ii) the date on which the
Trust's Registration Statement relating to Shares of the Fund becomes
effective. Upon effectiveness of this Agreement, it shall supersede all
previous agreements between the parties hereto covering the subject matter
hereof insofar as such Agreement may have been deemed to relate to the Funds.
(b) This Agreement shall continue in effect with respect to a Fund for
a period of one year from its effectiveness and thereafter shall continue in
effect with respect to a Fund until terminated; provided, that 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 (x) who are not parties to this Agreement
or interested persons of any such party (other than as Trustees of the Trust)
and (y) with respect to each class of a Fund for which there is an effective
Plan, who do not have any direct or indirect financial interest in any such
Plan applicable to the class or in any agreements related to the Plan, cast in
person at a meeting called for the purpose of voting on such approval.
(c) This Agreement may be terminated at any time with respect to a
Fund, 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 or, with respect to
each class of a Fund for which there is an effective Plan, a majority of
Trustees of the Trust who do not have any direct or indirect financial interest
in any such Plan or in any agreements related to the Plan, on sixty (60) days'
written notice to Forum or (ii) by Forum on sixty (60) days' written notice to
the Trust. The duties and obligations of Forum and the Adviser to each other
may be terminated by either party at any time with respect to a Fund, without
the payment of any penalty on sixty (60) days' written notice to the other
party.
(d) This Agreement shall automatically terminate upon its assignment
and upon the termination of Forum's membership in the NASD.
(e) If the Trust shall not file a Required Amendment within fifteen
days following receipt of a written request from Forum to do so, Forum may, at
its option, terminate this Agreement immediately.
(f) The obligations of Sections 5(e), 6(d), 7(c), 9, 10 and 11 shall
survive any termination of this Agreement.
(g) This Agreement and the rights and duties under this Agreement
otherwise shall not be assignable by any party except by the specific written
consent of the other parties; provided, that Forum may assign its rights to
payments hereunder at any time, with prior notice to the Adviser. All terms and
provisions of this Agreement shall be binding upon, inure to the benefit of and
be enforceable by the respective successors and assigns of the parties hereto.
SECTION 15. NOTICES
-16-
Any notice required or permitted to be given hereunder by any party to
the other shall be deemed sufficiently given if personally delivered or sent by
telegram, facsimile or registered, certified or overnight mail, postage
prepaid, addressed by the party giving such notice to the other party at the
last address furnished by the other party to the party giving such notice, and
unless and until changed pursuant to the foregoing provisions hereof each such
notice shall be addressed to the Adviser, Trust or Forum, as the case may be,
at their respective principal places of business.
SECTION 16. ACTIVITIES OF FORUM
(a) Except to the extent necessary to perform Forum's obligations
hereunder, nothing herein shall be deemed to limit or restrict Forum's right,
or the right of any of Forum's employees, agents, officers or directors who may
also be a trustee, officer or employee of the Trust, or affiliated persons 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.
(b) Forum may subcontract any or all of its responsibilities under
Section 5(b) pursuant to this Agreement to one or more corporations, trusts,
firms, individuals, or associations, which may be affiliated persons of Forum,
who agree to comply, with the terms of this Agreement; provided, that any such
subcontracting shall not relieve Forum of its responsibilities under this
Agreement. Forum may pay those persons for their services, but no such payment
will increase Forum's compensation from the Adviser. With prior notice to the
Adviser, Forum may assign its right to any or all payments hereunder to persons
of its choosing.
SECTION 17. 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 Forum 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 Forum'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 18. MISCELLANEOUS
(a) No party to this Agreement shall be liable to another party for
consequential damages under any provision of this Agreement.
(b) 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.
(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.
-17-
(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
the Adviser, Forum and the Trust 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 addresses, or at such other address as a
party may have designated in writing, shall be deemed to have been properly
given.
(i) Nothing contained in this Agreement is intended to or shall
require Forum, in any capacity hereunder, to perform any functions or duties on
any day other than a Fund business day. Functions or duties normally scheduled
to be performed on any day which is not a Fund business day shall be performed
on, and as of, the next Fund business day, unless otherwise required by law.
(j) Notwithstanding any other provision of this Agreement, the parties
agree that the assets and liabilities of each Fund 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, officer or director of
Forum shall be liable at law or in equity for Forum's obligations under this
Agreement.
(l) All references to any law in this Agreement shall be deemed to
include reference to the applicable rules and regulations promulgated under
authority of the law and all official interpretations of such law or rules or
regulations.
(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.
(n) 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 1940 Act.
-18-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
CENTURY CAPITAL MANAGEMENT TRUST
By:
-------------------------------
Name:
Title:
FORUM FUND SERVICES, LLC
By: /s/ XXXXXXX X. XXXXX
-------------------------------
Name: Xxxxxxx Xxxxx
Title: Chief Compliance Officer
CENTURY CAPITAL MANAGEMENT, LLC
By:
-------------------------------
Name:
Title:
-19-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
CENTURY CAPITAL MANAGEMENT TRUST
By: /s/ XXXXX X. XXXXXXXXX
-------------------------------
Name:
Title:
FORUM FUND SERVICES, LLC
By:
-------------------------------
Name:
Title:
CENTURY CAPITAL MANAGEMENT, LLC
By: /s/ XXXXX XXXXXXXXX
-------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Managing Director
-20-
CENTURY CAPITAL MANAGEMENT TRUST
DISTRIBUTION AND SUBADMINISTRATION AGREEMENT
Appendix A
Distribution Shareholder
Fund Classes Fee Service Fee
---- ------- ------------ -----------
Century Small Cap Select Fund Institutional N/A N/A
Investor N/A N/A
Century Shares Trust Single Class N/A N/A
A-1
CENTURY CAPITAL MANAGEMENT TRUST
DISTRIBUTION AND SUBADMINISTRATION AGREEMENT
APPENDIX B
COMPENSATION FROM ADVISER
ASSET-BASED FEE
A fee of 0.01% (1 basis point) of the total of the annualized average daily net
assets for the prior month of the Fund. [This fee shall be subject to a $3,250
minimum monthly fee.]
These fees shall be accrued daily and shall be payable monthly in arrears as of
the first day of each calendar month for services performed under this
Agreement during the prior calendar month. If the 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 based upon the assets during the applicable period.
REGISTERED REPRESENTATIVE FEE
A fee of $2,000 per year for each person employed or otherwise related to the
Adviser whose license as a registered representative is carried by Forum at the
Adviser's request ("Adviser Reps").
These fees shall be payable in arrears as of the first day of each calendar
month for Adviser Reps (a) for which Forum has made the appropriate filing to
register (currently the filing of a Form U-4 with fingerprint cards with the
NASD) during the prior calendar month or (b) whose annual anniversary as a
registered representative of Forum has occurred during the prior calendar
month.
BLUE SKY FEES
A fee of $65 per registration, permit or similar item ("Permit") of a Fund or
Class in each State.
These fees shall be payable monthly in arrears as of the first day of each
calendar month for those Permits (a) for which Forum has made the appropriate
filing (for instance, a Form NF) during the prior calendar month or (b) whose
annual anniversary or other renewal date has occurred during the prior calendar
month.
EXPENSE REIMBURSEMENTS
The Adviser shall pay the out-of-pocket costs and expenses of Forum to (i)
obtain and maintain the registration of Adviser Reps with the NASD and the
various States, (ii) subject to the following sentence, investigate, defend or
settle, or pay any fines resulting from, any regulatory investigation or
proceeding with respect to the activities of any
B-1
Adviser Rep, (iii) file advertising and sales literature with the NASD and
States and (iv) mail or otherwise deliver the various filings and documents
related to Permits and Adviser Reps, including postage and money transmittal
fees.
The Adviser shall have no obligation to reimburse Forum (a) for any costs,
expenses, fines, or amounts paid in settlement of any investigation or
proceeding unless Forum has given the Adviser notice promptly, but in any event
within five (5) business days, after Forum receives notice of the initiation of
such investigation or proceeding and has permitted the Adviser or the affected
Adviser Rep to participate in the defense of such investigation or proceeding
to the maximum extent permitted by the applicable regulatory agency and (b) for
any amounts paid in settlement of any investigation or proceeding without the
Adviser's prior written consent, which will not be unreasonably withheld; and
Forum shall not enter into any settlement or consent decree involving a
sanction or penalty imposed on the Adviser or any Adviser Rep without the prior
written consent of the Adviser or such Adviser Rep, as the case may be, which
will not be unreasonably withheld.
B-2
