AMENDMENT TO CUSTODIAN AGREEMENT
Exhibit 10.17 — Amendment to Custodian Agreement
AMENDMENT TO CUSTODIAN AGREEMENT
This Amendment to the Custodian Agreement is dated as of April 23, 2006 by and between U.S.
Global Investors 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
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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.
(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 fiscal quarter, 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.
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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 other compliance systems
generate 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.
(5) 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.
(6) 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.
(7) 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.
(8) 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
therefore 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.
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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 INVESTORS FUNDS | XXXXX BROTHERS XXXXXXXX & CO. | |||||||||
| AS THE FUND | AS SERVICE PROVIDER | |||||||||
By:
|
/s/ Xxxxx X. XxXxx
|
By: | /s/ Xxxxx X. Xxxx
|
|||||||
| Title: Executive Vice President | Title: Managing Director | |||||||||
00
XXXXXXXX X
DATED AS OF MARCH 23, 2006
TO
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
ITG (effective September 8, 2005)
Fund Managers/Advisor
INTERACTIVE DATA CORPORATION
REPUTABLE BROKERS
REUTERS
SUBCUSTODIAN BANKS
TELEKURS
REPUTABLE FINANCIAL PUBLICATIONS
STOCK EXCHANGES
XX XXXXX
FRI CORPORATION
BRIDGE
ITG (effective September 8, 2005)
FOREIGN EXCHANGE QUOTATIONS
PRICES ARE RETRIEVED DAILY @ 12 PM EST
AUTHORIZED SOURCE:
REUTERS
APPROVED:
|
/s/ Xxxxx X. XxXxx
|
5/25/06
|
||||||
| DATE |
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APPENDIX C
TO
ADMINISTRATIVE AND FUND ACCOUNTING AGENCY AGREEMENT
DATED AS OF MARCH 23, 2006
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 Investors Funds, a Massachusetts Business Trust on behalf of each of the
following series:
U.S. Treasury Securities Cash Fund
U.S. Government Securities Savings Fund
Near-Term Tax Free Fund
Tax Free Fund
All American Equity Fund
China Region Opportunity Fund
Global Resources Fund
World Previous Minerals Fund
Gold Shares Fund
U.S. Government Securities Savings Fund
Near-Term Tax Free Fund
Tax Free Fund
All American Equity Fund
China Region Opportunity Fund
Global Resources Fund
World Previous Minerals Fund
Gold Shares Fund
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