EXHIBIT (d)(25)
FORWARD FUNDS
INVESTMENT SUB-ADVISORY AGREEMENT
This INVESTMENT SUB-ADVISORY AGREEMENT ("Agreement") effective as of September
1, 2008, is by and among Los Angeles Capital Management and Equity Research,
Inc. (the "Sub-Advisor"), Forward Funds (the "Trust"), on behalf of the Accessor
Small to Mid Cap Fund, a series of the Trust (the "Fund"), and Forward
Management, LLC (the "Advisor").
WHEREAS, the Trust is a Delaware statutory trust of the series type organized
under an Amended and Restated Declaration of Trust dated as of June 9, 2005, as
amended, and is registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), as an open-end, diversified management investment company, and
the Fund is a series of the Trust; and
WHEREAS, the Advisor has been retained by the Trust to provide investment
advisory services to the Fund with regard to the Fund's investments, as further
described in the Trust's registration statement on Form N-1A (the "Registration
Statement") and pursuant to an Amended and Restated Investment Management
Agreement dated as of July 1, 2005, as amended ("Investment Management
Agreement"); and
WHEREAS, the Trust's Board of Trustees (the "Trustees"), including a majority of
the Trustees who are not "interested persons" as defined in the 1940 Act, and
the Fund's shareholders to the extent required under applicable law and
regulation have approved the appointment of the Sub-Advisor to perform certain
investment advisory services for the Fund, on behalf of the Advisor, pursuant to
this Agreement and as described in the Registration Statement, and the
Sub-Advisor is willing to perform such services for the Fund; and
WHEREAS, the Sub-Advisor is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act").
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed among the Advisor, the Trust and the Sub-Advisor as
follows:
1. Appointment. The Trust and the Advisor hereby appoint the Sub-Advisor to
perform advisory services for the Fund for the period and on the terms set forth
in this Agreement. The Sub-Advisor accepts such appointment and agrees to
furnish the services herein set forth, for the compensation herein provided.
2. Investment Advisory Duties. Subject to the supervision of the Trustees and
the Advisor, the Sub-Advisor will, in coordination with the Advisor as described
below: (a) provide a program of continuous investment management for the Fund;
(b) make investment decisions for the Fund; and (c) invest and reinvest in, and
place orders to purchase and sell, securities for the Fund in accordance with
the Fund's investment objectives, policies and limitations as stated in the
Fund's current Prospectus and Statement of Additional Information as provided to
the Sub-Advisor by the Advisor, as they may be amended from time to time;
provided, that the Advisor shall provide the Sub-Advisor reasonable advance
written notice of any change to such investment objectives, policies and
limitations.
The Sub-Advisor further agrees that, in performing its duties hereunder, it
will:
(a) with regard to its activities under this Agreement, use reasonable efforts
to comply in all material respects with the applicable provisions of the 1940
Act, the Advisers Act, and all applicable rules and regulations thereunder, the
U.S. Internal Revenue Code of 1986, as amended (the "Code"), and all other
applicable federal and state laws and regulations, and with any applicable
procedures adopted by the Trustees, as they may be amended from time to time,
provided that written copies of such procedures and amendments thereto are
provided to the Sub-Advisor by the Advisor;
(b) use reasonable efforts to manage the Fund so that it will qualify, and
continue to qualify, as a regulated investment company under Subchapter M of the
Code and regulations issued thereunder; provided, however, the Sub-Advisor shall
not be responsible for the tax effect of any decisions made by or any actions
taken by any person other than the Sub-Advisor;
(c) place orders pursuant to its investment determinations for the Fund, in
accordance with applicable policies expressed in the Fund's Prospectus and/or
Statement of Additional Information or otherwise established through written
guidelines established by the Fund and provided to the Sub-Advisor by the
Advisor, including without limitation, Section 4 hereof;
(d) furnish to the Trust and the Advisor whatever statistical information the
Trust or the Advisor may reasonably request with respect to the Fund's assets or
investments. In addition, the Sub-Advisor will keep the Trust, the Advisor and
the Trustees informed of developments that the Sub-Advisor reasonably believes
will materially affect the Fund's portfolio;
(e) make available to the Fund's administrator (the "Administrator"), the
Advisor and the Trust, promptly upon their request, such copies of its
investment records and ledgers with respect to the Fund as may reasonably be
required to assist the Advisor, the Administrator and the Trust in their
compliance with applicable laws and regulations. The Sub-Advisor will furnish
the Trustees, the Administrator, the Advisor and the Trust with such periodic
and special reports regarding the Fund as they may reasonably request;
(f) meet periodically with the Advisor and the Trustees, in person or by
teleconference, to explain its investment management activities, and any reports
related to the Fund as may reasonably be scheduled and requested by the Advisor
and/or the Trust;
(g) immediately notify the Advisor, in writing, of the receipt of any notice of
a class action proceeding related to the Fund or any other action or proceeding
in which the Advisor or the Fund may be entitled to participate as a result of
the Fund's securities holdings. The Sub-Advisor shall have no responsibility for
filing claims on behalf of the Advisor or the Trust with respect to any such
actions. The Sub-Advisor's responsibility with respect to such matters shall be
to comply with the foregoing notification obligations and to cooperate with the
Advisor and the Trust in making such filings, which shall include providing any
relevant information regarding the Fund's securities holdings to the Advisor;
(h) provide assistance to the Advisor, custodian or recordkeeping agent for the
Fund in determining or confirming, consistent with the procedures and policies
stated in the Fund's valuation procedures and/or Registration Statement, the
value of any portfolio securities or other
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assets of the Fund for which the Advisor, custodian or recordkeeping agent seeks
assistance from the Sub-Advisor or identifies for review by the Sub-Advisor.
This assistance includes (but is not limited to): (i) designating an employee of
the Sub-Advisor for consultation when the Trustees convene; (ii) notifying the
Advisor in the event the Sub-Advisor determines, with respect to a security that
is held both by the Fund and by another account managed by the Sub-Advisor, to
price the security pursuant to such other account's policies and procedures for
determining the fair value of a security; (iii) obtaining bids and offers or
quotes from broker/dealers or market-makers with respect to securities held by
the Fund, upon the request of the Advisor; (iv) verifying pricing and providing
fair valuations or recommendations for fair valuation in accordance with the
Fund's valuation procedures, as they may be amended from time to time; and (v)
maintaining adequate records and written backup information with respect to the
securities valuation services provided hereunder, and providing such information
to the Advisor upon request;
(i) assist the Advisor, the Fund, and any of its or their trustees, directors,
officers, and/or employees in complying with the provisions of the
Xxxxxxxx-Xxxxx Act of 2002 to the extent such provisions relate to the services
to be provided by, and obligations of, the Sub-Advisor hereunder. Specifically,
and without limitation to the foregoing, the Sub-Advisor agrees to provide
certifications to the principal executive and financial officers of the Fund
that correspond to the drafting and/or filing of the Fund's Form N-CSRs, N-Qs,
N-SARs, shareholder reports, financial statements, and other disclosure
documents or regulatory filings, in such form and content as the Advisor shall
reasonably request or as in accordance with procedures adopted by the Trust;
(j) assist the Fund, and accordingly, the Trust's Chief Compliance Officer
("CCO") in complying with Rule 38a-1 under the 1940 Act. Specifically, the
Sub-Advisor represents and warrants that it shall maintain a compliance program
in accordance with the requirements of Rule 206(4)-7 under the Advisers Act, and
shall provide the CCO with reasonable access to information regarding the
Sub-Advisor's compliance program, which access shall include on-site visits with
the Sub-Advisor as may be reasonably requested from time to time. In connection
with the periodic review and annual report required to be prepared by the CCO
pursuant to Rule 38a-1, the Sub-Advisor agrees to provide certifications as may
be reasonably requested by the CCO related to the design and implementation of
the Sub-Advisor's compliance program;
(k) provide assistance as may be reasonably requested by the Advisor in
connection with compliance by the Fund with any current or future legal and
regulatory requirements related to the services provided by the Sub-Advisor
hereunder;
(l) immediately notify the Advisor and the Trust to the extent required by
applicable law in the event that the Sub-Advisor or any of its affiliates: (1)
becomes aware that it is subject to a statutory disqualification that prevents
the Sub-Advisor from serving as an investment adviser pursuant to this
Agreement; or (2) becomes aware that it is the subject of an administrative
proceeding or enforcement action by the Securities and Exchange Commission
("SEC") or other regulatory authority. The Sub-Advisor further agrees to notify
the Trust and the Advisor promptly of any material fact known to the Sub-Advisor
respecting or relating to the Sub-Advisor that would make any written
information previously provided by the Sub-Advisor to the
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Advisor or the Trust materially inaccurate or incomplete or if any such written
information becomes untrue in any material respect;
(m) promptly notify the Advisor and the Trust if the Sub-Advisor suffers a
material adverse change in its business that would materially impair its ability
to perform its relevant duties for the Fund. For the purposes of this paragraph,
a "material adverse change" shall include, but is not limited to, a material
loss of assets or accounts under management or the departure of senior
investment professionals to the extent such professionals are not replaced
promptly with professionals of comparable experience and quality;
(n) use no inside information that may be in its possession in making investment
decisions for the Fund, nor seek to obtain any such information; and
(o) use its best judgment and efforts in rendering the advice and services
contemplated by this Agreement.
3. Investment Authority. The Sub-Advisor's investment authority shall include,
to the extent permitted under Section 2 hereof, the authority to invest,
reinvest, purchase, sell, and cover open positions, and generally to deal in
securities, swaps (including but not limited to interest rate swaps and credit
default swaps), financial futures contracts and options thereon, currency
transactions, and other derivatives and investment instruments and techniques as
may be permitted for use by the Fund and consistent with the Registration
Statement.
The Sub-Advisor may: (i) open and maintain brokerage accounts for financial
futures and options and securities (such accounts hereinafter referred to as
"Brokerage Accounts") on behalf of and in the name of the Fund; and (ii) execute
for and on behalf of the Brokerage Accounts, standard customer agreements with a
broker or brokers. The Sub-Advisor may, using such of the securities and other
property in the Brokerage Accounts as the Sub-Advisor deems necessary or
desirable, direct the custodian to deposit on behalf of the Fund, original and
maintenance brokerage deposits and otherwise direct payments of cash, cash
equivalents and securities and other property into such Brokerage Accounts and
to such brokers as the Sub-Advisor deems necessary or desirable.
The Sub-Advisor may enter into, make and perform all contracts, agreements and
other undertakings as may, in the Sub-Advisor's opinion, be necessary to
discharge its obligations hereunder.
4. Investment Guidelines. In addition to the information to be provided to the
Sub-Advisor under Section 2 hereof, the Trust or the Advisor shall supply the
Sub-Advisor with such other information as the Sub-Advisor shall reasonably
request concerning the Fund's investment policies, restrictions, limitations,
tax position, liquidity requirements and other information useful in managing
the Fund's investments.
5. Representations, Warranties and Covenants of the Trust, Advisor and
Sub-Advisor. The Trust represents and warrants to the Sub-Advisor that: (i) the
retention of the Sub-Advisor as contemplated by this Agreement is authorized by
the respective governing documents of the Fund; (ii) the execution, delivery and
performance of this Agreement does not violate any obligation by which either
the Fund or its property is bound, whether arising by contract,
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operation of law or otherwise; and (iii) this Agreement has been duly authorized
by appropriate action of the Fund and when executed and delivered by the
Advisor, on behalf of the Fund (and assuming due execution and delivery by the
Sub-Advisor), will be the legal, valid and binding obligation of the Fund,
enforceable against the Fund in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general equitable principles (regardless of
whether enforcement is sought in a proceeding in equity or law).
The Advisor represents and warrants to the Sub-Advisor that: (i) the execution,
delivery and performance of this Agreement does not violate any obligation by
which it or its property is bound, whether arising by contract, operation of law
or otherwise; and (ii) this Agreement has been duly authorized by appropriate
action of the Advisor and when executed and delivered by the Advisor (and
assuming due execution and delivery by the Sub-Advisor) will be the legal, valid
and binding obligation of the Advisor, enforceable against the Advisor in
accordance with its terms, subject, as to enforcement, to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and to general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or law).
The Sub-Advisor represents and warrants to the Advisor and the Trust that: (i)
it is authorized to perform the services hereunder; (ii) the execution, delivery
and performance of this Agreement does not violate any obligation by which the
Sub-Advisor or its property is bound, whether arising by contract, operation of
law or otherwise; (iii) this Agreement has been duly authorized by appropriate
action of the Sub-Advisor and when executed and delivered by the Sub-Advisor
(and assuming due execution and delivery by the Advisor and the Trust) will be
the legal, valid and binding obligation of the Sub-Advisor, enforceable against
the Sub-Advisor in accordance with its terms, subject, as to enforcement, to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
generally and to general equitable principles (regardless of whether enforcement
is sought in a proceeding in equity or law); (iv) it is registered as an
investment adviser with the SEC; and (v) it is not barred by operation of law,
or any rule, or order of the SEC or any other regulatory body, from acting as an
investment adviser.
6. Use of Securities Brokers and Dealers. In placing purchase and sale orders
for the Fund with brokers or dealers, the Sub-Advisor will attempt to obtain
"best execution" of such orders. "Best execution" shall mean prompt and reliable
execution at the most favorable terms of execution, taking into account price,
speed and efficiency of execution, other factors that may be deemed relevant by
the Sub-Advisor, and the other provisions hereinafter set forth. Whenever the
Sub-Advisor places orders, or directs the placement of orders, for the purchase
or sale of portfolio securities on behalf of the Fund, in selecting brokers or
dealers to execute such orders, the Sub-Advisor is expressly authorized to
consider the fact that a broker or dealer has furnished statistical, research or
other information or services that enhance the Sub-Advisor's research and
portfolio management capability generally. It is further understood in
accordance with Section 28(e) of the Securities Exchange Act of 1934, as amended
(the "Securities Exchange Act of 1934"), that the Sub-Advisor may negotiate with
and assign to a broker a commission that may exceed the commission that another
broker would have charged for effecting the transaction if the Sub-Advisor
determines in good faith that the amount of commission charged was reasonable in
relation to the value of brokerage and research services (as defined in Section
28(e) of the Securities Exchange Act of 1934 and related SEC interpretations)
provided by such broker,
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viewed in terms either of the Fund's or the Sub-Advisor's overall
responsibilities to the Sub-Advisor's discretionary accounts (the "Section 28(e)
Actions"); provided, however, that the Sub-Advisor's ability to engage in
Section 28(e) Actions shall be subject to review by the Trustees from time to
time, and if such Trustees reasonably determine that the Fund does not benefit,
directly or indirectly, from such Section 28(e) Actions, the Sub-Advisor shall
be prohibited from engaging in the same with respect to the Fund.
Unless otherwise directed by the Trust or the Advisor in writing, the
Sub-Advisor may utilize the service of whatever securities brokerage firm or
firms it deems appropriate to the extent that such firms are competitive with
respect to price of services and execution, and so long as the Sub-Advisor
complies with the "best execution" practices described above and applicable law
and regulation.
7. Compensation. The Fund agrees to pay a fee (the "Fee") to the Sub-Advisor for
the Fund assets managed by the Sub-Advisor, calculated as set forth in Exhibit A
attached hereto and incorporated by reference herein. The Sub-Advisor
acknowledges that the Fee is payable solely out of the assets of the Fund.
The Fee shall be computed and accrued daily and paid monthly in arrears based on
the average daily net asset value of the Fund as determined according to the
manner provided in the then-current prospectus of the Fund.
The Advisor shall provide to the Sub-Advisor, promptly following request
therefor, all information reasonably requested by the Sub-Advisor to support the
calculation of the Fee and shall permit the Sub-Advisor or its agents, upon
reasonable notice and at reasonable times and at Sub-Advisor's cost, to inspect
the books and records of the Fund pertaining to such calculation.
8. Expenses. The Sub-Advisor will not be required to pay any expenses of the
Fund except as expressly set forth in this Section 8. The Sub-Advisor will pay
the cost of maintaining the staff and personnel necessary for it to perform its
obligations under this Agreement, the expenses of office rent, telephone,
telecommunications and other facilities it is obligated to provide in order to
perform the services specified in Section 2 hereof, and any other expenses
incurred by the Sub-Advisor in the performance of its duties hereunder. The
Advisor shall cause to be paid out of the Fund all expenses incurred in
connection with investments by the Fund, including, without limitation,
brokerage commissions or fees in connection with the acquisition or disposition
of portfolio securities, futures or derivatives, interest on borrowings, taxes,
legal and accounting fees, and all custodial charges and fees.
9. Books and Records. The Sub-Advisor agrees to maintain such books and records
with respect to its services to the Fund as are required by Section 31 under the
1940 Act, and rules adopted thereunder, and to preserve such records for the
periods and in the manner required by that Section, and those rules. The
Sub-Advisor also agrees that records it maintains and preserves pursuant to
Rules 31a-1 and Rule 31a-2 under the 1940 Act with respect to the Fund are the
property of the Trust and will be surrendered promptly to the Trust upon its
request, except that the Sub-Advisor may retain copies of such documents. Any
computer systems, software or hardware, or other procedures developed by the
Sub-Advisor in performance of its obligations under this Agreement shall remain
the exclusive property of the Sub-Advisor. The
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Sub-Advisor further agrees that it will furnish to regulatory authorities having
the requisite authority any information or reports in connection with its
services hereunder which may be requested in order to determine whether the
operations of the Fund are being conducted in accordance with applicable laws
and regulations. Each party shall make available to the others, upon reasonable
request, copies of any books, records, and other relevant information that
enables the requesting party to comply with its obligations under applicable
federal or state rules or regulations, including Rule 38a-1 of the 1940 Act and
Rule 206(4)-7 of the Advisers Act, that arise as a result of the Agreement. Each
party shall cooperate fully to assist the others with any review or audit
conducted by another party or a third party designated by another party, for the
limited purpose of ensuring compliance with obligations under applicable federal
or state laws that the parties become subject to as a result of the Agreement.
10. Aggregation of Orders. Provided the investment objectives, policies and
restrictions of the Fund as provided to the Sub-Advisor in accordance with this
Agreement are adhered to, the Fund agrees that the Sub-Advisor may aggregate
sales and purchase orders of securities held in the Fund with similar orders
being made simultaneously for other accounts managed by the Sub-Advisor or with
accounts of the affiliates of the Sub-Advisor, if in the Sub-Advisor's
reasonable judgment such aggregation shall result in an overall economic benefit
to the Fund, taking into consideration the advantageous selling or purchase
price, brokerage commission and other expenses. The Fund acknowledges that the
determination of such economic benefit to the Fund by the Sub-Advisor represents
the Sub-Advisor's evaluation that the Fund may benefit from relatively better
purchase or sales prices, lower commission expenses and beneficial timing of
transactions or a combination of these and other factors.
11. Liability. Neither the Sub-Advisor nor its officers, directors, employees,
affiliates, agents or controlling persons shall be liable to the Trust, the
Fund, its shareholders and/or any other person for the acts, omissions, errors
of judgment and/or mistakes of law of any other fiduciary and/or other person
with respect to the Fund.
Neither the Sub-Advisor nor its officers, directors, employees, affiliates,
agents or controlling persons or assigns shall be liable for any act, omission,
error of judgment or mistake of law (whether or not deemed a breach of this
Agreement) and/or for any loss suffered by the Trust, the Fund, its shareholders
and/or any other person in connection with the matters to which this Agreement
relates; provided that no provision of this Agreement shall be deemed to protect
the Sub-Advisor against any liability to the Trust, the Fund and/or its
shareholders to which it might otherwise be subject by reason of any willful
misfeasance, bad faith or gross negligence in the performance of its duties or
the reckless disregard of its obligations and duties under this Agreement. The
Sub-Advisor shall not have any responsibilities with respect to any assets of
the Trust other than the Fund.
The Trust, on behalf of the Fund, hereby agrees to indemnify and hold harmless
the Sub-Advisor, its directors, officers, employees, affiliates, agents and
controlling persons (collectively, the "Indemnified Parties") against any and
all losses, claims damages or liabilities (including reasonable attorneys fees
and expenses), joint or several, relating to the Trust or the Fund, to which any
such Indemnified Party may become subject under the Securities Act of 1933, as
amended (the "1933 Act"), the Securities Exchange Act of 1934, the Advisers Act,
or other federal or state statutory law or regulation, at common law or
otherwise. It is understood,
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however, that nothing in this Section 11 shall protect any Indemnified Party
against, or entitle any Indemnified Party to, indemnification against any
liability to the Trust, the Fund or its shareholders to which such Indemnified
Party is subject, by reason of its willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of any reckless
disregard of its obligations and duties under this Agreement.
The rights and obligations that are provided for in this Section 11 shall
survive the cancellation, expiration or termination of this Agreement.
12. Services Not Exclusive. The services of the Sub-Advisor are not exclusive,
and nothing in this Agreement shall prevent the Sub-Advisor from providing
similar services to other investment advisory clients, including but not by way
of limitation, investment companies or to other series of investment companies,
including the Trust, or from engaging in other activities, provided such other
services and activities do not, during the term of this Agreement, interfere in
a material manner with the Sub-Advisor's ability to meet its obligations to the
Fund hereunder. When the Sub-Advisor recommends the purchase or sale of a
security for other investment companies or other clients, and at the same time
the Sub-Advisor recommends the purchase or sale of the same security for the
Fund, it is understood that in light of its fiduciary duty to the Fund, such
transactions will be executed on a basis that is fair and equitable to the Fund.
In connection with purchases or sales of portfolio securities for the account of
the Fund, neither the Sub-Advisor nor any of its directors, officers or
employees shall act as a principal. If the Sub-Advisor provides any advice to
its clients concerning the shares of the Fund, the Sub-Advisor shall act solely
as investment counsel for such clients and not in any way on behalf of the Trust
or the Fund.
The Sub-Advisor provides investment advisory services to numerous other
investment advisory clients, including but not limited to other funds, and may
give advice and take action which may differ from the timing or nature of action
taken by the Sub-Advisor with respect to the Fund. Nothing in this Agreement
shall impose upon the Sub-Advisor any obligations other than those imposed by
law to purchase, sell or recommend for purchase or sale, with respect to the
Fund, any security which the Sub-Advisor, or its shareholders, officers,
directors, employees or affiliates may purchase or sell for their own account or
for the account of any client, and the Trust shall have no first refusal,
co-investment or other rights in respect of any such investment, either for the
Fund or otherwise. Nothing stated herein shall preclude the Sub-Advisor from
using, allowing or causing materials to be used which have been prepared for
both the Fund and other accounts and other business activities.
13. Materials. Each of the Advisor, the Trust and the Fund shall not make any
representations regarding the Sub-Advisor or any of its affiliates in any
disclosure document, advertisement, sales literature or other promotional
materials without prior written consent of the Sub-Advisor, which consent shall
not be unreasonably withheld. If the Sub-Advisor has not notified the Advisor of
its disapproval of sample materials within twenty (20) days after its receipt
thereof, such materials shall be deemed approved. The Sub-Advisor will be
provided with any Registration Statements containing references or information
with respect to the Sub-Advisor prior to the filing of the same with any
regulatory authority and shall be afforded the opportunity to comment thereon.
In the event of termination of this Agreement, the Fund and the Advisor will
continue to furnish to the Sub-Advisor copies of any of the above-mentioned
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materials that refer in any way to the Sub-Advisor, and will not use such
material if the Sub-Advisor reasonably objects in writing within three business
days (or such other time as may be mutually agreed) after receipt thereof.
14. Duration and Termination. This Agreement shall continue until September 30,
2009, and thereafter shall continue automatically for successive annual periods,
provided such continuance is specifically approved at least annually by (i) the
Trustees or (ii) a vote of a "majority" (as defined in the 0000 Xxx) of the
Fund's outstanding voting securities (as defined in the 1940 Act), provided that
in either event the continuance is also approved by a majority of the Trustees
who are not parties to this Agreement or "interested persons" (as defined in the
0000 Xxx) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval.
Notwithstanding the foregoing, this Agreement may be terminated: (a) at any time
without penalty by the Fund upon the vote of a majority of the Trustees or by
vote of the majority of the Fund's outstanding voting securities, upon sixty
(60) days' written notice to the Sub-Advisor; (b) by the Advisor at any time
without penalty, upon sixty (60) days' written notice to the Sub-Advisor; or (c)
by the Sub-Advisor at any time without penalty, upon sixty (60) days' written
notice to the Trust. This Agreement will also terminate automatically in the
event of its assignment (as defined in the 1940 Act).
The Agreement will terminate immediately upon written notification from the
Advisor or the Trust if the Investment Management Agreement terminates with
respect to the Fund.
Any such termination shall not affect the status, obligations or liabilities of
any party hereto to any of the other parties that accrued prior to such
termination. Termination by either the Advisor or the Sub-Advisor shall not have
the effect of canceling orders to purchase or sell securities placed prior to
the receipt of written notice of termination.
15. Amendments. This Agreement may be amended at any time, but only by the
written agreement of all the parties hereto, which amendment must be approved by
the Trustees in the manner required by the 1940 Act.
16. Proxies. Unless the Trust gives written instructions to the contrary, the
Sub-Advisor shall vote all proxies solicited by or with respect to the issuers
of securities invested in by the Fund. The Sub-Advisor shall maintain a record
of how the Sub-Advisor voted and such record shall be available to the Trust
upon its request. The Sub-Advisor shall use its best good faith judgment to vote
such proxies in a manner which best serves the interests of the Fund's
shareholders. The Sub-Advisor may delegate proxy voting to a third-party company
provided, however, that the Sub-Advisor remains liable for the proxy voting.
17. Notices. Any written notice required by or pertaining to this Agreement
shall be personally delivered to the party for whom it is intended or shall be
sent to such party by prepaid first class mail or facsimile, at the address or
number stated below.
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If to the Trust:
Forward Funds
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
If to the Sub-Advisor:
Los Angeles Capital Management and Equity Research, Inc.
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxxx
If to the Advisor:
Forward Management, LLC
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
18. Confidential Information. Any information supplied by the Trust, the Fund or
the Advisor, which is not otherwise in the public domain, in connection with the
Fund or the Advisor is to be regarded as confidential and for use only by the
Sub-Advisor and/or its agents, and only in connection with the Sub-Advisor's
services under this Agreement. Any information supplied by the Sub-Advisor,
which is not otherwise in the public domain, in connection with the performance
of its duties hereunder is to be regarded as confidential and for use only by
the Fund and/or its agents, and only in connection with the Fund and its
investments. Any party in receipt of confidential information shall use
reasonable precautions (substantially identical to those used in safeguarding of
its own confidential information) that its directors, officers, employees and
advisors abide by these confidentiality provisions. The rights and obligations
that are provided for in this Section 18 shall survive the cancellation,
expiration or termination of this Agreement.
19. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by the laws of the State of
California, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act, or rules or orders of the SEC
thereunder.
(b) Delivery of Form ADV. At least 48 hours prior to entering into this
Agreement, the Sub-Advisor delivered to the Advisor and the Trust a copy of Part
II of the Sub-Advisor's Form ADV, as revised. The Advisor and the Trust hereby
acknowledge receipt of such copy.
(c) Captions. The captions of this Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
(d) Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
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(e) Agency Relationship. The Sub-Advisor shall for all purposes herein be deemed
to be an independent contractor and nothing herein shall be construed as
constituting the Sub-Advisor as an agent of the Trust or the Fund, except as
otherwise contemplated herein.
(f) Prior Agreement. This Agreement supersedes any prior agreement relating to
the subject matter hereof among the parties.
(g) Counterparts. This Agreement may be executed in counterparts and by the
different parties hereto on separate counterparts and by facsimile signature,
each of which when so executed and delivered, shall be deemed an original and
all of which counterparts shall constitute but one and the same agreement.
(h) Limited Liability of the Trust. The Sub-Advisor agrees that the Trust's
obligations under this Agreement shall be limited to the Fund and its assets,
and that the Sub-Advisor shall not seek satisfaction of any such obligation from
the shareholders of the Fund nor from any Trustee, officer, employee or agent of
the Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the effective date above
written.
FORWARD FUNDS
By: /s/ J. Xxxx Xxxx, Jr.
-----------------------------------
Name: J. Xxxx Xxxx, Jr.
Title: President
LOS ANGELES CAPITAL MANAGEMENT AND EQUITY RESEARCH, INC.
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Director of Research
FORWARD MANAGEMENT, LLC
By: /s/ Xxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxxxx
Title: Secretary
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EXHIBIT A
Pursuant to Section 7 of the Agreement, the Fund will pay to the
Sub-Advisor as compensation for the Sub-Advisor's services rendered, a Fee,
computed and accrued daily and paid monthly in arrears at the annual rate of
0.40% of the average daily net asset value of the Fund.
The Fee shall be paid to the Sub-Advisor by the Fund within 15 days
after the end of each month and no fees shall be paid to the Advisor under the
Agreement. If the Sub-Advisor shall serve for less than the whole of a month,
the Fee shall be prorated.
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