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 efined 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
- 7 -
currency of each 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 benefit of any futures commission, merchant or to pay to such
- 8 -
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
- 10 -
Shareholder 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
- 12 -
("Account") of the Custodian or 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 Custodian may assume, unless and until notified in
- 14 -
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
- 15 -
instructions given 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 securities depository (meeting the requirements of
- 16 -
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
- 17 -
the approval 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 written notice to the Fund of the Custodian's intention to make a payment
- 19 -
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.
- 20 -
B. ACCOUNTS - To keep books of account and render 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
- 21 -
Custodian shall compute the net asset value 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
- 23 -
willful misconduct 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
- 24 -
best 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 the
- 25 -
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
- 26 -
may be accepted and relied upon 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,
- 27 -
provided that the Custodian 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 promptly concerning any
- 28 -
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
- 29 -
restrictions, exchange controls, taxes, levies or other 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 writing by the Custodian and
the Fund. Such fee, together with all amounts for which the Custodian is to be
- 30 -
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.
- 31 -
9. This Agreement constitutes the entire understanding and 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 INTERNATIONAL FUND GROUP, INC.
By /s/
----------------------------
XXXXX BROTHERS XXXXXXXX & CO
- 33 -
XXXXX BROTHERS XXXXXXXX & CO. - GLOBAL CUSTODY NETWORK
BAILARD, XXXXX & XXXXXX INTERNATIONAL EQUITY FUND
APPENDIX A
COUNTRY SUBCUSTODIAN DEPOSITORY
------- ------------ ----------
ARGENTINA CITIBANK, N.A., BUENOS AIRES Caja de Valores
Citibank, N.A., New York Agt. 7/16/81 CRYL
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
AUSTRALIA NATIONAL AUSTRALIA BANK LTD., MELBOURNE Austraclear Ltd,
National Australia Bank Agt. 5/l/85 Reserve Bank of
Agreement Amendment 2/13/92 Australia
Omnibus Amendment 11/22/93
AUSTRIA CREDITANSTALT BANKVEREIN OeKB
Creditanstalt Bankverein Agreement 12/18/89
Omnibus Amendment 1/17/94
BELGIUM BANQUE BRUXELLES XXXXXXX CIK
Banque Bruxelles Xxxxxxx Agt. 11/15/90 Banque Nationale
Omnibus Amendment 0/x/00 xx Xxxxxxxx
XXXXXXX THE BANK OF N.T. XXXXXXXXXXX & SON LTD. None
The Bank of N.T. Xxxxxxxxxxx & Son Ltd.
Agreement 5/27/97
BRAZIL BANKBOSTON, N.A., SAO PAULO BOVESPA
The First National Bank of Boston CLC
Agreement 1/5/88
Omnibus Amendment 2/22/94
Amendment 7/29/96
CANADA CANADIAN IMPERIAL BANK OF COMMERCE Bank of Canada
Canadian Imperial Bank of Commerce CDS
Agreement 9/9/88
Omnibus Amendment 12/1/93
CHILE CITIBANK, N.A., XXXXXXXX DCV
Citibank, N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
CZECH REPUBLIC CESKOSLOVENSKA OBCHODNI BANKA, A.S., PRAGUE SCP
Ceskoslovenska Obchodni Banka Czech National
Agreement 2/28/94 Bank
DENMARK DEN DANSKE BANK VP
Den Danske Bank Agreement l/l/89
Omnibus Amendment 12/1/93
FINLAND XXXXXX BANK CSD
Union Bank of Finland Agreement 2/27/89
Omnibus Amendment 4/6/94
FRANCE BANQUE PARIBAS SICOVAM
Xxxxxx Guaranty Trust Company Banque de France
Agreement 4/2/93
Consent and Transfer Agreement 0/0/00
XXXXXXX XXXXXXXX XXXX XXX
Dresdner Bank Agreement 10/6/95
GREECE CITIBANK, N.A., ATHENS Apothetirion
Citibank, N.A., New York Agreement 7/16/81 Titlon A.E.
New York Agreement Amendment 8/31/90 Bank of Greece
New York Agreement Amendment 7/26/96
PAGE 1 OF 4
XXXXX BROTHERS XXXXXXXX & CO. - GLOBAL CUSTODY NETWORK
BAILARD, XXXXX & XXXXXX INTERNATIONAL EQUITY FUND
APPENDIX A
COUNTRY SUBCUSTODIAN DEPOSITORY
------- ------------ ----------
HONG KONG STANDARD CHARTERED BANK~ HONG KONG HKSCC
Standard Chartered Bank Agreement 2/18/92
Omnibus Amendment 6/13/94
Appendix 4/8/96
HIJNGARY CITIBANK BUDAPEST RT. for CITIBANK, N.A. KELER Ltd.
Citibank, N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
Citibank, N.A. Subsidiary Amendment 10/19/95
Citibank, N.A./Citibank Budapest
Agreement 1/24/92
INDONESIA CITIBANK, N.A., JAKARTA LPP
Citibank, N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
IRELAND ALLIED IRISH BANKS PLC Crestco.
Allied Irish Banks Agreement 1/10/89 Gilt Settlement
Omnibus Amendment 4/8/94 Office
ISRAEL BANK HAPOALIM X.X. XXXX
Bank Hapoalim Agreement 8/27/92 Clearinghouse Ltd.
ITALY BANCA COMMERCIALE ITALIANA Monte Titoli
Banca COMMERCIALE ITALIANA AGREEMENT 5/8/89 Banca D'Italia
Agreement Amendment 10/8/93
Omnibus Amendment 12/14/93
JAPAN SUMITOMO TRUST & BANKING COMPANY, LTD. JASDEC
Sumitomo Trust & Banking Agreement 7/17/92 Bank of Japan
OMNIBUS Amendment 1/13/94
KOREA CITIBANK, N.A., SEOUL KSD
Citibank, N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
Citibank, Seoul Agreement Supplement 10/28/94
MALAYSIA HONGKONG BANK MALAYSIA BERHAD Bank Negara
Hongkong & Shanghai Banking Corp. Malaysia MCD
Agt. 4/19/91
Omnibus Supplement 12/29/93
Schedule 5/14/96
Malaysia Subsidiary Supplement 5/23/94
Side letter Agreement dated 7/28/97
MEXICO CITIBANK MEXICO, S. A. Indeval
Citibank, N.A., New York Agreement 7/16/81 Banco de Mexico
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
Citibank Mexico, S.A. Amendment 2/7/95
NETHERLANDS ABN-AMRO BANK NECIGEF
AB'N-AMRO Agreement 00/00/00
Xx Xxxxxxxxxxxxx Xxxx
XXX XXXXXXX NATIONAL AUSTRALIA BANK LTD., AUCKLAND Reserve Bank
National Australia Bank Agreement 5/1/85 of New Zealand
Agreement Amendment 2/13/92
Omnibus Amendment 11/22/93
New Zealand Addendum 3/7/89
PAGE 2 OF 4
XXXXX BROTHERS XXXXXXXX & CO. - GLOBAL CUSTODY NETWORK
BAILA,RD, XXXXX & XXXXXX INTERNATIONAL EQUITY FUND
APPENDIX A
COUNTRY SUBCUSTODIAN DEPOSITORY
------- ------------ ----------
NORWAY DEN NORSKE BANK VPS
Den norske Bank Agreement 11/16/94
PERU CITIBANK, N.A., LIMA CAVALI
Citibank, N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
PHILIPPINES CITIBANK, N.A., MANILA PCD
Citibank, N.A., New York Agreement 7/16181 XXXX
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
POLAND CITIBANK (POLAND), S.A. for CITIBANK, N.A. NDS
Citibank, N.A., New York Agreement 7/16/81 National Bank
New York Agreement Amendment 8/31/90 of Poland
New York Agreement Amendment 7/26/96
Citibank Subsidiary Amendment 10/19/95
Citibank, N.A./Citibank Poland S.A. Agt. 11/6/92
PORTUGAL BANCO ESPIRITO SANTO E COMERCIAL Interbolsa
DE LISBOA, S.A.
BESCL Agreement 4/26/89
Omnibus Amendment 2/23/94
SINGAPORE STANDARD CHARTERED BANK, SINGAPORE CDP
Standard Chartered Bank Agreement 2/18/92
Omnibus Amendment 6/13/94
Xxxxxxxx 0/0/00
XXXXX XXXXXX FIRST NATIONAL BANK OF SOUTHERN AFRICA CD
First National Bank of Southern Africa Agt. 8/7/91
SPAIN BANCOSANTANDER. SCLV Banco
Banco Santander Agreement 12/14/88 de Espana
SWEDEN SKANDINAVISKA ENSKILDA BANKEN VPC
Skandinaviska Enskilda Banken Agreement 2/20/89
Omnibus Amendment 12/3/93
SWITZERLAND SWISS BANK CORPORATION SEGA
Swiss Bank Corporation Agreement 0/x/00
XXXXXX XXXXXXXX XXXXXXXXX XXXX, XXXXXX TSCD
Standard Chartered Bank Agreement 2/18/92
Omnibus Amendment 6/13/94
Appendix 4/8/96
THAILAND HONGKONG & SHANGHAI BANKING XXX.X.XXX., BANGKOK TSDC
Hongkong & Shanghai Banking Corp. Agt. 4/19/91
Omnibus Amendment 12/29/93
Schedule 5/14/96
TRANSNATIONAL XXXXX BROTHERS XXXXXXXX & CO. Cedel
Euroclear
TURKEY CITIBANK, N.A., ISTANBUL Takasbank
Citibank, N.A., New York Agreement 7/16/81 Central Bank
New York Agreement Amendment 8/31/90 of Turkey
New York Agreement Amendment 7/26/96
PAGE 3 OF 4
XXXXX BROTHERS XXXXXXXX & CO. - GLOBAL CUSTODY NETWORK
BAILARD, XXXXX & XXXXXX INTERNATIONAL EQUITY FUND
APPENDIX A
COUNTRY SUBCUSTODIAN DEPOSITORY
------- ------------ ----------
UNITED KINGDOM RBS TRUST BANK LTD. CGO
Royal Bank of Scotland Agreement 5/24/96 CMO
CrestCo.
I HEREBY CERTIFY THAT AT ITS MEETING ON _________________________ THE BOARD
APPROVED THE COUNTRIES, SUBCUSTODIANS, AGREEMENTS, AND CENTRAL DEPOSITORIES
LISTED ON THIS APPENDIX.
------------------------------- ---------------------
(SIGNATURE) (DATE)
-------------------------------
(TITLE)
PAGE 4 OF 4
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 Fund Group, Inc.
----------------------------------
(signature)
----------------------------------
(name/title)
XXXXX BROTHERS XXXXXXXX & CO.
CONTRACT AMENDMENT
Reference is made to the Custodian Agreement dated June 12, 1990, as
amended December 22, 1995 (the "Custodian Agreement") 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 Bond Fund (the "Funds"), and XXXXX BROTHERS XXXXXXXX & CO. (the
"Custodian"). Said Agreement is hereby amended by replacing Section 3 of said
agreement with the following:
3. Subject to the provisions hereinafter set forth in this Section 3, the
Company hereby authorizes the Custodian to utilize Subcustodians to act on
behalf of the Funds. Unless otherwise indicated, capitalized terms shall have
the meaning provided in Rule 17f-5 under the Investment Company Act of 1940 (the
"1940 Act"), or any successor rule or regulation ("Rule 17f-5").
A. DEPOSIT AND MAINTENANCE OF SECURITIES or FUNDS WITH FOREIGN
SUBCUSTODIANS - The Custodian may deposit and/or maintain non-U.S. investments
of a Fund in any non-U.S. Securities Depository or Clearing Agency provided such
Securities Depository or Clearing Agency meets the requirements of an "Eligible
Foreign Custodian" under Rule 17f-5 or which by order of the Securities and
Exchange Commission is exempted therefrom. 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
l7f-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 for purposes of
holding investments of the Fund outside the United States. Such Securities
Depositories, Clearing Agencies, banks, trust companies and other entities are
referred to herein as "Subcustodians".
1
Unless and except to the extent that review of certain matters concerning
the appointment of Subcustodians shall have been delegated to the Custodian
pursuant to the next paragraph, the Custodian shall, prior to the appointment of
any Subcustodian for purposes of holding property of the Fund outside the United
States, obtain written confirmation of the approval of the Board of Directors of
the Company (the "Board") or its delegate (other than the Custodian) with
respect to the Subcustodian and any Subcustodian agreement which shall govern
such appointment. Each such duly approved Subcustodian shall be listed on
Schedule I attached hereto as the same may from time to time be amended.
From time to time, the Custodian may offer, and the Company may accept,
that the custodian perform certain reviews of Subcustodians and of Subcustodian
contracts as delegate of the 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 separate delegation agreement between the
Company and the Custodian.
With respect to securities and funds held by a Subcustodian, either
directly or indirectly, including demand and interest bearing deposits,
currencies or other deposits and foreign exchange and futures contracts as
referred to in Sections 2L, 2M, 2N, or 20 the Custodian shall be liable to a
Fund (in addition to any liability it may have under the separate delegation
agreement described in the preceding paragraph) 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 right against such agent. The Custodian shall
nevertheless be liable to the Fund for its own negligence in transmitting any
instruction 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.
In the event that any Subcustoidan 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 the Fund's
request terminate such Subcustodian and, if necessary or desirable, appoint
2
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.
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 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.
B. DEALING IN FOREIGN SECURITIES AND CASH - With respect to securities and
funds held by a Subcustodian, 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 Proper
Instructions.
3
EFFECTIVE as of June 15, 1998.
BAILARD, XXXXX & XXXXXX INTERNATIONAL FUND GROUP, INC. on behalf of the BAILARD,
XXXXX & XXXXXX INTERNATIONAL EQUITY FUND and the BAILARD, XXXXX & XXXXXX
INTERNATIONAL BOND FUND
By:
-----------------------------------
Title
---------------------------------
XXXXX BROTHERS XXXXXXXX & CO.
By:
-----------------------------------
Name: Xxxxxxx Xxxxxxxxxxx Xxxxxxxxx
---------------------------------
Title: Partner
--------------------------------
4
