Exhibit (g)(1)
CUSTODIAN AGREEMENT
THIS AGREEMENT, dated as of June 18, 2001, between FORWARD FUNDS, INC an
open-end management investment company organized under the laws of the State of
Maryland and registered with the Commission under the 1940 Act (the Fund) on
behalf of each of the Funds listed on the Appendix "B" as the same may be
amended from time to time (each a Fund and collectively the Funds) and XXXXX
BROTHERS XXXXXXXX & CO., a limited partnership formed under the laws of the
State of New York (BBH&Co. or the Custodian),
W I T N E S S E T H:
WHEREAS, the Fund wishes to employ BBH&Co. to act as custodian for the Fund
and to provide related services, all as provided herein, and BBH&Co. is willing
to accept such employment, subject to the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the Fund and BBH&Co. hereby agree, as follows:
1. Appointment of Custodian. The Fund hereby appoints BBH&Co. as the Fund's
custodian, and BBH&Co. hereby accepts such appointment. All Investments of the
Fund delivered to the Custodian or its agents or Subcustodians shall be dealt
with as provided in this Agreement. The duties of the Custodian with respect to
the Fund's Investments shall be only as set forth expressly in this Agreement
which duties are generally comprised of safekeeping and various administrative
duties that will be performed in accordance with Instructions and as reasonably
required to effect Instructions.
2. Representations, Warranties and Covenants of the Fund. The Fund hereby
represents, warrants and covenants each of the following:
2.1 This Agreement has been, and at the time of delivery of each
Instruction such Instruction will have been, duly authorized, executed and
delivered by the Fund. This Agreement does not violate any Applicable Law or
conflict with or constitute a default under the Fund's prospectus or other
organic document, agreement, judgment, order or decree to which the Fund is a
party or by which it or its Investments is bound.
2.2 By providing an Instruction with respect to the first acquisition of an
Investment in a jurisdiction other than the United States of America, the Fund
shall be deemed to have confirmed to the Custodian that the Fund has (a)
assessed and accepted all material Country or Sovereign Risks and accepted
responsibility for their occurrence, (b) made all determinations required to be
made by the Fund under the 1940 Act, and (iii) appropriately and adequately
disclosed to its shareholders, other investors and all persons who have rights
in or to such Investments, all material investment risks, including those
relating to the custody and settlement infrastructure or the servicing of
securities in such jurisdiction.
2.3 The Fund shall safeguard and shall solely be responsible for the
safekeeping of any testkeys, identification codes, passwords, other security
devices or statements of account with which the Custodian provides it. In
furtherance and not limitation of the foregoing, in the event the Fund utilizes
any on-line service offered by the Custodian, the Fund and the Custodian shall
be fully responsible for the security of each party's connecting terminal,
access thereto and the proper and authorized use thereof and the initiation and
application of continuing effective safeguards in respect thereof. Additionally,
if the Fund uses any on-line or similar communications service made available by
the Custodian, the Fund shall be solely responsible for ensuring the security of
its access to the service and for the use of the service, and shall only attempt
to access the service and the Custodian's computer systems as directed by the
Custodian. If the Custodian provides any computer software to the Fund relating
to the services described in this Agreement, the Fund will only use the software
for the purposes for which the Custodian provided the software to the Fund, and
will abide by the license agreement accompanying the software and any other
security policies which the Custodian provides to the Fund.
3. Representation and Warranty of BBH&Co. BBH&Co. hereby represents and warrants
that this Agreement has been duly authorized, executed and delivered by BBH&Co.
and does not and will not violate any Applicable Law or conflict with or
constitute a default under BBH&Co.'s limited partnership agreement or any
agreement, instrument, judgment, order or decree to which BBH&Co. is a party or
by which it is bound.
4. Instructions. Unless otherwise explicitly indicated herein, the Custodian
shall perform its duties pursuant to Instructions. As used herein, the term
Instruction shall mean a directive initiated by the Fund, acting directly or
through its board of directors, officers or other Authorized Persons, which
directive shall conform to the requirements of this Section 4.
4.1 Authorized Persons. For purposes hereof, an Authorized Person shall be
a person or entity authorized to give Instructions for or on behalf of the Fund
by written notices to the Custodian or otherwise in
accordance with procedures delivered to and acknowledged by the Custodian,
including without limitation the Fund's Investment Adviser or Foreign Custody
Manager. The Custodian may treat any Authorized Person as having full authority
of the Fund to issue Instructions hereunder unless the notice of authorization
contains explicit limitations as to said authority. The Custodian shall be
entitled to rely upon the authority of Authorized Persons until it receives
appropriate written notice from the Fund to the contrary.
4.2 Form of Instruction. Each Instruction shall be transmitted by such
secured or authenticated electro-mechanical means as the Custodian shall make
available to the Fund from time to time unless the Fund shall elect to transmit
such Instruction in accordance with Subsections 4.2.1 through 4.2.3 of this
Section.
4.2.1 Fund Designated Secured-Transmission Method. Instructions may be
transmitted through a secured or tested electro-mechanical means identified
by the Fund or by an Authorized Person entitled to give Instruction and
acknowledged and accepted by the Custodian; it being understood that such
acknowledgment shall authorize the Custodian to receive and process such
means of delivery but shall not represent a judgment by the Custodian as to
the reasonableness or security of the method determined by the Authorized
Person.
4.2.2 Written Instructions. Instructions may be transmitted in a
writing that bears the manual signature of Authorized Persons.
4.2.3 Other Forms of Instruction. Instructions may also be transmitted
by another means determined by the Fund or Authorized Persons and
acknowledged and accepted by the Custodian (subject to the same limits as
to acknowledgements as is contained in Subsection 4.2.1, above) including
Instructions given orally or by SWIFT, telex or telefax (whether tested or
untested).
When an Instruction is given by means established under Subsections 4.2.1
through 4.2.3, it shall be the responsibility of the Custodian to use reasonable
care to adhere to any security or other procedures established in writing
between the Custodian and the Authorized Person with respect to such means of
Instruction, but such Authorized Person shall be solely responsible for
determining that the particular means chosen is reasonable under the
circumstances. Oral Instructions shall be binding upon the Custodian only if and
when the Custodian takes action with respect thereto. With respect to telefax
instructions, the parties agree and acknowledge that receipt of legible
instructions cannot be assured, that the Custodian cannot verify that authorized
signatures on telefax instructions are original or properly affixed, and that
the Custodian shall not be liable for losses or expenses incurred
through actions taken in reliance on inaccurately stated, illegible or
unauthorized telefax instructions. The provisions of Section 4A of the Uniform
Commercial Code shall apply to Funds Transfers performed in accordance with
Instructions. The Funds Transfer Services Schedule to this Agreement shall
comprise a designation of form of a means of delivering Instructions for
purposes of this Section 4.2.
4.3 Completeness and Contents of Instructions. The Authorized Person shall
be responsible for assuring the adequacy and accuracy of Instructions.
Particularly, upon any acquisition or disposition or other dealing in the Fund's
Investments and upon any delivery and transfer of any Investment or moneys, the
person initiating such Instruction shall give the Custodian an Instruction with
appropriate detail, including, without limitation:
4.3.1 The transaction date and the date and location of settlement;
4.3.2 The specification of the type of transaction;
4.3.3 A description of the Investments or moneys in question,
including, as appropriate, quantity, price per unit, amount of money to be
received or delivered and currency information. Where an Instruction is
communicated by electronic means, or otherwise where an Instruction
contains an identifying number such as a CUSIP, SEDOL or ISIN number, the
Custodian shall be entitled to rely on such number as controlling
notwithstanding any inconsistency contained in such Instruction,
particularly with respect to Investment description; and
4.3.4 The name of the broker or similar entity concerned with
execution of the transaction.
If the Custodian shall determine that an Instruction is either unclear or
incomplete, the Custodian may give prompt notice of such determination to the
Fund, and the Fund shall thereupon amend or otherwise reform such Instruction.
In such event, the Custodian shall have no obligation to take any action in
response to the Instruction initially delivered until the redelivery of an
amended or reformed Instruction.
4.4 Timeliness of Instructions. In giving an Instruction, the Fund shall
take into consideration delays which may occur due to the involvement of a
Subcustodian or agent, differences in time zones, and other factors particular
to a given market, exchange or issuer. When the Custodian has established
specific timing requirements or deadlines with respect to particular classes of
Instruction, or when an Instruction is received by the Custodian at such a time
that it could not reasonably be expected to have acted on such instruction due
to time zone differences or
other factors beyond its reasonable control, the execution of any Instruction
received by the Custodian after such deadline or at such time (including any
modification or revocation of a previous Instruction) shall be at the risk of
the Fund.
5. Safekeeping of Fund Assets. The Custodian shall hold Investments delivered to
it or Subcustodians for the Fund in accordance with the provisions of this
Section. The Custodian shall not be responsible for (a) the safekeeping of
Investments not delivered or that are not caused to be issued to it or its
Subcustodians; or, (b) pre-existing faults or defects in Investments that are
delivered to the Custodian, or its Subcustodians. The Custodian is hereby
authorized to hold with itself or a Subcustodian, and to record in one or more
accounts, all Investments delivered to and accepted by the Custodian, any
Subcustodian or their respective agents pursuant to an Instruction or in
consequence of any corporate action. The Custodian shall hold Investments for
the account of the Fund and shall segregate Investments from assets belonging to
the Custodian and shall cause its Subcustodians to segregate Investments from
assets belonging to the Subcustodian in an account held for the Fund or in an
account maintained by the Subcustodian generally for non-proprietary assets of
the Custodian.
5.1 Use of Securities Depositories. The Custodian may deposit and maintain
Investments in any Securities Depository, either directly or through one or more
Subcustodians appointed by the Custodian. Investments held in a Securities
Depository shall be held (a) subject to the agreement, rules, statement of terms
and conditions or other document or conditions effective between the Securities
Depository and the Custodian or the Subcustodian, as the case may be, and (b) in
an account for the Fund or in bulk segregation in an account maintained for the
non-proprietary assets of the entity holding such Investments in the Depository.
If market practice or the rules and regulations of the Securities Depository
prevent the Custodian, the Subcustodian or (any agent of either) from holding
its client assets in such a separate account, the Custodian, the Subcustodian or
other agent shall as appropriate segregate such Investments for benefit of the
Fund or for benefit of clients of the Custodian generally on
its own books.
5.2 Certificated Assets. Investments which are certificated may be held in
registered or bearer form: (a) in the Custodian's vault; (b) in the vault of a
Subcustodian or agent of the Custodian or a Subcustodian; or (c) in an account
maintained by the Custodian, Subcustodian or agent at a Securities Depository;
all in accordance with customary market practice in the jurisdiction in which
any Investments are held.
5.3 Registered Assets. Investments which are registered may be registered
in the name of the Custodian, a Subcustodian, or in the name of the Fund or a
nominee for any of the foregoing, and may be held in any manner set forth in
paragraph 5.2 above with or without any identification of fiduciary capacity in
such registration.
5.4 Book Entry Assets. Investments which are represented by book-entry may
be so held in an account maintained by the Book-entry Agent on behalf of the
Custodian, a Subcustodian or another agent of the Custodian, or a Securities
Depository.
5.5 Replacement of Lost Investments. In the event of a loss of Investments
for which the Custodian is responsible under the terms of this Agreement, the
Custodian shall replace such Investment, or in the event that such replacement
cannot be effected, the Custodian shall pay to the Fund the fair market value of
such Investment based on the last available price as of the close of business in
the relevant market on the date that a claim was first made to the Custodian
with respect to such loss, or, if less, such other amount as shall be agreed by
the parties as the date for settlement.
6. Administrative Duties of the Custodian. The Custodian shall perform the
following administrative duties with respect to Investments of the Fund.
6.1 Purchase of Investments. Pursuant to Instruction, Investments purchased
for the account of the Fund shall be paid for (a) against delivery thereof to
the Custodian or a Subcustodian, as the case may be, either directly or through
a Clearing Corporation or a Securities Depository (in accordance with the rules
of such Securities
Depository or such Clearing Corporation), or (b) otherwise in accordance with an
Instruction, Applicable Law, generally accepted trade practices, or the terms of
the instrument representing such Investment.
6.2 Sale of Investments. Pursuant to Instruction, Investments sold for the
account of the Fund shall be delivered (a) against payment therefor in cash, by
check or by bank wire transfer, (b) by credit to the account of the Custodian or
the applicable Subcustodian, as the case may be, with a Clearing Corporation or
a Securities Depository (in accordance with the rules of such Securities
Depository or such Clearing Corporation), or (c) otherwise in accordance with an
Instruction, Applicable Law, generally accepted trade practices, or the terms of
the instrument representing such Investment.
6.3 Delivery and Receipt in Connection with Borrowings of the Fund or other
Collateral and Margin Requirements. Pursuant to Instruction, the Custodian may
deliver or receive Investments or cash of the Fund in connection with borrowings
or loans by the Fund and other collateral and margin requirements.
6.4 Futures and Options. If, pursuant to an Instruction, the Custodian
shall become a party to an agreement with the Fund and a futures commission
merchant regarding margin (Tri-Party Agreement), the Custodian shall (a) receive
and retain, to the extent the same are provided to the Custodian, confirmations
or other documents evidencing the purchase or sale by the Fund of
exchange-traded futures contracts and commodity options, (b) when required by
such Tri-Party Agreement, deposit and maintain in an account opened pursuant to
such Agreement (Margin Account), segregated either physically or by book-entry
in a Securities Depository for the benefit of any futures commission merchant,
such Investments as the Fund shall have designated as initial, maintenance or
variation "margin" deposits or other collateral intended to secure the Fund's
performance of its obligations under the terms of any exchange-traded futures
contracts and commodity options; and (c) thereafter pay, release or transfer
Investments into or out of the margin account in accordance with the provisions
of such Agreement. Alternatively, the Custodian may deliver Investments, in
accordance with an Instruction, to a futures commission merchant for purposes of
margin requirements in accordance with Rule 17f-6. The Custodian shall in no
event be responsible for the acts and omissions of any futures commission
merchant to whom Investments are delivered pursuant to this Section; for the
sufficiency of Investments held in any Margin Account; or, for the performance
of any terms of any exchange-traded futures contracts and commodity options.
6.5 Contractual Obligations and Similar Investments. From time to time, the
Fund's Investments may include Investments that are not ownership interests as
may be represented by certificate (whether registered or bearer), by entry in a
Securities Depository or by book entry agent, registrar or similar agent for
recording ownership interests in the relevant Investment. If the Fund shall at
any time acquire such Investments, including
without limitation deposit obligations, loan participations, repurchase
agreements and derivative arrangements, the Custodian shall (a) receive and
retain, to the extent the same are provided to the Custodian, confirmations or
other documents evidencing the arrangement, and (b) perform on the Fund's
account in accordance with the terms of the applicable arrangement, but only to
the extent directed to do so by Instruction. The Custodian shall have no
responsibility for agreements running to the Fund as to which it is not a party
other than to retain, to the extent the same are provided to the Custodian,
documents or copies of documents evidencing the arrangement and, in accordance
with Instruction, to include such arrangements in reports made to the Fund.
6.6 Exchange of Securities. Unless otherwise directed by Instruction, the
Custodian shall: (a) exchange securities held for the account of the Fund for
other securities in connection with any reorganization, recapitalization,
conversion, split-up, change of par value of shares or similar event, and (b)
deposit any such securities in accordance with the terms of any reorganization
or protective plan.
6.7 Surrender of Securities. Unless otherwise directed by Instruction, the
Custodian may surrender securities: (a) in temporary form for definitive
securities; (b) for transfer into the name of an entity allowable under Section
5.3; and (c) for a different number of certificates or instruments representing
the same number of shares or the same principal amount of indebtedness.
6.8 Rights, Warrants, Etc. Pursuant to Instruction, the Custodian shall (a)
deliver warrants, puts, calls, rights or similar securities to the issuer or
trustee thereof, or to any agent of such issuer or trustee, for purposes of
exercising such rights or selling such securities, and (b) deposit securities in
response to any invitation for the tender thereof.
6.9 Mandatory Corporate Actions. Unless otherwise directed by Instruction,
the Custodian shall: (a) comply with the terms of all mandatory or compulsory
exchanges, calls, tenders, redemptions or similar rights of securities ownership
affecting securities held on the Fund's account and promptly notify the Fund of
such action, and (b) collect all stock dividends, rights and other items of like
nature with respect to such securities.
6.10 Income Collection. Unless otherwise directed by Instruction, the
Custodian shall collect any amount due and payable to the Fund with respect to
Investments and promptly credit the amount collected to a Principal or Agency
Account; provided, however, that the Custodian shall not be responsible for: (a)
the collection of amounts due and payable with respect to Investments that are
in default, or (b) the collection of cash or share entitlements with respect to
Investments that are not registered in the name of the Custodian or its
Subcustodians. The Custodian is hereby authorized to endorse and deliver any
instrument required to be so endorsed and delivered to effect collection of any
amount due and payable to the Fund with respect to Investments.
6.11 Ownership Certificates and Disclosure of the Fund's Interest. The
Custodian is hereby authorized to execute on behalf of the Fund ownership
certificates, affidavits or other disclosure required under Applicable Law or
established market practice in connection with the receipt of income, capital
gains or other payments by the Fund with respect to Investments, or in
connection with the sale, purchase or ownership of Investments.
With respect to securities issued in the United States of America, the
Custodian [ ] may [ ] may not release the identity of the Fund to an issuer
which requests such information pursuant to the Shareholder Communications
Act of 1985 for the specific purpose of direct communications between such
issuer and the Fund. IF NO BOX IS CHECKED, THE CUSTODIAN SHALL RELEASE SUCH
INFORMATION UNTIL IT RECEIVES CONTRARY INSTRUCTIONS FROM THE FUND. With
respect to securities issued outside of the United States of America,
information shall be released in accordance with law or custom of the
particular country in which such security is located.
6.12 Proxy Materials. The Custodian shall deliver, or cause to be
delivered, to the Fund proxy forms, notices of meeting, and any other notices or
announcements materially affecting or relating to Investments received by the
Custodian or any nominee.
6.13. Taxes. The Custodian shall, where applicable, assist the Fund in the
reclamation of taxes withheld on dividends and interest payments received by the
Fund. In the performance of its duties with respect to tax withholding and
reclamation, the Custodian shall be entitled to rely on the advice of counsel
and upon information and advice regarding the Fund's tax status that is received
from or on behalf of the Fund without duty of separate inquiry.
6.14 Other Dealings. The Custodian shall otherwise act as directed by
Instruction, including without limitation effecting the free payments of moneys
or the free delivery of securities, provided that such Instruction shall
indicate the purpose of such payment or delivery and that the Custodian shall
record the party to whom such payment or delivery is made.
The Custodian shall attend to all nondiscretionary details in connection
with the sale or purchase or other administration of Investments, except as
otherwise directed by an Instruction, and may make payments to itself or others
for minor expenses of administering Investments under this Agreement; provided
that the Fund shall have the right to request an accounting with respect to such
expenses.
In fulfilling the duties set forth in Sections 6.6 through 6.10 above, the
Custodian shall provide to the Fund all material information pertaining to a
corporate action which the Custodian actually receives; provided that the
Custodian shall not be responsible for the completeness or accuracy of such
information. Any advance credit of cash or shares expected to be received as a
result of any corporate action shall be subject to actual collection and may,
when the Custodian deems collection unlikely, be reversed by the Custodian.
The Custodian may at any time or times in its discretion appoint (and may
at any time remove) agents (other than Subcustodians) to carry out some or all
of the administrative provisions of this Agreement (Agents), provided, however,
that the appointment of such agent shall not relieve the Custodian of its
administrative obligations under this Agreement.
7. Cash Accounts, Deposits and Money Movements. Subject to the terms and
conditions set forth in this Section 7, the Fund hereby authorizes the Custodian
to open and maintain, with itself or with Subcustodians, cash accounts in United
States Dollars, in such other currencies as are the currencies of the countries
in which the Fund maintains Investments or in such other currencies as the Fund
shall from time to time request by Instruction.
7.1 Types of Cash Accounts. Cash accounts opened on the books of the
Custodian (Principal Accounts) shall be opened in the name of the Fund. Such
accounts collectively shall be a deposit obligation of the Custodian and shall
be subject to the terms of this Section 7 and the general liability provisions
contained in Section 9. Cash accounts opened on the books of a Subcustodian may
be opened in the name of the Fund or the Custodian or in the name of the
Custodian for its customers generally (Agency Accounts). Such deposits shall be
obligations of the Subcustodian and shall be treated as an Investment of the
Fund. Accordingly, the Custodian shall be responsible for exercising reasonable
care in the administration of such accounts but shall not be liable for their
repayment in the event such Subcustodian, by reason of its bankruptcy,
insolvency or otherwise, fails to make repayment.
7.2 Payments and Credits with Respect to the Cash Accounts. The Custodian
shall make payments from or deposits to any of said accounts in the course of
carrying out its administrative duties, including but not limited to
income collection with respect to the Fund's Investments, and otherwise in
accordance with Instructions. The Custodian and its Subcustodians shall be
required to credit amounts to the cash accounts only when moneys are actually
received in cleared funds in accordance with banking practice in the country and
currency of deposit. Any credit made to any Principal or Agency Account before
actual receipt of cleared funds shall be provisional and may be reversed by the
Custodian in the event such payment is not actually collected. Unless otherwise
specifically agreed in writing by the Custodian or any Subcustodian, all
deposits shall be payable only at the branch of the Custodian or Subcustodian
where the deposit is made or carried.
7.3 Currency and Related Risks. The Fund bears risks of holding or
transacting in any currency. The Custodian shall not be liable for any loss or
damage arising from the applicability of any law or regulation now or hereafter
in effect, or from the occurrence of any event, which may delay or affect the
transferability, convertibility or availability of any currency in the country
(a) in which such Principal or Agency Accounts are maintained or (b) in which
such currency is issued, and in no event shall the Custodian be obligated to
make payment of a deposit denominated in a currency during the period during
which its transferability, convertibility or availability has been affected by
any such law, regulation or event. Without limiting the generality of the
foregoing, neither the Custodian nor any Subcustodian shall be required to repay
any deposit made at a foreign branch of either the Custodian or Subcustodian if
such branch cannot repay the deposit due to a cause for which the Custodian
would not be responsible in accordance with the terms of Section 9 of this
Agreement unless the Custodian or such Subcustodian expressly agrees in writing
to repay the deposit under such circumstances. All currency transactions in any
account opened pursuant to this Agreement are subject to exchange control
regulations of the United States and of the country where such currency is the
lawful currency or where the account is maintained. Any taxes, costs, charges or
fees imposed on the convertibility of a currency held by the Fund shall be for
the account of the Fund.
7.4 Foreign Exchange Transactions. The Custodian shall, subject to the
terms of this Section, settle
foreign exchange transactions (including contracts, futures, options and options
on futures) on behalf and for the account of the Fund with such currency brokers
or banking institutions, including Subcustodians, as the Fund may direct
pursuant to Instructions. The Custodian may act as principal in any foreign
exchange transaction with the Fund in accordance with Section 7.4.2 of this
Agreement. The obligations of the Custodian in respect of all foreign exchange
transactions (whether or not the Custodian shall act as principal in such
transaction) shall be contingent on the free, unencumbered transferability of
the currency transacted on the actual settlement date of the transaction.
7.4.1 Third Party Foreign Exchange Transactions. The Custodian shall
process foreign exchange transactions (including without limitation
contracts, futures, options, and options on futures), where any third party
acts as principal counterparty to the Fund on the same basis it performs
duties as agent for the Fund with respect to any other of the Fund's
Investments. Accordingly the Custodian shall only be responsible for
delivering or receiving currency on behalf of the Fund in respect of such
contracts pursuant to Instructions. The Custodian shall not be responsible
for the failure of any counterparty (including any Subcustodian) in such
agency transaction to perform its obligations thereunder. The Custodian (a)
shall transmit cash and Instructions to and from the currency broker or
banking institution with which a foreign exchange contract or option has
been executed pursuant hereto, (b) may make free outgoing payments of cash
in the form of Dollars or foreign currency without receiving confirmation
of a foreign exchange contract or option or confirmation that the
countervalue currency completing the foreign exchange contract has been
delivered or received or that the option has been delivered or received,
and (c) shall hold all confirmations, certificates and other documents and
agreements received by the Custodian and evidencing or relating to such
foreign exchange transactions in safekeeping. The Fund accepts full
responsibility for its use of third-party foreign exchange dealers and for
execution of said foreign exchange contracts and options and understands
that the Fund shall be responsible for any and all costs and interest
charges which may be incurred by the Fund or the Custodian as a result of
the failure or delay of third parties to deliver foreign exchange.
7.4.2 Foreign Exchange with the Custodian as Principal. The Custodian
may undertake foreign exchange transactions with the Fund as principal as
the Custodian and the Fund may agree from time to time. In such event, the
foreign exchange transaction will be performed in accordance with the
particular agreement of the parties, or in the event a principal foreign
exchange transaction is initiated by Instruction in the absence of specific
agreement, such transaction will be performed in accordance with the usual
commercial terms of the Custodian.
7.5 Delays. If no event of Force Majeure shall have occurred and be
continuing and in the event that a delay shall have been caused by the
negligence or willful misconduct of the Custodian in carrying out an Instruction
to credit or transfer cash, the Custodian shall be liable to the Fund: (a) with
respect to Principal Accounts, for interest to be calculated at the rate
customarily paid on such deposit and currency by the Custodian on overnight
deposits at the time the delay occurs for the period from the day when the
transfer should have been effected until the day it is in fact effected. The
Custodian shall not be liable for delays in carrying out such Instructions to
transfer cash which are not due to the Custodian's own negligence or willful
misconduct.
7.6 Advances. If, for any reason in the conduct of its safekeeping duties
pursuant to Section 5 hereof or its administration of the Fund's assets pursuant
to Section 6 hereof, the Custodian or any Subcustodian advances monies to
facilitate settlement or otherwise for benefit of the Fund (whether or not any
Principal or Agency Account shall be overdrawn either during, or at the end of,
any Business Day), the Fund hereby does:
7.6.1 acknowledge that the Fund shall have no right or title to any
Investments purchased with such Advance save a right to receive such
Investments upon: (a) the debit of the Principal or Agency Account; or, (b)
if such debit would produce an overdraft in such account, other
reimbursement of the associated Advance;
7.6.2 grant to the Custodian a security interest in all Investments;
and
7.6.3 agree that the Custodian may secure the resulting Advance by
perfecting a security interest in all Investments under Applicable Law.
Neither the Custodian nor any Subcustodian shall be obligated to advance
monies to the Fund, and in the event that such Advance occurs, any transaction
giving rise to an Advance shall be for the account and risk of the Fund and
shall not be deemed to be a transaction undertaken by the Custodian for its own
account and risk. If such Advance shall have been made by a Subcustodian or any
other person, the Custodian may assign the security interest and any other
rights granted to the Custodian hereunder to such Subcustodian or other person.
If the Fund shall fail to repay when due the principal balance of an Advance and
accrued and unpaid interest thereon, the Custodian or its assignee, as the case
may be, shall be entitled to utilize the available cash balance in any Agency or
Principal Account and to dispose of any Investments to the extent necessary to
recover payment of all principal of, and interest on, such Advance in full. The
Custodian may assign any rights it has hereunder to a Subcustodian or third
party. Any security interest in Investments taken hereunder shall be treated as
financial assets credited to securities
accounts under Articles 8 and 9 of the Uniform Commercial Code (1997).
Accordingly, the Custodian shall have the rights and benefits of a secured
creditor that is a securities intermediary under such Articles 8 and 9.
7.7 Integrated Account. For purposes hereof, deposits maintained in all
Principal Accounts (whether or not denominated in Dollars) shall collectively
constitute a single and indivisible current account with respect to the Fund's
obligations to the Custodian, or its assignee, and balances in such Principal
Accounts shall be available for satisfaction of the Fund's obligations under
this Section 7. The Custodian shall further have a right of offset against the
balances in any Agency Account maintained hereunder to the extent that the
aggregate of all Principal Accounts is overdrawn.
8. Subcustodians and Securities Depositories. Subject to the provisions
hereinafter set forth in this Section 8, the Fund hereby authorizes the
Custodian to utilize Securities Depositories to act on behalf of the Fund and to
appoint from time to time and to utilize Subcustodians. With respect to
securities and funds held by a Subcustodian, either directly or indirectly
(including by a Securities Depository or Clearing Corporation), notwithstanding
any provisions of this Agreement to the contrary, payment for securities
purchased and delivery of securities sold may be made prior to receipt of
securities or payment, respectively, and securities or payment may be received
in a form, in accordance with (a) governmental regulations, (b) rules of
Securities Depositories and clearing agencies, (c) generally accepted trade
practice in the applicable local market, (d) the terms and characteristics of
the particular Investment, or (e) the terms of Instructions.
8.1 Domestic Subcustodians and Securities Depositories. The Custodian may
deposit and/or maintain, either directly or through one or more agents appointed
by the Custodian, Investments of the Fund in any Securities Depository in the
United States, including The Depository Trust Company, provided such Depository
meets applicable requirements of the Federal Reserve Bank or of the Securities
and Exchange Commission. The Custodian may, at any time and from time to time,
appoint any bank as defined in Section 2(a)(5) of the 1940 Act meeting the
requirements of a custodian under Section 17(f) of the 1940 Act and the rules
and regulations thereunder, to act on behalf of the Fund as a Subcustodian for
purposes of holding Investments of the Fund in the United States.
8.2 Foreign Subcustodians and Securities Depositories. Unless instructed
otherwise by the Fund, the Custodian may deposit and/or maintain non-U.S.
Investments of the Fund in any non-U.S. Securities Depository provided such
Securities Depository meets the requirements of an "eligible securities
depository" under Rule 17f-7 promulgated under the 1940 Act, or any successor
rule or regulation ("Rule 17f-7") or which by order of the Securities and
Exchange Commission is exempted therefrom. Prior to the time that securities are
placed with such depository, but subject to the provisions of Section 8.2.4
below, the Custodian shall have prepared an assessment of the custody risks
associated with maintaining assets with the Securities Depository and shall have
established a system to monitor such risks on a continuing basis in accordance
with subsection 8.2.3 of this Section. Additionally, the Custodian may, at any
time and from time to time, appoint (a) any bank, trust company or other entity
meeting the requirements of an "eligible foreign custodian" under Rule 17f-5 or
which by order of the Securities and Exchange Commission is exempted therefrom,
or (b) any bank as defined in Section 2(a)(5) of the 1940 Act meeting the
requirements of a custodian under Section 17(f) of the 1940 Act and the rules
and regulations thereunder, to act on behalf of the Fund as a Subcustodian for
purposes of holding Investments of the Fund outside the United States. Such
appointment of foreign Subcustodians shall be subject to approval of the Fund in
accordance with Subsections 8.2.1 and 8.2.2 hereof, and use of non-U.S.
Securities Depositories shall be subject to the terms of Subsections 8.2.3 and
8.2.4 hereof. An Instruction to open an account in a given country shall
comprise authorization of the Custodian to hold assets in such country in
accordance with the terms of this Agreement. The Custodian shall not be required
to make independent inquiry as to the authorization of the Fund to invest in
such country.
8.2.1 Board Approval of Foreign Subcustodians. Unless and except to
the extent that the Board has delegated to and the Custodian has accepted
delegation of review of certain matters concerning the appointment of
Subcustodians pursuant to Subsection 8.2.2, the Custodian shall, prior to
the appointment of any Subcustodian for purposes of holding Investments of
the Fund outside the United States, obtain written confirmation of the
approval of the Board of Trustees or Directors of the Fund with respect to
(a) the identity of a Subcustodian, and (b) the Subcustodian agreement
which shall govern such appointment, such
approval to be signed by an Authorized Person.
8.2.2 Delegation of Board Review of Subcustodians. From time to time,
the Custodian may agree to perform certain reviews of Subcustodians and of
Subcustodian Contracts as delegate of the Fund's Board. In such event, the
Custodian's duties and obligations with respect to this delegated review
will be performed in accordance with the terms of the attached 17f-5
Delegation Schedule to this Agreement.
8.2.3 Monitoring and Risk Assessment of Securities Depositories. Prior
to the placement of any assets of the Fund with a non-U.S. Securities
Depository, the Custodian: (a) shall provide to the Fund or its authorized
representative an assessment of the custody risks associated with
maintaining assets within such Securities Depository; and (b) shall have
established a system to monitor the custody risks associated with
maintaining assets with such Securities Depository on a continuing basis
and to promptly notify the Fund or its Investment Adviser of any material
changes in such risk. In performing its duties under this subsection, the
Custodian shall use reasonable care and may rely on such reasonable sources
of information as may be available including but not limited to: (i)
published ratings; (ii) information supplied by a Subcustodian that is a
participant in such Securities Depository; (iii) industry surveys or
publications; (iv) information supplied by the depository itself, by its
auditors (internal or external) or by the relevant Foreign Financial
Regulatory Authority. It is acknowledged that information procured through
some or all of these sources may not be independently verifiable by the
Custodian and that direct access to Securities Depositories is limited
under most circumstances. Accordingly, the Custodian shall not be
responsible for errors or omissions in its duties hereunder provided that
it has performed its monitoring and assessment duties with reasonable care.
The risk assessment shall be provided to the Fund or its Investment Advisor
by such means as the Custodian shall reasonably establish. Advices of
material change in such assessment may be provided by the Custodian in the
manner established as customary between the Fund and the Custodian for
transmission of material market information.
8.2.4 Special Transitional Rule. It is acknowledged that Rule 17f-7
has an effective date of July 1, 2001 and that the Custodian will require a
period of time to fully prepare risk assessment information and to
establish a risk monitoring system as provided in Subsection 8.2.3.
Accordingly, until July 1, 2001, the Custodian shall use reasonable efforts
to implement the measures required by Subsection 8.2.3, and shall in the
interim provide to the Fund or its Investment Advisor the depository
information customarily provided and shall promptly inform the Fund or its
Investment Advisor of any material development affecting the custody risks
associated with the maintenance of assets with a particular Securities
Depository of which it becomes aware in the course of its general duties
under this Agreement or from its duties under Section 8.2.3 as such duties
have been implemented at any given time.
8.3 Responsibility for Subcustodians. With respect to securities and funds
held by a Subcustodian, either directly or indirectly (including by a Foreign
Depository, Securities System or foreign clearing agency), including demand
deposit and interest bearing deposits, currencies or other deposits and foreign
exchange contracts as referred to herein, the Custodian shall be liable to the
Fund if and only to the extent that such Subcustodian is liable to the Custodian
and the Custodian recovers under the applicable subcustodian agreement.
8.4 New Countries. The Fund shall be responsible for informing the
Custodian sufficiently in advance of a proposed investment which is to be held
in a country in which no Subcustodian is authorized to act in order that the
Custodian shall, if it deems appropriate to do so, have sufficient time to
establish a subcustodial arrangement in
accordance herewith. In the event, however, the Custodian is unable to establish
such arrangements prior to the time such investment is to be acquired, the
Custodian is authorized to designate at its discretion a local safekeeping
agent, and the use of such local safekeeping agent shall be at the sole risk of
the Fund, and accordingly the Custodian shall be responsible to the Fund for the
actions of such agent if and only to the extent the Custodian shall have
recovered from such agent for any damages caused the Fund by such agent.
9. Responsibility of the Custodian. In performing its duties and obligations
hereunder, the Custodian shall use reasonable care under the facts and
circumstances prevailing in the market where performance is effected. Subject to
the specific provisions of this Section, the Custodian shall be liable for any
direct damage incurred by the Fund in consequence of the Custodian's negligence,
bad faith or willful misconduct. In no event shall the Custodian be liable
hereunder for any special, indirect, punitive or consequential damages arising
out of, pursuant to or in connection with this Agreement even if the Custodian
has been advised of the possibility of such damages. It is agreed that the
Custodian shall have no duty to assess the risks inherent in the Fund's
Investments or to provide investment advice with respect to such Investments and
that the Fund as principal shall bear any risks attendant to particular
Investments such as failure of counterparty or issuer.
9.1 Limitations of Performance. The Custodian shall not be responsible
under this Agreement for any failure to perform its duties, and shall not liable
hereunder for any loss or damage in association with such failure to perform,
for or in consequence of the following causes:
9.1.1 Force Majeure. Force Majeure shall mean any circumstance or
event which is beyond the reasonable control of the Custodian, a
Subcustodian or any agent of the Custodian or a Subcustodian and which
adversely affects the performance by the Custodian of its obligations
hereunder, by the Subcustodian of its obligations under its Subcustody
Agreement or by any other agent of the Custodian or the Subcustodian,
including any event caused by, arising out of or involving (a) an act of
God, (b) accident, fire, water damage or explosion, (c) any computer,
system or other equipment failure or malfunction caused by any computer
virus or the malfunction or failure of any communications medium, (d) any
interruption of the power supply or other utility service, (e) any strike
or other work stoppage, whether partial or total, (f) any delay or
disruption resulting from or reflecting the occurrence of any Sovereign
Risk, (g) any disruption of, or suspension of trading in, the securities,
commodities or foreign exchange markets, whether or not resulting from or
reflecting the occurrence of any Sovereign Risk, (h) any encumbrance on the
transferability of a currency or a currency position on the actual
settlement date of a foreign exchange transaction, whether or not resulting
from or reflecting the occurrence of any Sovereign Risk, or (i) any other
cause similarly beyond the reasonable control of the Custodian.
9.1.2 Country Risk. Country Risk shall mean, with respect to the
acquisition, ownership, settlement or custody of Investments in a
jurisdiction, all risks relating to, or arising in consequence of, systemic
and markets factors affecting the acquisition, payment for or ownership of
Investments including (a) the prevalence of crime and corruption, (b) the
inaccuracy or unreliability of business and financial information, (c) the
instability or volatility of banking and financial systems, or the absence
or inadequacy of an infrastructure to support such systems, (d) custody and
settlement infrastructure of the market in which such Investments are
transacted and held, (e) the acts, omissions and operation of any
Securities Depository, (f) the risk of the bankruptcy or insolvency of
banking agents, counterparties to cash and securities transactions,
registrars or transfer agents, and (g) the existence of market conditions
which prevent the orderly execution or settlement of transactions or which
affect the value of assets.
9.1.3 Sovereign Risk. Sovereign Risk shall mean, in respect of any
jurisdiction, including the United States of America, where Investments is
acquired or held hereunder or under a Subcustody Agreement, (a) any act of
war, terrorism, riot, insurrection or civil commotion, (b) the imposition
of any investment, repatriation or exchange control restrictions by any
Governmental Authority, (c) the confiscation, expropriation or
nationalization of any Investments by any Governmental Authority, whether
de facto or de jure, (iv) any devaluation or revaluation of the currency,
(d) the imposition of taxes, levies or other charges affecting Investments,
(vi) any change in the Applicable Law, or (e) any other economic or
political risk incurred or experienced.
9.2. Limitations on Liability. The Custodian shall not be liable for any
loss, claim, damage or other liability arising from the following causes:
9.2.1 Failure of Third Parties. The failure of any third party
including: (a) any issuer of Investments or book-entry or other agent of
and issuer; (b) any counterparty with respect to any Investment, including
any issuer of exchange-traded or other futures, option, derivative or
commodities contract; (c) failure of an Investment Advisor, Foreign Custody
Manager or other agent of the Fund; or (d) failure of other third parties
similarly beyond the control or choice of the Custodian.
9.2.2 Information Sources. The Custodian may rely upon information
received from issuers of Investments or agents of such issuers, information
received from Subcustodians and from other commercially reasonable sources
such as commercial data bases and the like, but shall not be responsible
for specific inaccuracies in such information, provided that the Custodian
has relied upon such information in good faith, or for the failure of any
commercially reasonable information provider.
9.2.3 Reliance on Instruction. Action by the Custodian or the
Subcustodian in accordance with an Instruction, even when such action
conflicts with, or is contrary to any provision of, the Fund's declaration
of trust, certificate of incorporation or by-laws, Applicable Law, or
actions by the trustees, directors or shareholders of the Fund.
9.2.4 Restricted Securities. The limitations inherent in the rights,
transferability or similar investment characteristics of a given Investment
of the Fund.
10. Indemnification. The Fund hereby indemnifies the Custodian and each
Subcustodian, and their respective agents, nominees and the partners, employees,
officers and directors, and agrees to hold each of them harmless from and
against all claims and liabilities, including counsel fees and taxes, incurred
or assessed against any of them in connection with the performance of this
Agreement and any Instruction unless such loss or claim results from the
Custodian's or a Subcustodian's breach of the relevant standard of conduct set
forth in this Agreement. If a Subcustodian or any other person indemnified under
the preceding sentence, gives written notice of claim to the Custodian, the
Custodian shall promptly give written notice to the Fund. Not more than thirty
days following the date of such notice, unless the Custodian shall be liable
under Section 8 hereof in respect of such claim, the Fund will pay the amount of
such claim or reimburse the Custodian for any payment made by the Custodian in
respect thereof.
11. Reports and Records. The Custodian shall:
11.1 create and maintain records relating to the performance of its
obligations under this Agreement;
11.2 make available to the Fund, its auditors, agents and employees, during
regular business hours of the Custodian, upon reasonable request and during
normal business hours of the Custodian, all records maintained by the Custodian
pursuant to paragraph 11.1 above, subject, however, to all reasonable security
requirements of the Custodian then applicable to the records of its custody
customers generally; and
11.3 make available to the Fund all Electronic Reports; it being understood
that the Custodian shall not be liable hereunder for the inaccuracy or
incompleteness thereof or for errors in any information included therein.
The Fund shall examine all records, howsoever produced or transmitted,
promptly upon receipt thereof and notify the Custodian promptly of any
discrepancy or error therein. Unless the Fund delivers written notice of any
such discrepancy or error within a reasonable time after its receipt thereof,
such records shall be deemed to be true and accurate. It is understood that the
Custodian now obtains and will in the future obtain information on the value of
assets from outside sources which may be utilized in certain reports made
available to the Fund. The Custodian deems such sources to be reliable but it is
acknowledged and agreed that the Custodian does not verify nor represent nor
warrant as to the accuracy or completeness of such information and accordingly
shall be without liability in selecting and using such sources and furnishing
such information.
12. Miscellaneous.
12.1 Proxies, etc. The Fund will promptly execute and deliver, upon
request, such proxies, powers of attorney or other instruments as may be
necessary or desirable for the Custodian to provide, or to cause any
Subcustodian to provide, custody services.
12.2 Entire Agreement. Except as specifically provided herein, this
Agreement constitutes the entire agreement between the Fund and the Custodian
with respect to the subject matter hereof. Accordingly, this Agreement
supersedes any custody agreement or other oral or written agreements heretofore
in effect between the Fund and the Custodian with respect to the custody of the
Fund's Investments.
12.3 Waiver and Amendment. No provision of this Agreement may be waived,
amended or modified, and no addendum to this Agreement shall be or become
effective, or be waived, amended or modified, except by an instrument in writing
executed by the party against which enforcement of such waiver, amendment or
modification is sought; provided, however, that an Instruction shall, whether or
not such Instruction shall constitute a waiver, amendment or modification for
purposes hereof, shall be deemed to have been accepted by the Custodian when it
commences actions pursuant thereto or in accordance therewith.
12.4 GOVERNING LAW AND JURISDICTION. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND BE GOVERNED BY THE LAWS OF, THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO THE CONFLICTS OF LAW OF SUCH STATE. THE PARTIES HERETO
IRREVOCABLY CONSENT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND THE FEDERAL COURTS LOCATED IN NEW YORK CITY IN THE BOROUGH OF
MANHATTAN.
12.5 Notices. Notices and other writings contemplated by this Agreement,
other than Instructions, shall be delivered (a) by hand, (b) by first class
registered or certified mail, postage prepaid, return receipt requested, (c)
by a nationally recognized overnight courier, or (d) by facsimile transmission,
provided that any notice or other writing sent by facsimile transmission shall
also be mailed, postage prepaid, to the party to whom such notice is addressed.
All such notices shall be addressed, as follows:
If to the Fund:
FORWARD FUNDS, INC.
C/x Xxxxxxx Investment Management, Inc.
000 Xxxxxxxxxx Xxxxxx Xxxxx 0000
Xxx Xxxxxxxxx Xx 00000
Attn: Xxxx XxXxxxx
Telephone: [415] 000-0000
Facsimile [415] 982-2566
If to the Custodian:
Xxxxx Brothers Xxxxxxxx & Co.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Manager, Securities Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000,
or such other address as the Fund or the Custodian may have designated in
writing to the other.
12.6 Headings. Paragraph headings included herein are for convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof.
12.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
the Fund and the Custodian.
12.8 Confidentiality. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all information
provided by each party to the other regarding its business and
operations. All confidential information provided by a party hereto shall be
used by any other party hereto solely for the purpose of rendering or obtaining
services pursuant to this Agreement and, except as may be required in carrying
out this Agreement, shall not be disclosed to any third party without the prior
consent of such providing party. The foregoing shall not be applicable to any
information that is publicly available when provided or thereafter becomes
publicly available other than through a breach of this Agreement, or that is
required to be disclosed by or to any bank examiner of the Custodian or any
Subcustodian, any Regulatory Authority, any auditor of the parties hereto, or by
judicial or administrative process or otherwise by Applicable Law.
12.9 Counsel. In fulfilling its duties hereunder, the Custodian shall be
entitled to receive and act upon the advice of (i) counsel regularly retained by
the Custodian in respect of such matters, (ii) counsel for the Fund or (iii)
such counsel as the Fund and the Custodian may agree upon, with respect to all
matters, and the Custodian shall be without liability for any action reasonably
taken or omitted pursuant to such advice.
12.10 Conflict. Nothing contained in this Agreement shall prevent the
Custodian and its associates from (i) dealing as a principal or an intermediary
in the sale, purchase or loan of the Fund's Investments to, or from the
Custodian or its associates; (ii) acting as a custodian, a subcustodian, a
trustee, an agent, securities dealer, an investment manager or in any other
capacity for any other client whose interests may be adverse to the interest of
the Fund; or (iii) buying, holding, lending, and dealing in any way in any
assets for the benefit of its own account, or for the account of any other
client whose interests may be adverse to the Fund notwithstanding that the same
or similar assets may be held or dealt in by, or for the account of the Fund by
the Custodian. The Fund hereby voluntarily consents to, and waives any potential
conflict of interest between the Custodian and/or its associates and the Fund,
and agrees that:
(a) the Custodian's and/or its associates' engagement in any such
transaction shall not disqualify the Custodian from continuing to
perform as the custodian of the Fund under this Agreement;
(b) the Custodian and/or its associates shall not be under any duty
to disclose any information in connection with any such
transaction to the Fund;
(c) the Custodian and/or its associates shall not be liable to
account to the Fund for any profits
or benefits made or derived by or in connection with any such
transaction; and
13. Definitions. The following defined terms will have the respective meanings
set forth below.
13.1 Advance shall mean any extension of credit by or through the Custodian
or by or through any Subcustodian and shall include amounts paid to third
parties for account of the Fund or in discharge of any expense, tax or other
item payable by the Fund.
13.2 Agency Account(s) shall mean any deposit account opened on the books
of a Subcustodian or other banking institution in accordance with Section 7.1.
13.3 Agent(s) shall have the meaning set forth in the last sentence of
Section 6.
13.4 Applicable Law shall mean with respect to each jurisdiction, all (a)
laws, statutes, treaties, regulations, guidelines (or their equivalents); (b)
orders, interpretations licenses and permits; and (c) judgments, decrees,
injunctions writs, orders and similar actions by a court of competent
jurisdiction; compliance with which is required or customarily observed in such
jurisdiction.
13.5 Authorized Person(s) shall mean any person or entity authorized to
give Instructions on behalf of the Fund in accordance with Section 4.1.
13.6 Book-entry Agent(s) shall mean an entity acting as agent for the
issuer of Investments for purposes of recording ownership or similar entitlement
to Investments, including without limitation a transfer agent or registrar.
13.7 Clearing Corporation shall mean any entity or system established for
purposes of providing securities settlement and movement and associated
functions for a given market.
13.8 Delegation Agreement shall mean any separate agreement entered into
between the Custodian and the Fund or its authorized representative with respect
to certain matters concerning the appointment and administration of
Subcustodians delegated to the Custodian pursuant to Rule 17f-5.
13.9 Foreign Custody Manager shall mean the Fund's foreign custody manager
appointed pursuant to Rule 17f-5 of the 1940 Act.
13.10 Foreign Financial Regulatory Authority shall have the meaning given
by Section 2(a)(50) of the 0000 Xxx.
13.11 Funds Transfer Services Schedule shall mean any separate schedule
entered into between the Custodian and the Bank or its authorized representative
with respect to certain matters concerning the processing of payment orders from
Principal Accounts of the Bank.
13.12 Instruction(s) shall have the meaning assigned in Section 4.
13.13 Investment Advisor shall mean any person or entity who is an
Authorized Person to give Instructions with respect to the investment and
reinvestment of the Fund's Investments.
13.14 Investment(s) shall mean any investment asset of the Fund, including
without limitation securities, bonds, notes, and debentures as well as
receivables, derivatives, contractual rights or entitlements and other
intangible assets.
13.15 Margin Account shall have the meaning set forth in Section 6.4
hereof.
13.16 Principal Account(s) shall mean deposit accounts of the Fund carried
on the books of BBH&Co. as principal in accordance with Section 7.
13.17 Safekeeping Account shall mean an account established on the books of
the Custodian or any Subcustodian for purposes of segregating the interests of
the Fund (or clients of the Custodian or Subcustodian) from the assets of the
Custodian or any Subcustodian.
13.18 Securities Depository shall mean a central or book entry system or
agency established under Applicable Law for purposes of recording the ownership
and/or entitlement to investment securities for a given market that, if a
foreign Securities Depository, meets the definitional requirements of Rule 17f-7
under the 1940 Act.
13.19 Subcustodian(s) shall mean each foreign bank appointed by the
Custodian pursuant to Section 8, but shall not include Securities Depositories.
13.20 Tri-Party Agreement shall have the meaning set forth in Section 6.4
hereof.
13.21 1940 Act shall mean the Investment Company Act of 1940.
14. Compensation. The Fund agrees to pay to the Custodian (a) a fee in an amount
set forth in the fee letter between the Fund and the Custodian in effect on the
date hereof or as amended from time to time, and (b) all out-of-pocket expenses
incurred by the Custodian, including the fees and expenses of all Subcustodians,
and payable from time to time. Amounts payable by the Fund under and pursuant to
this Section 14 shall be payable by wire transfer to the Custodian at BBH&Co. in
New York, New York.
15. Termination. This Agreement may be terminated by either party in accordance
with the provisions of this Section. The provisions of this Agreement and any
other rights or obligations incurred or accrued by any party hereto prior to
termination of this Agreement shall survive any termination of this Agreement.
15.1 Notice and Effect. This Agreement may be terminated by either party by
written notice effective no sooner than seventy-five (75) consecutive calendar
days following the date that notice to such effect shall be delivered to other
party at its address set forth in paragraph 12.5 hereof.
15.2 Successor Custodian. In the event of the appointment of a successor
custodian, it is agreed that the Investments of the fund held by the Custodian
or any Subcustodian shall be delivered to the successor custodian in accordance
with reasonable Instructions. The Custodian agrees to cooperate with the Fund in
the execution of documents and performance of other actions necessary or
desirable in order to facilitate the succession of the new custodian. If no
successor custodian shall be appointed, the Custodian shall in like manner
transfer the Fund's Investments in accordance with Instructions.
15.3 Delayed Succession. If no Instruction has been given as of the
effective date of termination, Custodian may at any time on or after such
termination date and upon ten (10) consecutive calendar days written notice to
the Fund either (a) deliver the Investments of the Fund held hereunder to the
Fund at the address designated for receipt of notices hereunder; or (b) deliver
any investments held hereunder to a bank or trust company having a
capitalization of $2,000,000 USD equivalent and operating under the Applicable
law of the jurisdiction where such Investments are located, such delivery to be
at the risk of the Fund. In the event that Investments or moneys of the Fund
remain in the custody of the Custodian or its Subcustodians after the date of
termination owing to the failure of the Fund to issue Instructions with respect
to their disposition or owing to the fact that such disposition could not be
accomplished in accordance with such Instructions despite diligent efforts of
the Custodian, the Custodian shall be entitled to compensation for its services
with respect to such Investments and moneys during such period as the Custodian
or its Subcustodians retain possession of such items and the provisions of this
Agreement shall remain in full force and effect until disposition in accordance
with this Section is accomplished.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed as of the date first above written.
XXXXX BROTHERS XXXXXXXX & CO. FORWARD FUNDS, INC.
on behalf of each of the Funds
listed on the Appendix "B" to the
Custodian Agreement
By: /s/Xxxxxxx X. Xxxxxx By: /s/Xxxx X. XxXxxxx
---------------------------- -----------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxx X. XxXxxxx
Title: Partner Title: Treasurer
Date: June 14, 2001 Date: June 18, 2001
FUNDS TRANSFER SERVICES SCHEDULE TO CUSTODIAN AGREEMENT
1. Execution of Payment Orders. Xxxxx Brothers Xxxxxxxx & Co. (the Custodian) is
hereby instructed by FORWARD FUNDS, INC. (the Company) on behalf of each of the
Funds listed on the Appendix "B" to the Custodian Agreement, to execute each
payment order, whether denominated in United States dollars or other applicable
currencies, received by the Custodian in the Company's name as sender and
authorized and confirmed by an Authorized Person as defined in a Custodian
Agreement dated as of June 18, 2001 by and between the Custodian and the
Company, as amended or restated from time thereafter (the Agreement), provided
that the Company has sufficient available funds on deposit in a Principal
Account as defined in the Agreement and provided that the order (i) is received
by the Custodian in the manner specified in this Funds Transfer Services
Schedule or any amendment hereafter; (ii) complies with any written instructions
and restrictions of the Company as set forth in this Funds Transfer Services
Schedule or any amendment hereafter; (iii) is authorized by the Company or is
verified by the Custodian in compliance with a security procedure set forth in
Paragraph 2 below for verifying the authenticity of a funds transfer
communication sent to the Custodian in the name of the Company or for the
detection of errors set forth in any such communication; and (iv) contains
sufficient data to enable the Custodian to process such transfer.
2. Security Procedure. The Company hereby elects to use the procedure selected
below as its security procedure (the Security Procedure). The Security Procedure
will be used by the Custodian to verify the authenticity of a payment order or a
communication amending or canceling a payment order. The Custodian will act on
instructions received provided the instruction is authenticated by the Security
Procedure. The Company agrees and acknowledges in connection with (i) the size,
type and frequency of payment orders normally issued or expected to be issued by
the Company to the Custodian, (ii) all of the security procedures offered to the
Company by the Custodian, and (iii) the usual security procedures used by
customers and receiving banks similarly situated, that authentication through
the Security Procedure shall be deemed commercially reasonable for the
authentication of all payment orders submitted to the Custodian. The Company
hereby elects (please choose one) the following Security Procedure as described
below:
[ ] BIDS and BIDS Worldview Payment Products. BIDS and BIDS Worldview
Payment Products, are on-line payment order authorization facilities
with built-in authentication procedures. The Custodian and the Company
shall each be responsible for maintaining the confidentiality of
passwords or other codes to be used by them in connection with BIDS.
The Custodian will act on instructions received through BIDS without
duty of further confirmation unless the Company notifies the Custodian
that its password is not secure.
[ ] SWIFT. The Custodian and the Company shall comply with SWIFT's
authentication procedures. The Custodian will act on instructions
received via SWIFT provided the instruction is authenticated by the
SWIFT system.
[ ] Tested Telex. The Custodian will accept payment orders sent by tested
telex, provided the test key matches the algorithmic key the Custodian
and Company have agreed to use.
[ ] Computer Transmission. The Custodian is able to accept transmissions
sent from the Company's computer facilities to the Custodian's
computer facilities provided such transmissions are encrypted and
digitally certified or are otherwise authenticated in a reasonable
manner based on available technology. Such procedures shall be
established in an operating protocol between the Custodian and the
Company.
[X] Telefax Instructions. A payment order transmitted to the Custodian by
telefax transmission shall transmitted by the Company to a telephone
number specified from time to time by the Custodian for such purposes.
If it detects no discrepancies, the Custodian will then either:
1. If the telefax requests a repetitive payment order, the
Custodian may call the Company at its last known telephone
number, request to speak to the Company or Authorized
Person, and confirm the authorization and the details of the
payment order (a "Callback"); or
2. If the telefax requests a non-repetitive order, the
Custodian will perform a Callback.
All faxes must be accompanied by a fax cover sheet which indicates the
sender's name, company name, telephone number, fax number, number of
pages, and number of transactions or instructions attached.
[ ] Telephonic. A telephonic payment order shall be called into the
Custodian at the telephone number designated from time to time by the
Custodian for that purpose. The caller shall identify herself/himself
as an Authorized Person. The Custodian shall obtain the payment order
data from the caller. The Custodian shall then:
1. If a telephonic repetitive payment order, the Custodian may
perform a Callback; or
2. If a telephonic non-repetitive payment order, the Custodian
will perform a Callback.
In the event the Company chooses a procedure which is not a Security Procedure
as described above, the Company agrees to be bound by any payment order (whether
or not authorized) issued in its name and accepted by the Custodian in
compliance with the procedure selected by the Company.
3. Rejection of Payment Orders. The Custodian shall give the Company timely
notice of the Custodian's rejection of a payment order. Such notice may be given
in writing or orally by telephone, each of which is hereby deemed commercially
reasonable. In the event the Custodian fails to execute a properly executable
payment order and fails to give the Company notice of the Custodian's
non-execution, the Custodian shall be liable only for the Company's actual
damages and only to the extent that such damages are recoverable under UCC 4A
(as defined in Paragraph 7 below). Notwithstanding anything in this Funds
Transfer Services Schedule and the Agreement to the contrary, the Custodian
shall in no event be liable for any consequential or special damages under this
Funds Transfer Services Schedule, whether or not such damages relate to services
covered by UCC 4A, even if the Custodian has been advised of the possibility of
such damages. Whenever compensation in the form of interest is payable by the
Custodian to the Company pursuant to this Funds Transfer Services Schedule, such
compensation will be payable at the rate specified in UCC 4A.
4. Cancellation of Payment Orders. The Company may cancel a payment order but
the Custodian shall have no liability for the Custodian's failure to act on a
cancellation instruction unless the Custodian has received such cancellation
instruction at a time and in a manner affording the Custodian reasonable
opportunity to act prior to the Custodian's execution of the order. Any
cancellation shall be sent and confirmed in the manner set forth in Paragraph 2
above.
5. Responsibility for the Detection of Errors and Unauthorized Payment Orders.
Except as may be provided, the Custodian is not responsible for detecting any
Company error contained in any payment order sent by the
Company to the Custodian. In the event that the Company's payment order to the
Custodian either (i) identifies the beneficiary by both a name and an
identifying or bank account number and the name and number identify different
persons or entities, or (ii) identifies any bank by both a name and an
identifying number and the number identifies a person or entity different from
the bank identified by name, execution of the payment order, payment to the
beneficiary, cancellation of the payment order or actions taken by any bank in
respect of such payment order may be made solely on the basis of the number. The
Custodian shall not be liable for interest on the amount of any payment order
that was not authorized or was erroneously executed unless the Company so
notifies the Custodian within thirty (30) business days following the Company's
receipt of notice that such payment order had been processed. If a payment order
in the name of the Company and accepted by the Custodian was not authorized by
the Company, the liability of the parties will be governed by the applicable
provisions of UCC 4A.
6. Laws and Regulations. The rights and obligations of the Custodian and the
Company with respect to any payment order executed pursuant to this Funds
Transfer Services Schedule will be governed by any applicable laws, regulations,
circulars and funds transfer system rules, the laws and regulations of the
United States of America and of other relevant countries including exchange
control regulations and limitations on dealings or other sanctions, and
including without limitation those sanctions imposed under the law of the United
States of America by the Office of Foreign Assets Control. Any taxes, fines,
costs, charges or fees imposed by relevant authorities on such transactions
shall be for the account of the Company.
7. Miscellaneous. All accounts opened by the Company or its authorized agents at
the Custodian subsequent to the date hereof shall be governed by this Funds
Transfer Schedule. All terms used in this Funds Transfer Services Schedule shall
have the meaning set forth in Article 4A of the Uniform Commercial Code as
currently in effect in the State of New York (UCC 4A) unless otherwise set forth
herein. The terms and conditions of this Funds Transfer Services Schedule are in
addition to, and do not modify or otherwise affect, the terms and conditions of
the Agreement and any other agreement or arrangement between the parties hereto.
8. Indemnification. The Custodian does not recommend the sending of instructions
by telefax or telephonic means as provided in Paragraph 2. BY ELECTING TO SEND
INSTRUCTIONS BY TELEFAX OR TELEPHONIC MEANS, THE COMPANY AGREES TO INDEMNIFY THE
CUSTODIAN AND ITS PARTNERS, OFFICERS AND EMPLOYEES FOR ALL LOSSES THEREFROM.
---------------------------------------------
OPTIONAL: The Custodian will perform a Callback if instructions
are sent by telefax or telephonic means as provided in Paragraph 2.
THE COMPANY MAY, AT ITS OWN RISK AND BY HEREBY AGREEING TO INDEMNIFY
THE CUSTODIAN AND ITS PARTNERS, OFFICERS AND EMPLOYEES FOR ALL LOSSES
THEREFROM, ELECT TO WAIVE A CALLBACK BY THE CUSTODIAN BY INITIALLING
HERE:
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Accepted and agreed:
XXXXX BROTHERS XXXXXXXX & CO. FORWARD FUNDS, INC.
on behalf of each of the Funds
listed on the Appendix "B" to the
Custodian Agreement
By: /s/Xxxxxxx X. Xxxxxx By: /s/Xxxx X. XxXxxxx
----------------------------- -----------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxx X. XxXxxxx
Title: Partner Title: Treasurer
Date: June 14, 2001 Date: June 18, 2001
17f-5 DELEGATION SCHEDULE
By its execution of this Delegation Schedule dated as of June 18, 2001,
FORWARD FUNDS, INC an open-end management investment company organized under the
laws of the State of Maryland and registered with the Commission under the 1940
Act (the Fund) on behalf of each of the Funds listed on the Appendix "B" to the
Custodian Agreement (each a Fund and collectively the Funds), acting through its
Board of Directors/Trustees or its duly appointed representative (the "Fund"),
hereby appoints XXXXX BROTHERS XXXXXXXX & CO., a New York limited partnership
with an office in Boston, Massachusetts (the "Foreign Custody Manager") as its
delegate to perform certain functions with respect to the custody of Fund's
Assets outside the United States.
1. Maintenance of Fund's Assets Abroad. The Fund, acting through its Board or
its duly authorized representative, hereby instructs Foreign Custody Manager
pursuant to the terms of the Custodian Agreement dated as of the date hereof
executed by and between the Fund and the Foreign Custody Manager (the "Custodian
Agreement") to place and maintain the Fund's Assets in countries outside the
United States in accordance with Instructions received from the Fund's
investment advisor. Such instruction shall represent a Proper Instruction under
the terms of the Custodian Agreement. The Fund acknowledges that - (a) the
Foreign Custody Manager shall perform services hereunder only with respect to
the countries where it provides custodial services to the Fund under the
Custodian Agreement; (b) depending on conditions in the particular country,
advance notice may be required before the Foreign Custody Manager shall be able
to perform its duties hereunder in or with respect to such country (such advance
notice to be reasonable in light of the specific facts and circumstances
attendant to performance of duties in such country); and (c) nothing in this
Delegation Schedule shall require the Foreign Custody Manager to provide
delegated or custodial services in any country, and there may from time to time
be countries as to which the Foreign Custody Manager determines it will not
provide delegation services.
2. Delegation. Pursuant to the provisions of Rule 17f-5 under the 1940 Act as
amended, the Board hereby delegates to the Foreign Custody Manager, and the
Foreign Custody Manager hereby accepts such delegation and agrees to perform,
only those duties set forth in this Delegation Schedule concerning the
safekeeping of the Fund's Assets in each of the countries as to which it acts as
the Board's delegate. The Foreign Custody Manager is hereby authorized to take
such actions on behalf of or in the name of the Fund as are reasonably required
to discharge its duties under this Delegation Schedule, including, without
limitation, to cause the Fund's Assets to be placed with a particular Eligible
Foreign Custodian in accordance herewith. The Fund confirms to the Foreign
Custody Manager that the Fund or its investment adviser has considered the
Sovereign Risk and prevailing country risk as part of its continuing investment
decision process, including such factors as may be reasonably related to the
systemic risk of maintaining the Fund's Assets in a particular country,
including, but not limited to, financial infrastructure, prevailing custody and
settlement systems and practices (including the use of any Securities
Depository in the context of information provided by the Custodian in the
performance of its duties as required under Rule 17f-7 and the terms of the
Custodian Agreement governing such duties), and the laws relating to the
safekeeping and recovery of the Fund's Assets held in custody pursuant to the
terms of the Custodian Agreement.
3. Selection of Eligible Foreign Custodian and Contract Administration. The
Foreign Custody Manager shall perform the following duties with respect to the
selection of Eligible Foreign Custodians and administration of certain contracts
governing the Fund's foreign custodial arrangements:
(a) Selection of Eligible Foreign Custodian. The Foreign Custody
Manager shall place and maintain the Fund's Assets with an Eligible Foreign
Custodian; provided that the Foreign Custody Manager shall have determined that
the Fund's Assets will be subject to reasonable care based on the standards
applicable to custodians in the relevant market after considering all factors
relevant to the safekeeping of such assets including without limitation:
(i) The Eligible Foreign Custodian's practices, procedures, and
internal controls, including, but not limited to, the physical protections
available for certificated securities (if applicable), the controls and
procedures for dealing with any Securities Depository, the method of
keeping custodial records, and the security and data protection practices;
(ii) Whether the Eligible Foreign Custodian has the requisite
financial strength to provide reasonable care for the Fund's Assets;
(iii) The Eligible Foreign Custodian's general reputation and
standing; and
(iv) Whether the Fund will have jurisdiction over and be able to
enforce judgments against the Eligible Foreign Custodian, such as by virtue
of the existence of any offices of such Eligible Foreign Custodian in the
United States or such Eligible Foreign Custodian's appointment of an agent
for service of process in the United States or consent to jurisdiction in
the United States.
The Foreign Custody Manager shall be required to make the foregoing
determination to the best of its knowledge and belief based only on information
reasonably available to it.
(b) Contract Administration. The Foreign Custody Manager shall cause
that the foreign custody arrangements with an Eligible Foreign Custodian shall
be governed by a written contract that the Foreign Custody Manager has
determined will provide reasonable care for Fund assets based on the standards
applicable to custodians in the relevant market. Each such contract shall,
except as set forth in the last paragraph of this subsection (b), include
provisions that provide:
(i) For indemnification or insurance arrangements (or any combination
of the foregoing) such
that the Fund will be adequately protected against the risk of loss of
assets held in accordance with such contract;
(ii) That the Fund's Assets will not be subject to any right, charge,
security interest, lien or claim of any kind in favor of the Eligible
Foreign Custodian or its creditors except a claim of payment for their safe
custody or administration or, in the case of cash deposits, liens or rights
in favor of creditors of such Custodian arising under bankruptcy,
insolvency or similar laws;
(iii) That beneficial ownership of the Fund's Assets will be freely
transferable without the payment of money or value other than for safe
custody or administration;
(iv) That adequate records will be maintained identifying the Fund's
Assets as belonging to the Fund or as being held by a third party for the
benefit of the Fund;
(v) That the Fund's independent public accountants will be given
access to those records described in (iv) above or confirmation of the
contents of such records; and
(vi) That the Foreign Custody Manager will receive sufficient and
timely periodic reports with respect to the safekeeping of the Fund's
Assets, including, but not limited to, notification of any transfer to or
from the Fund's account or a third party account containing the Fund's
Assets.
Such contract may contain, in lieu of any or all of the provisions
specified in this Section 3 (b), such other provisions that the Foreign
Custody Manager determines will provide, in their entirety, the same or a
greater level of care and protection for the Fund's Assets as the specified
provisions, in their entirety.
(c) Limitation to Delegated Selection. Notwithstanding anything in
this Delegation Schedule to the contrary, the duties under this Section 3 shall
apply only to Eligible Foreign Custodians selected by the Foreign Custody
Manager and shall not apply to Securities Depositories or to any Eligible
Foreign Custodian that the Foreign Custody Manager is directed to use pursuant
to Section 7.
4. Monitoring. The Foreign Custody Manager shall establish a system to monitor
at reasonable intervals the appropriateness of maintaining the Fund's Assets
with each Eligible Foreign Custodian that has been selected by the Foreign
Custody Manager pursuant to Section 3 of this Delegation Schedule. The Foreign
Custody Manager shall monitor the continuing appropriateness of placement of the
Fund's Assets in accordance with the criteria established under Section 3(a) of
this Delegation Schedule. The Foreign Custody Manager shall monitor the
continuing appropriateness of the contract governing the Fund's arrangements in
accordance with the criteria established under Section 3(b) of this Delegation
Schedule.
5. Reporting. At least annually and more frequently as mutually agreed between
the parties, the Foreign Custody Manager shall provide to the Board written
reports specifying placement of the Fund's Assets with
each Eligible Foreign Custodian selected by the Foreign Custody Manager pursuant
to Section 3 of this Delegation Schedule and shall promptly report as to any
material changes to such foreign custody arrangements. Foreign Custody Manager
will prepare such a report with respect to any Eligible Foreign Custodian that
the Foreign Custody Manager has been instructed to use pursuant to Section 7
only to the extent specifically agreed with respect to the particular situation.
6. Withdrawal of Fund's Assets. If the Foreign Custody Manager determines that
an arrangement with a specific Eligible Foreign Custodian selected by the
Foreign Custody Manager under Section 3 of this Delegation Schedule no longer
meets the requirements of said Section, Foreign Custody Manager shall withdraw
the Fund's Assets from the non-complying arrangement as soon as reasonably
practicable; provided, however, that if in the reasonable judgment of the
Foreign Custody Manager, such withdrawal would require liquidation of any of the
Fund's Assets or would materially impair the liquidity, value or other
investment characteristics of the Fund's Assets, it shall be the duty of the
Foreign Custody Manager to provide information regarding the particular
circumstances and to act only in accordance with Proper Instructions of the Fund
or its Investment Advisor with respect to such liquidation or other withdrawal.
7. Direction as to Eligible Foreign Custodian. Notwithstanding this Delegation
Schedule, the Fund, acting through its Board, its Investment Adviser or its
other authorized representative, may direct the Foreign Custody Manager to place
and maintain the Fund's Assets with a particular Eligible Foreign Custodian,
including without limitation with respect to investment in countries as to which
the Custodian will not provide delegation services. In such event, the Foreign
Custody Manager shall be entitled to rely on any such instruction as a Proper
Instruction under the terms of the Custodian Agreement and shall have no duties
under this Delegation Schedule with respect to such arrangement save those that
it may undertake specifically in writing with respect to each particular
instance.
8. Standard of Care. In carrying out its duties under this Delegation Schedule,
the Foreign Custody Manager agrees to exercise reasonable care, prudence and
diligence such as a person having responsibility for safekeeping the Fund's
Assets would exercise.
9. Representations.The Foreign Custody Manager hereby represents and warrants
that it is a U.S. Bank and that this Delegation Schedule has been duly
authorized, executed and delivered by the Foreign Custody Manager and is a
legal, valid and binding agreement of the Foreign Custody Manager.
The Fund hereby represents and warrants that its Board of Directors has
determined that it is reasonable to rely on the Foreign Custody Manager to
perform the delegated responsibilities provided for herein and that this
Delegation Schedule has been duly authorized, executed and delivered by the Fund
and is a legal, valid and
binding agreement of the Fund.
10. Effectiveness; termination. This Delegation Schedule shall be effective as
of the date on which this Delegation Schedule shall have been accepted by the
Foreign Custody Manager, as indicated by the date set forth below the Foreign
Custody Manager's signature. This Delegation Schedule may be terminated at any
time, without penalty, by written notice from the terminating party to the
non-terminating party. Such termination shall be effective on the 30th day
following the date on which the non-terminating party shall receive the
foregoing notice. The foregoing to the contrary notwithstanding, this Delegation
Schedule shall be deemed to have been terminated concurrently with the
termination of the Custodian Agreement.
11. Notices.Notices and other communications under this Delegation Schedule are
to be made in accordance with the arrangements designated for such purpose under
the Custodian Agreement unless otherwise indicated in a writing referencing this
Delegation Schedule and executed by both parties.
12. Definitions. Capitalized terms in this Delegation Schedule have the
following meanings:
a. Eligible Foreign Custodian - shall have the meaning set forth in Rule
17f-5(a)(1) and shall also include a U.S. Bank.
b. Fund's Assets - shall mean any of the Fund's investments (including
foreign currencies) for which the primary market is outside the United
States, and such cash and cash equivalents as are reasonably necessary to
effect the Fund's transactions in such investments.
c. Proper Instructions - shall have the meaning set forth in the Custodian
Agreement.
d. Securities Depository - shall have the meaning set forth in Rule 17f-7.
e. Sovereign Risk - shall have the meaning set forth in Section [6.3] of
the Custodian Agreement.
f . U.S. Bank - shall mean a bank which qualifies to serve as a custodian
of assets of investment companies under Section 17(f) of the Act.
13. Governing Law and Jurisdiction. This Delegation Schedule shall be construed
in accordance with the laws of the State of New York. The parties hereby
submit to the exclusive jurisdiction of the Federal courts sitting in the State
of New York or the state courts of such State.
14. Fees. Foreign Custody Manager shall perform its functions under this
Delegation Schedule for the compensation determined under the Custodian
Agreement.
15. Integration. This Delegation Schedule sets forth all of the Foreign Custody
Manager's duties with respect to the selection and monitoring of Eligible
Foreign Custodians, the administration of contracts with Eligible Foreign
Custodians, the withdrawal of assets from Eligible Foreign Custodians and the
issuance of reports in connection with such duties. The terms of the Custodian
Agreement shall apply generally as to matters not expressly covered in this
Delegation Schedule, including dealings with the Eligible Foreign Custodians in
the course of discharge of the Foreign Custody Manager's obligations under the
Custodian Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed as of the date first above written.
XXXXX BROTHERS XXXXXXXX & CO. FORWARD FUNDS, INC.
on behalf of each of the Funds
listed on the Appendix "B" to the
Custodian Agreement
By: /s/Xxxxxxx X. Xxxxxx By: /s/Xxxx X. XxXxxxx
----------------------------- -----------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxx X. XxXxxxx
Title: Partner Title: Treasurer
Date: June 14, 2001 Date: June 18, 2001
