AMENDED AND RESTATED
EXPENSE LIMITATION AGREEMENT
for
the U.S. EQUITY fund
THIS AGREEMENT, dated as of February 25, 1999, and amended and restated
January 27, 2000, is made and entered into by and between Forward Funds, Inc., a
Maryland corporation (the "Company"), on behalf of its series The U.S. Equity
Fund (the "Fund"), and Xxxxxxx Investment Management Co., LLC (the "Adviser").
WHEREAS, the Adviser has been appointed the investment adviser of the
Fund pursuant to an Investment Management Agreement dated September, 1998,
between the Company, on behalf of the Fund, and the Adviser (the "Advisory
Agreement"); and
WHEREAS, the Company and the Adviser desire to enter into the
arrangements described herein relating to certain expenses of the Fund;
NOW, THEREFORE, the Company and the Adviser hereby agree as follows:
1. Until further notice from the Adviser to the Company, the Adviser
agrees, subject to Section 2 hereof, to reduce the fees payable to it under the
Advisory Agreement (but not below zero) to the extent necessary to limit the
operating expenses of the Fund (exclusive of brokerage costs, interest, taxes
and dividend and extraordinary expenses) as follows:
For the period of one year from the date of this Agreement, the Adviser
shall limit its fee so that the operating expenses of the Fund shall be
limited to an annual rate (as a percentage of the Fund's average daily
net assets) of 1.45% (exclusive of any and all 12b-1 and shareholder
servicing fees).
2. The Fund agrees to pay to the Adviser the amount of fees that, but
for Section 1 hereof, would have been payable by the Fund to the Adviser
pursuant to the Advisory Agreement (the "Deferred Fees") for a period of two
years following the end of the period provided for in Section 1 (the "Recoupment
Period"), subject to the limitations provided in this Section. Such repayment
shall be made monthly, but only if the operating expenses of the Fund (exclusive
of brokerage costs, interest, taxes and dividend and extraordinary expenses),
without regard to such repayment, are at an annual rate (as a percentage of the
average daily net assets of the Fund) of 1.45% or less. Furthermore, the amount
of Deferred Fees paid by the Fund in any month shall be limited so that the sum
of (a) the amount of such payment and (b) the other operating expenses of the
Fund (exclusive of brokerage costs, interest, taxes and extraordinary expenses)
do not exceed the foregoing annual percentage rate. In no event will the Fund be
obligated to pay any fees waived or deferred by the Adviser with respect to any
other series of the Company.
3. The Adviser may by notice in writing to the Company terminate, in
whole or in part, its obligation under Section 1 to reduce its fees with respect
to the Fund in any period following the date specified in such notice (or change
the percentage specified in Section 1), but no such change shall affect the
obligation (including the amount of the obligation) of the Fund to repay amounts
of Deferred Fees with respect to periods prior to the date specified in such
notice.
4. A copy of the Agreement and Certificate of Incorporation
establishing the Company is on file with the Secretary of State of Maryland, and
notice is hereby given that this Agreement is executed by the Company on behalf
of the Fund by an officer of the Company as an officer and not individually and
that the obligations of or arising out of this Agreement are not binding upon
any of the Directors, officers or shareholders individually but are binding only
upon the assets and property belonging to the Fund.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
Forward Funds, Inc.
on behalf of its series
The U.S. Equity Fund Xxxxxxx Investment Management Co., LLC
By: ------------------------ By: ------------------------
Name: ------------------------ Name: ------------------------
Title: ------------------------ Title: ------------------------
