AMENDMENT TO CUSTODIAN AGREEMENT
This Amendment to the Custodian Agreement is dated as of April 23, 2006 by and
between U.S. Global Accolade Funds, a Massachusetts business trust, on behalf
of each of the portfolios listed on Appendix C to the Custodian Agreement (the
"Fund") and attached hereto and Xxxxx Brothers Xxxxxxxx & Co., a limited
partnership organized under the laws of the State of New York ("BBH") (the Fund
and BBH collectively known as the "Parties").
Whereas pursuant to a Custodian Agreement dated as of November 1, 1997, by and
between the Fund and BBH, as amended to date (the "Agreement") the latter has
been appointed (i) custodian, (ii) administrator, and (iii) fund accounting
agent;
Whereas the Parties have agreed to make certain modifications to the Agreement
in order to update and amend the administrative services to be provided by BBH;
Now therefore, for good and valuable consideration, the receipt and sufficiency
of which are acknowledged, the parties hereby agree to amend the Agreement as
follows:
I. Amendment to the Agreement
1. The Agreement is hereby amended by deleting the second paragraph of Section
8.5 in its entirety and substituting therefor with the following:
"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 which BBH was authorized to rely upon 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,
which sources BBH in its reasonable judgment shall have deemed appropriate
for such information. (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.) The Fund may
instruct the Custodian to utilize a particular source for the valuation of
a specific Security or other Property and the Custodian shall be protected
in utilizing the valuation provided by such source without further inquiry
(save for its usual and customary automated review of price disparities) in
order to effect calculation of the Fund's net asset value. Notwithstanding
anything in this Agreement to the contrary, provided the Custodian shall
perform its duties under Sections 8.6(3) and 8.6(6) with reasonable care
and diligence, the Custodian shall not be responsible for the failure of
the Fund or the Investment Adviser to provide the Custodian with Proper
Instructions regarding liabilities which ought to be included in the
calculation of the Fund's net asset value."
2. The Agreement is hereby amended by deleting Section 8.6 in its entirety and
substituting therefore with the following:
"8.6 Appointment as Administrator.
The Custodian is hereby appointed administrator of the Funds with
responsibility for performing the services set forth in this Section 8.6,
subject to the supervision and direction of the Trustees of the Funds, and
subject to any changes or modifications to such services that the Funds and
Custodian shall from time to time agree in writing. In performing its
duties and obligations hereunder, the Custodian shall act in accordance
with the Funds' Declaration of Trust, By-laws (or comparable documents) and
Prospectus and Statement of Additional Information and with the Proper
Instructions of its Trustees, Treasurer and any other person reasonably
believed by the Custodian to be authorized to act on behalf of the Funds.
It is agreed and understood, however, that the Custodian shall not be
responsible for compliance of any Fund's investments with any applicable
documents, laws or regulations, or for losses,
costs or expenses arising out of such Fund's failure to comply with said
documents, laws, regulations, or for losses, costs, or expenses arising out
of the Fund's failure or inability to correct any non-compliance therewith
and shall be protected in acting on any direction from the Funds'
Investment Advisor, Trustees, Treasurer and any other person reasonably
believe by the Custodian to be authorized to act on behalf of the Funds.
(1) Shareholder Reports. The Custodian shall accumulate information for and
prepare one annual and one semi-annual shareholder report for the Funds per
fiscal year, such preparation includes but is not limited to, the
coordination of all printer and author edits, the review of printer drafts
and the coordination of the audit of the Funds by its independent public
auditor (e.g. manage open items lists, host weekly audit meeting, etc.)
(2) Regulatory Filings to the Securities and Exchange Commission. The
Custodian shall accumulate information for and prepare one annual report
and one semi-annual report on Form N-SAR, one first fiscal quarter report
and one third fiscal quarter report on Form N-Q and one annual Rule 24f-2
Notice for the Funds, as requested by the Funds' Treasurer. Upon acceptance
of these reports by each of the Funds, the Custodian shall edgarize and
file such reports, including the edgarizing and filing of any applicable
executed officer certifications. The Custodian shall also prepare a 13f
report and shall submit said report to the Fund for review on a quarterly
basis. For avoidance of doubt, the Custodian shall not be responsible for
approving or filing 13f reports.
(3) Treasurer Support Services. The Custodian shall provide the following
support services to the Treasurer of the Funds:
a. Expenses. The Custodian shall prepare all expense invoices for
authorization by the Funds and shall process all such authorized
expenses. The Custodian shall review all contractual expenses of
the Funds submitted by the Investment Advisor prior to processing
such expenses. The Custodian shall prepare and periodically
review the expense accruals for all fixed vendor expenses of the
Funds.
b. Budgets. The Custodian shall prepare and provide an analysis of
each Fund's budget at the end of each month, which shall include
a review of each Fund's fixed expenses accruals and
recommendations, if any, for budget adjustments.
c. Monthly Expense Reports. The Custodian shall prepare and review
Monthly Expense Reports, which shall consist of for each Fund,
(i) a reconciliation of fund accounting monthly expenses to fund
administration monthly expenses, (ii) a basis point summary
sheet, (iii) a cash disbursements journal, (iv) an expense
accrual analysis worksheet and (v) an average net assets
worksheet.
d. Quarterly Reporting. In the Funds' preparation of its quarterly
reporting to its Board of Trustees, the Custodian shall prepare
various quarterly reports, which shall consist of (i) a cost
versus market value analysis for the applicable portfolios listed
on Appendix C attached hereto, (ii) an expense ratio report,
(iii) an exit fee calculation report and (iv) a portfolio
turnover calculation report and shall provide the broker reports
that are electronically downloaded from the Custodian's
accounting system and have been requested by the Funds.
(4) Compliance Support. The Custodian shall perform, in accordance with
operating procedures as the Custodian and the Funds shall from time to time
agree in writing, administrative compliance monitoring of the Funds with
respect to the investment objectives, restrictions and policies set forth
in (i) the Fund's current prospectus and statement of additional
information provided by the Funds, or otherwise available to the Custodian,
(ii) the 1940 Act and (iii) applicable IRS rules and regulations, using
both manual compliance testing and an automatic compliance system currently
utilized by the Custodian through an unaffiliated third party vendor. Any
changes or modifications to the administrative compliance monitoring
provided by the Custodian shall be agreed upon by the Funds and the
Custodian in writing. In performing its compliance monitoring services, the
Custodian shall use post net asset value compliance monitoring.
a. The Custodian and the Funds agreed that each shall promptly
notify the other of any possible non-compliance by the Funds of
their investment restrictions and policies.
b. The Custodian agrees that it shall provide the Investment Advisor
with a compliance summary report for the Funds for each fiscal
month end.
c. The Funds agree that they shall remain fully responsible for
ensuring compliance of the investments of the Funds with their
investment restrictions and policies and that assistance provided
by the Custodian in monitoring investment restrictions and
policies shall not be deemed to be a delegation of responsibility
to the Custodian. In addition, the Funds agree that the Custodian
shall not be liable for the accuracy, completeness or use of any
information or data generated by third party information sources
in connection with such administrative compliance monitoring on
any given date.
d. The Funds acknowledge that the compliance monitoring of the
investments of the Funds with respect to investment restrictions
and policies is subject to parameters that may vary over time and
that may be beyond the control or knowledge of the Custodian.
Consequently, the results of the monitoring as notified by the
Custodian to the Funds are to be considered merely as an
indication of possible non-compliance with the investment
restrictions and policies of the Funds rather than an affirmative
statement as to non-compliance with the investment restrictions
and policies. Moreover, the Custodian might not detect a breach
and consequently may not notify the Funds thereof if information
or data in its possession are inaccurate, incomplete or
ambiguous. For avoidance of doubt, the Custodian shall exercise
reasonable care in carrying out its compliance monitoring
obligations hereunder.
(5) Fidelity Bond Coverage. The Custodian shall report monthly to the
Fund's Treasurer on compliance of the Fund's fidelity bond coverage with
Rule 17g-1 of the 1940 Act. For avoidance of doubt, the Custodian shall not
be responsible for approving or filing the fidelity bond.
(6) Performance Information. The Custodian shall prepare the Funds'
performance analysis reports (including yield and total return information)
calculated in accordance with applicable U.S. securities laws and in
reporting portfolio holdings information to external databases as may
reasonably be requested.
(7) Tax Reporting. The Custodian shall assist the Funds' Treasurer in
preparing and reporting all required information under the Federal, state
and applicable local tax laws, which shall consist of preparing fiscal and
excise tax distribution calculations, preparing and filing federal, state
and any local income tax returns, including tax return extension requests,
preparing shareholder year end reporting statements, providing the
appropriate amounts and characterization of distributions declared during
the calendar year for Forms 1099 reporting, periodically reviewing and
determining the distributions to be paid to shareholders, consulting with
the Funds' Treasurer regarding potential passive foreign investment
companies, and consulting with the Funds' Treasurer on various tax issues
as they arise and with the Funds' outside auditors, as appropriate.
(8) Blue Sky Compliance. The Custodian shall select and monitor an
independent service supplier to provide for reasonable and necessary
monitoring of compliance with the securities regulations of the fifty
states of the United States on such terms as the Funds may direct, or in
the absence of such direction, as the Custodian shall reasonably deem
appropriate, provided however, that such arrangement shall require that
such service supplier act with reasonable care in the discharge of its
duties. The Custodian shall deliver to the Funds, or cause to be delivered
to the Funds, regular reports and notices with respect to blue sky
compliance and shall be responsible to use reasonable efforts to enforce
the terms of the agreement with the service supplier on the Funds' behalf.
The Funds shall be responsible to provide copies of its prospectus and
other relevant documents and information relating to the Funds as may be
reasonably required for the performance of state securities law compliance.
(9) Other Assistance. The Custodian shall consult with and assist the
Funds' Treasurer, officers and Investment Advisor in such as other matters
as the Funds and the Custodian shall from time to time agree in writing.
3. The Amendment is hereby amended by deleting Section 12 in its entirety and
substituting therefor with the following:
"12. Compensation. The Fund shall pay the Custodian such fee for custody,
administrative and fund accounting services as set forth in that certain
Fee Agreement between the Fund and the Custodian dated as of June 2005, as
may be amended from time to time by the Custodian and the Fund. Such fee,
together with all out-of-pocket expenses for which the Custodian is to be
reimbursed, shall be billed to the Fund and be paid by cash or wire
transfer to the Custodian."
4. The Agreement is amended by replacing the existing Appendix B with the
attached Appendix B, which document shall list the sources of quotations
approved by the Parties to be used in computing the net asset value.
5. The Agreement is further amended by replacing the existing Appendix C with
the attached Appendix C, which document shall list the funds served under the
Agreement.
II. Miscellaneous
1. As amended and appended hereby, all terms and provisions of the Agreement are
hereby ratified and affirmed as of the date hereof and are hereby extended to
give effect to the terms hereof.
2. Terms not otherwise defined herein shall have the definitions set forth in
the Agreement.
3. By signing below where indicated, the Fund hereby ratifies and affirms each
of the representations and warranties set forth in the Agreement and confirms
that each representation and warranty remains true and correct as of the date
hereof.
4. This Amendment, the Agreement and the other agreements, documents and
certificates referred to herein or therein constitute the entire understanding
of the parties with respect to the subject matter hereof and thereof and
supersede all prior or current understandings and agreements, whether written or
oral.
5. Upon receipt by BBH of a fully executed copy of this Amendment, this
Amendment shall be deemed to be executed as an instrument under seal and
governed by such laws as provided in Section 14.6 of the Agreement. This
Amendment may be executed in original counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
Amendment.
U.S. GLOBAL ACCOLADE FUNDS XXXXX BROTHERS XXXXXXXX & CO.
AS THE FUND AS SERVICE PROVIDER
By:/s/ Xxxxx X. XxXxx By:/s/ Xxxxx X. Xxxx
--------------------------- -----------------------------
Name: Xxxxx X. XxXxx Name: Xxxxx X. Xxxx
Title: Executive Vice President Title: Managing Director
APPENDIX B
DATED AS OF MARCH 23, 2006
TO
CUSTODIAN AGREEMENT
WITH RESPECT TO
ADMINISTRATIVE AND FUND ACCOUNTING AGENCY SERVICES
THE FOLLOWING AUTHORIZED SOURCES ARE TO BE USED FOR PRICING:
AUTHORIZED SOURCES
-------------------
BLOOMBERG
Fund Managers/Advisor
INTERACTIVE DATA CORPORATION
REPUTABLE BROKERS
REUTERS
SUBCUSTODIAN
BANKS
TELEKURS
REPUTABLE FINANCIAL
PUBLICATIONS
STOCK EXCHANGES
XX XXXXX
FRI CORPORATION
BRIDGE
FOREIGN EXCHANGE QUOTATIONS
---------------------------
PRICES ARE RETRIEVED DAILY @ 12 NOON EST
AUTHORIZED SOURCE:
------------------
REUTERS
APPROVED: /s/ Xxxxx X. XxXxx 5/25/06
----------------------------
Xxxxx X. XxXxx DATE
APPENDIX C
DATED AS OF MARCH 23, 2006
TO
CUSTODIAN AGREEMENT
WITH RESPECT TO
ADMINISTRATIVE AND FUND ACCOUNTING AGENCY SERVICES
The following is a list of Investment Companies for which BBH shall perform
services under a Custodian Agreement dated as of November 1, 1997, as amended.
U.S. Global Accolade Funds, a Massachusetts Business Trust on behalf of each of
the following series:
MegaTrends Fund
Eastern European Fund
Xxxxxx Growth Fund
Global Emerging Markets Fund
********
