Exhibit No. EX-99(g)(1)(b)
EXHIBIT B
RIDER TO GLOBAL CUSTODY AGREEMENT
CASH TRADE EXECUTION PRODUCT
(UNITED STATES)
This Rider to Global Custody Agreement (this "Rider") amends and
supplements the Global Custody Agreement (the "Agreement"), dated April 4, 2003
by and between Gartmore Mutual Funds ("Customer"), on behalf of each of its
current, and any future, series of shares of beneficial interest (each series, a
"Fund," and collectively, the "Funds"), and JPMorgan Chase Bank, N.A. ("Bank").
Capitalized terms in this Rider that are not defined herein have the
meaning set forth in the Agreement. For purposes of the Agreement and this
Rider, Bank shall treat each Fund as a separate customer and shall establish and
maintain separate accounting for, and identify on its books and records and
those of its Subcustodians, the assets and liabilities of each Fund, shall
establish and maintain separate records of the assets and liabilities of each
Fund, and shall account for and remit the interests, income and expenses of each
Fund separately under the Agreement as such interests, income and expenses are
or become applicable to such Fund.
1. JOINT ACCOUNT
(a) Subject to the terms and conditions of this Rider, Bank shall place
cash held in Account(s) of Fund(s) as of the applicable cut-off time listed on
Schedule A to this Rider ("Schedule A"), which Customer has not notified Bank as
being needed to settle pending trades or to effect Customer's cash instructions,
into a joint account ("Joint Account") as a separate account into which Bank may
deposit on behalf of Customer daily all, or a portion of, its cash balance
pursuant to the terms and conditions hereof; PROVIDED THAT only Funds and other
investment companies and other funds that are advised or sub-advised by the
investment adviser of Customer, or by an entity controlling, controlled by or
under common control with the investment adviser of Customer (each such Fund,
company or fund, individually, a "Participant," and collectively, the
"Participants") may participate in such a Joint Account.
(b) Each Participant shall participate in a Joint Account on the same
basis as any other Participant in the Joint Account and one Fund or other
Participant shall not be in a less favorable position than the other Funds or
Participants with respect to the Joint Account and investments of assets held in
the joint accounts. A Participant participating in a Joint Account shall not
necessarily have such Participant's cash invested in every Cash Instrument, as
defined below, purchased though the Joint Account. To the extent that a
Participant's cash is applied to a particular Cash Instrument, the Participant
shall participate in and own such Participant's proportional share of such Cash
Instrument, and any income earned or accrued thereon, based upon the percentage
of the Cash Instrument that was purchased with monies that were contributed by
such Participant.
2. SHORT-TERM INVESTMENTS
(a) The cash in the Joint Account shall be invested in short-term
investments (including undivided interests in such investments held in common
with other Participants that are customers of Bank) of the type set forth on
Schedule A ("Cash Instruments"). Each Fund shall remain fully
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responsible for overdrafts of its Deposit Account or Custody Account resulting
from the placement of cash in a Joint Account and invested in a Cash Instrument.
(b) The placement of cash into Cash Instruments shall be limited to cash
held in the currencies, and shall be subject to the minimum balance
requirements, set forth in Schedule A. Bank may enter into Cash Instrument
transactions on behalf of Fund(s) with any of the counterparties listed on
Schedule B to this Rider ("Schedule B"). Bank may make additions to and
deletions from Schedules A or B, PROVIDED that (i) Customer must consent to the
addition of any type of instrument to those eligible as Cash Instruments and
(ii) Customer must approve any additions of counterparties listed in Schedule B.
Customer may instruct Bank to delete any of the counterparties listed in
Schedule B.
3. INTERESTS IN CASH INSTRUMENTS
(a) Each and every Fund's proportionate share of every Cash Instrument
shall be deemed a Financial Asset of the Customer's Custody Account and shall
constitute a Securities Entitlement with respect to which the Customer at all
times shall constitute the Entitlement Holder, on behalf of the applicable
Funds. Customer's interest in any Cash Instruments shall be subject to the terms
and conditions imposed by the applicable counterparty, local law or local
governmental authorities. Bank shall not perform tax reclaim services with
respect to Cash Instruments purchased under this Rider. Cash Instruments are not
liabilities of or guaranteed by Bank. Bank shall not be responsible for any
losses incurred by Customer or any of its Funds in the event of the insolvency
or failure of any counterparty with respect to a Cash Instrument.
(b) Bank and Customer shall not allow any Participant to create a negative
balance in any Joint Account for any reason; PROVIDED that each Participant
shall be permitted to draw down such Participant's entire balance in a Joint
Account at any time; and PROVIDED FURTHER, that the investment adviser of the
Participant approves of the draw-down in an Instruction to the Bank. In
addition, each Participant shall retain the sole rights of ownership to any of
such Participant's assets invested in the Cash Instruments, including interest
payable on such Assets that are invested in the Cash Instruments.
(c) Bank acknowledges and agrees that it is acting as agent for the
Customer and each Fund, respectively, in connection with any trades or
transactions in Cash Instruments entered into by the Bank for or on behalf of
the Customer or one or more Funds under or in connection with this Rider. For
purposes of each transaction in repurchase agreements, the Bank shall indicate
by book entry all Financial Assets credited to Customer's Custody Account.
4. SALE OF SHORT-TERM INVESTMENTS.
(a) Cash Instruments that are held in a Joint Account generally shall not
be sold prior to maturity unless:
(i) a Participant's Adviser instructs the Bank that the investment no
longer presents minimal credit risks for the Participant;
(ii) a Participant's Adviser instructs the Bank that the investment no
longer satisfies the investment criteria of all of the Participants
participating in the investment because of a credit downgrading or
otherwise; or
(iii) in the case of a repurchase agreement, the counterparty defaults.
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(b) The Bank may sell any Cash Instrument (or fractional portion thereof)
on behalf of some or all of the Participants prior to the maturity of the Cash
Instrument; PROVIDED, that the cost of this transaction shall be allocated
solely to the selling Participant(s) and the transaction shall not adversely
affect the other Participant(s) participating in the Joint Account. In no case
shall a sale prior to maturity by less than all of the Participants be permitted
unless the Adviser of each of the Participants participating in the Joint
Account instructs the Bank that the sale would not reduce the principal amount
or yield that is received by the other Participant(s) in the Joint Account, or
otherwise would adversely affect the other Participant(s). Each Participant in a
Joint Account shall be deemed to have consented to the sale and partition of the
Cash Instruments in the Joint Account.
5. COMPENSATION OF BANK
Bank shall be entitled to an administration fee for placing cash of each
Fund in a Joint Account and investing the cash in Cash Instruments, which shall
be paid out of interest paid on the undivided interest of such Fund in the
various Cash Instruments in exact proportion to the interest of such Fund in
such Cash Instruments. Any interest earnings on Cash Instruments reflected on
statements or confirmations shall be net of Bank's administrative fee. Upon
request, Bank shall disclose the fees charged to each Fund with respect to Cash
Instruments in which such Fund invested without charge to Customer or the Fund.
6. TERMINATION
This Rider can be terminated by Bank or Customer upon written notice in
the same manner as set forth in the Agreement. In the event of a conflict of the
terms hereof and the terms of the Agreement, the terms hereof shall govern.
JPMORGAN CHASE BANK, N.A. GARTMORE MUTUAL FUNDS, on
behalf of each of its current and
future Funds
BY /s/ Xxxxx X. Xxxxx BY /s/ Xxxxxxx X. Xxxxxxx
------------------ ----------------------
NAME: Xxxxx X. Xxxxx NAME:
TITLE: Vice President TITLE:
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SCHEDULE A (UNITED STATES CONTRACT)
CURRENCIES AND INSTRUMENTS USED FOR CASH TRADE EXECUTION(1)
CURRENCIES, MINIMUM BALANCES AND CASH INSTRUCTION CUT-OFF TIMES:
CURRENCY MINIMUM BALANCE EST CASH SWEEP TIME
(SUBJECT TO CHANGE ON NOTICE BY THE BANK)
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US Dollar None 2:00 P.M. Same Day
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CASH INSTRUMENTS:
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CASH INSTRUMENT MAXIMUM MATURITY
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Demand Deposit Overnight
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Time Deposit 90 days
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Repurchase Agreement(2) Overnight
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Effective Date: -----------------------------------
Initials (Required only initially and for revisions adding types of eligible
Cash Instruments)
The Customer, on behalf of each Fund, and other Participants (3): --------
The Adviser, on behalf of each Participant (3): ------------
The Bank: -----------------------------------
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(1) Subject to change on notice by the Bank, except that the consent of the
applicable Participant and its Adviser shall be required for the addition of any
eligible Cash Instrument.
(2) Repurchase agreements will be secured by collateral consisting of U.S.
Securities that is deemed acceptable to the Bank.* The value of the instruments
collateralizing the repurchase agreement shall be at least equal to the purchase
price multiplied by at least 102%, measured at the time at which the repurchase
agreement is entered into and, for purposes of Rule 5b-3 adopted under the
Investment Company Act of 1940, as amended, the value of such instruments
(reduced by the transaction costs (including loss of interest) that the
applicable Fund reasonably could expect to incur if the seller defaults) shall
be, and during the entire term of the repurchase agreement, shall remain, at
least equal to the resale price to the seller provided in the repurchase
agreement. Under the terms and conditions of the repurchase agreement, the
collateral shall be maintained and held in custody accounts of the Bank as agent
for its customers and the Bank shall be given full authorization to deliver to
counterparty, upon termination of the repurchase agreement, Financial Assets of
the same class and value in place of those deposited as collateral.
(3) Initials of Customer on behalf of the Funds, or for other Participants,
initials of the Participants, and initials of Advisers of Participants, required
only for initial version of this Schedule and additions of eligible Cash
Instruments.
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* BILLS, BONDS OR NOTES ISSUED BY THE UNITED STATES TREASURY, OR OTHER
SECURITIES GUARANTEED AS TO PRINCIPAL AND INTEREST BY THE GOVERNMENT OF THE
UNITED STATES, ITS AGENCIES, INSTRUMENTALITIES OR ESTABLISHMENTS;
MORTGAGE-BACKED SECURITIES SPONSORED BY AGENCIES OF THE GOVERNMENT OF THE UNITED
STATES; CORPORATE OBLIGATIONS OF DOMESTIC ISSUERS WITH A MINIMUM RATING OF AA BY
STANDARD & POOR'S CORPORATION ("S&P") OR AA BY XXXXX'X INVESTOR SERVICES, INC.
("MOODY'S"); ASSET-BACKED SECURITIES WITH A MINIMUM RATING OF AAA BY S&P OR AAA
BY MOODY'S; OR MONEY MARKET INSTRUMENTS (INCLUDING, BUT NOT LIMITED TO,
CERTIFICATES OF DEPOSIT, BANK NOTES, DEPOSIT NOTES, BANKERS' ACCEPTANCES AND
COMMERCIAL PAPER ISSUED BY DOMESTIC ISSUERS WITH A MINIMUM RATING OF A-1 BY S&P
AND P-1 BY MOODY'S).
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SCHEDULE B (UNITED STATES CONTRACT) (4)
COUNTERPARTY LIST
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AGENT BANKS OTHER ISSUERS
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ABN Amro NV. Abbey National Plc.
Allied Irish Bank Plc. Abbey National Treasury Services Plc.
ANZ Banking Group (NZ) Limited American Express Corporation
Banco Commercial Portugues Banco Bilbao Vizcaya SA
Banco Espirito Santo e Commercial de Lisboa BankAmerica Corporation
Banco Santander SA Bank of America (NT & SA)
Bank Austria AG Bank of New York
Bank Leumi Le Israel Bankers Trust Corporation
Bank of Bermuda Banque ET Caisse D'Epargne De L'Etat (BCEE)
Bank of Ireland Banque Nationale de Paris SA
Bank of Tokyo Mitsubishi Barclays Capital
Banque Brussels Xxxxxxx XX Bayerische Hypotheken-und Wechsel Bank AG
Banque Commerciale du Maroc Bayerische Landesbank GZ
Banque Generale du Luxembourg Bayerische Vereinsbank AG
Banque Paribas SA Commerzbank AG
Barclays Bank Plc. Commonwealth Bank of Australia
Canadian Imperial Bank of Commerce (CIBC) Credit Commercial de France
Ceskoslovenska Obchodni Banka (CSOB) Credito Italiano
Chase Manhattan Bank Halifax Plc
Citibank NA Industrial Bank of Japan
Citibank Budapest Rt. Kredietbank SA
Citibank Mexico SA Lloyds Bank Plc.
Credit Agricole Indosuez SA Midland Bank Plc.
Credit Suisse National Australia Bank Limited
Den Danske Bank National Westminster Bank Plc.
Den norske Bank ASA Nationwide Building Society
Deutsche Bank AG Norddeutsche Landesbank GZ
Dresdner Bank AG Rabobank NV
First Chicago NBD Royal Bank of Scotland Plc.
First National Bank of Southern Africa Limited Sanwa Bank
Fuji Bank Ltd. Societe Generale Australia Limited
Generale Banque SA Sudwestdeutsche Landesbank GZ
The Hong Kong & Shanghai Banking Corporation Limited Swiss Bank Corporation (UBS AG)
ING Bank NV Toronto Dominion Bank
Xxxxxx Bank Limited Unibank A/S
National Nominees Ltd. (parent: National Australia Bank)
Oversea Chinese Banking Corporation Limited
Royal Bank of Canada
Skandinaviska Enskilda Banken
Societe Generale des Banques SA
Standard Chartered Bank Plc.
Svenska Handlesbanken
UBS AG
Westpac Banking Corporation
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(4) Subject to change on notice by the Bank, except that the Customer, on
behalf of the Funds, the other Participants and the Adviser of each
Participant may direct the Bank in writing not to enter into Cash
Instrument transactions with specified counterparties.
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