SUBADVISORY AGREEMENT
AGREEMENT made as of the 28th day of January 2005, between U.S. GLOBAL
INVESTORS, INC., a corporation organized under the laws of the State of Texas
("Adviser"), U.S. GLOBAL ACCOLADE FUNDS, a Massachusetts business trust having
its principal place of business in San Antonio, Texas ("Trust"), on behalf of
the GLOBAL EMERGING MARKETS FUND ("Fund"), a series of shares of the Trust, and
CHARLEMAGNE CAPITAL (IOM) LIMITED ("Subadviser"), a corporation organized under
the laws of the Isle of Man.
WHEREAS, the Adviser is engaged in the business of rendering investment
management services to the Trust; and
WHEREAS, the Trust is an open-end management investment company and is so
registered under the Investment Company Act of 1940 ("1940 Act"); and
WHEREAS, the Trust is operated as a "series company" within the meaning of
Rule 18f-2 under the 1940 Act and has separate series of shares of beneficial
interest, one of which series is the Fund.
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF SUBADVISER
The Subadviser is hereby appointed to provide investment advisory services
to the Fund for the period and on the terms herein set forth. The
Subadviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided. To enable the
Subadviser to exercise fully its discretion and authority as provided in
this Section 1, the Trust hereby constitutes and appoints the Subadviser as
the Trust's agent and attorney-in-fact with full power and authority for
the Trust and on the Trust's behalf to buy, sell, and otherwise deal in
securities and contracts relating to same for the Fund.
2. DUTIES OF SUBADVISER
(a) The Subadviser is hereby authorized and directed and hereby agrees, subject
to the stated investment objectives and policies of the Fund as set forth
in the Fund's Prospectus (as defined below) and subject to the supervision
of the Adviser and the Board of Trustees of the Trust, (i) to develop,
recommend and implement such investment program and strategy for the Fund
as may from time to time under the circumstances appear most appropriate to
the achievement of the investment objective of the Fund as stated in the
aforesaid Prospectus, (ii) to provide research and analysis relative to the
investment program and investments of the Fund, (iii) to determine which
securities should be purchased and sold and what portion of the assets of
the Fund should be held in cash or cash equivalents, and (iv) to monitor on
a continuing basis the performance of the portfolio securities of the Fund.
The Subadviser will advise the Trust's custodian and the Adviser on a
prompt basis of each purchase and sale of a portfolio security specifying
the name of the issuer, the description and amount or number of shares of
the security purchased, the market price, commission and gross or net
price, trade date, settlement date and identity of the effecting broker or
dealer; and will review the accuracy of the pricing of portfolio securities
in accordance with Trust procedures. From time to time, as the Trustees of
the Trust or the Adviser may reasonably request, the Subadviser will
furnish to the Trust's officers and to each of its Trustees reports on
portfolio transactions and reports on issues of securities held in the
portfolio, all in such detail as the Trust or the Adviser may reasonably
request. The Subadviser will also inform the Trust's officers and Trustees
on a current basis of changes in investment strategy or tactics. The
Subadviser will make its officers and employees available to meet with the
Trust's officers and Trustees on due notice to review the investments and
investment program of the Fund in the light of current and prospective
economic and market conditions.
The Subadviser shall place all orders for the purchase and sale of
portfolio securities for the account of the Fund with brokers or dealers
selected by the Subadviser, although the Trust will pay the actual
brokerage commissions and any transfer taxes with respect to transactions
in the portfolio securities of the Trust. The Subadviser is authorized to
submit any such order collectively with orders on behalf of other accounts
under its management, provided that the Subadviser shall have determined
that such action is in the best interest of the Fund and is in accordance
with applicable law, including, without limitation, Rule 17d-1 under the
1940 Act. In executing portfolio transactions and selecting brokers or
dealers, the Subadviser will use its best efforts to seek on behalf of the
Fund the best overall terms available. In assessing the best overall terms
available for any transaction, the Subadviser shall consider all factors it
deems relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution capability of
the broker or dealer, and the reasonableness of the commission, if any (for
the specific transaction and on a continuing basis). In evaluating the best
overall terms available, and in selecting the broker or dealer to execute a
particular transaction, the Subadviser may also consider the brokerage and
research services [as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934] provided to the Fund and/or other accounts
over which the Subadviser or an affiliate of the Subadviser exercises
investment discretion. The Subadviser is authorized to pay to a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Fund which is in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if, but only if, the Subadviser determines in
good faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer,
viewed in terms of that particular transaction or in terms of all of the
accounts over which investment discretion is so exercised. An affiliated
person of the Subadviser may provide brokerage services to the Fund
provided that the Subadviser shall have determined that such action is
consistent with its obligation to seek the best overall terms available and
is in accordance with applicable law, including, without limitation,
Section 17(e) of the 0000 Xxx. The foregoing shall not be deemed to
authorize an affiliated person of the Subadviser to enter into transactions
with the Fund as principal.
In the performance of its duties hereunder, the Subadviser is and shall be
an independent contractor and unless otherwise expressly provided or
authorized shall have no authority to act for or represent the Trust in any
way or otherwise be deemed to be an agent of the Trust or of the Adviser.
(B) DELIVERY OF DOCUMENTS. The Adviser will furnish upon request or has
previously furnished the Subadviser with true copies of each of the
following:
(i) The Trust's Second Amended and Restated Master Trust Agreement dated
August 16, 2000, as filed with the Secretary of State of the
Commonwealth of Massachusetts and all amendments thereto (such Master
Trust Agreement, as presently in effect and as it shall from time to
time be amended, is herein called the "Master Trust Agreement");
(ii)The Trust's By-Laws and amendments thereto (such By-Laws, as presently
in effect and as it shall from time to time be amended, are herein
called the "By-Laws");
(iii)Resolutions of the Trust's Board of Trustees authorizing the
appointment of the Adviser and Subadviser and approving the Advisory
Agreement and this Agreement;
(iv)The most recent Post-Effective Amendment to the Trust's Registration
Statement on Form N-1A under the Securities Act of 1933 as amended
("1933 Act") and the 1940 Act as filed with the Securities and
Exchange Commission;
(v) The Fund's most recent prospectus (such prospectus, as presently in
effect and all amendments and supplements thereto being referred to
herein as the "Prospectus"); and
(vi)All resolutions of the Board of Trustees of the Trust pertaining to the
management of the assets of the Fund.
During the term of this Agreement, the Adviser shall not use or implement
any amendment or supplement that relates to or affects the obligations of
the Subadviser hereunder if the Subadviser reasonably objects in writing
within five business days after delivery thereof (or such shorter period of
time as the Adviser shall specify upon delivery, if such shorter period of
time is reasonable under the circumstances).
3. ADVISORY FEE
(a) For the services to be provided to the Fund by the Subadviser as
provided in Paragraph 2 hereof, the Adviser will pay the Subadviser in
accordance with the following:
(i) The Fund will pay to the Adviser a 1.375% annual management fee.
The Adviser will retain 0.625% of the management fee and pay to
the Subadviser 0.750% (less a pro rata portion of fees reimbursed
and waived).
(ii)The Fund is not responsible for paying any portion of the
Subadviser's fees.
(iii)The fee is payable in monthly installments in arrears. The
"Management Fee" means the management fee paid by the Trust to
the Adviser under the Letter Agreement to the Advisory Agreement,
dated as of January 28, 2005, between the Trust and the Adviser
with respect to the management of the Fund.
(b) In the case of termination of the Agreement during any calendar month,
the fee with respect to that month shall be reduced proportionately
based upon the number of calendar days during which it is in effect
and the fee shall be computed upon the average net assets of the Fund
for the days during which it is so in effect.
(c) The "Monthly Average Net Assets" of the Fund for any calendar month
shall be equal to the quotient produced by dividing (i) the sum of the
net assets of the Fund, determined in accordance with procedures
established from time to time by or under the direction of the Board
of Trustees of the Trust in accordance with the Master Trust
Agreement, as of the close of business on each day during such month
that the Fund was open for business, by (ii) the number of such days.
4. EXPENSES
During the term of this Agreement, the Subadviser will bear all expenses
incurred by it in the performance of its duties hereunder.
5. FUND TRANSACTIONS
The Subadviser agrees that neither it nor any of its employees, officers,
or directors will take any short-term position in the shares of the Fund
for trading purposes provided, however, that such prohibition shall not
prevent the purchase of shares of the Fund by any of the persons above
described for their account and for investment at the price at which such
shares are available to the public at the time of purchase.
6. REPRESENTATION aND WARRANTY
The Subadviser hereby represents and warrants to the Adviser that it is
duly registered as an investment adviser, or is exempt from registration,
under the Investment Adviser's Act of 1940, as amended, and that it shall
maintain such registration or exemption at all times during which this
Agreement is in effect.
7. LIABILITY OF SUBADVISER
In the performance of its duties under this Agreement, the Subadviser shall
act in conformity with and in compliance with the requirements of the 1940
Act and all other applicable U.S. Federal and state laws and regulations
and shall not cause the Fund to take any action that would require the Fund
or any affiliated person thereof to register as a commodity pool operator
under the terms of the U.S. Commodity Exchange Act, as amended (it being
understood by the Subadviser that a notice of eligibility may be filed on
behalf of the Trust pursuant to Rule 4.5 promulgated under said Act). The
Subadviser shall be responsible for maintaining such procedures as may be
reasonably necessary to ensure that the investment and reinvestment of the
Fund's assets are made in compliance with its investment objectives and
policies and with all applicable statutes and regulations and that the Fund
qualifies as a regulated investment company under Subchapter M of the
Internal Revenue Code. No provision of this Agreement shall be deemed to
protect the Subadviser against any liability to the Trust or its
shareholders to which it might otherwise be subject by reason of any
willful misfeasance, bad faith, or gross negligence in the performance of
its duties or the reckless disregard of its obligations and duties under
this Agreement.
8. REPORTS
The Subadviser shall render to the Board of Trustees of the Trust such
periodic and special reports as the Board of Trustees may reasonably
request with respect to matters relating to duties of the Subadviser set
forth herein.
9. DURATION aND TERMINATION OF THIS AGREEMENT
(A) DURATION. With respect to the Trust, this Agreement shall become
effective upon the date hereof and shall continue in full force and
effect through May 31, 2005, and from year to year thereafter so long
as such continuance is approved at least annually (i) by either the
Trustees of the Trust or by vote of a majority of the outstanding
voting securities (as defined in the 0000 Xxx) of the Fund, and (ii)
in either event by the vote of a majority of the Trustees of the Trust
who are not parties to this Agreement or "interested persons" (as
defined in the 0000 Xxx) of any such party, cast in person at a
meeting called for the purpose of voting on such approval.
(B) TERMINATION. With respect to the Trust, this Agreement may be
terminated at any time, without payment of any penalty (i) by vote of
the Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Fund (as defined in the 0000 Xxx) on sixty
(60) days' written notice to the other parties, (ii) by the Adviser on
sixty (60) days' written notice to the other parties or, (iii) by the
Subadviser on ninety (90) days' written notice to the other parties.
(C) AUTOMATIC TERMINATION. With respect to the Trust, this Agreement shall
automatically and immediately terminate in the event of its assignment
or upon expiration of the Advisory Agreement now or hereafter in
effect between the Adviser and the Trust with respect to the Fund.
10. SERVICES NOT EXCLUSIVE
The services of the Subadviser of the Fund hereunder are not to be deemed
exclusive, and the Subadviser shall be free to render similar services to
others.
11. LIMITATION OF LIABILITY
(A) THE TRUST. The term "U.S. Global Accolade Funds" means and refers to
the Trustees from time to time serving under the Master Trust
Agreement. It is expressly agreed that the obligations of the Trust
hereunder shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents, or employees of the Trust, personally, but
bind only the assets and property of the Trust, as provided in the
Master Trust Agreement. The execution and delivery of the Agreement
have been authorized by the Trustees and shareholders of the Trust and
signed by an authorized officer of the Trust, acting as such, and
neither such authorization by such Trustees and shareholders nor such
execution and delivery by such officer shall be deemed to have been
made by any of them individually or to impose any liability on any of
them personally, but shall bind only the assets and property of the
Trust as provided in its Master Trust Agreement.
(B) THE ADVISER AND SUBADVISER. It is expressly agreed that the
obligations of the Adviser and Subadviser hereunder shall not be
binding upon any of the shareholders, nominees, officers, agents, or
employees of the Adviser or Subadviser, personally, but bind only the
assets and property of the Adviser and Subadviser, respectively. The
execution and delivery of the Agreement have been authorized by the
directors and officers of the Adviser and Subadviser and signed by an
authorized officer of the Adviser and Subadviser, acting as such, and
neither such authorization by such directors and officers nor such
execution and delivery by such officer shall be deemed to have been
made by any of them individually or to impose any liability on any of
them personally, but shall bind only the assets and property of the
Adviser and Subadviser, respectively. This limitation of liability
shall not be deemed to protect the shareholders, nominees, officers,
agents, or employees of the Adviser and Subadviser against any
liability to the Trust or its shareholders to which they might
otherwise be subject by reason of any willful misfeasance, bad faith,
or gross negligence in the performance of their duties or the reckless
disregard of their obligations and duties under this Agreement.
12. MISCELLANEOUS.
(A) NOTICE. Any notice under this Agreement shall be in writing, addressed
and delivered or mailed, postage prepaid, to the other parties at such
address as such other parties may designate in writing for the receipt
of such notices.
(B) SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule, or otherwise, the
remainder shall not be thereby affected.
(C) APPLICABLE LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
(d) This Agreement constitutes the entire agreement of the parties and
supersedes all prior or contemporaneous written or oral negotiations,
correspondence, agreements, and understandings, regarding the subject
matter hereof.
13. STANDARD OF CARE
To the extent permitted under applicable law (including section 36 of the
1940 Act), the Subadviser will not be liable to the Trust or the Adviser
for any losses incurred by the Trust, the Fund or the Adviser that arise
out of or are in any way connected with any recommendation or other act or
failure to act of the Subadviser under this Agreement, including, but not
limited to, any error in judgment with respect to the Fund, so long as such
recommendation or other act or failure to act does not constitute a breach
of the Subadviser's fiduciary duty to the Trust, the Fund, or the Adviser.
Anything in this section 13 or otherwise in this Agreement to the contrary
notwithstanding, however, nothing herein shall constitute a waiver or
limitation of any rights that the Trust, the Adviser, or the Fund may have
under any Federal or state securities laws.
IN WITNESS WHEREOF, the Adviser, the Trust, and the Subadviser have caused
this Agreement to be executed on the day and year first above written.
U.S. GLOBAL INVESTORS, INC.
By: /s/Xxxxx X. XxXxx
Title: President
U.S. GLOBAL ACCOLADE FUNDS
By: /s/Xxxxx X. Xxxxxx
Title:Chairman of the Board
CHARLEMAGNE CAPITAL (IOM) LIMITED
By:/s/Xxxxxx Xxxxxxx
Title: Managing Director
