Exhibit 99 (4) (x)
SUB-ADVISORY AGREEMENT
Agreement made as of July 31, 2006 between UBS GLOBAL ASSET MANAGEMENT
(AMERICAS) INC. ("UBS GLOBAL Americas"), a Delaware corporation, and GARTMORE
GLOBAL PARTNERS ("Sub-Adviser"), a Delaware general partnership (the
"Agreement").
RECITALS
(1) UBS GLOBAL Americas has entered into a Management Agreement dated April
1, 2006 ("Management Agreement") with UBS PACE Select Advisors Trust (formerly
known as Managed Accounts Services Portfolio Trust ("Trust")), an open-end
management investment company registered under the Investment Company Act of
1940, as amended ("1940 Act"), with respect to UBS PACE INTERNATIONAL EMERGING
MARKETS EQUITY INVESTMENTS ("Portfolio");
(2) UBS GLOBAL Americas is authorized to retain one or more sub-advisers to
furnish certain investment advisory services to UBS GLOBAL Americas and the
Portfolio;
(3) UBS GLOBAL Americas desires to retain the Sub-Adviser to furnish
certain investment advisory services to UBS GLOBAL Americas and the Portfolio;
and
(4) The Sub-Adviser is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, UBS GLOBAL Americas and the Sub-Adviser agree as follows:
1. APPOINTMENT. UBS GLOBAL Americas hereby appoints the Sub-Adviser as an
investment sub-adviser with respect to the Portfolio for the period and on the
terms set forth in this Agreement. The Sub-Adviser accepts that appointment and
agrees to render the services herein set forth, for the compensation herein
provided. The Sub-Advisor will perform the services contemplated by this
Agreement as agent only, not as principal.
2. DUTIES AS SUB-ADVISER.
(a) Subject to the supervision and direction of the Trust's Board of
Trustees (the "Board") and review by UBS GLOBAL Americas, and any written
guidelines adopted by the Board or UBS GLOBAL Americas, the Sub-Adviser will
provide a continuous investment program for all or a designated portion of the
assets ("Segment") of the Portfolio, including investment research and
discretionary management with respect to all securities and investments and cash
equivalents in the Portfolio or Segment. The Sub-Adviser will determine from
time to time what investments will be purchased, retained or sold by the
Portfolio or Segment and has authority to instruct the custodian of the
Portfolio accordingly. The Sub-Adviser will be responsible for placing purchase
and sell orders for investments and for other related transactions for the
Portfolio or Segment. The Sub-Adviser will be entitled to instruct the custodian
on voting proxies of issuers of securities held by the Portfolio or Segment. The
Sub-Adviser understands that the Portfolio's assets need to be managed so as to
permit the Portfolio to qualify
or to continue to qualify as a regulated investment company under Subchapter M
of the Internal Revenue Code, as amended ("Code"). The Sub-Adviser will provide
services under this Agreement in accordance with the Portfolio's investment
objective, policies and restrictions as stated in the Trust's currently
effective registration statement under the 1940 Act, and any amendments or
supplements thereto ("Registration Statement"). UBS GLOBAL Americas will provide
Sub-Advisor with reasonable advance notice of any changes in the Portfolio's
investment objectives, policies and restrictions as stated in the Prospectus.
(b) The Sub-Adviser agrees that it will not consult with any other
sub-adviser ("Other Sub-Adviser") for the Trust or Portfolio concerning any
transaction by the Portfolio or Segment in securities or other assets, including
(i) the purchase by the Portfolio or Segment of a security issued by the Other
Sub-Adviser, or an affiliate of the Other Sub-Adviser, to the Trust or Portfolio
except as permitted by the 1940 Act or (ii) transactions by the Portfolio or
Segment in any security for which the Other Sub-Adviser, or its affiliate, is
the principal underwriter.
(c) The Sub-Adviser agrees that, in placing orders with brokers, it will
seek best execution for the Portfolio as such principle exists under U.S. law
and under the rules of the Financial Services Authority ("FSA"); provided that,
on behalf of the Portfolio, and subject to any higher standard required under
the rules of FSA the Sub-Adviser may, in its discretion, use brokers that
provide the Sub-Adviser with research, analysis, advice and similar services to
execute portfolio transactions on behalf of the Portfolio, and the Sub-Adviser
may pay to those brokers in return for brokerage and research services a higher
commission than may be charged by other brokers, subject to the Sub-Adviser's
determination in good faith that such commission is reasonable in terms either
of the particular transaction or of the overall responsibility of the
Sub-Adviser to the Portfolio and its other clients and that the total
commissions paid by the Portfolio or Segment will be reasonable in relation to
the benefits to the Portfolio over the long term. In no instance will portfolio
securities be purchased from or sold to UBS GLOBAL Americas or the Sub-Adviser,
or any affiliated person thereof, except in accordance with the federal
securities laws and the rules and regulations thereunder. Subject to such
polices as the Trustee may determine, or as may be mutually agreed to by UBS
GLOBAL Americas and the Sub-Adviser, the Sub-Adviser shall not be deemed to have
acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Portfolio to pay a broker
that provides brokerage and research services (within the meaning of Section 28e
of the Securities Exchange Act of 1934 and within the Rules on Soft Commissions
applicable to such arrangements established by FSA). The Sub-Adviser may
aggregate sales and purchase orders with respect to the assets of the Portfolio
or Segment with similar orders being made simultaneously for other accounts
advised by the Sub-Adviser or its affiliates. Whenever the Sub-Adviser
simultaneously places orders to purchase or sell the same security on behalf of
the Portfolio and one or more other accounts advised by the Sub-Adviser, the
orders will be allocated as to price and amount among all such accounts in a
manner believed to be equitable over time to each account. UBS GLOBAL Americas
recognizes that in some cases the aggregation of orders and this procedure of
allocation may adversely affect the results obtained for the Portfolio or
Segment.
Subject to the Sub-Adviser's obligations to seek best execution, UBS GLOBAL
Americas agrees that the Sub-Adviser, in its sole discretion, may place
transactions on behalf of the Series and the Trust with any broker-dealer deemed
to be an affiliate of the Sub-Adviser (the
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"Affiliated Broker-Dealers") so long as such transactions are effected in
conformity with the requirements (including any applicable exemptions and
administrative interpretations set forth in Part II of the Sub-Adviser's Form
ADV Registration Statement on file with the Securities and Exchange Commission
("Form ADV")) of Section 11(a)(1)(H) of the Securities Exchange Act of 1934. In
all such dealings, the Affiliated Broker-Dealers shall be authorized and
entitled to retain any commissions, remuneration or profits which may be made in
such transactions and shall not be liable to account for the same to UBS GLOBAL
Americas, the Series or the Trust.
UBS GLOBAL Americas further authorizes the Sub-Adviser and its Affiliated
Broker-Dealers to execute agency cross transactions (the "Cross Transactions")
on behalf of the Series and the Trust. Cross Transactions are transactions which
may be effected by the Affiliated Broker-Dealers acting for both the Series or
the Trust and the counterparty to the transaction. Cross Transactions enable the
Sub-Adviser to purchase or sell a block of securities for the Series or the
Trust at a set price and possibly avoid an unfavorable price movement that may
be created through entrance into the market with such purchase or sale order. As
such, the Sub-Adviser believes that Cross Transactions can provide meaningful
benefits for the Series and the Trust and its clients generally. UBS GLOBAL
Americas, the Series and the Trust should be aware, however, that in a Cross
Transaction an Affiliated Broker-Dealer will be receiving commissions from both
sides of the trade and, therefore, there is a potentially conflicting division
of loyalties and responsibilities. Subject to any other written instructions of
the Trust or UBS GLOBAL Americas, the Sub-Adviser is hereby appointed the agent
for UBS GLOBAL Americas and the Trust and attorney-in-fact for the limited
purposes of executing account documentation, agreements, contracts and other
documents as the Sub-Adviser shall be requested by brokers, dealers and
counterparties and other persons in connection with its management of the
segment.
(d) The Sub-Adviser will maintain all books and records required to be
maintained pursuant to Rule 31a-1(b)(ii)(3), (5), (6), (7), (9) and (10) under
the 1940 Act and the rules and regulations promulgated thereunder with respect
to transactions by the Sub-Adviser on behalf of the Portfolio or Segment, and
will furnish the Board and UBS GLOBAL Americas with such periodic and special
reports as the Board or UBS GLOBAL Americas reasonably may request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Sub-Adviser hereby agrees that all records which it maintains for the Portfolio
are the property of the Trust, agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any records that it maintains for the Portfolio
and that are required to be maintained by Rule 31a-1 under the 1940 Act, and
further agrees to surrender promptly to the Trust any records which it maintains
for the Portfolio upon request by the Trust.
(e) At such times as shall be reasonably requested by the Board or UBS
GLOBAL Americas, the Sub-Adviser will provide the Board and UBS GLOBAL Americas
with quarterly reports setting forth the investment strategy and performance and
changes in composition of the Portfolio or Segment and make available to the
Board and UBS GLOBAL Americas any economic, statistical and investment services
that the Sub-Adviser normally makes available to its institutional or other
customers. The Sub-Adviser adheres to AIMR/GIPS standards and requirements in
respect of performance measurement calculation.
(f) In accordance with procedures adopted by the Board, as amended from
time to time, the Sub-Adviser is responsible for assisting in the fair valuation
of all portfolio securities in
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the Portfolio or Segment and will use its reasonable efforts to provide
information which may assist UBS GLOBAL Americas in determining a fair value for
each portfolio security for which the custodian does not obtain prices in the
ordinary course of business from an automated pricing service.
3. FURTHER DUTIES. In all matters relating to the performance of this
Agreement, the Sub-Adviser will seek to act in conformity with the Trust's Trust
Instrument, By-Laws and Registration Statement and with the written instructions
and written directions of the Board and UBS GLOBAL Americas; and will comply
with the requirements of the 1940 Act, and the Investment Advisers Act of 1940,
as amended ("Advisers Act"), and the rules under each, the Code, and all other
federal and state laws and regulations applicable to the Trust and the
Portfolio. UBS GLOBAL Americas agrees to provide to the Sub-Adviser copies of
the Trust's Trust Instrument, By-Laws, Registration Statement, written
instructions and directions of the Board and UBS GLOBAL Americas, any and all
relevant Trust procedures and Policies and any amendments or supplements to any
of these materials as soon as practicable after such materials become available;
and further agrees to identify to the Sub-Adviser in writing any broker-dealers
that are affiliated with UBS GLOBAL Americas (other than UBS Financial Services
Inc. and UBS GLOBAL Americas itself).
4. EXPENSES. During the term of this Agreement, the Sub-Adviser will bear
all expenses incurred by it in connection with its services under this Agreement
other than the cost of securities commodities and other investments (including
brokerage commissions, taxes and other transaction charges, if any) purchased
for the Portfolio. The Sub-Adviser shall not be responsible for any expenses
incurred by the Trust, the Portfolio or UBS GLOBAL Americas.
5. COMPENSATION.
(a) For the services provided and the expenses assumed by the Sub-Adviser
pursuant to this Agreement, UBS GLOBAL Americas, not the Portfolio, will pay to
the Sub-Adviser a fee, computed daily and payable monthly, at an annual rate of
0.50% of the average daily net assets of the Portfolio or Segment allocated to
its management (computed in the manner specified in the Management Agreement),
and will provide the Sub-Adviser with a schedule showing the manner in which the
fee was computed. If the Sub-Adviser is managing a Segment, its fees will be
based on the value of the assets of the Portfolio within the Sub-Adviser's
Segment.
(b) The fee shall be accrued daily and payable monthly to the Sub-Adviser
on or before the last business day of the next succeeding calendar month.
(c) If this Agreement becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be pro-rated according to the proportion which such period bears to the
full month in that such effectiveness or termination occurs.
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6. LIMITATION OF LIABILITY.
(a) The Sub-Adviser shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Portfolio, the Trust or its
shareholders or by UBS GLOBAL Americas in connection with the matters to which
this Agreement relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement. In
addition, the Sub-Adviser shall not be liable for the non-performance or partial
performance of any obligations under this Agreement (nor for any losses arising
as a result) by reason of any cause beyond the Sub-Adviser's reasonable control.
UBS GLOBAL Americas shall indemnify the Sub-Adviser for any liability and
expenses, including reasonable attorneys' fees which may be sustained as a
result of UBS GLOBAL Americas's willful misfeasance, bad faith or gross
negligence, on its part in the performance of its duties or from reckless
disregard of its obligations under the Agreement or under law.
(b) In no event will the Sub-Adviser have any responsibility for any other
series of the Trust, for any portion of the Portfolio not managed by the
Sub-Adviser or for the acts or omissions of the custodian of the Portfolio or
any other sub-adviser to the Trust or Portfolio.
In particular, in the event the Sub-Adviser shall manage only a portion of
the Portfolio's investments, the Sub-Adviser shall have no responsibility for
the Portfolio's being in violation of any applicable law or regulation or
investment policy or restriction applicable to the Portfolio as a whole or for
the Portfolio's failing to qualify as a regulated investment company under the
Code, if the securities and other holdings of the Segment of the Portfolio
managed by the Sub-Adviser are such that such Segment would not be in such
violation or fail to so qualify if such Segment were deemed a separate series of
the Trust or a separate "regulated investment company" under the Code. UBS
GLOBAL Americas acknowledges and agrees that the Registration statement will at
all times be in compliance with all disclosure requirements under all federal
and state laws and regulations relative to the Trust or the Portfolio,
including, without limitation the 1940 Act.
Nothing in this section shall be deemed a limitation or waiver of any
obligation or duty that may not by law be limited or waived.
7. REPRESENTATIONS OF SUB-ADVISER AND UBS GLOBAL AMERICAS.
The Sub-Adviser represents, warrants and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this Agreement
remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this Agreement; (iii) has met, and
will seek to continue to meet for so long as this Agreement remains in effect,
any other applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency, necessary to
be met in order to perform the services contemplated by this Agreement; (iv) has
the authority to enter into and perform the services contemplated by this
Agreement; and (v) will promptly notify UBS GLOBAL Americas of the occurrence of
any event that would disqualify the Sub-Adviser from
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serving as an investment adviser of an investment company pursuant to Section
9(a) of the 1940 Act or otherwise.
(b) The Sub-Adviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide UBS GLOBAL
Americas and the Board with a copy of such code of ethics, together with
evidence of its adoption. Within thirty days of the end of the last calendar
quarter of each year that this Agreement is in effect, a duly authorized officer
of the Sub-Adviser shall certify to UBS GLOBAL Americas that the Sub-Adviser has
complied with the requirements of Rule 17j-1 during the previous year and that
there has been no material violation of the Sub-Adviser's code of ethics or, if
such a violation has occurred, that appropriate action was taken in response to
such violation. Upon the written request of UBS GLOBAL Americas, the Sub-Adviser
shall permit UBS GLOBAL Americas, its employees or its agents to examine the
reports required to be made by the Sub-Adviser pursuant to Rule 17j-I and all
other records relevant to the Sub-Adviser's code of ethics.
(c) The Sub-Adviser has provided UBS GLOBAL Americas with a copy of its
Form ADV, as most recently filed with the Securities and Exchange Commission
("SEC"), and promptly will furnish a copy of all amendments to UBS GLOBAL
Americas at least annually.
(d) The Sub-Adviser will notify UBS GLOBAL Americas of any change of
control of the Sub-Adviser, including any change of its general partners or 25%
shareholders or 25% limited partners, as applicable, and any changes in the key
personnel who are either the portfolio manager(s) of the Portfolio or senior
management of the Sub-Adviser, in each case prior to or promptly after such
change.
(e) UBS GLOBAL Americas and the Sub-Adviser agree that neither of them nor
any of their affiliates, will in any way refer directly or indirectly to their
relationship with one another or any of their respective affiliates in offering,
marketing or other promotional materials without the express written consent of
the other, which consent will be promptly provided and not unreasonably
withheld.
UBS GLOBAL Americas represents, warrants and agrees as follows:
(a) it is duly incorporated, established or constituted (as the case may
be) and validly existing under the laws of Delaware;
(b) it has legal capacity and authority to enter into this Agreement, that
this Agreement is duly executed, and that the terms of this Agreement are legal,
valid and binding obligations on it which are enforceable against it and do not
constitute a breach of any obligation by which it is bound whether by contract,
operation of law or otherwise; and
(c) the Portfolio is and will continue, until the Sub-Adviser's appointment
is terminated, to be property which UBS GLOBAL Americas is empowered to deal
with, and to the best of UBS GLOBAL Americas's knowledge is free from any lien,
charge or other encumbrance or security interest and UBS GLOBAL Americas
undertakes that it will not, dispose of, encumber or otherwise deal with the
Segment of the Portfolio managed by the Sub-Adviser nor permit any other person
so to do.
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8. SERVICES NOT EXCLUSIVE. The services furnished by the Sub-Adviser
hereunder are not to be deemed exclusive, and except as the Sub-Adviser may
otherwise agree in writing, the Sub-Adviser shall be free to furnish similar
services to others so long as its services under this Agreement are not impaired
thereby. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of the Sub-Adviser, who may also be a trustee,
officer or employee of the Trust, to engage in any other business or to devote
his or her time and attention in part to the management or other aspects of any
other business, whether of a similar nature or a dissimilar nature.
9. DURATION AND TERMINATION.
(a) This Agreement shall become effective upon the consummation of the
anticipated transaction involving a change in control of the Sub-Advisor
resulting in the automatic termination of the prior agreement between the
parties hereto, provided that this Agreement shall not take effect unless it has
first been approved (i) by a vote of a majority of those trustees of the Trust
who are not parties to this Agreement or interested persons of any such party
("Independent Trustees"), cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of the Portfolio's
outstanding voting securities, unless UBS GLOBAL Americas has authority to enter
into this Agreement pursuant to exemptive relief from the SEC without a vote of
the Portfolio's outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Agreement shall
continue in effect for two years from its effective date. Thereafter, if not
terminated, this Agreement shall continue automatically for successive periods
of twelve months each, provided that such continuance is specifically approved
at least annually (i) by a vote of a majority of the Independent Trustees, cast
in person at a meeting called for the purpose of voting on such approval, and
(ii) by the Board or by vote of a majority of the outstanding voting securities
of the Portfolio.
(c) Notwithstanding the foregoing, this Agreement may be terminated at any
time, without the payment of any penalty, by vote of the Board or by a vote of a
majority of the outstanding voting securities of the Portfolio on 30 days'
written notice to the Sub-Adviser. This Agreement may also be terminated,
without the payment of any penalty, by UBS GLOBAL Americas: (i) upon 120 days'
written notice to the Sub-Adviser; (ii) upon material breach by the Sub-Adviser
of any of the representations, warranties and agreements set forth in Paragraph
7 of this Agreement; or (iii) immediately if, in the reasonable judgment of UBS
GLOBAL Americas, the Sub-Adviser becomes unable to discharge its duties and
obligations under this Agreement, including circumstances such as financial
insolvency of the Sub-Adviser or other circumstances that could adversely affect
the Portfolio. The Sub-Adviser may terminate this Agreement at any time, without
the payment of any penalty, on 120 days' written notice to UBS GLOBAL Americas.
This Agreement will terminate automatically in the event of its assignment or
upon termination of the Management Agreement, as it relates to this Portfolio.
UBS GLOBAL Americas will notify the Sub-Adviser immediately of the termination
of the Management Agreement.
The termination of this Agreement shall not affect liabilities or
obligations incurred or arising from past or ongoing transactions initiated
under this Agreement prior to such
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termination. Upon termination, it is UBS GLOBAL Americas' responsibility to
monitor the securities in the Portfolio, and the Sub-Adviser will have no
further obligation to act or advise with respect to those assets except that
termination will be without prejudice to the completion of transactions already
initiated.
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by both parties. To the extent required by applicable law, no
amendment of this Agreement shall be effective until approved (i) by a vote of a
majority of the Independent Trustees, and (ii) if the terms of this Agreement
shall have changed, by a vote of a majority of the Portfolio's outstanding
voting securities (except in the case of (ii), pursuant to the terms and
conditions of the SEC order permitting it to modify the Agreement without such
vote).
11. GOVERNING LAW. This Agreement shall be construed in accordance with the
1940 Act and the laws of the State of New York, without giving effect to the
conflicts of laws principles thereof. To the extent that the applicable laws of
the State of New York conflict with the applicable provisions of the 1940 Act,
the latter shall control.
12. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"affiliated person," "interested person," "assignment," "broker," "investment
adviser," "net assets," "sale," "sell" and "security" shall have the same
meanings as such terms have in the 1940 Act, subject to such exemption as may be
granted by the SEC by any rule, regulation or order. Where the effect of a
requirement of the federal securities laws reflected in any provision of this
Agreement is made less restrictive by a rule, regulation or order of the SEC,
whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order. This Agreement may be
signed in counterpart.
13. NOTICES. Any notice herein required is to be in writing and is deemed
to have been given to the Sub-Adviser or UBS GLOBAL Americas upon receipt of the
same at their respective addresses set forth below. All written notices required
or permitted to be given under this Agreement will be delivered by personal
service, by postage mail return receipt requested or by facsimile machine or a
similar means of same delivery which provides evidence of receipt (with a
confirming copy by mail as set forth herein). All notices provided to UBS GLOBAL
Americas will be sent to the attention of the General Counsel. All notices
provided to the Sub-Adviser will be sent to the attention of Xxxxxx X. Xxxxx,
Xx.
14. RISK ACKNOWLEDGEMENT. The Sub-Adviser does not guarantee the future
performance of the Portfolio or Segment or any specific level of performance,
the success of any investment decision or strategy that the Sub-Adviser may use,
or the success of the Sub-Adviser's overall management of the Portfolio or
Segment.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
UBS GLOBAL ASSET
MANAGEMENT (AMERICAS) INC.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attest:
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx
--------------------------------- ------------------------------------
Name: Xxxx Xxxxxxx Name: Xxxxx X. Xxxxxx
Title: Director and Associate Title: Executive Director &
General Counsel Sr. Associate General Counsel
GARTMORE GLOBAL PARTNERS
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attest:
By: /s/ Xxxxx X. Crosselet By: /s/ Xxxxxxx X. Xxxxx
--------------------------------- ------------------------------------
Name: Xxxxx X. Crosselet Name: Xxxxxxx X. Xxxxx
Title: EVP & General Counsel Title: President & CEO
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