Exhibit 23(g)
[GRAPHIC OMITED]
GLOBAL CUSTODY AGREEMENT
This AGREEMENT is effective August 18, 2003, and is between JPMORGAN CHASE
BANK ("Bank") and GARTMORE MUTUAL FUNDS II, INC. ("Customer").
1. CUSTOMER ACCOUNTS.
Bank, acting as "Securities Intermediary" (as defined in Section 15(g)
hereof) shall establish and maintain the following accounts ("Accounts"):
(a) a Custody Account (as defined in Section 15(b) hereof) in the name
of Customer for Financial Assets, which shall, except as modified by Section
15(d) hereof, mean stocks, shares, bonds, debentures, notes, mortgages or other
obligations for the payment of money, bullion, coin and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or sub-scribe for the same or evidencing or representing any other rights or
interests therein and other similar pro-perty whether certificated or
uncertificated as may be received by Bank or its Subcustodian (as defined in
Section 3 hereof) for the account of Customer, including as an "Entitlement
Holder" as defined in Section 15(c) hereof); and
(b) an account in the name of Customer ("Deposit Account") for any and
all cash in any currency received by Bank or its Subcustodian for the account of
Customer, which cash shall not be subject to withdrawal by draft or check.
Customer warrants its authority to: 1) deposit the cash and Financial
Assets (collectively "Assets") received in the Accounts and 2) give Instructions
(as defined in Section 11 hereof) concerning the Accounts. Bank may deliver
Financial Assets of the same class in place of those deposited in the Custody
Account.
Upon written agreement between Bank and Customer, additional Accounts may
be established and separately accounted for as additional Accounts hereunder.
2. MAINTENANCE OF FINANCIAL ASSETS AND CASH AT BANK AND SUBCUSTODIAN
LOCATIONS.
Unless Instructions specifically require another location acceptable to
Bank:
(a) Financial Assets shall be held in the country or other jurisdiction
in which the principal trading market for such Financial Assets is located,
where such Financial Assets are to be presented for payment or where such
Financial Assets are acquired; and
(b) Cash shall be credited to an account in a country or other
jurisdiction in which such cash may be legally deposited or is the legal
currency for the payment of public or private debts. Cash will be held in the
name of Customer at Bank's London Branch office ("London Branch") in either
interest or non-interest bearing cash accounts as the Customer may instruct and
as may be available for the particular currency. Notwithstanding the preceding
sentence, cash held in respect of those markets where Customer is required to
have a cash account in its own name held directly with the relevant Subcustodian
shall be held in that manner and shall not be part of any cash account with
Bank. Any cash so deposited with London Branch shall be payable exclusively by
London Branch in the applicable currency, subject to compliance with any
applicable laws, regulations, governmental decrees or similar orders including,
without limitation, any restrictions on transactions in the applicable currency
imposed by the country of the applicable currency.
If Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by Bank and Customer.
3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
Bank may act hereunder through the subcustodians listed in Schedule A
hereof with which Bank has entered into subcustodial agreements
("Subcustodians"). Customer authorizes Bank to hold Assets in the Accounts
which Bank has established with one or more of its branches or Subcustodians.
Bank and Subcustodians are authorized to hold any of the Financial Assets in
their account with any securities depository in which they participate.
Bank reserves the right to add new, replace or remove Subcustodians.
Customer shall be given written notice by Bank of any amendment to Schedule A.
Upon request by Customer, Bank shall identify the name, address and principal
place of business of any Subcustodian of Customer's Assets and the name and
address of the governmental agency or other regulatory authority that supervises
or regulates such Subcustodian.
The Bank shall remain responsible for the performance of all of its duties
as described in this Agreement.
4. USE OF SUBCUSTODIAN.
(a) Bank shall identify the Assets on its books as belonging to
Customer.
(b) A Subcustodian shall hold such Assets together with assets
belonging to other customers of Bank in accounts identified on such
Subcustodian's books as custody accounts for the exclusive benefit of customers
of Bank.
(c) Except as may otherwise be required by local law or regulation, any
Financial Assets: (i) in the Accounts held by a Subcustodian shall be subject
only to the instructions of Bank or its agent; and (ii) held in a securities
depository for the account of a Subcustodian shall be subject only to the
instructions of such Subcustodian.
(d) Any agreement Bank enters into with a Subcustodian for holding
Bank's customers' assets shall provide that such assets shall not be subject to
any right, charge, security interest, lien or claim of any kind in favor of such
Subcustodian or its creditors except a claim of payment for their safe custody
or administration or, in the case of cash deposits, except for liens or rights
in favor of creditors of the Subcustodian arising under bankruptcy, insolvency
or similar laws, and that the beneficial ownership of such assets shall be
freely transferable without the payment of money or value other than for safe
custody or administration. Where Securities are deposited by a Subcustodian
with a securities depository, Bank shall cause the Subcustodian to identify on
its books as belonging to Bank, as agent, the Securities shown on the
Subcustodian's account on the books of such securities depository. The
foregoing shall not apply to the extent of any special agreement or arrangement
made by Customer with any particular Subcustodian.
5. DEPOSIT ACCOUNT TRANSACTIONS.
(a) Bank or its Subcustodians shall make payments from the Deposit
Account upon receipt of Instructions which include all information required by
Bank.
(b) In the event that any payment to be made under this Section 5
exceeds the funds available in the Deposit Account, Bank, in its discretion, may
advance Customer such excess amount which shall be deemed a loan payable on
demand, bearing interest at the rate customarily charged by Bank on similar
loans.
(c) If Bank credits the Deposit Account on a payable date, or at any
time prior to actual collec-tion and reconciliation to the Deposit Account, with
interest, dividends, redemptions or any other amount due, Customer shall
promptly return any such amount upon oral or written notification: (i) that such
amount has not been received in the ordinary course of business or (ii) that
such amount was incorrectly credited. If Customer does not promptly return any
amount upon such notification, Bank shall be entitled, upon oral or written
notification to Customer, to reverse such credit by debiting the Deposit Account
for the amount pre-viously credited. Bank or its Subcustodian shall have no
duty or obligation to institute legal proceedings, file a claim or a proof of
claim in any insolvency proceeding or take any other action with respect to the
collection of such amount, but may act for Customer upon Instructions after
consultation with Customer.
6. CUSTODY ACCOUNT TRANSACTIONS.
(a) Financial Assets shall be transferred, exchanged or delivered by
Bank or its Subcustodian upon receipt by Bank of Instructions which include all
information required by Bank. Settlement and pay-ment for Financial Assets
received for, and delivery of Financial Assets out of, the Custody Account may
be made in accordance with the customary or established securities trading or
securities processing practices and procedures in the jurisdiction or market in
which the transaction occurs, including, without limitation, deli-very of
Financial Assets to a purchaser, dealer or their agents against a receipt with
the expectation of re-ceiving later payment and free delivery. Delivery of
Financial Assets out of the Custody Account may also be made in any manner
specifically required by Instructions acceptable to Bank.
(b) Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Financial Assets with respect to any
sale, exchange or purchase of Financial Assets. Otherwise, such transactions
shall be credited or debited to the Accounts on the date cash or Financial
Assets are actually received by Bank and reconciled to the Account.
(i) On notice to Customer, Bank may reverse credits or debits made to
the Accounts in its discretion if the related transaction fails to settle within
a reasonable period, determined by Bank in its discretion, after the contractual
settlement date for the related transaction.
(ii) If any Financial Assets delivered pursuant to this Section 6 are
returned by the recipient thereof, Bank may on notice to Customer reverse the
credits and debits of the particular transaction at any time.
7. ACTIONS OF BANK.
Bank shall follow Instructions received regarding Assets held in the
Accounts. However, until it receives Instructions to the contrary, Bank shall:
(a) Present for payment any Financial Assets which are called, redeemed
or retired or other-wise become payable and all coupons and other income items
which call for payment upon presentation, to the extent that Bank or
Subcustodian is actually aware of such opportunities pursuant to its monitoring
of such financial publications as would be ordinarily monitored by professional
custodians of Bank's reputation and stature.
(b) Execute in the name of Customer such ownership and other
certificates as may be required to obtain payments in respect of Financial
Assets.
(c) Exchange interim receipts or temporary Financial Assets for
definitive Financial Assets.
(d) Appoint agents for any transaction involving the Financial Assets,
including, without limitation, "Affiliates" of Bank or any Subcustodian. (For
purposes hereof, the term "Affiliate" shall mean an entity controlling,
controlled by, or under common control with, Bank.)
(e) Issue statements to Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
Bank shall send Customer an advice or notification of any transfers of
Assets to or from the Accounts. Such statements, advices or notifications shall
indicate the identity of the entity having custody of the Assets. Unless
Customer sends Bank a written exception or objection to any Bank statement
within sixty (60) days of receipt, Customer shall be deemed to have approved
such statement. In such event, or where Customer has otherwise approved any
such statement, Bank shall, to the extent permitted by law, be released,
relieved and discharged with respect to all matters set forth in such statement
or reasonably implied therefrom as though it had been settled by the decree of a
court of competent jurisdiction in an action where Customer and all persons
having or claiming an interest in Customer or Customer's Accounts were parties.
All collections of funds or other property paid or distributed in respect
of Financial Assets in the Custody Account shall be made at the risk of
Customer. Bank shall have no liability for any loss occasioned by delay in the
actual receipt of notice by Bank or by its Subcustodians of any payment,
redemption or other trans-action regarding Financial Assets in the Custody
Account in respect of which Bank has agreed to take any action hereunder.
8. CORPORATE ACTIONS; PROXIES; TAX RECLAIMS.
(a) Corporate Actions. Whenever Bank receives information concerning
the Financial Assets which requires discretionary action by the beneficial owner
of the Financial Assets (other than a proxy), such as sub-scription rights,
bonus issues, stock repurchase plans and rights offerings, or legal notices or
other material intended to be transmitted to securities holders ("Corporate
Actions"), Bank shall give Custo-mer prompt notice of such Corporate Actions to
the extent that Bank's central corporate actions department has actual knowledge
of a Corporate Action in time to notify its customers.
When a rights entitlement or a fractional interest resulting from a rights
issue, stock dividend, stock split or similar Corporate Action is received which
bears an expiration date, Bank shall endeavor to obtain Instructions from
Customer or its Authorized Person (as defined in Section 10 hereof), but if
Instructions are not received in time for Bank to take prompt and timely action,
or actual notice of such Corporate Action was received too late to seek
Instructions, Bank is authorized to sell such rights entitlement or fractional
interest and to credit the Deposit Account with the proceeds or take any other
action it deems, in good faith, to be appro-priate in which case it shall be
held harmless for any such action.
(b) Proxy Voting. Bank shall provide proxy voting services, if elected
by Customer, in accor-dance with the terms of the proxy voting services rider
hereto. Proxy voting services may be provided by Bank or, in whole or in part,
by one or more third parties appointed by Bank (which may be Affiliates of
Bank).
(c) Tax Reclaims.
(i) Subject to the provisions hereof, Bank shall apply for a reduction
of withholding tax and any refund of any tax paid or tax credits which apply in
each applicable market in respect of income payments on Financial Assets for
Customer's benefit which Bank believes may be available to Customer.
(ii) The provision of tax reclaim services by Bank is conditional upon
Bank's receiving from Customer or, to the extent the Financial Assets are
beneficially owned by others, from each beneficial owner, A) a declaration of
the beneficial owner's identity and place of residence and (B) certain other
documentation (pro forma copies of which are available from Bank). Customer
acknowledges that, if Bank does not receive such declarations, documentation and
information, Bank shall be unable to provide tax reclaim services.
(iii) Bank shall not be liable to Customer or any third party for any
taxes, fines or penalties payable by Bank or Customer, and shall be indemnified
accordingly, whether these result from the inaccurate completion of documents by
Customer or any third party, or as a result of the provision to Bank or any
third party of inaccurate or misleading information or the withholding of
material information by Customer or any other third party, or as a result of any
delay of any revenue authority or any other matter beyond Bank's control.
(iv) Bank shall perform tax reclaim services only with respect to
taxation levied by the revenue authorities of the countries notified to Customer
from time to time and Bank may, by notification in writing, at Bank's absolute
discretion, supplement or amend the markets in which tax reclaim services are
offered. Other than as expressly provided in this sub-clause, Bank shall have
no responsibility with regard to Customer's tax position or status in any
jurisdiction.
(v) Customer confirms that Bank is authorized, on notice to Customer,
to disclose any information requested by any revenue authority or any
governmental body in relation to Customer or the securities and/or cash held for
Customer.
(vi) Tax reclaim services may be provided by Bank or, in whole or in part,
by one or more third parties appointed by Bank (which may be Bank's affiliates);
provided that Bank shall be liable for the performance of any such third party
to the same extent as Bank would have been if Bank had performed such services.
(d) Tax Obligations.
(i) Customer confirms that, upon notice to Customer, Bank is authorized
to deduct from any cash received or credited to the Deposit Account any taxes or
levies required by any revenue or govern-mental authority for whatever reason in
respect of the Custody Account.
(ii) Customer shall provide to Bank such documentation and information
as Bank may require in connection with taxation, and warrants that, when given,
this information shall be true and correct in every respect, not misleading in
any way, and contain all ma-terial information. Customer undertakes to notify
Bank immediately if any such infor-mation requires updating or amendment.
(iii) Customer shall be responsible for the payment of all taxes
relating to the Xxxxx-cial Assets in the Custody Account, and Customer agrees to
pay, indemnify and hold Bank harmless from and against any and all liabilities,
penalties, interest or addi-tions to tax with respect to or resulting from any
delay in, or failure by, Bank (1) to pay, with-hold or report any U.S. federal,
state or local taxes or foreign taxes imposed on, or (2) to report interest,
dividend or other income paid or credited to the Deposit Account, whether such
failure or delay by Bank to pay, withhold or report tax or income is the result
of (x) Customer's failure to comply with the terms of Sections 8(c) and (d), or
(y) Bank's own acts or omissions; provided however, Customer shall not be liable
to Bank for any penalty or additions to tax due, or any interest thereon, as a
result of Bank's failure to pay, withhold or report tax or to report interest,
dividend or other income paid or credited to the Deposit Account solely as a
result of Bank's negligent acts or omissions, for which Bank will beliable and
instead in such cases, Bank will be liable for any such penalties or additions
to tax due or interest thereon; and provided that Customer's indemnification of
Bank under this Section shall not extend to Bank's attorneys' fees or other
expenses in the event that such liabilities are solely the result of Bank's
negligent acts or omissions.
9. NOMINEES.
Financial Assets which are ordinarily held in registered form may be
registered in a nominee name of Bank, Subcustodian or securities depository, as
the case may be. Bank may without notice to Customer cause any such Financial
Assets to cease to be registered in the name of any such nominee and to be
registered in the name of Customer. In the event that any Financial Assets
registered in a nominee name are called for partial redemption by the issuer,
Bank may allot the called portion to the respective beneficial hol-ders of such
class of security in any manner Bank deems to be fair and equitable. Customer
shall hold Bank, Subcustodians, and their respective nominees harmless from any
liability arising directly or indirectly from their status as a mere record
holder of Financial Assets in the Custody Account.
10. AUTHORIZED PERSONS.
As used herein, the term "Authorized Person" means employees or agents
including investment managers as have been designated by written notice from
Customer or its designated agent to act on behalf of Customer hereunder. Such
persons shall continue to be Authorized Persons until such time as Bank receives
Instructions from Customer or its designated agent that any such employee or
agent is no longer an Authorized Person.
11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by Bank, via telephone, telex, facsimile transmission, bank wire or
other teleprocess or electronic instruction or trade information system
acceptable to Bank which Bank believes in good faith to have been given by
Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which Bank may specify. Unless
otherwise expressly provided, all Instructions shall continue in full force and
effect until canceled or superseded. The term "Instructions" includes, without
limitation, instructions to sell, assign, transfer, deliver, purchase or receive
for the Custody Account, any and all stocks, bonds and other Financial Assets or
to transfer funds in the Deposit Account.
Any Instructions delivered to Bank by telephone shall promptly thereafter
be confirmed in writing by an Authorized Person (which confirmation may bear the
facsimile signature of such Person), but Customer shall hold Bank harmless for
the failure of an Authorized Person to send such confirmation in writing, the
failure of such confirmation to conform to the telephone instructions received
or Bank's failure to produce such confirmation at any subsequent time. Bank may
electronically record any Instructions given by telephone, and any other
telephone discussions with respect to the Custody Account. Customer shall be
responsible for safeguarding any testkeys, identification codes or other
security devices which Bank shall make available to Customer or its Authorized
Persons.
12. STANDARD OF CARE; LIABILITIES.
(a) Bank shall be responsible for the performance of only such duties
as are set forth herein or expressly contained in Instructions which are
consistent with the provisions hereof as follows:
(i) Notwithstanding any other provisions of this Agreement, Bank's
responsibilities shall be limited to the exercise of reasonable care with
respect to its obligations hereunder. Bank shall only be liable to Customer for
any loss which shall occur as the result of the failure of a Subcustodian to
exercise reasonable care with respect to the safekeeping of such Assets where
such loss results directly from the failure by the Subcustodian to use
reasonable care in the provision of custodial services by it in accordance with
the standards prevailing in its local market . In the event of any loss to
Customer which is compensable hereunder (i.e. a loss arising by reason of the
failure of Bank or its Subcustodian to use reasonable care), Bank shall be
liable to Customer only to the extent of Customer's direct damages, to be
determined based on the market value of the property which is the subject of the
loss at the date of discovery of such loss and without reference to any special
conditions or circumstances. Bank shall have no liability whatsoever for any
consequential, special, indirect or speculative loss or damages (including, but
not limited to, lost profits) suffered by Customer in connec-tion with the
transactions and services contemplated hereby and the relationship established
hereby even if Bank has been advised as to the possibility of the same and
regardless of the form of the action.
(ii) Bank shall not be responsible for the insolvency of any
Subcustodian which is not a branch or Affiliate of Bank. Bank shall not be
responsible for any act, omission, default or the solvency of any agent which it
or a Subcustodian appoints unless such appointment was made negli-gently or in
bad faith.
(iii) (A) Customer shall indemnify and hold Bank and its directors,
officers, agents and employees (collectively the "Indemnitees") harmless from
and against any and all claims, liabilities, losses, damages, fines, penalties,
and expenses, including out-of-pocket and incidental expenses and legal fees
("Losses") that may be imposed on, incurred by, or asserted against, the
Indemnitees or any of them for following any instructions or other directions
upon which Bank is authorized to rely pursuant to the terms of this Agreement.
(B) In addition to and not in limitation of the preceding subparagraph, Customer
shall also indemnify and hold the Indemnitees and each of them harmless from and
against any and all Losses that may be imposed on, incurred by, or asserted
against, the Indemnitees or any of them in connection with or arising out of
Bank's performance under this Agreement, provided the Indemnitees have not acted
with negligence, bad faith or engaged in willful miscon-duct or reckless
disregard of its duties, obligations or responsibilities set forth in this
Agreement. (C) In performing its obligations hereunder, Bank may rely on the
genuineness of any docu-ment which it believes in good faith to have been
validly executed.
(iv) Customer shall pay for and hold Bank harmless from any liability
or loss resulting from the imposition or assessment of any taxes or other
governmental charges, and any related expenses, with respect to income from or
Assets in the Accounts.
(v) Bank shall be entitled to rely, and may act, upon the advice of
counsel (who may be counsel for Customer) on all matters and shall be without
liability for any action reasonably taken or omitted pursuant to such advice.
(vi) Bank need not maintain any insurance for the benefit of Customer.
(vii) Without limiting the foregoing, Bank shall not be liable for any
loss which results from: 1) the general risk of investing, or 2) investing or
holding Assets in a particular country including, but not limited to, losses
resulting from malfunction, interruption of or error in the trans-mission of
information caused by any machines or system or interruption of communication
facil-ities, abnormal operating conditions, nationalization, expropriation or
other governmental actions; regulation of the banking or securities industry;
currency restrictions, devaluations or fluctuations; and market conditions which
prevent the orderly execution of securities transactions or affect the value of
Assets.
(viii) Neither party shall be liable to the other for any loss due to
forces beyond their control including, but not limited to strikes or work
stoppages, acts of war (whether declared or undeclared) or terrorism,
insurrection, revolution, nuclear fusion, fission or radiation, or acts of God.
Nevertheless, the parties acknowledge their duty to take such reasonable actions
to mitigate any such losses to the extent within their control.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that Bank shall have no duty or
responsibility to:
(i) question Instructions or make any suggestions to Customer or an
Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to investments or
the retention of Financial Assets;
(iii) advise Customer or an Authorized Person regarding any default in
the payment of principal or income of any security other than as provided in
Section 5(c) hereof;
(iv) evaluate or report to Customer or an Authorized Person regarding
the financial condition of any broker, agent or other party to which Financial
Assets are delivered or payments are made pursuant hereto; and
(v) review or reconcile trade confirmations received from brokers.
Customer or its Authorized Persons issuing Instructions shall bear any
responsibility to review such confirmations against Instructions issued to and
statements issued by Bank.
(c) Customer authorizes Bank to act hereunder notwithstanding that Bank
or any of its divisions or Affiliates may have a material interest in a
transaction, or circumstances are such that Bank may have a potential conflict
of duty or interest including the fact that Bank or any of its Affiliates may
provide broker-age services to other customers, act as financial advisor to the
issuer of Financial Assets, act as a lender to the issuer of Financial Assets,
act in the same transaction as agent for more than one customer, have a material
interest in the issue of Financial Assets, or earn profits from any of the
activities listed herein.
13. FEES AND EXPENSES.
Customer shall pay Bank for its services hereunder the fees set forth in
Schedule B hereto or such other amounts as may be agreed upon in writing,
together with Bank's reasonable out-of-pocket or incidental expenses, including,
but not limited to, legal fees. Bank shall have a lien on the Accounts to the
extent of 104% of any amounts owing by Customer to Bank at any time and is
authorized to charge any Accounts of Customer for any such amounts owing to Bank
under any provision hereof.
14. MISCELLANEOUS.
(a) Foreign Exchange Transactions. To facilitate the administration of
Customer's trading and investment activity, when instructed by specific or
standing Instruction, Bank is authorized to enter into spot or forward foreign
exchange contracts with Custo-mer or an Authorized Person for Customer and may
also provide foreign exchange through its subsidiaries, Affiliates or
Subcustodians. Instructions may be issued with respect to such contracts but
Bank may establish rules or limitations concerning any foreign exchange facility
made avail-able. In all cases where Bank, its subsidiaries, Affiliates or
Subcustodians enter into a separate master foreign exchange contract with
Customer that covers foreign exchange transactions for the Accounts, the terms
and conditions of that foreign exchange contract, and to the extent not
inconsistent, this Agreement, shall apply to such transactions.
(b) Certification of Residency, etc. Customer certifies that it is a
resident of the United States and shall notify Bank of any changes in residency.
Bank may rely upon this certification or the certification of such other facts
as may be required to administer Bank's obligations hereunder. Customer shall
indem-nify Bank against all losses, liability, claims or demands arising
directly or indirectly from any such certifi-cations.
(c) Access to Records. Bank shall allow Customer's independent public
accountant reasonable access to the records of Bank relating to Financial Assets
as is required in connection with their examination of books and records
pertaining to Customer's affairs. Subject to restrictions under applicable law,
Bank shall also obtain an undertaking to permit Customer's independent public
accountants reasonable access to the records of any Subcustodian which has
physical possession of any Financial Assets as may be required in connection
with the examination of Customer's books and records.
(d) Governing Law; Successors and Assigns; Immunity; Captions. THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN NEW YORK and shall not be assignable by
either party, but shall bind the successors in interest of Customer and Bank.
To the extent that in any jurisdiction Customer may now or hereafter be entitled
to claim, for itself or its assets, immunity from suit, execution, attachment
(before or after judgment) or other legal process by Bank, Customer irrevocably
shall not claim, and it hereby waives, such immunity. The captions given to the
sections and subsections of this Agreement are for convenience of reference only
and are not to be used to interpret this Agreement.
(e) Entire Agreement; Applicable Riders. Customer represents that the
Assets deposited in the Accounts are (Check one):
X Investment Company assets subject to certain U.S. Securities and
Exchange Commission rules and regulations;
Other (specify)
This Agreement consists exclusively of this document together with
Schedules A and B, Exhibits I - _______ and the following Rider(s) [Check
applicable rider(s)]:
X INVESTMENT COMPANY
_X_ PROXY VOTING
X SPECIAL TERMS AND CONDITIONS
Except with respect to certain ancillary agreements that have been executed
contemporaneously in connection with the custodial services contemplated hereby,
there are no other provisions hereof and this Agreement supersedes any other
agreements, whether written or oral, between the parties. Any amendment hereto
must be in writing, executed by both parties.
(f) Severability. In the event that one or more provisions hereof are
held invalid, illegal or unenforceable in any respect on the basis of any
particular circumstances or in any jurisdiction, the validity, legality and
enforceability of such provision or provisions under other circumstances or in
other jurisdictions and of the remaining provisions shall not in any way be
affected or impaired.
(g) Waiver. Except as otherwise provided herein, no failure or delay
on the part of either party in exercising any power or right hereunder operates
as a waiver, nor does any single or partial exercise of any power or right
preclude any other or further exercise, or the exercise of any other power or
right. No waiver by a party of any provision hereof, or waiver of any breach or
default, is effective unless in writing and signed by the party against whom the
waiver is to be enforced.
(h) Representations and Warranties. (i) Customer hereby represents and
warrants to Bank that: (A) it has full authority and power to deposit and
control the Financial Assets and cash deposited in the Accounts; (B) it has all
necessary authority to use Bank as its custodian; (C) this Agreement
constitutes its legal, valid and binding obligation, enforceable in accordance
with its terms; (D) it has taken all necessary action to authorize the execution
and delivery hereof. (E) it shall have full authority and power to borrow moneys
and enter into foreign exchange transactions; and (F) it has not relied on any
oral or written representation made by Bank or any person on its behalf, and
acknowledges that this Agreement sets out to the fullest extent the duties of
Bank. (ii) Bank hereby represents and warrants to Customer that: (A) it has the
full power and authority to perform its obligations hereunder, (B) this
Agreement constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms; and (C) it has taken all necessary action to
authorize the execution and delivery hereof.
(i) Notices. All notices hereunder shall be effective when actually
received. Any notices or other communications which may be required hereunder
are to be sent to the parties at the following addresses or such other addresses
as may subsequently be given to the other party in writing: (a) Bank: JPMorgan
Chase Bank, 0 Xxxxx XxxxxXxxx Xxxxxx, Xxxxxxxx, X.X. 00000, Attention: Global
Investor Services, Investment Management Group; and (b) Customer: Gartmore
Mutual Funds II, Inc., 0000 Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Operations.
(j) Termination. This Agreement may be terminated by Customer or Bank
by giving sixty (60) days' written notice to the other, provided that such
notice to Bank shall specify the names of the persons to whom Bank shall deliver
the Assets in the Accounts. If notice of termination is given by Bank, Customer
shall, within sixty (60) days following receipt of the notice, deliver to Bank
Instructions specifying the names of the persons to whom Bank shall deliver the
Assets. In either case Bank shall deliver the Assets to the persons so
specified, after deducting any amounts which Bank determines in good faith to be
owed to it under Section 13. If within sixty (60) days following receipt of a
notice of termination by Bank, Bank does not receive Instructions from Customer
specifying the names of the persons to whom Bank shall deliver the Assets, Bank,
at its election, may deliver the Assets to a bank or trust company doing
business in the State of New York to be held and disposed of pursuant to the
provisions hereof, or to Authorized Persons, or may continue to hold the Assets
until Instructions are provided to Bank.
(k) Money Laundering. Customer warrants and undertakes to Bank for
itself and its agents that all Customer's customers are properly identified in
accor-dance with U.S. Money Laundering regulations and guidelines as in effect
from time to time.
(l) Imputation of certain information. Bank shall not be held
responsible for and shall not be required to have regard to information held by
any person by imputation or information of which Bank is not aware by virtue of
a "Chinese Wall" arrangement. If Bank becomes aware of confidential information
which in good faith it feels inhibits it from effecting a transaction hereunder
Bank may refrain from effecting it.
(m) Information Concerning Deposits at London Branch. London Branch is a
member of the United Kingdom Deposit Protection Scheme (the "Scheme")
established under Banking Xxx 0000 (as amended). The Scheme provides that in
the event of Custodian's insolvency payments may be made to certain customers of
London Branch. Payments under the Scheme are limited to 90% of a depositor's
total cash deposits subject to a maximum payment to any one depositor of 18,000
(or 20,000 euros if greater). Most deposits denominated in sterling and other
European Economic Area Currencies and euros made with Custodian within the
United Kingdom are covered. (Further details of the Scheme are available upon
request.)
(n)In the event that Custodian incurs a loss attributable to Country Risk (as
defined in the Investment Company rider hereto) with respect to any cash balance
it maintains on deposit at a Subcustodian or other correspondent bank in regard
to its global custody or trust businesses in the country where the Subcustodian
or other correspondent bank is located, Custodian may set such loss off against
Company's Cash Account to the extent that such loss is directly attributable to
Company's investments in that market and, to the extent that such loss is not
directly attributable to any of Custodian's customers' investments in that
market, Custodian may set such loss off in a pro-rata manner against its
customers' cash account holdings in that currency, including such holdings in
Company's Cash Account.
15. Definitions.
As used herein, the following terms shall have the meaning hereinafter
stated:
a) "Certificated Security" shall mean a security that is represented by
a certificate.
b) "Custody Account" shall mean each Securities custody account on
Bank's records to which Financial Assets are or may be credited pursuant hereto.
c) "Entitlement Holder" shall mean the person on the records of a
Securities Intermediary as the person having a Securities Entitlement against
the Securities Intermediary.
d) "Financial Asset" shall mean, as the context requires, either the
asset itself or the means by which a person's claim to it is evidenced,
including a Certificated Security or Uncertificated Security, a security
certifi-cate, or a Securities Entitlement. Financial Assets shall not include
cash.
e) "Securities" shall mean stocks, bonds, rights, warrants and other
negotiable and non-negotiable paper whether issued as Certificated Securities or
Uncertificated Securities and commonly traded or dealt in on securities
exchanges or financial markets, and other obligations of an issuer, or shares,
participations and interests in an issuer recognized in an area in which it is
issued or dealt in as a medium for investment and any other property as shall be
acceptable to Bank for the Custody Account.
f) "Securities Entitlement" shall mean the rights and property interest
of an Entitlement Holder with respect to a Financial Asset as set forth in Part
5 of the Uniform Commercial Code.
g) "Securities Intermediary" shall mean Bank, a Subcustodian, a
securities depository, and any other financial institution which in the ordinary
course of business maintains custody accounts for others and acts in that
capacity.
h) "Uncertificated Security" shall mean a security that is not
represented by a certificate.
i) "Uniform Commercial Code" shall mean Article 8 of the Uniform
Commercial Code of the State of New York, as the same may be amended from time
to time.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first-above written.
CUSTOMER
By:____________________________________________
Title:
Date:
JPMORGAN CHASE BANK
By:____________________________________________
Title:
Date:
STATE OF NEW YORK)
: ss.
COUNTY OF WESTCHESTER)
On this ___ day of August, 2003 , before me personally came Xxxx X. Xxxxxx,
to me known, who being by me duly sworn, did depose and say that he resides in
______________________, is Chairman, President and Chief Executive Officer of
Gartmore Mutual Funds II, Inc., the entity described in and which executed the
foregoing instrument; that he knows the seal of said entity, that the seal
affixed to said instrument is such seal, that it was so affixed by order of said
entity, and that he signed his name thereto by like order.
Sworn to before me this
_________ day of August, 2003.
Notary
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
On this____day of___________, 200_ , before me personally came
_____________, to me known, who being by me duly sworn, did depose and say that
he/she resides in____________at______________; that he/she is a Vice President
of JPMORGAN CHASE BANK, the corporation described in and which executed the
foregoing instrument; that he/she knows the seal of said corporation, that the
seal affixed to said instrument is such corporate seal, that it was so affixed
by order of the Board of Directors of said corporation, and that he/she signed
his/her name thereto by like order.
_____________________
Sworn to before me this
day of, 200_.
Notary
Investment Company Rider to Global Custody Agreement
Between JPMorgan Chase Bank and
Gartmore Mutual Funds II, Inc.
Effective August 18, 2003
To the extent of any inconsistency between this Rider and the Agreement with
regard to the standard of care to be exercised by Bank, the terms of this Rider
shall prevail. The following modifications are made to the Agreement:
I. Add the following after the first sentence of Section 3 of the
Agreement:
At the request of Customer, Bank may, but need not, add to Schedule A an
Eligible Foreign Custodian (as hereinafter defined) where Bank has not acted as
Foreign Custody Manager with respect to the selection thereof. Bank shall
notify Customer in the event that it elects to add any such entity.
II. Add the following language to the end of Section 3 of the Agreement:
The term Subcustodian as used herein shall mean the following:
(a) a "U.S. Bank," which shall mean a U.S. bank as defined in rule
17f-5(a)(7); and
(b) an "Eligible Foreign Custodian," which, as defined in rule 17f-5(a)(1)
and (5), shall mean (i) a banking institution or trust company, incorporated or
organized under the laws of a country other than the United States, that is
regulated as such by that country's government or an agency thereof, and (ii) a
majority-owned direct or indirect subsidiary of a U.S. Bank or bank holding
company which subsidiary is incorporated or organized under the laws of a
country other than the United States. In addition, an Eligible Foreign
Custodian shall also mean any other entity that shall have been so qualified by
exemptive order, rule or other appropriate action of the SEC.
The term "securities depository" as used herein shall mean the following, when
referring to a securities depository located:
(a) outside the U.S., an "Eligible Securities Depository" which, in turn, shall
have the same meaning as in rule 17f-7(b)(1)(i)-(vi) as the same may be amended
from time to time, or that has otherwise been made exempt by an SEC exemptive
order, rule other appropriate SEC action, except that prior to the compliance
date with rule 17f-7 for a particular securities depository the term "securities
depository" shall be as defined in (a)(1)(ii)-(iii) of the 1997 amendments to
rule 17f-5; and
(b) in the U.S., shall mean a "securities depository" as defined in SEC rule
17f-4(a).
For purposes of provisions of the Agreement imposing liability on Bank, the
term Subcustodian shall not include any Eligible Foreign Custodian as to which
Bank has not acted as Foreign Custody Manager. For purposes of clarity, the
term Subcustodian shall not include any securities depository."
III. Add the following language to the end of the first sentence of
Section 4(d) of the Agreement: "or, in the case of cash deposits, except for
liens or rights in favor of creditors of the Subcustodian arising under
bankruptcy, insolvency or similar laws."
IV. Add a new Section 16 to the Agreement as follows:
16. COMPLIANCE WITH SECURITIES AND EXCHANGE COMMISSION RULE 17F-5 ("RULE
17F-5").
(a) Customer's board of directors (or equivalent body) (hereinafter
"Board") hereby delegates to Bank, and Bank hereby accepts the delegation to it
of, the obligation to perform as Customer's "Foreign Custody Manager" (as that
term is defined in rule 17f-5(a)(3)), including for the purposes of: (i)
selecting Eligible Foreign Custodians (as that term is defined in rule
17f-5(a)(1), as the same may be amended from time to time, or that have
otherwise been exempted by SEC exemptive order, rule other appropriate SEC
action) to hold Customer's foreign Financial Assets and Cash (collectively,
"Foreign Assets"), (ii) evaluating the contractual arrangements with such
Eligible Foreign Custodians (as set forth in rule 17f-5(c)(2)), and (iii)
monitoring such foreign custody arrangements (as set forth in rule 17f-5(c)(3)).
(b) In connection with the foregoing, Bank shall:
(i) provide written reports notifying Customer's Board of the placement of
Foreign Assets with par-ticular Eligible Foreign Custodians and of any material
change in the arrangements with such Eligible Foreign Custodians, with such
reports to be provided to Customer's Board at such times as the Board deems
reasonable and appropriate based on the circumstances of Customer's foreign
custody arrange-ments but until further notice from Customer requesting a
different schedule, such reports shall be provided not less than quarterly in
summary form, with a more detailed report annually.
(ii) exercise such reasonable care, prudence and diligence in performing as
Customer's Foreign Custody Manager as a person having responsibility for the
safekeeping of Foreign Assets would exercise;
(iii) in selecting an Eligible Foreign Custodian, first have determined that
Foreign Assets placed and maintained in the safekeeping of such Eligible Foreign
Custodian shall be subject to reasonable care, based on the standards applicable
to custodians in the relevant market, after having considered all factors
relevant to the safekeeping of such Assets, including, without limitation, those
factors set forth in rule 17f-5(c)(1)(i)-(iv);
(iv) determine that the written contract with the Eligible Foreign Custodian
requires that the Eligible Foreign Custodian will provide reasonable care for
Foreign Assets based on the standards applicable to custodians in the relevant
market as provided in rule 17f-5(c)(2); and
(v) have established a system to monitor the continued appropriateness of
maintaining Foreign Assets with particular Eligible Foreign Custodians and
performance of the governing contractual arrangements; it being understood,
however, that in the event that Bank shall have determined that the existing
Eligible Foreign Custodian in a given country would no longer afford Foreign
Assets reasonable care and that no other Eligible Foreign Custodian in that
country would afford reasonable care, Bank shall promptly so advise Customer and
shall then act in accordance with the Instructions of Customer with respect to
the disposition of the affected Foreign Assets.
Subject to (b)(i)-(v) above, Bank is hereby authorized to place and maintain
Foreign Assets on behalf of Customer with Eligible Foreign Custodians pursuant
to a written contract deemed appropriate by Bank.
(c) Except as expressly provided herein and in Section 17 hereof, Customer
shall be solely responsible to assure that the maintenance of Foreign Assets
hereunder complies with the rules, regulations, interpretations and exemptive
orders promulgated by or under the authority of the SEC.
(d) Bank represents to Customer that it is a U.S. Bank as defined in rule
17f-5(a)(7). Customer represents to Bank that: (1) the Assets being placed and
maintained in Bank's custody are subject to the Investment Company Act of 1940,
as amended (the "1940 Act") as the same may be amended from time to time; (2)
its Board (or other governing body) has determined that it is reasonable to rely
on Bank to perform as Customer's Foreign Custody Manager; and (3) its Board (or
other governing body) or its investment adviser shall have determined that
Customer may maintain Foreign Assets in each country in which Customer's Foreign
Assets shall be held hereunder and determined to accept the risks arising
therefrom (including, but not limited to, a country's financial infrastructure,
prevailing custody and settlement practices, laws applicable to the safekeeping
and recovery of Foreign Assets held in custody, and the likelihood of
nationalization, currency controls and the like) (collectively ("Country
Risk")). Nothing contained herein shall require Bank to make any selection on
behalf of Customer that would entail consideration of Country Risk and, except
as may be provided in (e) below, to engage in any monitoring of Country Risk.
(e) Bank shall provide to Customer such information relating to Country
Risk as is specified in Appendix 1-A hereto. Customer hereby acknowledges that:
(i) such information is solely designed to inform Customer of market conditions
and procedures and is not intended as a recommendation to invest or not invest
in particular markets; and (ii) Bank has gathered the information from sources
it considers reliable, but that Bank shall have no responsibility for
inaccuracies or incomplete information.
V. Add a new Section 17 to the Agreement as follows:
17. COMPLIANCE WITH SECURITIES AND EXCHANGE COMMISSION RULE 17F-7 ("RULE
17F-7").
(a) Bank shall, for consideration by Customer, provide an analysis in
accordance with rule 17f-7(a)(1)(i)(A) of the custody risks associated with
maintaining Customer's Foreign Assets with each Eligible Securities Depository
used by Bank as of the date hereof (or, in the case of an Eligible Securities
Depository not used by Bank as of the date hereof, prior to the initial
placement of Customer's Foreign Assets at such Depository) and at which any
Foreign Assets of Custo-mer are held or are expected to be held. The foregoing
analysis will be provided to Customer at Bank's Website. In connection with the
foregoing, Customer shall notify Bank of any Eligible Securities Depositories at
which it does not choose to have its Foreign Assets held. Bank shall monitor
the custody risks associated with maintaining Customer's Foreign Assets at each
such Eligible Securities Depository on a continuing basis and shall promptly
notify Customer or its adviser of any material changes in such risks.
(b) Bank shall exercise reasonable care, prudence and diligence in
performing the requirements set forth in Section 17(a) above.
(c) Based on the information available to it in the exercise of diligence,
Bank shall determine the eligibility under rule 17f-7(b)(1) of each depository
before including it on Appendix 1-B hereto and shall promptly advise Customer if
any Eligible Securities Depository ceases to be eligible. (Eligible Securities
Depositories used by Bank as of the date hereof are set forth in Appendix 1-B
hereto, and as the same may be amended on notice to Customer from time to time.)
(d) Bank need not commence performing any of the duties set forth in this
Section 17 prior to March 31, 2001, but Bank shall advise Customer if it is
prepared to commence such duties prior to such date as to particular
depositories.
Appendix 1-A
Information Regarding Country Risk
1. To aid Customer in its determinations regarding Country Risk, Bank
shall furnish annually and upon the initial placing of Foreign Assets into a
country the following information:
A Opinions of local counsel concerning:
i. Whether applicable foreign law would restrict the access afforded
Customer's independent public accountants to books and records kept by
an Eligible Foreign Custodian located in that country.
ii. Whether applicable foreign law would restrict the Customer's ability
to recover its assets in the event of the bankruptcy of an Eligible
Foreign Custodian located in that country.
iii. Whether applicable foreign law would restrict the Customer's ability
to recover assets that are lost while under the control of an Eligible
Foreign Custodian located in the country.
B. Written information concerning:
i. The likelihood of expropriation, nationalization, freezes, or
confiscation of Customer's assets.
ii. Whether difficulties in converting Customer's cash and cash
equivalents to U.S. dollars are reasonably foreseeable.
C. A market report with respect to the following topics:
(i) securities regulatory environment, (ii) foreign ownership
restrictions, (iii) foreign exchange, (iv) securities settlement and
registration, (v) taxation, (vi) market settlement risk, (vii)
Eligible Securities Depositories (including Depository evaluation), if
any.
2. Bank shall furnish the following additional information:
Market flashes, including with respect to changes in the information in
market reports.
Appendix 1-B
ELIGIBLE SECURITIES DEPOSITORIES
GLOBAL PROXY SERVICE RIDER
To Global Custody Agreement
Between
JPMORGAN CHASE BANK
AND
GARTMORE MUTUAL FUNDS II, INC.
Dated August 18, 2003.
1. Global Proxy Services ("Proxy Services") shall be provided for the
countries listed in the proce-dures and guidelines ("Procedures") furnished
to Customer, as the same may be amended by Bank from time to time on prior
notice to Customer. The Procedures are incorporated by reference herein and
form a part of this Rider.
2. Proxy Services shall consist of those elements as set forth in the
Procedures, and shall include (a) notifications ("Notifications") by Bank
to Customer of the dates of pending shareholder meetings, resolutions to be
voted upon and the return dates as may be received by Bank or provided to
Bank by its Subcustodians or third parties, and (b) voting by Bank of
proxies based on Customer Instructions. Original proxy materials or copies
thereof shall not be provided. Notifications shall generally be in English
and, where necessary, shall be summarized and translated from such
non-English materials as have been made available to Bank or its
Subcustodian. In this respect Bank's only obligation is to provide
information from sources it believes to be reliable and/or to provide
materials summarized and/or translated in good faith. Bank reserves the
right to provide Notifications, or parts thereof, in the language received.
Upon reasonable advance request by Customer, backup information relative to
Notifications, such as annual reports, explanatory material concerning
resolutions, management recommenda-tions or other material relevant to the
exercise of proxy voting rights shall be provided as available, but without
translation.
3. While Bank shall attempt to provide accurate and complete Notifications,
whether or not translated, Bank shall not be liable for any losses or other
consequences that may result from reliance by Customer upon Notifications
where Bank prepared the same in good faith.
4 Notwithstanding the fact that Bank may act in a fiduciary capacity with
respect to Customer under other agreements or otherwise under the
Agreement, in performing Proxy Services Bank shall be acting solely as the
agent of Customer, and shall not exercise any discretion with regard to
such Proxy Services.
5. Proxy voting may be precluded or restricted in a variety of circumstances,
including, without limitation, where the relevant Financial Assets are: (i)
on loan; (ii) at registrar for registration or reregistration; (iii) the
subject of a conversion or other corporate action; (iv) not held in a name
subject to the control of Bank or its Subcustodian or are otherwise held in
a manner which precludes voting; (v) not capable of being voted on account
of local market regulations or practices or restrictions by the issuer; or
(vi) held in a margin or collateral account.
6 Customer acknowledges that in certain countries Bank may be unable to vote
individual proxies but shall only be able to vote proxies on a net basis
(e.g., a net yes or no vote given the voting instructions received from all
customers).
7. Customer shall not make any use of the information provided hereunder,
except in connection with the funds or plans covered hereby, and shall in
no event sell, license, give or otherwise make the information provided
hereunder available, to any third party, and shall not directly or
indirectly compete with Bank or diminish the mar-ket for Proxy Services by
provision of such informa-tion, in whole or in part, for compensation or
otherwise, to any third party.
8. The names of Authorized Persons for Proxy Services shall be furnished to
Bank in accordance with 10 of the Agreement. Proxy Services fees shall be
as set forth in 13 of the Agreement or as separately agreed.
SPECIAL TERMS AND CONDITIONS RIDER
GLOBAL CUSTODY AGREEMENT
WITH GARTMORE MUTUAL FUNDS II, INC.
DATED AUGUST 18, 2003
DOMESTIC ONLY
Domestic Corporate Actions and Proxies
With respect to domestic U.S. and Canadian Financial Assets (the latter if
held in DTC), the following provisions shall apply rather than the
provisions of Section 8 of the Agreement and the Global Proxy Service
rider:
Bank shall send to Customer or the Authorized Person for a Custody
Account, such proxies (signed in blank, if issued in the name of
Bank's nominee or the nominee of a central depository) and
communications with respect to Financial Assets in the Custody Account
as call for voting or relate to legal proceedings within a reasonable
time after sufficient copies are received by Bank for forwarding to
its customers. In addition, Bank shall follow coupon payments,
redemptions, exchanges or similar matters with respect to Financial
Assets in the Custody Account and advise Customer or the Authorized
Person for such Account of rights issued, tender offers or any other
discretionary rights with respect to such Financial Assets, in each
case, of which Bank has received notice from the issuer of the
Financial Assets, or as to which notice is published in publications
routinely utilized by Bank for this purpose.
