Exhibit (h)(1)(a)
TRANSFER AGENCY AND SERVICES AGREEMENT
THIS AGREEMENT, dated as of this 1st day of April, 1998 between the FORWARD
FUNDS, INC. (the "Fund"), a Maryland corporation having its principal place of
business at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
and FIRST DATA INVESTOR SERVICES GROUP, INC. ("Investor Services Group"), a
Massachusetts corporation with principal offices at 0000 Xxxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxxxxx 00000.
WITNESSETH
WHEREAS, the Fund is authorized to issue Shares in separate series, with
each such series representing interests in a separate portfolio of securities or
other assets.
WHEREAS, the Fund initially intends to offer Shares in those Portfolios
identified in the attached Exhibit 1, each such Portfolio, together with all
other Portfolios subsequently established by the Fund shall be subject to this
Agreement in accordance with Article 14;
WHEREAS, the Fund on behalf of the Portfolios, desires to appoint Investor
Services Group as its transfer agent, dividend disbursing agent and agent in
connection with certain other activities and Investor Services Group desires to
accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the Fund and Investor Services Group agree as follows:
Article 1 Definitions.
1.1 Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Articles of Incorporation" shall mean the Articles of
Incorporation, Declaration of Trust, or other similar organizational
document as the case may be, of the Fund as the same may be amended from
time to time.
(b) "Authorized Person" shall be deemed to include (i) any authorized
officer of the Fund; or (ii) any person, whether or not such person is an
officer or employee of the Fund, duly authorized to give Oral Instructions
or Written Instructions on behalf of the Fund as indicated in writing to
Investor Services Group from time to time.
(c) "Board of Directors" shall mean the Board of Directors or Board of
Trustees of the Fund, as the case may be.
(d) "Commission" shall mean the Securities and Exchange Commission.
(e) "Custodian" refers to any custodian or subcustodian of securities
and
other property which the Fund may from time to time deposit, or cause to be
deposited or held under the name or account of such a custodian pursuant to
a Custodian Agreement.
(f) "Fund Home Page" shall mean the Fund's proprietary web site on the
Internet used by the Fund to provide information to its shareholders and
potential shareholders.
(g) "Internet" shall mean the communications network comprised of
multiple communications networks linking education, government, industrial
and private computer networks.
(h) "1934 Act" shall mean the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder, all as amended from time to
time.
(i) "1940 Act" shall mean the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder, all as amended from time to
time.
(j) "Oral Instructions" shall mean instructions, other than Written
Instructions, actually received by Investor Services Group from a person
reasonably believed by Investor Services Group to be an Authorized Person;
(k) "Portfolio" shall mean each separate series of shares offered by
the Fund representing interests in a separate portfolio of securities and
other assets;
(l) "Prospectus" shall mean the most recently dated Fund Prospectus
and Statement of Additional Information, including any supplements thereto
if any, which has become effective under the Securities Act of 1933 and the
1940 Act.
(m) "Shares" refers collectively to such shares of capital stock or
beneficial interest, as the case may be, or class thereof, of each
respective Portfolio of the Fund as may be issued from time to time.
(n) "Shareholder" shall mean a record owner of Shares of each
respective Portfolio of the Fund.
(o) "Transfer Agent Secure Net Gateway" shall mean the system of
computer hardware and software and network established by the Transfer
Agent to provide access between the Transfer Agent recordkeeping system and
the Internet.
(p) "Transfer Agent Web Transaction Engine" shall mean the system of
computer hardware and software created and established by the Transfer
Agent in order to enable Shareholders of the Fund to perform the
transactions contemplated hereunder.
(q) "Written Instructions" shall mean a written communication signed
by a person reasonably believed by Investor Services Group to be an
Authorized Person and actually received by Investor Services Group. Written
Instructions shall include manually executed originals and authorized
electronic transmissions, including telefacsimile of a
manually executed original or other process.
Article 2 Appointment of Investor Services Group.
The Fund, on behalf of the Portfolios, hereby appoints and constitutes
Investor Services Group as its sole and exclusive transfer agent and dividend
disbursing agent for Shares of each respective Portfolio of the Fund and as
shareholder servicing agent for the Fund and Investor Services Group hereby
accepts such appointments and agrees to perform the duties hereinafter set
forth.
Article 3 Duties of Investor Services Group.
3.1 Investor Services Group shall be responsible for:
(a) Administering and/or performing the customary services of a
transfer agent; acting as service agent in connection with dividend and
distribution functions; and for performing shareholder account and
administrative agent functions in connection with the issuance, transfer
and redemption or repurchase (including coordination with the Custodian) of
Shares of each Portfolio, as more fully described in the written schedule
of Duties of Investor Services Group annexed hereto as Schedule A and
incorporated herein, and in accordance with the terms of the Prospectus of
the Fund on behalf of the applicable Portfolio, applicable law and the
procedures established from time to time between Investor Services Group
and the Fund.
(b) Recording the issuance of Shares and maintaining pursuant to Rule
l7Ad-10(e) of the 1934 Act a record of the total number of Shares of each
Portfolio which are authorized, based upon data provided to it by the Fund,
and issued and outstanding. Investor Services Group shall provide the Fund
on a regular basis with the total number of Shares of each Portfolio which
are authorized and issued and outstanding and shall have no obligation,
when recording the issuance of Shares, to monitor the issuance of such
Shares or to take cognizance of any laws relating to the issue or sale of
such Shares, which functions shall be the sole responsibility of the Fund.
(c) In addition to providing the foregoing services, the Fund hereby
engages Investor Services Group as its exclusive service provider with
respect to the Print/Mail Services as set forth in Schedule B for the fees
also identified in Schedule B. Investor Services Group agrees to perform
the services and its obligations subject to the terms and conditions of
this Agreement.
(d) Notwithstanding any of the foregoing provisions of this Agreement,
Investor Services Group shall be under no duty or obligation to inquire
into, and shall notbe liable for: (i) the legality of the issuance or sale
of any Shares or the sufficiency of the amount to be received therefor;
(ii) the legality of the redemption of any Shares, or the propriety of the
amount to be paid therefor; (iii) the legality of the declaration of any
dividend by the Board of Directors, or the legality of the issuance of any
Shares in payment of any dividend; or (iv) the legality of any
recapitalization or readjustment of the Shares.
3.2 In addition, the Fund shall (i) identify to Investor Services Group in
writing those transactions and assets to be treated as exempt from blue sky
reporting for each State and (ii) verify the establishment of transactions for
each State on the system prior to activation and thereafter monitor the daily
activity for each State. The responsibility of Investor Services Group for the
Fund's blue sky State registration status is solely limited to the initial
establishment of transactions subject to blue sky compliance by the Fund and the
reporting of such transactions to the Fund as provided above.
3.3 Investor Services Group agrees to provide the services set forth herein
in accordance with the performance standards annexed hereto as Exhibit 1-A of
Schedule A and incorporated herein (the "Performance Standards"). Such
Performance Standards may be amended from time to time upon written agreement of
the parties.
3.4 In connection with the Electronic Commerce Services to be provided by
Investor Services Group, as described in Schedule A to this Agreement, the Fund
shall be responsible for the following: (a) establishment and maintenance of the
Fund Home Page on the Internet; (b) services and relationships between the Fund
and any third party on-line service providers to enable the Shareholders to
access the Fund Home Page; and (c) providing Investor Services Group with access
to and information regarding the Fund Home Page in order to enable Investor
Services Group to provide the services contemplated hereunder.
3.5 In addition to the duties set forth herein, Investor Services Group
shall perform such other duties and functions, and shall be paid such amounts
therefor, as may from time to time be agreed upon in writing between the Fund
and Investor Services Group.
Article 4 Recordkeeping and Other Information.
4.1 Investor Services Group shall create and maintain all records required
of it pursuant to its duties hereunder and as set forth in Schedule A in
accordance with all applicable laws, rules and regulations, including records
required by Section 31(a) of the 1940 Act. Where applicable, such records shall
be maintained by Investor Services Group for the periods and in the places
required by Rule 31 a-2 under the 1940 Act.
4.2 To the extent required by Section 31 of the 1940 Act, Investor Services
Group agrees that all such records prepared or maintained by Investor Services
Group relating to the services to be performed by Investor Services Group
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such section, and will be surrendered promptly
to the Fund on and in accordance with the Fund's request.
4.3 In case of any requests or demands for the inspection of Shareholder
records of the Fund, Investor Services Group will endeavor to notify the Fund of
such request and secure Written Instructions as to the handling of such request.
Investor Services Group reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel that it may be held
liable for the failure to comply with such request.
Article 5 Fund Instructions.
5.1 Investor Services Group will have no liability when acting upon Written
or Oral
Instructions believed to have been executed or orally communicated by an
Authorized Person and will not be held to have any notice of any change of
authority of any person until receipt of a Written Instruction thereof from the
Fund. Investor Services Group will also have no liability when processing Share
certificates which it reasonably believes to bear the proper manual or facsimile
signatures of the officers of the Fund and the proper countersignature of
Investor Services Group.
5.2 At any time, Investor Services Group may request Written Instructions
from the Fund and may seek advice from legal counsel for the Fund, or its own
legal counsel, with respect to any matter arising in connection with this
Agreement, and it shall not be liable for any action taken or not taken or
suffered by it in good faith in accordance with such Written Instructions or in
accordance with the opinion of counsel for the Fund or for Investor Services
Group. Written Instructions requested by Investor Services Group will be
provided by the Fund within a reasonable period of time.
5.3 Investor Services Group, its officers, agents or employees, shall
accept Oral Instructions or Written Instructions given to them by any person
representing or acting on behalf of the Fund only if said representative is an
Authorized Person. The Fund agrees that all Oral Instructions shall be followed
within one business day by confirming Written Instructions, and that the Fund's
failure to so confirm shall not impair in any respect Investor Services Group's
right to rely on Oral Instructions.
Article 6 Compensation.
6.1 The Fund on behalf of each of the Portfolios will compensate Investor
Services Group for the performance of its obligations hereunder in accordance
with the fees set forth in the written Fee Schedule annexed hereto as Schedule
13 and incorporated herein.
6.2 In addition to those fees set forth in Section 6.1 above, the Fund on
behalf of each of the Portfolios agrees to pay, and will be billed separately
for, out-of-pocket expenses incurred by Investor Services Group in the
performance of its duties hereunder. Out-of-pocket expenses shall include, but
shall not be limited to, the items specified in the written schedule of
out-of-pocket charges annexed hereto as Schedule C and incorporated herein.
Schedule C may be modified by written agreement between the parties. Unspecified
out-of-pocket expenses shall be limited to those out-of-pocket expenses
reasonably incurred by Investor Services Group in the performance of its
obligations hereunder.
6.3 The Fund on behalf of each of the Portfolios agrees to pay all fees and
out-of-pocket expenses to Investor Services Group by Federal Funds Wire within
fifteen (15) business days following the receipt of the respective invoice. In
addition, with respect to all fees under this Agreement, Investor Services Group
may charge a service fee equal to the lesser of (i) one and one half percent (1
1/2%) per month or (ii) the highest interest rate legally permitted on any past
due invoiced amounts.
6.4 Any compensation agreed to hereunder may be adjusted from time to time
by attaching to Schedule B, a revised Fee Schedule executed and dated by the
parties hereto.
6.5 The Fund acknowledges that the fees that Investor Services Group
charges the Fund under this Agreement reflect the allocation of risk between the
parties, including the disclaimer of warranties in Section 9.3 and the
limitations on liability and exclusion of remedies in Section 11.2 and Article
12. Modifying the allocation of risk from what is stated here would affect the
fees that Investor Services Group charges, and in consideration of those fees,
the Fund agrees to the stated allocation of risk.
Article 7 Documents.
In connection with the appointment of Investor Services Group, the Fund
shall, on or before the date this Agreement goes into effect, but in any case
within a reasonable period of time for Investor Services Group to prepare to
perform its duties hereunder, deliver or caused to be delivered to Investor
Services Group the documents set forth in the written schedule of Fund Documents
annexed hereto as Schedule D.
Article 8 Transfer Agent System.
8.1 Investor Services Group shall retain title to and ownership of any and
all data bases, computer programs, screen formats, report formats, interactive
design techniques, derivative works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents, copyrights, trade secrets,
and other related legal rights developed by Investor Services Group in
connection with the services provided by Investor Services Group to the Fund
herein (the "Investor Services Group System").
8.2 Investor Services Group hereby grants to the Fund a limited license to
the Investor Services Group System for the sole and limited purpose of having
Investor Services Group provide the services contemplated hereunder and nothing
contained in this Agreement shall be construed or interpreted otherwise and such
license shall immediately terminate with the termination of this Agreement.
8.3 In the event that the Fund, including any affiliate or agent of the
Fund or any third party acting on behalf of the Fund is provided with direct
access to the Investor Services Group System for either account inquiry or to
transmit transaction information, including but not limited to maintenance,
exchanges, purchases and redemptions, such direct access capability shall be
limited to direct entry to the Investor Services Group System by means of
on-line mainframe terminal entry or PC emulation of such mainframe terminal
entry and any other nonconforming method of transmission of information to the
Investor Services Group System is strictly prohibited without the prior written
consent of Investor Services Group.
Article 9 Representations and Warranties.
9.1 Investor Services Group represents and warrants to the Fund that:
(a) it is a corporation duly organized, existing and in good standing
under the laws of the Commonwealth of Massachusetts;
(b) it is empowered under applicable laws and by its Articles of
Incorporation
and By-Laws to enter into and perform this Agreement;
(c) all requisite corporate proceedings have been taken to authorize
it to enter into this Agreement;
(d) it is duly registered with its appropriate regulatory agency as a
transfer agent and such registration will remain in effect for the duration
of this Agreement; and
(e) it has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations
under this Agreement.
9.2 The Fund represents and warrants to Investor Services Group that:
(a) it is duly organized, existing and in good standing under the laws
of the jurisdiction in which it is organized;
(b) it is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into this Agreement;
(c) all corporate proceedings required by said Articles of
Incorporation, By-Laws and applicable laws have been taken to authorize it
to enter into this Agreement;
(d) a registration statement under the Securities Act of 1933, as
amended, and the 1940 Act on behalf of each of the Portfolios is currently
effective and will remain effective, and all appropriate state securities
law filings have been made and will continue to be made, with respect to
all Shares of the Fund being offered for sale; and
(e) all outstanding Shares are validly issued, fully paid and
non-assessable and when Shares are hereafter issued in accordance with the
terms of the Fund's Articles of
Incorporation and its Prospectus with respect to each Portfolio, such
Shares shall be validly issued, fully paid and non-assessable.
9.3 THIS IS A SERVICE AGREEMENT. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, INVESTOR SERVICES GROUP DISCLAIMS ALL OTHER REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, MADE TO THE FUND OR ANY OTHER PERSON, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTIES REGARDING QUALITY, SUITABILITY,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE (IRRESPECTIVE OF
ANY COURSE OF DEALING, CUSTOM OR USAGE OF TRADE) OF ANY SERVICES OR ANY GOODS
PROVIDED INCIDENTAL TO SERVICES PROVIDED UNDER THIS AGREEMENT. INVESTOR SERVICES
GROUP DISCLAIMS ANY WARRANTY OF TITLE OR NON-INFRINGEMENT EXCEPT AS OTHERWISE
SET FORTH IN THIS AGREEMENT.
Article 10 Indemnification.
10.1 Investor Services Group shall not be responsible for and the Fund on
behalf of
each Portfolio shall indemnify and hold Investor Services Group harmless from
and against any and all claims, costs, expenses (including reasonable attorneys'
fees), losses, damages, charges, payments and liabilities of any sort or kind
which may be asserted against Investor Services Group or for which Investor
Services Group may be held to be liable (a "Claim") arising out of or
attributable to any of the following:
(a) any actions of Investor Services Group required to be taken
pursuant to this Agreement unless such Claim resulted from a negligent act
or omission to act or bad faith by Investor Services Group in the
performance of its duties hereunder;
(b) Investor Services Group's reasonable reliance on, or reasonable
use of information, data, records and documents (including but not limited
to magnetic tapes, computer printouts, hard copies and microfilm copies)
received by Investor Services Group from the Fund, or any authorized third
party acting on behalf of the Fund, including but not limited to the prior
transfer agent for the Fund, in the performance of Investor Services
Group's duties and obligations hereunder;
(c) the reliance on, or the implementation of, any Written or Oral
Instructions or any other instructions or requests of the Fund on behalf of
the applicable Portfolio;
(d) the offer or sales of shares in violation of any requirement under
the securities laws or regulations of any state that such shares be
registered in such state or in violation of any stop order or other
determination or ruling by any state with respect to the offer or sale of
such shares in such state; and
(e) the Fund's refusal or failure to comply with the terms of this
Agreement, or any Claim which arises out of the Fund's negligence or
misconduct or the breach of any representation or warranty of the Fund made
herein.
10.2 In any case in which the Fund may be asked to indemnify or hold
Investor Services Group harmless, Investor Services Group will notify the Fund
promptly after identifying any situation which it believes presents or appears
likely to present a claim for indemnification against the Fund although the
failure to do so shall not prevent recovery by Investor Services Group and shall
keep the Fund advised with respect to all developments concerning such
situation. The Fund shall have the option to defend Investor Services Group
against any Claim which may be the subject of this indemnification, and, in the
event that the Fund so elects, such defense shall be conducted by counsel chosen
by the Fund and satisfactory to Investor Services Group, and thereupon the Fund
shall take over complete defense of the Claim and Investor Services Group shall
sustain no further legal or other expenses in respect of such Claim. Investor
Services Group will not confess any Claim or make any compromise in any case in
which the Fund will be asked to provide indemnification, except with the Fund's
prior written consent. The obligations of the parties hereto under this Article
10 shall survive the termination of this Agreement.
10.3 Any claim for indemnification under this Agreement must be made prior
to the earlier of:
(a) one year after the Fund becomes aware of the event for which
indemnification is claimed; or
(b) one year after the earlier of the termination of this Agreement or
the expiration of the term of this Agreement.
10.4 Except for remedies that cannot be waived as a matter of law (and
injunctive or provisional relief), the provisions of this Article 10 shall be
Investor Services Group's sole and exclusive remedy for claims or other actions
or proceedings to which the Fund's indemnification obligations pursuant to this
Article 10 may apply.
Article 11 Standard of Care.
11.1 Investor Services Group shall at all times act in good faith and
agrees to use its best efforts within commercially reasonable limits to ensure
the accuracy of all services performed under this Agreement, but assumes no
responsibility for loss or damage to the Fund unless said errors are caused by
Investor Services Group's own negligence, bad faith or willful misconduct or
that of its employees.
11.2 Each party shall have the duty to mitigate damages for which the other
party may become responsible.
Article 12 Consequential Damages.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL
INVESTOR SERVICES GROUP, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE UNDER ANY THEORY OF
TORT, CONTRACT, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR LOST
PROFITS, EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL
DAMAGES, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS
OF WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER EITHER PARTY OR ANY ENTITY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Article 13 Term and Termination.
13.1 This Agreement shall be effective on the date first written above and
shall continue for a period of five (5) years (the "Initial Term").
13.2 Upon the expiration of the Initial Term, this Agreement shall
automatically renew for successive terms of two (2) years ("Renewal Terms")
each, unless the Fund or Investor Services Group provides written notice to the
other of its intent not to renew. Such notice must be received not less than
ninety (90) days and not more than one-hundred eighty (180) days prior to the
expiration of the Initial Term or the then current Renewal Term.
13.3 In the event a termination notice is given by the Fund, all expenses
associated with movement of records and materials and conversion thereof to a
successor transfer agent will be borne by the Fund.
13.4 If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party") the other party (the
"Non-Defaulting Party") may give written notice thereof to the Defaulting Party,
and if such material breach shall not have been remedied within thirty (30) days
after such written notice is given, then the Non-Defaulting Party may terminate
this Agreement by giving thirty (30) days written notice of such termination to
the Defaulting Party. If Investor Services Group is the Non-Defaulting Party,
its termination of this Agreement shall not constitute a waiver of any other
rights or remedies of Investor Services Group with respect to services performed
prior to such termination of rights of Investor Services Group to be reimbursed
for out-of-pocket expenses. In all cases, termination by the Non-Defaulting
Party shall not constitute a waiver by the Non-Defaulting Party of any other
rights it might have under this Agreement or otherwise against the Defaulting
Party.
13.5 Notwithstanding anything contained in this Agreement to the contrary,
in the event that a merger, acquisition or change in control of the Fund or an
affiliate (as defined under the 0000 Xxx) of the Fund results, either directly
or indirectly, in the termination of this Agreement (an "Early Termination")
during the Initial Term of this Agreement, the Fund shall pay to Investor
Services Group within 30 days of the notice of termination the fee set forth in
Schedule C (the "Early Termination Fee"). Such Early Termination Fee shall not
be payable if Investor Services Group provides to a successor in interest of the
Fund services substantially similar to those services provided to the Fund
hereunder. A liquidation of the Fund or a Portfolio thereof (a "Liquidation")
shall not be deemed a termination of the Agreement subject to the Early
Termination Fee so long as such Liquidation did not result from a merger or
acquisition of the Fund or Portfolio; provided, however, that in the event of
the Liquidation of the Fund, the Fund shall pay to Investor Services Group
within 30 days of the notice of termination the fee set forth in Schedule C (the
"Liquidation Fee")
Article 14 Additional Portfolios.
14.1 In the event that the Fund establishes one or more Portfolios in
addition to those identified in Exhibit 1, with respect to which the Fund
desires to have Investor Services Group render services as transfer agent under
the terms hereof, the Fund shall so notify Investor Services Group in writing,
and if Investor Services Group agrees in writing to provide such services,
Exhibit 1 shall be amended to include such additional Portfolios.
Article 15 Confidentiality.
15.1 The parties agree that the Proprietary Information (defined below) and
the contents of this Agreement (collectively "Confidential Information") are
confidential information of the parties and their respective licensors. The Fund
and Investor Services Group shall exercise at least the same degree of care, but
not less than reasonable care, to safeguard the confidentiality of the
Confidential Information of the other as it would exercise to protect its own
confidential information of a similar nature. The Fund and Investor Services
Group shall not duplicate, sell or disclose to others the Confidential
Information of the other, in whole or in part, without the prior written
permission of the other party. The Fund and Investor Services Group may,
however, disclose Confidential Information to their respective parent
corporation, their respective affiliates, their subsidiaries and affiliated
companies ~ind employees, provided that each shall use reasonable efforts to
ensure that the Confidential Information is not duplicated or
disclosed in breach of this Agreement. The Fund and Investor Services Group may
also disclose the Confidential Information to independent contractors, auditors,
and professional advisors, provided they first agree in writing to be bound by
the confidentiality obligations substantially similar to this Section 15.1.
Notwithstanding the previous sentence, in no event shall either the Fund or
Investor Services Group disclose the Confidential Information to any competitor
of the other without specific, prior written consent.
15.2 Proprietary Information means:
(a) any data or information that is competitively sensitive material,
and not generally known to the public, including, but not limited to,
information about product plans, marketing strategies, finance, operations,
customer relationships, customer profiles, sales estimates, business plans,
and internal performance results relating to the past, present or future
business activities of the Fund or Investor Services Group, their
respective subsidiaries and affiliated companies and the customers, clients
and suppliers of any of them;
(b) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable and secret
in the sense that its confidentiality affords the Fund or Investor Services
Group a competitive advantage over its competitors; and
(c) all confidential or proprietary concepts, documentation, reports,
data, specifications, computer software, source code, object code, flow
charts, databases, inventions, know-how, show-how and trade secrets,
whether or not patentable or copyrightable.
15.3 Confidential Information includes, without limitation, all documents,
inventions, substances, engineering and laboratory notebooks, drawings,
diagrams, specifications, bills of material, equipment, prototypes and models,
and any other tangible manifestation of the foregoing of either party which now
exist or come iiflo the control or possession of the other.
15.4 The obligations of confidentiality and restriction on use herein shall
not apply to any Confidential Information that a party proves:
(a) Was in the public domain prior to the date of this Agreement or
subsequently came into the public domain through no fault of such party; or
(b) Was lawfully received by the party from a third party free of any
obligation of confidence to such third party; or
(c) Was already in the possession of the party prior to receipt
thereof, directly or indirectly, from the other party; or
(d) Is required to be disclosed in a judicial or administrative
proceeding after
all reasonable legal remedies for maintaining such information in
confidence have been exhausted including, but not limited to, giving the
other party as much advance notice of the possibility of such disclosure as
practical so the other party may attempt to stop such disclosure or obtain
a protective order concerning such disclosure; or
(f) Is subsequently and independently developed by employees,
consultants or agents of the party without reference to the Confidential
Information disclosed under this Agreement.
Article 16 Force Majeure.
No party shall be liable for any default or delay in the performance of its
obligations under this Agreement if and to the extent such default or delay is
caused, directly or indirectly, by (i) fire, flood, elements of nature or other
acts of God; (ii) any outbreak or escalation of hostilities, war, riots or civil
disorders in any country, (iii) any act or omission of the other party or any
governmental authority; (iv) any labor disputes (whether or not the employees'
demands are reasonable or within the party's power to satisfy); or (v)
nonperformance by a third party or any similar cause beyond the reasonable
control of such party, including without limitation, failures or fluctuations in
telecommunications or other equipment. In any such event, the non- performing
party shall be excused from any further performance and observance of the
obligations so affected only for as long as such circumstances prevail and such
performing party shall be excused from any further performance and observance of
the obligations so affected only for as long as such circumstances prevail and
such party continues to use commercially reasonable efforts to recommence
performance or observance as soon as practicable.
Article 17 Assignment and Subcontracting.
This Agreement, its benefits and obligations shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement may not be assigned or otherwise transferred
by either party hereto, without the prior written consent of the other party,
which consent shall not be unreasonably withheld; provided, however, that
Investor Services Group may, in its sole discretion, assign all its right, title
and interest in this Agreement to an affiliate, parent or subsidiary, or to the
purchaser of substantially all of its business. Investor Services Group may, in
its sole discretion, engage subcontractors to perform any of the obligations
contained in this Agreement to be performed by Investor Services Group.
Article 18 Notice.
Any notice or other instrument authorized or required by this Agreement to
be given in writing to the Fund or Investor Services Group, shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To the Fund:
Forward Funds, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention:
To Investor Services Group:
First Data Investor Services Group, Inc~.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with a copy to Investor Services Group's General Counsel
Article 19 Governing Law/Venue.
The laws of the Commonwealth of Massachusetts, excluding the laws on
conflicts of laws, shall govern the interpretation, validity, and enforcement of
this agreement. All actionsarising from or related to this Agreement shall be
brought in the state and federal courts sitting in the City of Boston, and
Investor Services Group and Client hereby submit themselves to the exclusive
jurisdiction of those courts.
Article 20 Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original; but such counterparts shall, together,
constitute only one instrument.
Article 21 Captions.
The captions of this Agreement are included for convenience of reference
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
Article 22 Publicity.
Neither Investor Services Group nor the Fund shall release or publish news
releases, public announcements, advertising or other publicity relating to this
Agreement or to the transactions contemplated by it without the prior review and
written approval of the other party; provided, however, that either party may
make such disclosures as are required by legal, accounting or regulatory
requirements after making reasonable efforts in the circumstances to consult in
advance with the other party.
Article 23 Relationship of Parties/Non-Solicitation.
23.1 The parties agree that they are independent contractors and not
partners or co-venturers and nothing contained herein shall be interpreted or
construed otherwise.
23.2 During the term of this Agreement and for one (1) year afterward, the
Fund shall
not recruit, solicit, employ or engage, for the Fund or others, Investor
Services Group's employees.
Article 24 Entire Agreement: Severability.
24.1 This Agreement, including Schedules, Addenda, and Exhibits hereto,
constitutes the entire Agreement between the parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous proposals,
agreements, contracts, representations, and understandings, whether written or
oral, between the parties with respect to the subject matter hereof. No change,
termination, modification, or waiver of any term or condition of the Agreement
shall be valid unless in writing signed by each party. No such writing shall be
effective as against Investor Services Group unless said writing is executed by
a Senior Vice President, Executive Vice President, or President of Investor
Services Group. A party's waiver of a breach of any term or condition in the
Agreement shall not be deemed a waiver of any subsequent breach of the same or
another term or condition.
24.2 The parties intend every provision of this Agreement to be severable.
If a court of competent jurisdiction determines that any term or provision is
illegal or invalid for any reason, the illegality or invalidity shall not affect
the validity of the remainder of this Agreement. In such case, the parties shall
in good faith modify or substitute such provision consistent with the original
intent of the parties. Without limiting the generality of this paragraph, if a
court determines that any remedy stated in this Agreement has failed of its
essential purpose, then all other provisions of this Agreement, including the
limitations on liability and exclusion of damages, shall remain fully effective.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, as of the day and year first above
written.
FORWARD FUNDS, INC.
By: /s/ Xxxxxx Xxxxxx
----------------------------------------
Title: President
FIRST DATA INVESTOR SERVICES GROUP, INC.
By: /s/ Xxxxx X. Xxx
----------------------------------------
Title: Chief Operating Officer
Exhibit 1
LIST OF PORTFOLIOS
The Global Fund
The Money Market Fund
Schedule A
DUTIES OF INVESTOR SERVICES GROUP
1. Shareholder Information. Investor Services Group shall maintain a record
of the number of Shares held by each Shareholder of record which shall include
name, address, taxpayer identification and which shall indicate whether such
Shares are held in certificates or uncertificated form.
2. Shareholder Services. Investor Services Group shall respond as
appropriate to all inquiries and communications from Shareholders relating to
Shareholder accounts with respect to its duties hereunder and as may be from
time to time mutually agreed upon between Investor Services Group and the Fund.
3. Share Certificates.
(a) At the expense of the Fund, the Fund shall supply Investor
Services Group with an adequate supply of blank share certificates to meet
Investor Services Group requirements therefor. Such Share certificates shall be
properly signed by facsimile. The Fund agrees that, notwithstanding the death,
resignation, or removal of any officer of the Fund whose signature appears on
such certificates, Investor Services Group or its agent may continue to
countersign certificates which bear such signatures until otherwise directed by
Written Instructions.
(b) Investor Services Group shall issue replacement Share certificates
in lieu of certificates which have been lost, stolen or destroyed, upon receipt
by Investor Services Group of properly executed affidavits and lost certificate
bonds, in form satisfactory to Investor Services Group, with the Fund and
Investor Services Group as obligees under the bond.
(c) Investor Services Group shall also maintain a record of each
certificate issued, the number of Shares represented thereby and the Shareholder
of record. With respect to Shares held in open accounts or uncertificated form
(i.e., no certificate being issued with respect thereto) Investor Services Group
shall maintain comparable records of the Shareholders thereof including their
names, addresses and taxpayer identification. Investor Services Group shall
further maintain a stop transfer record on lost and/or replaced certificates.
4. Mailing Communications to Shareholders: Proxy Materials. Investor
Services Group will address and mail to Shareholders of the Fund, all reports to
Shareholders, dividend and distribution notices and proxy material for the
Fund's meetings of Shareholders. In connection with meetings of Shareholders,
Investor Services Group will prepare Shareholder lists, mail and certify as to
the mailing of proxy materials, process and tabulate returned proxy cards,
report on proxies voted prior to meetings, act as inspector of election at
meetings and certify Shares voted at meetings.
5. Sales of Shares.
(a) Investor Services Group shall not be required to issue any Shares
of the
Fund where it has received a Written Instruction from the Fund or official
notice from any appropriate authority that the sale of the Shares of the Fund
has been suspended or discontinued. The existence of such Written Instructions
or such official notice shall be conclusive evidence of the right of Investor
Services Group to rely on such Written Instructions or official notice.
(b) In the event that any check or other order for the payment of
money is returned unpaid for any reason, Investor Services Group will endeavor
to: (i) give prompt notice of such return to the Fund or its designee; (ii)
place a stop transfer order against all Shares issued as a result of such check
or order; and (iii) take such actions as Investor Services Group may from time
to time deem appropriate.
6. Transfer and Repurchase.
(a) Investor Services Group shall process all requests to transfer or
redeem Shares in accordance with the transfer or repurchase procedures set forth
in the Fund's Prospectus.
(b) Investor Services Group will transfer or repurchase Shares upon
receipt of Oral or Written Instructions or otherwise pursuant to the Prospectus
and Share certificates, if any, properly endorsed for transfer or redemption,
accompanied by such documents as Investor Services Group reasonably may deem
necessary.
(c) Investor Services Group reserves the right to refuse to transfer
or repurchase Shares until it is satisfied that the endorsement on the
instructions is valid and genuine. Investor Services Group also reserves the
right to refuse to transfer or repurchase Shares until it is satisfied that the
requested transfer or repurchase is legally authorized, and it shall incur no
liability for the refusal, in good faith, to make transfers or repurchases which
Investor Services Group, in its good judgement, deems improper or unauthorized,
or until it is reasonably satisfied that there is no basis to any claims adverse
to such transfer or repurchase.
(d) When Shares are redeemed, Investor Services Group shall, upon
receipt of the instructions and documents in proper form, deliver to the
Custodian and the Fund or its designee a notification setting forth the number
of Shares to be repurchased. Such repurchased shares shall be reflected on
appropriate accounts maintained by Investor Services Group reflecting
outstanding Shares of the Fund and Shares attributed to individual accounts.
(e) Investor Services Group shall upon receipt of the monies provided
to it by the Custodian for the repurchase of Shares, pay such monies as are
received from the Custodian, all in accordance with the procedures described in
the written instruction received by Investor Services Group from the Fund.
(f) Investor Services Group shall not process or effect any repurchase
with respect to Shares of the Fund after receipt by Investor Services Group or
its agent of notification of the suspension of the determination of the net
asset value of the Fund.
7. Dividends.
(a) Upon the declaration of each dividend and each capital gains
distribution
by the Board of Directors of the Fund with respect to Shares of the Fund, the
Fund shall furnish or cause to be furnished to Investor Services Group Written
Instructions setting forth the date of the declaration of such dividend or
distribution, the ex-dividend date, the date of payment thereof, the record date
as of which Shareholders entitled to payment shall be determined, the amount
payable per Share to the Shareholders of record as of that date, the total
amount payable on the payment date and whether such dividend or distribution is
to be paid in Shares at net asset value.
(b) On or before the payment date specified in such resolution of the
Board of Directors, the Fund will provide Investor Services Group with
sufficient cash to make payment to the Shareholders of record as of such payment
date.
(c) If Investor Services Group does not receive sufficient cash from
the Fund to make total dividend and/or distribution payments to all Shareholders
of the Fund as of the record date, Investor Services Group will, upon notifying
the Fund, withhold payment to all Shareholders of record as of the record date
until sufficient cash is provided to Investor Services Group.
8. In addition to and neither in lieu nor in contravention of the services
set forth above, Investor Services Group shall: (i) perform all the customary
services of a transfer agent, registrar, dividend disbursing agent and agent of
the dividend reinvestment and cash purchase plan as described herein consistent
with those requirements in effect as at the date of this Agreement. The detailed
definition, frequency, limitations and associated costs (if any) set out in the
attached fee schedule, include but are not limited to: maintaining all
Shareholder accounts, preparing Shareholder meeting lists, mailing proxies,
tabulating proxies, mailing Shareholder reports to current Shareholders,
withholding taxes on U.S. resident and non-resident alien accounts where
applicable, preparing and filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and distributions by
federal authorities for all Shareholders.
9. Electronic Commerce. Investor Services Group agrees to provide the
following services to the Fund:
(a) in accordance with the written procedures established between the
Fund and Investor Services Group, enable the Fund and its Shareholders utilize
the Internet in order to access Fund information maintained by Investor Services
Group through the use of the Transfer Agent Web Transaction Engine and Secure
Net Gateway;
(b) allow the Shareholders to perform account inquiries and
transactions;
(c) maintenance of the Transfer Agent Secure Net Gateway and the
Transfer Agent Web Transaction Engine.
EXHIBIT 1
TO
SCHEDULE B
PERFORMANCE STANDARDS
Teleservicing
To be measured on a quarterly basis, minimum of 300 calls offered.
. The average speed of answering calls will be twenty (20) seconds or
less
. The abandonment rate for teleservicing calls will be five (5) percent
or less (Calculation: calls abandoned over 20 seconds/calls offered)
. The service level will be eighty-five percent (85%) or higher Pricing
Processing
The following standards will be met 95% of the time measured on a quarterly
basis, minimum 50 items per standard measured.
. New accounts in good order will be established on Transfer Agent
system on the same day received
. Shareholder transactions in good order will be processed on Transfer
Agent system on the same say received
. Correspondence will be completed within five (5) business days of
receipt
. Maintenance items in good order will be completed within five (5)
business days of receipt
Print/Mail
The following standards will be met 95% of the time measured on a quarterly
basis, minimum of 50 items per standard measured.
. Daily confirmations will be mailed to Shareholders on Trade Date plus
two(2) business days
. Check requests will be mailed to Shareholders on Trade Date plus
two(2) business days
. Quarterly statements will be mailed to Shareholders within five (5)
business days from quarter end
Penalties
The penalty for missing the same standard in one (1) quarter is written notice.
The penalty for missing the same standard two (2) quarters in succession is 5%
reduction of Investor Services Group's quarterly fee for that service.
The penalty for missing the same standard three (3) quarters in a rolling six
(6) quarter period is 10% reduction in Investor Services Group's quarterly fee
for that service.
Measurement standards will commence after a one (1) quarter grace period.
Schedule B
FEE SCHEDULE
1. Standard Fees
Per Open Account: $ 20.00
Per Closed Account: $ 3.00
Portfolio Minimum (up to 2 classes) $12,000 per Portfolio per year
After the one year anniversary of the effective date of this Agreement, Investor
Services Group may adjust the above fees once per calendar year, upon thirty
(30) days prior written notice in an amount not to exceed the cumulative
percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U)
U.S. City Average, All items (unadjusted) - (1982-84=100), published by the U.S.
Department of Labor since the last such adjustment in the Client's monthly fees
(or the Effective Date absent a prior such adjustment).
2. Programming Costs
(a) Dedicated Team:
Programmer $100,000 per annum
BSA $ 85,000 per annum
Tester $ 65,000 per annum
(b) System Enhancements (Non Dedicated Team):
Programmer $135.00 per hour
The above rates are subject to an annual 5% increase after the one year
anniversary of the effective date of this Agreement.
3. Early Termination Fee; Liquidation Fee: The Early Termination Fee shall be an
amount equal to the lesser of (a) the previous month's fee multiplied by the
number of months remaining on the Initial Term of the Agreement, or (b) the
previous month's fee multiplied by twelve to reflect one year's fee. If a
Liquidation (as such term is defined in Section 13.5 hereof) occurs during the
first year of this Agreement, the Liquidation Fee shall be an amount equal to
the fees paid to Investor Services Group by the Fund under this Agreement for
the previous month annualized to reflect one year's fee (the "Annual Fee"). If
such Liquidation occurs during the second year of this Agreement, the
Liquidation Fee shall equal two-thirds of the Annual Fee. If such Liquidation
occurs during the third year of this Agreement, the Liquidation Fee shall equal
one-third of the Annual Fee.
4. Print/Mail Fees.
Implementation Fee $5,000
Testing Application or Data Requirements $2.50/fax to client or record keeper
Work Order $15.00 per work order
Daily Work (Confirms) $71/M with $75.00 minimum
Hand $0.07/each insert (up to 3 inserts at no charge)
Machine $42/M with $50.00 minimum
$0.01/each insert (up to 3 inserts at no charge)
There is a $2.50 charge for each Form 3606 sent.
Statements
Hand $78/M with $75.00 minimum
$0.08/each insert (up to 3 inserts at no charge)
$125/M for intelligent inserting
Machine $52/M with $75.00 minimum
$0.01/each insert (up to 3 inserts at no charge)
$58/M for intelligent inserting
Periodic Checks $91/M with $100.00 minimum
Hand $0.08/each insert (up to 3 inserts at no charge)
$125/M for intelligent inserting
Machine $52/M with $100.00 minimum
$0.01/each insert (up to 3 inserts at no charge)
12b-1/Dealer Commission $0.78/each envelope with $100.00 minimum
Check/Statements
Spac Reports/Group Statements $78/M with $75.00 minimum
Listbills $0.78 per envelope with $75.00 minimum
Printing Charges $0.08/confirm/statement/page
$0.10/check
Folding (Machine) $18M
Folding (Hand) $12 each
Presort Charge $0.277 Postage rate
$0.035/piece
Courier Charge $15.00 for each on call courier trip/
or actual cost for on demand
Overnight Charge $3.50/package service charge plus
Federal Express/Airborne charge
Inventory Charge $20.00 for each inventory
location as of the 15th of the
month
Hourly Work: Special Projects, $24.00/hour
Opening Envelopes, etc.
Special Pulls $2.50 per account pull
Boxes/Envelopes
Shipping Boxes $0.85 each
Oversized Envelopes $0.45 each
Forms Development/Programming Fee $100.00/hour
Cutting Charges $10.00/M
Web Transaction Engine:
Set up Fee: $150.00 per hour
Reviewing client network requirements and signing off on the requirements
Recommending method of linking to the Web Transaction Engine
Installing the network hardware and software
Implementing the network connectivity
Testing the network connectivity and performance
Transaction Cost:
Account Inquiry $.10 per inquiry
Financial Transactions $.50 per transaction
Annual Maintenance Fee: $20,000 per annum
Releases of new versions of Web Transaction Engine (does not include
customization)
Maintain security infrastructure with auditing function
Monthly Usage Reports
Help Desk Support
Hardware Maintenance Fee: $20,000 per annum
Does not include client hardware and software requirements. That is an
out-of-pocket expense for the client
Installation of hardware is billed as time and materials
Does not include third party hardware and software maintenance agreements
Customized Development: $150 per hour
Call Center Services for Registration (one-time): $2.50 per call
Shareholder Notification campaign: priced per campaign
Schedule C
OUT-OF-POCKET EXPENSES
The Fund shall reimburse Investor Services (Group monthly for applicable
out-of-pocket expenses, including, but not limited to the following items:
. Microfiche/microfilm production
. Magnetic media tapes and freight
. Printing costs, including certificates, envelopes, checks and
stationery
. Postage (bulk, pre-sort, ZIP+4, barcoding, first class) direct pass
through to the Fund
. Due diligence mailings
. Telephone and telecommunication costs, including all lease,
maintenance and line costs
. Ad hoc reports
. Proxy solicitations, mailings and tabulations
. Daily & Distribution advice mailings
. Shipping, Certified and Overnight mail and insurance
. Year-end form production and mailings
. Terminals, communication lines, printers and other equipment and any
expenses incurred in connection with such terminals and lines
. Duplicating services
. Courier services
. Incoming and outgoing wire charges
. Federal Reserve charges for check clearance
. Overtime, as approved by the Fund
. Temporary staff, as approved by the Fund
. Travel and entertainment, as approved by the Fund
. Record retention, retrieval and destruction costs, including, but not
limited to exit fees charged by third party record keeping vendors
. Third party audit reviews
. Ad hoc SQL time
. Insurance
. Such other miscellaneous expenses reasonably incurred by Investor
Services Group in performing its duties and responsibilities under
this Agreement.
The Fund agrees that postage and mailing expenses will be paid on the day
of or prior to mailing as agreed with Investor Services Group. In addition, the
Fund will promptly reimburse Investor Services Group for any other unscheduled
expenses incurred by Investor Services Group whenever the Fund and Investor
Services Group mutually agree that such expenses are not otherwise properly
borne by Investor Services Group as part of its duties and obligations under the
Agreement.
