CUSTODIAN AGREEMENT
AGREEMENT made this 12th day of June, 1990, between BAILARD, XXXXX &
XXXXXX INTERNATIONAL FUND GROUP, INC. (the "Company") on behalf of the Bailard,
Xxxxx. & Xxxxxx International Equity Fund and the Bailard, Xxxxx & Xxxxxx
International Fixed-Income Fund portfolio that may be designated from time (the
"Funds"), and Xxxxx Brothers Xxxxxxxx and any other separate to time by the
Company & Co. (the "Custodian")
WITNESSETH: That in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. The Company hereby employs and appoints the Custodian as a custodian
for the term and Subject to the provisions of this Agreement. The Custodian
shall not be under any duty or obligation to require the Company to deliver to
it any securities or funds owned by the Company and shall have no responsibility
or liability for or on account of securities or funds not so delivered. The
Company will deposit with the Custodian copies of the Articles of Incorporation
and By-Laws (or comparable documents) of the Company arid all amendments
thereto, and copies of such votes and other proceedings of the Company as may be
necessary for or convenient to the Custodian in the performance of its duties.
- 1 -
2. Except for-securities and funds held by subcustodians appointed
pursuant to the provisions of Section 3 hereof, the Custodian shall have and
perform the following powers and duties:
A. Safekeeping - To keep safely the securities of each Fund that have
been delivered to the Custodian and from time to time to receive delivery of
securities for safekeeping.
B. Manner of Holding Securities - To hold securities of each Fund (1)
by physical possession of the share certificates or other instruments
representing such securities in registered or bearer form, or (2) in book-entry
form by a Securities System (as said term is defined in Section 2U).
C. Registered Name; Nominee - To hold registered securities of each
Fund (1) in the name or any nominee name of the Custodian or the Fund, or in the
name or any nominee name of any agent appointed pursuant to Section 6E, or (2)
in street certificate form, so-called, and in any case with or without any
indication of fiduciary capacity.
D. Purchases - Upon receipt of Proper Instructions, as defined in
Section X on Page 15, insofar as funds are available for the purpose, to pay for
and receive securities purchased for the account of the Fund, payment being made
only upon receipt of the securities (1) by the Custodian, or (2) by a clearing
corporation of a national securities exchange of which the Custodian is a
member, (3) by a Securities System or (4) by a Subcustodian. However, (i) in the
case of repurchase agreements
- 2 -
entered into by the Fund, the Custodian may release funds to a Securities System
or to a Subcustodian prior to the receipt of advice from the Securities System
or Subcustodian that the securities underlying such repurchase agreement have
been transferred by book entry into the Account (as defined in Section 2U) of
the Custodian maintained with such Securities System or Subcustodian, so long as
the payment instructions to such Securities System or Subcustodian include a
requirement that delivery is only against payment of securities, and (ii) in the
case of time deposits, call account deposits, currency deposits, and other
deposits, contracts or options pursuant to Sections 2L, 2M and 2N, the Custodian
may make payment therefor without receiving an instrument evidencing said
deposit so long as the payment instructions detail specific securities to be
acquired.
E. Exchanges - Upon receipt of Proper Instructions, to exchange
securities held by it for the account of a Fund for other securities in
connection with any reorganization, recapitalization, split-up of shares, change
of par value, conversion or other event, and to deposit any such securities in
accordance with the terms of any reorganization or protective plan. Without such
instructions, the Custodian may surrender securities in temporary form for
definitive securities, may surrender securities for transfer into a name or
nominee name as permitted in Section 2C, and may surrender securities for a
different number of certificates or instruments representing the
- 3 -
same number of shares or same principal amount of indebtedness, provided the
securities to be issued are to be delivered to the Custodian and further
provided Custodian shall at the time of surrendering securities or instruments
receive a receipt or other evidence of ownership thereof.
F. Sales of Securities - Upon receipt of Proper Instructions, to make
delivery of securities which have been sold for the account of a Fund, but only
against payment therefor (1) in cash, by a certified check, bank cashier's
check, bank credit, or bank wire transfer, or (2) by credit to the account of
the Custodian with a clearing corporation of a national securities exchange of
which the Custodian is a member, or (3) by credit to the account of the
Custodian or an Agent of the Custodian with a Securities System.
G. Depositary Receipts - Upon receipt of Proper Instructions, to
instruct a subcustodian appointed pursuant to Section 3 hereof (a
"Subcustodian") or an agent of the Custodian appointed pursuant to Section 6E
hereof (an "Agent") to surrender securities to the depositary used by an issuer
of American Depositary Receipts or International Depositary Receipts
(hereinafter collectively referred to as "ADRs") for such securities against a
written receipt therefor adequately describing such securities and written
evidence satisfactory to the Subcustodian or Agent that the depositary has
acknowledged receipt of instructions to issue with respect to such securities
- 4 -
ADRs in the name of the Custodian, or a nominee of the Custodian, for delivery
to the Custodian in Boston, Massachusetts, or at such other place as the
Custodian may from time to time designate.
Upon receipt of Proper Instructions, to surrender ADRs to the
issuer thereof against a written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the Custodian that the issuer
of the ADRs has acknowledged receipt of instructions to cause its depositary to
deliver the securities underlying such ADRs to a Subcustodian or an Agent.
H. Exercise of Rights; Tender Offers - Upon timely receipt of Proper
Instructions, to deliver to the issuer or trustee thereof, or to the agent of
either, warrants, puts, calls, rights or similar securities for the purpose of
being exercised or sold, provided that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian, and, upon receipt
of Proper Instructions, to deposit securities upon invitations for tenders of
securities, provided that the consideration is to be paid or delivered or the
tendered securities are to be returned to the Custodian.
I. Stock Dividends, Rights, Etc. - To receive and collect all stock
dividends, rights and other items of like nature; and to deal with the same
pursuant to Proper Instructions relative thereto.
- 5 -
J. 0ptions - Upon receipt of Proper Instructions, to receive and retain
confirmations or other documents evidencing the purchase or writing of an option
on a security or securities index by the Fund; to deposit and maintain in a
segregated account, either physically or by book-entry in a Securities System,
securities subject to a covered call option written by the Fund; and to release
and./or transfer such securities or other assets only in accordance with a
notice or other communication evidencing the expiration, termination or exercise
of such covered option furnished by The Options Clearing Corporation, the
securities or options exchange on which such covered option is traded or such
other organi2ation as may be responsible for handling such options transactions.
K. Borrowings - Upon receipt of Proper Instructions, to deliver
securities of a Fund to lenders or their agents as collateral for borrowings
effected by the Fund, provided that such borrowed money is payable to or upon
the Custodian's order as Custodian for the Fund.
L. Demand Deposit Bank Accounts - To open and operate an account or
accounts in the name of a Fund on the Custodian's books subject only to draft or
order by the Custodian. All funds received by the Custodian from or for the
account of the Fund shall be deposited in said account(s). The responsibilities
of the Custodian to the Fund for deposits accepted on the Custodian's books
shall be that of a U. S. bank for a similar deposit.
- 6 -
If and when authorized by Proper Instructions, the Custodian may open
and operate an additional account(s) in such other banks or trust companies as
may be designated by a Fund in such instructions (any such bank or trust company
so designated by a Fund being referred to hereafter as a "Banking Institution"),
provided that such account(s) shall be in the name of the Custodian for account
of the Fund and subject only to the Custodian's draft or order. Such accounts
may be opened with Banking Institutions in the United States and in other
countries and may be denominated in either U. S. Dollars or other currencies as
the Fund may determine. All such deposits shall be deemed to be portfolio
securities of the Fund and accordingly the responsibility of the Custodian
therefor shall be the same as and no greater than the Custodian's responsibility
in respect of other portfolio securities of the Fund.
M. Interest Bearing Call or Time Deposits - To place interest bearing
fixed term and call deposits with such banks and in such amounts as a Fund may
authorize pursuant to Proper Instructions. Such deposits may be placed with the
Custodian or with Subcustodians or other Banking Institutions as the Fund may
determine. Deposits may be denominated in U. S. Dollars or other currencies and
need not be evidenced by the issuance or delivery of a certificate to the
Custodian, provided that the Custodian shall include in its record:3 with
respect to the assets of the Fund, appropriate notation as to the amount and
currency of each
- 7 -
such deposit, the accepting Banking Institution, and other appropriate details.
Such deposits, other than those placed with the Custodian, shall be deemed
portfolio securities of the Fund and the responsibilities of the Custodian
therefor shall be the same as those for demand deposit bank accounts placed with
other banks, as described in Section L of this agreement. The responsibility of
the Custodian for such deposits accepted on the Custodian's books shall be that
of a U. S. bank for a similar deposit.
N. Foreign Exchange Transactions - Pursuant to Proper Instructions, to
enter into foreign exchange contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf and for the account of a Fund.
Such transactions may be undertaken by the Custodian with such Banking
Institutions, including the Custodian and Subcustodian(s) as principals, as
approved and authorized by the Fund. Foreign exchange contracts and options
other than those executed with the Custodian, shall be deemed to be portfolio
securities of the Fund and the responsibilities of the Custodian therefor shall
be the same as those for demand deposit bank accounts placed with other banks as
described in Section 2-L of this agreement.
0. Futures Contracts - Upon receipt of Proper Instructions, to receive
and retain confirmations evidencing the purchase or sale of a futures contract
or an option on a futures contract by a Fund; to deposit and maintain in a
segregated account, for the
- 8 -
benefit of any futures commission, merchant or to pay to such futures commission
merchant, assets designated by the Fund as initial, maintenance or variation
"margin" deposits intended to secure the Fund's performance of its obligations
under any futures contracts purchased or sold or any options on futures
contracts written by the Fund, in accordance with the provisions of any
agreement or agreements among any of the Fund, the Custodian and such futures
commission merchant, designated to comply with the rules of the Commodity
Futures Trading Commission and/or any contract market, the Securities and
Exchange Commission or any similar organization or organizations, regarding such
margin deposits; and to release and/or transfer assets in such margin accounts
only in accordance with any such agreements or rules.
P. Stock Loans - Upon receipt of Proper Instructions, to deliver
securities of a Fund, in connection with loans of securities by the Fund, to the
borrower thereof upon the receipt of the cash collateral, if any, for such
borrowing. In the event U. S. Government securities are to be used as
collateral, the Custodian will not release the securities to be loaned until it
has received confirmation that such collateral has been delivered to the
Custodian. The Custodian and the Funds understand that the timing of receipt of
such confirmation will normally require that the delivery of securities to be
loaned will be made one day after receipt of the U. S. Government collateral.
- 9 -
Q. Collections - To collect, receive and deposit in said account or
accounts all income and other payments with respect to the securities held
hereunder, and to execute ownership and other certificates and affidavits for
all federal and state tax purposes in connection with receipt of income or other
payments with respect to securities of a Fund or in connection with transfer of
securities, and pursuant to Proper Instructions to take such other actions with
respect to collection or receipt of funds or transfer of securities which
involve an investment decision.
R. Dividends, Distributions and Redemptions - Upon receipt of Proper
Instructions from a Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon receipt of Proper
Instructions from a Fund, or upon receipt of instructions from the Shareholder
Servicing Agent (given by such person or persons and in such manner on behalf of
the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities, insofar as available, to the
Shareholder
- 10 -
Servicing Agent or as such Agent shall otherwise instruct for payment to Fund
shareholders who have delivered to such Agent a request for repurchase or
redemption of their shares of capital stock of the Fund.
S. Proxies, Notices, Etc. - Promptly to deliver or mail to a Fund all
forms of proxies and all notices of meetings and any other notices or
announcements affecting or relating to securities owned by the Fund that are
received by the Custodian, and upon receipt of Proper Instructions, to execute
and deliver or cause its nominee to execute and deliver such proxies or other
authorizations as may be required. Neither the Custodian nor its nominee shall
vote upon any of such securities or execute any proxy to vote thereon or give
any consent or take any other action with respect thereto (except as otherwise
herein provided) unless ordered to do so by Proper Instructions.
T. Nondiscretionary Details - Without the necessity of express
authorization from a Fund, (1) to attend to all nondiscretionary details in
connection with the sale, exchange, substitution, purchase, transfer or other
dealings with securities, funds or other property of that Fund held by the
Custodian except as otherwise directed from time to time by the Directors of the
Company, and (2) to make payments to itself or others for minor expenses of
handling securities or other similar items relating to the Custodian's duties
under this Agreement, provided that all such payments shall be accounted for to
the Fund.
- 11 -
U. Bills - Upon receipt of Proper Instructions, to pay or cause to be
paid, insofar as funds are available for the purpose, bills, statements, or
other obligations of a Fund.
V. Deposit of Fund Assets in Securities Systems - The Custodian may
deposit and/or maintain securities owned by a Fund in (i) The Depository Trust
Company, (ii) any book-entry system as provided in Subpart 0 of Treasury
Circular Xx. 000, 00 XXX 000, Xxxxxxx X of 31 CFR Part 350, or the book-entry
regulations of federal agencies substantially in the form of Subpart 0, or (iii)
any other domestic clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934 which acts
as a securities depository and whose use the Fund has previously approved in
writing (each of the foregoing being referred to in this Agreement as a
"Securities System"). Utilization of a Securities System shall be in accordance
with applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may deposit and/or maintain Fund securities, either
directly or through one or more Agents appointed by the Custodian (provided that
any such agent shall be qualified to act as a custodian of the Fund pursuant to
the Investment Company Act of 1940 and the rules and regulations thereunder), in
a Securities System provided that such securities are represented in an account
("Account") of the Custodian or
- 12 -
such Agent in the Securities System which shall not include any assets of the
Custodian or Agent other than assets held as a fiduciary, custodian, or
otherwise for customers;
2) The records of the Custodian with respect to securities of a Fund
which are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of
a Fund upon (i) receipt of advice from the Securities System that such
securities have been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such payment and transfer for the
account of that Fund. The Custodian shall Transfer securities sold for the
account of a Fund upon (i) receipt of advice from the Securities System that
payment for such securities has been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of all advices from the Securities
System of transfers of securities for the account of a Fund shall identify the
Fund, be maintained for that Fund by the Custodian or an Agent as referred to
above, and be provided to that Fund at its request. The Custodian shall furnish
a Fund confirmation of each transfer to or from the account of the Fund in the
form of a written advice or notice and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the Securities System
for the account of the Fund on the next business day;
- 13 -
4) The Custodian shall provide a Fund with any report obtained by the
Custodian or any Agent as referred to above on the Securities System's
accounting system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System; and the Custodian and such Agents
shall send to the Fund such reports on their own systems of internal accounting
control as the Fund may reasonably request from time to time.
5) At the written request of a Fund, the Custodian will terminate the
use of any such Securities System on behalf of the Fund as promptly as
practicable.
W. Other Transfers - Upon receipt of Proper Instructions, to deliver
securities, funds and other property of a Fund to a Subcustodian or another
custodian of the Fund; and, upon receipt of Proper Instructions, to make such
other disposition of securities, funds or other property of a Fund in a manner
other than or for purposes other than as enumerated elsewhere in this Agreement,
provided that the instructions relating to such disposition shall include a
statement of the purpose for which the delivery is to be made, the amount of
securities to be delivered and the name of the person or persons to whom
delivery is to be made..
X. Investment Limitations - In performing its duties generally, and
more particularly in connection with the purchase, sale and exchange of
securities made by or for a Fund, the
- 14 -
Custodian may assume,-unless and until notified in writing to the contrary that
Proper Instructions received by it are not in conflict with or in any way
contrary to any provisions of the Company's Articles of Incorporation or By-Laws
(or comparable documents) or votes or proceedings of the stockholders or
Directors of the Company. The Custodian shall in no event be liable to a Fund
and shall be indemnified by the Fund for any violation which occurs in the
course of carrying out instructions given by the Fund of any investment
limitations to which the Fund is subject or other limitations with respect to
the Fund's powers to make expenditures, encumber securities, borrow or take
similar actions affecting its portfolio.
Y. Proper Instructions - Proper instructions shall mean a tested telex
from a Fund or a written request, direction, instruction or certification signed
or initialled on behalf of the Fund by one or more person or persons as the
Board of Directors of a Fund shall have from time to time authorized, provided,
however, that no such instructions directing the delivery of securities or the
payment of funds to an authorized signatory of the Fund shall be signed by such
person. Those persons authorized to give Proper Instructions may be identified
by the Board of Directors by name, title or position and will include at least
one officer empowered by the Board to name other individuals who are authorized
to give Proper Instructions on behalf of the Fund. Telephonic or other oral
instructions given
- 15 -
by any one of the above persons will be considered Proper Instructions if the
Custodian reasonably believes them to have been given by a person authorized to
give such instructions with respect to the transaction involved. Oral
instructions will be confirmed by tested telex or in writing in the manner set
forth above but the lack of such confirmation shall in no way affect any action
taken by the Custodian in reliance upon such oral instructions. The Company
authorizes the Custodian to tape record any and all telephonic or other oral
instructions given to the Custodian by or on behalf of a Fund (including any of
its officers, Directors, employees or agents) and will deliver to the Custodian
a similar authorization from any investment manager or adviser or person or
entity with similar responsibilities which is authorized to give Proper
Instructions on behalf of the Fund to the Custodian. Proper instructions may
relate to specific transactions or to types or classes of transactions, and may
be in the form of standing instructions.
Proper instructions may include communications effected directly
between electro-mechanical or electronic devices or systems, in addition to
tested telex, provided that the Company and the Custodian agree to the use of
such device or system.
3. Securities, funds and other property of a Fund may be held by
subcustodians appointed pursuant to the provisions of this Section 3 (a
"Subcustodian"). The Custodian may, at any time and from time to time, appoint
any bank or trust company or
- 16 -
securities depository (meeting the requirements of a custodian or a foreign
custodian under the Investment Company Act of 1940 and the rules and regulations
thereunder) to act as a Subcustodian for a Fund, provided that the Fund shall
have approved in writing (1) any such bank or trust company or securities
depository and the subcustodian agreement to be entered into between such bank
or trust company and the Custodian or any Subcustodian, and (2) if the
subcustodian is a bank, trust company or securities depository organized under
the laws of a country other than the United States, the holding of securities,
cash and other property of the Fund in the country in which it is proposed to
utilize the services of such subcustodian. Upon such approval by the Fund, the
Custodian is authorized on behalf of the Fund to notify each Subcustodian of its
appointment as such. The Custodian may, at any time in its discretion, remove
any bank or trust company or securities depository that has been appointed as a
Subcustodian but will promptly notify the Fund of any such action.
Those Subcustodians, their offices or branches which each Fund has
approved to date are set forth on Appendix A hereto. Such Appendix shall be
amended from time to time as Subcustodians, branches or offices are changed,
added or deleted. A Fund shall be responsible for informing the Custodian
sufficiently in advance of a proposed investment which is to be held at a
location not listed on Appendix A, in order that there shall be sufficient time
for the Fund to give the approval
- 17 -
required by the preceding paragraph and for the Custodian to put the appropriate
arrangements in place with such Subcustodian pursuant to such subcustodian
agreement.
Although a Fund does not intend to invest in a country before the
foregoing procedures have been completed, in the event that an investment is
made prior to approval, if practical, such security shall be removed to an
approved location or if not practical such security shall be held by such agent
as the Custodian may appoint. In such event, the Custodian shall be liable to a
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 and
provided that the Custodian shall pursue its rights against such agent.
With respect to the securities and funds held by a Subcustodian, either
directly or indirectly, including demand and interest bearing deposits,
currencies or other deposits and foreign exchange contracts as referred to in
Sections 2L, 2M, 2N, or 20 the Custodian shall be liable to a Fund if and only
to the extent that such Subcustodian or any other Subcustodian is liable to the
Custodian and the Custodian recovers under the applicable subcustodian agreement
provided that the custodian shall pursue its rights against such agent. The
Custodian shall nevertheless be liable to the Fund for its own negligence in
transmitting any instructions received by it from the Fund and for its own
negligence in connection with the delivery of any securities or funds held by it
to any such Subcustodian.
- 18 -
In the event that any Subcustodian appointed pursuant to the provisions
of this Section 3 fails to perform any of its obligations under the terms and
conditions of the applicable subcustodian agreement, the Custodian shall use its
best efforts to cause such Subcustodian to perform such obligations. In the
event that the Custodian is unable to cause such Subcustodian to perform fully
its obligations thereunder, the Custodian shall forthwith upon a Fund's request
terminate such Subcustodian and, if necessary or desirable, appoint another
subcustodian in accordance with the provisions of this Section 3. At the
election of the Fund, it shall have the right to enforce, to the extent
permitted by the subcustodian agreement and applicable law, the Custodian's
rights against any such Subcustodian for loss or damage caused the Fund by such
Subcustodian.
At the written request of a Fund, the Custodian will terminate any
Subcustodian appointed pursuant to the provisions of this Section 3 in
accordance with the termination provisions under the applicable subcustodian
agreement. The Custodian will not amend any subcustodian agreement or agree to
change or permit any changes thereunder except upon the prior written approval
of the Fund.
In the event the Custodian receives a claim from a Subcustodian under
the indemnification provisions of any subcustodian agreement, the Custodian
shall promptly give written notice to the Fund of such claim. No more than
thirty days after
- 19 -
written notice to the Fund of the Custodian's intention to make a payment under
such indemnification provisions, the Fund will reimburse the Custodian the
amount of such payment except in respect of any negligence or misconduct of the
Custodian or any Subcustodian.
4. The Custodian may assist generally in the preparation of reports to
Fund shareholders and others, audits of accounts, and other ministerial matters
of like nature.
5. Each Fund hereby also appoints the Custodian as its financial agent.
With respect to the appointment as financial agent, the Custodian shall have and
perform the following powers and duties:
A. Records - To create, maintain and retain such records relating to
its activities and obligations under this Agreement as are required under the
Investment Company Act of 1940 and the rules and regulations thereunder
(including Section 31 thereof and Rules 3la-1 and 3la-2 thereunder) and under
applicable Federal and State tax laws. All such records will be the property of
the Fund and in the event of termination of this Agreement shall be delivered to
the successor custodian, and the Custodian agrees to cooperate with the Fund in
execution of documents and other actions necessary or desirable in order to
substitute the successor custodian for the Custodian under this agreement.
B. Accounts - To keep books of account and render
- 20 -
statements, including interim monthly and complete quarterly financial
statements, or copies thereof, from time to time as reasonably requested by
Proper Instructions.
C. Access to Records - Subject to security requirements of the
Custodian applicable to its own employees having access to similar records
within the Custodian and such regulations as may be reasonably imposed by the
Custodian, the books and records maintained by the Custodian pursuant to
Sections 5A and 5B shall be open to inspection and audit at reasonable times by
officers of, attorneys for, and auditors employed by, the Fund.
D. Calculation of Net Asset Value - To compute and determine the net
asset value per share of capital stock of the Fund as of the close of business
on the New York Stock Exchange on each day on which such Exchange is open,
unless otherwise directed by Proper Instructions. Such computation and
determination shall be made in accordance with (1) the provisions of the
Articles of Incorporation or By-Laws of the Company, as they may from time to
time be amended and delivered to the Custodian, (2) the votes of the Board of
Directors of the Company at the time in force and applicable, as they may from
time to time be delivered to the Custodian, and (3) Proper instructions from
such officers of the Company or other persons as are from time to time
authorized by the Board of Directors of the Company to give instructions with
respect to computation and determination of the net asset value. On each day
that the Custodian shall compute the net asset value
- 21 -
per share of the Fund, the Custodian shall provide the Fund with written reports
which permit the Fund to verify that portfolio transactions have been recorded
in accordance with the Fund's instructions.
In computing the net asset value, the Custodian may rely upon any
information furnished by Proper Instructions, including without limitation any
information (1) as to accrual of liabilities of the Fund and as to liabilities
of the Fund not appearing on the books of account kept by the Custodian, (2) as
to the existence, status and proper treatment of reserves, if any, authorized by
the Fund, (3) as to the sources of quotations to be used in computing the net
asset value, including those listed in Appendix B, (4) as to the fair value to
be assigned to any securities or other property for which price quotations are
not readily available, and (5) as to the sources of information with respect to
"corporate actions" affecting portfolio securities of the Fund, including those
listed in Appendix B. (Information as to "corporate. actions" shall include
information as to dividends, distributions, stock splits, stock dividends,
rights offerings, conversions, exchanges, recapitalizations, mergers,
redemptions, calls, maturity dates and similar transactions, including the ex-
and record dates and the amounts or other terms thereof.)
In like manner, the Custodian shall compute and determine the net asset
value as of such other times as the Board of Directors of the Company from time
to time may reasonably request.
- 22 -
Notwithstanding any other provisions of this Agreement, including
Section 6C, the following provisions shall apply with respect to the Custodian's
foregoing responsibilities in this Section 5D: The Custodian shall. be held to
the exercise of reasonable care in computing and determining net asset value as
provided in this Section 5D, but shall not be held accountable or liable for any
losses, damages or expenses the Fund or any shareholder or former shareholder of
the Fund may suffer or incur arising from or based upon errors or delays in the
determination of such net asset value unless such error or delay was due to the
Custodian's negligence, gross negligence or reckless or willful misconduct in
determination of such net asset value. (The parties hereto acknowledge, however,
that the Custodian's causing an error or delay in the determination of net asset
value may, but does not in and of itself, constitute negligence, gross
negligence or reckless or willful misconduct.) In no event shall the Custodian
be liable or responsible to a Fund, any present or former shareholder of a Fund
or any other party for any error or delay which continued or was undetected
after the date of an audit performed by the certified public accountants
employed by a Fund if, in the exercise of reasonable care in accordance with
generally accepted accounting standards, such accountants should have become
aware of such error or delay in the course of performing such audit. The
Custodian's liability for any such negligence, gross negligence or reckless or
willful misconduct
- 23 -
which results in an error in determination of such net asset value shall be
limited to the direct, out-of-pocket loss a Fund, shareholder or former
shareholder shall actually incur, measured by the difference between the actual
and the erroneously computed net asset value, and any expenses a Fund shall
incur in connection with correcting the records of a Fund affected by such error
(including charges made by a Fund's registrar and transfer agent for making such
corrections) or communicating with shareholders or former shareholders of the
Fund affected by such error.
Without limiting the foregoing, the Custodian shall not be held
accountable or liable to the Fund, any shareholder or former shareholder thereof
or any other person for any delays or losses, damages or expenses any of them
may suffer or incur resulting from (1) the Custodian's failure to receive timely
and suitable notification concerning quotations or corporate actions relating to
or affecting portfolio securities of a Fund or (2) any errors in the computation
of the net asset value based upon or arising out of quotations or information as
to corporate actions if received by the Custodian either (i) from a source which
the Custodian was authorized pursuant to the second paragraph of this Section 5D
to rely upon, or (ii) from a source which in the Custodian's reasonable judgment
was as reliable a source for such quotations or information as the sources
authorized pursuant to that paragraph. Nevertheless, the Custodian will use its
best
- 24 -
judgment in determining whether to verify through other sources any information
it has received as to quotations or corporate actions if the Custodian has
reason to believe that any such information might be incorrect.
In the event of any error, or delay in the determination of such net
asset value for which the Custodian may be liable, the Fund and the Custodian
will consult and make good faith efforts to reach agreement on what actions
should be taken in order to mitigate any loss suffered by the Fund or its
present or former shareholders, in order that the Custodian's exposure to
liability shall be reduced to the extent possible after taking into account all
relevant factors and alternatives. Such actions might include the Fund or the
Custodian taking reasonable steps to collect from any shareholder or former
shareholder who has received any overpayment upon redemption of shares such
overpaid amount or to collect from any shareholder who has underpaid upon a
purchase of shares the amount of such underpayment or to reduce the number of
shares issued to such shareholder. It is understood that in attempting to reach
agreement on the actions to be taken or the amount of the loss which should
appropriately be borne by the Custodian, the Fund and the Custodian will
consider such relevant factors as applicable law, the amount of the loss
involved, the Fund's desire to avoid loss of shareholder good will, the fact
that other persons or entities could have been reasonably expected to have
detected the error sooner than
- 25 -
the time it was actually discovered, the appropriateness of limiting or
eliminating the benefit which shareholders or former shareholders might have
obtained by reason of the error, and the possibility that other parties
providing services to a Fund might be induced to absorb a portion of the loss
incurred.
E. Disbursements - Upon receipt of Proper Instructions, to pay or cause
to be paid, insofar as funds are available for the purpose, bills, statements
and other obligations of the Fund (including but not limited to interest
charges, taxes, management fees, compensation to Company officers and employees,
and other operating expenses of the Fund).
6. A. The Custodian shall not be liable for any action taken or omitted
in reliance upon Proper Instructions believed by it to be genuine or upon any
other written notice, request, direction, instruction, certificate or other
instrument believed by it to be genuine and signed by the proper party or
parties.
The Secretary or Assistant Secretary of the Company shall certify to
the Custodian the names, signatures and scope of authority of all persons
authorized to give Proper Instructions or any other such notice, request,
direction, instruction, certificate or instrument on behalf of each Fund, the
names and signatures of the officers of the Company, the name and address of the
Shareholder Servicing Agent, and any resolutions, votes, instructions or
directions of the Company's Board of Directors or shareholders. Such certificate
may be accepted and relied upon
- 26 -
by the Custodian as conclusive evidence of the facts set forth therein and may
be considered in full force and effect until receipt of a similar certific.1te
to the contrary.
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement.
The Custodian shall be entitled, at the expense of a Fund, to receive
and act upon advice of counsel (who may be counsel for a Fund) on all matters,
and the Custodian shall be without liability for any action reasonably taken or
omitted pursuant to such advice.
B. With respect to the portfolio securities, cash and other property of
a Fund held by a Securities System, the Custodian shall be liable to that Fund
only for any loss or damage to the Fund resulting from use of the Securities
System if caused by any negligence, misfeasance or misconduct of the Custodian
or any of its agents or of any of its or their employees or from any failure of
the Custodian or any such agent to enforce effectively such rights as it may
have against the Securities System.
C. Except as may otherwise be set forth in this Agreement with respect
to particular matters, the Custodian shall be held only to the exercise of
reasonable care and diligence in carrying out the provisions of this Agreement,
provided that the Custodian
- 27 -
shall not thereby be required to take any action which is in contravention of
any applicable law. However, nothing herein shall exempt the Custodian from
liability due to its own negligence or willful misconduct. The Company agrees to
indemnify and hold harmless the Custodian and its nominees from all claims and
liabilities (including counsel fees) incurred or assessed against it or its
nominees in connection with the performance of this Agreement, except such as
may arise from its or its nominee's breach of the relevant standard of conduct
set forth in this Agreement. Without limiting the foregoing indemnification
obligation of the Company, the Company agrees to indemnify the Custodian and its
nominees against any liability the Custodian or such nominee may incur by reason
of taxes assessed to the Custodian or such nominee or other costs, liability or
expense incurred by the Custodian or such nominee resulting directly or
indirectly from the fact that portfolio securities or other property of a Fund
is registered in the name of the Custodian or such nominee.
In order that the indemnification provisions contained in this
Paragraph 6-C shall apply, however, it is understood that in any case the
Company may be asked to indemnify or hold the Custodian harmless, the Company
shall be fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the Custodian will use
all reasonable care to identify and notify the Company
- 28 -
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against the Company. The
Company shall have the option to defend the Custodian against any claim which
may be the subject of this indemnification, and in the event that the Company so
elects it will so notify the Custodian, and thereupon the Company shall take
over complete defense of the claim, and the Custodian shall in such situation
initiate no further legal or other expenses for which it shall seek
indemnification under this Paragraph 6-C. The Custodian shall in no case confess
any claim or make any compromise in any case in which the Company will be asked
to indemnify the Custodian except with the Company's prior written consent.
It is also understood that the Custodian shall not be liable for any
loss involving any securities, currencies, deposits or other property of the
Company, whether maintained by it, a Subcustodian, an agent of the Custodian or
a Subcustodian, a Securities System, or a Banking Institution, or a loss arising
from a foreign currency transaction or contract, resulting from a Sovereign
Risk. A "Sovereign Risk" shall mean nationalizaton, expropriation, devaluation,
revaluation, confiscation, seizure, cancellation, destruction or similar action
by any governmental authority, de facto or de jure; or enactment, promulgation,
imposition or enforcement by any such governmental authority of currency
restrictions, exchange controls, taxes, levies or other
- 29 -
charges affecting the Company's property; or acts of war, terrorism,
insurrection or revolution; or any other similar act or event beyond the
Custodian's control.
D. The Custodian shall be entitled to receive reimbursement from a Fund
on demand, in the manner provided in Section 7, for its cash disbursements,
expenses and charges (including the fees and expenses of any Subcustodian or any
Agent) in connection with this Agreement, but excluding salaries and usual
overhead expenses.
E. The Custodian may at any time or times in its discretion appoint
(and may at any time remove) any other bank or trust company as its agent (an
"Agent") to carry out such of the provisions of this Agreement as the Custodian
may from time to time direct, provided, however, that the appointment of such
Agent (other than an Agent appointed pursuant to the third paragraph of Section
3) shall not relieve the Custodian of any of its responsibilities under this
Agreement.
F. Upon request, a Fund shall deliver to the Custodian such proxies,
powers of attorney or other instruments as may be reasonable and necessary or
desirable in connection with the performance by the Custodian or any
Subcustodian of their respective obligations under this Agreement or any
applicable subcustodian agreement.
7. Each Fund shall pay the Custodian a custody fee based on such fee
schedule as may from time to time be agreed upon in
- 30 -
writing by the Custodian and the Fund. Such fee, together with all amounts for
which the Custodian is to be reimbursed in accordance with Section 6D, shall. be
billed to each Fund in such a manner as to permit payment by a direct cash
payment to the Custodian or by placing Fund portfolio transactions with the
Custodian resulting in an agreed-upon amount of commissions being paid to the
Custodian resulting in an agreed-upon period of time.
8. This Agreement shall continue in full force and effect until
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid, to the other party, such termination to take effect not sooner
than seventy five (75) days after the date of such delivery or mailing. In . the
event of termination the Custodian shall be entitled to receive prior to
delivery of the securities, funds and other property held by it all accrued fees
and unreimbursed expenses the payment of which is contemplated by Sections 6D
and 7, upon receipt by the Fund of a statement setting forth such fees and
expenses.
In the event of the appointment of a successor custodian, it is agreed
that the funds and securities owned by a Fund and held by the Custodian or any
Subcustodian shall be delivered to the successor custodian, and the Custodian
agrees to cooperate with the Company in execution of documents and performance
of other actions necessary or desirable in order to substitute the successor
custodian for the Custodian under this Agreement.
9. This Agreement constitutes the entire understanding and
- 31 -
agreement of the parties hereto with respect to the subject matter hereof. No
provision of this Agreement may be amended or terminated except by a statement
in writing signed by the party against which enforcement of the amendment or
termination is sought.
In connection with the operation of this Agreement, the Custodian and
the Company may agree in writing from time to time on such provisions
interpretative of or in addition to the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor of this Agreement. No
interpretative or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement.
10. This instrument is executed and delivered in The Commonwealth of
Massachusetts and shall be governed by and construed according to the laws of
said Commonwealth.
11. Notices and other writings delivered or mailed postage prepaid to
the Fund addressed to the Company at 0000 Xxxxxx Xxxxx, Xxx Xxxxx, XX 00000 or
to such other address as the Company may have designated to the Custodian in
writing, or to the Custodian at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Manager, Securities Department, or to such other address as the
Custodian may have designated to the Company in writing, shall be deemed to have
been properly delivered or given hereunder to the respective addressee.
- 32 -
12. This Agreement shall be binding on and shall inure to the benefit
of the Company and the Custodian and their respective successors and assigns,
provided that neither party hereto may assign this Agreement or any of its
rights or obligations hereunder without the prior written consent of the other
party.
13. 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 each of the parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
BAILARD, XXXXX & XXXXXX XXXXX BROTHERS XXXXXXXX & CO
INTERNATIONAL FUND GROUP, INC.
By /s/ Xxxxxxx X. Xxxxxxxx /s/ [ILLEGIBLE]
------------------------------------ ----------------------------------
Partner
- 33 -
AMENDMENT TO THE
----------------
CUSTODIAN AGREEMENT
-------------------
Amendment made as of December 22, 1995 (the "Amendment"), between
Bailard, Xxxxx & Xxxxxx International Fund Group, Inc. (the "Company") and Xxxxx
Brothers Xxxxxxxx & Co. (the "Custodian") to the Custodian Agreement dated June
12, 1990, on behalf of Bailard, Xxxxx & Xxxxxx International Equity Fund and
Bailard (the "Fund"), Xxxxx & Xxxxxx International Fixed-Income Fund (the
"Fund") and any other separate portfolio that may be designated from time to
time by the Fund and Xxxxx Brothers Xxxxxxxx & Co.
In consideration of the mutual covenants and agreements herein
contained, the Fund and the Custodian agree that the Custodian Agreement is
hereby amended as follows:
I . Section [y], proper Instructions, is amended in its entirety as
follows:
" [y]. Proper Instructions - Proper instructions shall include, in
order of preference, authenticated electro-mechanical communications including
SWIFT and tested telex; a written request signed by two or more authorized
persons as set forth below; telefax transmissions and oral instructions. Each of
the foregoing methods of communicating proper instructions is described and
defined below and may from time to time be further described and defined in
written operating memoranda between the Custodian and the Fund.
Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices or systems, including
authenticated SWIFT and tested telex transmissions. The media through which such
Proper Instructions shall be transmitted and the data which must be contained in
such Proper Instructions in order for such instruction to be complete shall be
set forth in certain operating memoranda to which the Custodian and the Fund
shall from time to time agree. The Fund shall be responsible for sending
instructions which meet the requirements set forth therein and the Custodian
shall be only be responsible for acting on instructions which meet such
requirements. The Custodian shall not be liable for direct or consequential
losses resulting from technical failures of any kind in respect of instructions
sent via electro-mechanical or electronic communications.
Proper Instructions shall include a written request, direction,
instruction or certification signed or initialed on behalf of the Fund by two or
more persons as the Board of Trustees or Directors of the Fund shall have from
time to time authorized, provided, however, that no such instructions directing
the delivery of securities or the payment of funds to an authorized signatory of
the Fund shall be signed by such persons. Those persons authorized to give
proper instructions may be identified by the Board of Trustees or Directors by
name, title or position and will include at least one officer empowered by the
Board to name other individuals who are authorized to give proper instructions
on behalf of the Fund. Telephonic or other oral instructions or instructions
given by facsimile transmission may be given by any one of the above persons and
will be considered proper instructions if the Custodian reasonably believes them
to have been given by a person authorized to give such instructions with respect
to the transaction involved.
With respect to telefax transmissions, the Fund and the Custodian
hereby acknowledge that (i) receipt of legible instructions cannot be assured,
(ii) the Custodian cannot verify that authorized signatures on telefax
instructions are original, and (iii) the Custodian shall not be responsible for
losses or expenses incurred through actions taken in reliance on such telefax
instructions.
The Custodian may act on oral instructions provided such instructions
will be confirmed by authenticated electro-mechanical communications in the
manner set forth above but the lack of such confirmation shall in no way affect
any action taken by the Custodian in reliance upon such oral instructions. The
Fund authorizes the Custodian to tape record any and all telephonic or other
oral instructions given to the Custodian by or on behalf of the Fund (including
any of its officers, Directors, Trustees, employees or agents or any investment
manager or adviser or person or entity with similar responsibilities which is
authorized to give proper instructions on behalf of the Fund to the Custodian.)
Proper instructions may relate to specific transactions or to types or
classes or transactions, and may be in the form of standing instructions."
Except as amended above, all the provisions of the Custodian Agreement
as hereto effect shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first set forth above.
Bailard, Xxxxx & Xxxxxx International XXXXX BROTHERS XXXXXXXX & CO.
Fund Group, Inc.
_____________________________________ _________________________________
(signature)
_____________________________________ _________________________________
(name/title)
