CUSTODY, ADMINISTRATION AND
ACCOUNTING SERVICES AGREEMENT
TABLE OF CONTENTS
SECTION PAGE
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DEFINITIONS..................................................................1
ARTICLE I - CUSTODY SERVICES.................................................3
1. APPOINTMENT OF MELLON.................................................3
2. CUSTODY OF CASH AND SECURITIES........................................3
3. SETTLEMENT OF TRANSACTIONS............................................7
4. LENDING OF SECURITIES.................................................8
5. PERSONS HAVING ACCESS TO ASSETS.......................................8
6. APPOINTMENT OF SUBCUSTODIANS..........................................8
7. OVERDRAFT FACILITY AND SECURITY FOR PAYMENT...........................9
8. TAX OBLIGATIONS.......................................................9
ARTICLE II - FOREIGN CUSTODY MANAGER SERVICES...............................10
1. DELEGATION...........................................................10
2. CHANGES TO APPENDIX B................................................10
3. REPORTS TO BOARD.....................................................10
4. MONITORING SYSTEM....................................................10
5. STANDARD OF CARE.....................................................10
6. USE OF SECURITIES DEPOSITORIES.......................................10
ARTICLE III - INFORMATION SERVICES..........................................11
1. RISK ANALYSIS........................................................11
2. MONITORING OF SECURITIES DEPOSITORIES................................11
3. USE OF AGENTS........................................................11
4. EXERCISE OF REASONABLE CARE..........................................11
5. LIABILITIES AND WARRANTIES...........................................11
ARTICLE IV - ADMINISTRATION SERVICES........................................11
1. APPOINTMENT OF MELLON................................................11
2. ADMINISTRATION SERVICES..............................................11
3. SUPERVISION OF TRANSFER AGENT AND OTHER SERVICE PROVIDERS............12
ARTICLE V - ACCOUNTING SERVICES.............................................12
1. APPOINTMENT OF MELLON................................................12
2. ACCOUNTING SERVICES..................................................12
3. NET ASSET VALUE SERVICE..............................................13
ARTICLE VI - GENERAL MATTERS................................................14
1. STANDARD OF CARE; SCOPE OF RESPONSIBILITIES..........................14
2. INSOLVENCY OF FOREIGN CUSTODIANS.....................................16
3. LIABILITY FOR DEPOSITORIES...........................................16
4. DAMAGES..............................................................16
5. INDEMNIFICATION; LIABILITY OF A FUND.................................16
6. FORCE MAJEURE........................................................17
7. COMMUNICATIONS.......................................................18
8. COMPENSATION AND EXPENSES............................................18
9. TERM AND TERMINATION.................................................19
10. INSPECTION OF BOOKS AND RECORDS......................................19
11. SERVICE LEVEL AGREEMENTS.............................................20
12. MISCELLANEOUS........................................................20
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APPENDIX A. LIST OF FUNDS.................................................A-1
APPENDIX B. SELECTED COUNTRIES............................................B-1
APPENDIX C. AUTHORIZED PERSONS............................................C-1
APPENDIX D. TRUST OFFICERS................................................D-1
APPENDIX E. FEES AND EXPENSES.............................................E-1
APPENDIX F. SERVICE LEVEL AGREEMENTS......................................F-1
APPENDIX G. SELF CUSTODY RIDER............................................G-1
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CUSTODY, ADMINISTRATION AND
ACCOUNTING SERVICES AGREEMENT
This Agreement, effective as of the 1st day of October, 2003, and is
between Mellon Institutional Funds Investment Trust (the "Trust"), a business
trust organized under the laws of the Commonwealth of Massachusetts having its
principal office and place of business at Xxx Xxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, and Mellon Bank, N.A. ("Mellon"), a national bank with its
principal place of business at Xxx Xxxxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx
00000.
W I T N E S S E T H:
WHEREAS, the Trust is authorized to issue shares in separate series with
each such series representing interests in a separate portfolio of securities
and other assets, and the Trust has made the series listed on Appendix A subject
to this Agreement (each such series, together with all other series subsequently
established by the Trust and made subject to the Agreement in accordance with
the terms hereof, shall be referred to as a "Fund" and, collectively, as the
"Funds");
WHEREAS, the Trust and Mellon desire to set forth their agreement with
respect to the custody of the Funds' securities and cash, and the processing of
securities transactions;
WHEREAS, the Board desires to delegate certain of its responsibilities for
performing the services set forth in paragraphs (c)(1), (c)(2) and (c)(3) of
Rule 17f-5 to Mellon as a Foreign Custody Manager;
WHEREAS, Mellon agrees to accept such delegation with respect to Assets,
including those held by Foreign Custodians in the Selected Countries as set
forth in jurisdictions listed on Appendix B as set forth in Article II;
WHEREAS, Mellon also agrees to perform the function of a Primary Custodian
under Rule 17f-7; and
WHEREAS, Mellon agrees to perform administration and accounting services
for each Fund as described herein;
NOW THEREFORE, the Trust and Mellon agree as follows:
DEFINITIONS
The following words and phrases, unless the context requires otherwise,
shall have the following meanings:
1. "Act": the Investment Company Act of 1940 and the rules and regulations
thereunder, all as amended from time to time.
2. "Agreement": this Agreement and any amendments hereto.
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3. "Assets": of a Fund, any of the Fund's investments, including Securities, and
foreign currencies and investments for which the primary market is outside the
United States, and such cash and cash equivalents as are reasonably necessary to
effect the Fund's transactions in such investments.
4. "Authorized Person": the Chairman of the Trust's Board, its President, and
any Vice President, Secretary, Treasurer or any other person, whether or not any
such person is an officer or employee of the Trust, duly authorized by the Board
to add or delete jurisdictions pursuant to Article II and to give Instructions
on behalf of a Fund that is listed in the Certificate annexed hereto as Appendix
C or such other Certificate as may be received by Mellon from time to time.
5. "Board": the Board of Trustees of the Trust.
6. "Book-Entry System": the Federal Reserve/Treasury book-entry system for
United States and federal agency Securities, its successor or successors and its
nominee or nominees.
7. "Business Day": any day that the New York Stock Exchange is open for trading.
8. "Certificate": any notice, instruction or other instrument in writing,
authorized or required by this Agreement to be given to Mellon, which is
actually received by Mellon and signed on behalf of the Trust on behalf of a
Fund by an Authorized Person or Persons designated by the Board to issue a
Certificate.
9. "Eligible Securities Depository": the meaning of the term set forth in Rule
17f-7(b)(1).
10. "Exchange Act": the Securities Exchange Act of 1934 and the rules and
regulations thereunder, all as amended from time to time.
11. "Foreign Custodian": (a) 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 the country's government or an agency of the country's
government; (b) a majority-owned direct or indirect subsidiary of a U.S. Bank or
bank-holding company; or (c) any entity other than a Securities Depository with
respect to which exemptive or no-action relief has been granted by the
Securities and Exchange Commission permitting such entity to serve as an
"Eligible Foreign Custodian" under Rule 17f-5 under the Act. For the avoidance
of doubt, the term "Foreign Custodian" shall not include Euroclear, Clearstream,
Bank One or any other transnational system for the central handling of
securities or equivalent book-entries regardless of whether or not such entities
or their service providers are acting in a custodial capacity with respect to
Assets, Securities or other property of a Fund.
12. "Instructions": directions and instructions to Mellon from an Authorized
Person in writing by facsimile or electronic transmission subject to Mellon's
practices or any other method specifically agreed upon, provided that Mellon
may, in its discretion, accept oral directions and instructions from an
individual it reasonably believes to be an Authorized Person and may require
confirmation in writing.
13. "NASD": National Association of Securities Dealers, Inc.
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14. "Primary Custodian": the meaning set forth in Rule 17f-7(b)(2).
15. "Prospectus": a Fund's current prospectus and statement of additional
information relating to the registration of the Shares under the Securities Act.
16. "Risk Analysis": the analysis required under Rule 17f-7(a)(1)(i)(A).
17. "Rules 17f-4, 17f-5 and 17f-7": such Rules as promulgated under Section
17(f) of the Act, as such rules (and any successor rules or regulations) may be
amended from time to time.
18. "Securities Act": the Securities Act of 1933 and the rules and regulations
thereunder, all as amended from time to time.
19. "Securities Depository": a system for the central handling of securities as
defined in Rule 17f-4(c)(6).
20. "Security" or "Securities": bonds, debentures, notes, stocks, shares,
evidences of indebtedness, and other securities, commodities, interests and
investments from time to time owned by the Fund.
21. "Selected Countries": the jurisdictions listed on Appendix B as such may be
amended from time to time in accordance with Article II.
22. "Shares": shares of beneficial interest of each Fund, however designated.
23. "Tax Obligations": taxes, withholding, certification and reporting
requirements, claims for exemptions or refund, interest, penalties, additions to
tax and other related expenses of a Fund.
24. "U.S. Bank": a "U.S. Bank," as such term is defined in Rule 17f-5(a)(7)
under the Act.
25. "Valuation Date": each day on which a valuation is determined, which, except
as may otherwise be provided by order of the Securities and Exchange Commission,
shall be any day that the New York Stock Exchange is open for trading.
ARTICLE I. - CUSTODY SERVICES
1. Appointment of Mellon. The Board appoints Mellon, and Mellon accepts
appointment, as custodian of all the Assets at the time owned by or in the
possession of each Fund during the period of this Agreement.
2. Custody of Cash and Securities.
a. Receipt and Holding of Assets. Each Fund will deliver or cause to be
delivered to Mellon all Securities and monies owned by it at any time during the
period of this Agreement. Mellon will not be responsible for such Assets until
actually received. The Board specifically authorizes Mellon to hold Assets of
each Fund with any domestic subcustodian, or Securities Depository, and Foreign
Custodians or Eligible Securities Depositories in the Selected Countries
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as provided in Article II. Assets of each Fund deposited in a Securities
Depository or Eligible Securities Depositories will be reflected in an account
or accounts that include only assets held by Mellon or a Foreign Custodian for
its customers.
b. Disbursements of Cash and Delivery of Securities. Mellon shall disburse
cash or deliver out Securities only for the purposes listed below. Instructions
must specify or evidence the purpose for which any transaction is to be made and
each Fund shall be solely responsible to assure that Instructions are in accord
with any limitations or restrictions applicable to the Fund.
(i) In payment for Securities purchased for such Fund;
(ii) In payment of dividends or distributions with respect to Shares
of such Fund;
(iii) In payment for Shares of such Fund that have been redeemed by
such Fund;
(iv) In payment of taxes of such Fund;
(v) When Securities of such Fund are sold, called, redeemed,
retired, or otherwise become payable;
(vi) In exchange for or upon conversion into other securities of
such Fund alone or other securities and cash pursuant to any plan of merger,
consolidation, reorganization, recapitalization or readjustment;
(vii) Upon conversion of Securities of such Fund pursuant to their
terms into other securities;
(viii) Upon exercise of subscription, purchase or other similar
rights represented by Securities of such Fund;
(ix) For the payment of interest, management or supervisory fees,
distributions or operating expenses of such Fund;
(x) In payment of fees and in reimbursement of the expenses and
liabilities of Mellon attributable to such Fund;
(xi) In connection with any borrowings by such Fund or short sales
of securities requiring a pledge of Securities of such Fund, but only against
receipt of amounts borrowed;
(xii) In connection with any loans, but only against receipt of
adequate collateral as specified in Instructions, which shall reflect any
restrictions applicable to such Fund;
(xiii) For the purpose of redeeming Shares of such Fund and the
delivery to, or the crediting to the account of, Mellon or such Fund's transfer
agent, such Shares to be purchased or redeemed;
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(xiv) For the purpose of redeeming in kind Shares of such Fund
against delivery to Mellon, its subcustodian or the Fund's transfer agent
(solely in its or their capacity as such) of such Shares to be so redeemed;
(xv) For delivery in accordance with the provisions of any agreement
among the Trust with respect to such Fund, Mellon and a broker-dealer registered
under the Exchange Act and a member of NASD, relating to compliance with the
rules of the Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by such Fund.
Mellon will act only in accordance with Instructions in the delivery of
Securities of such Fund to be held in escrow and will have no responsibility or
liability for any such Securities that are not returned promptly when due other
than to make proper requests for such return;
(xvi) For spot or forward foreign exchange transactions to
facilitate security trading, receipt of income from Securities of such Fund or
related transactions;
(xvii) Upon the termination of this Agreement; and
(xviii) For other proper purposes as may be specified in
Instructions issued by an officer of the Trust with respect to such Fund, which
shall include a statement of the purpose for which the delivery or payment is to
be made, the amount of the payment or specific Securities to be delivered, the
name of the person or persons to whom delivery or payment is to be made, and a
Certificate stating that the purpose is a proper purpose under the instruments
governing the Trust.
c. Actions That May be Taken Without Instructions. Unless an Instruction
to the contrary is received, Mellon shall:
(i) Collect all income due to or payable by each Fund and use
reasonable efforts to investigate circumstances of nonreceipt of payments,
provided that Mellon shall not be responsible for the failure to receive payment
of (or late payment of) distributions or other payments with respect to
Securities or other property held in the account of such Fund;
(ii) Present for payment and collect the amount payable upon all
Securities of each Fund, which may mature or be called, redeemed, retired or
otherwise become payable. Notwithstanding the foregoing, Mellon shall have no
responsibility to a Fund for monitoring or ascertaining any call, redemption or
retirement dates with respect to put bonds or similar instruments that are owned
by such Fund and held by Mellon or its nominees where such dates are not
published in sources routinely used by Mellon. Nor shall Mellon have any
responsibility or liability to a Fund for any loss by such Fund for any missed
payments or other defaults resulting therefrom, unless Mellon received timely
notification from such Fund specifying the time, place and manner for the
presentment of any such put bond owned by such Fund and held by Mellon or its
nominee. Mellon shall not be responsible and assumes no liability for the
accuracy or completeness of any notification Mellon may receive from a third
party and duly furnishes the information contained in such notification to a
Fund with respect to put bonds or similar instruments;
(iii) Surrender Securities of a Fund in temporary form for
definitive Securities;
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(iv) Hold directly, or through a Securities Depository with respect
to Securities therein deposited, for the account of each Fund all rights and
similar securities issued with respect to any Securities held by Mellon
hereunder for that Fund;
(v) Submit or cause to be submitted to each Fund or its investment
adviser as designated by the Trust information actually received by Mellon
regarding ownership rights pertaining to property held for such Fund;
(vi) Deliver or cause to be delivered any Securities held for each
Fund in exchange for other Securities or cash issued or paid in connection with
the liquidation, reorganization, refinancing, merger, consolidation or
recapitalization of any business entity, or the exercise of any conversion
privilege;
(vii) Deliver or cause to be delivered any Securities held for each
Fund to any protective committee, reorganization committee or other person in
connection with the reorganization, refinancing, merger, consolidation or
recapitalization or sale of assets of any business entity, and receive and hold
under the terms of this Agreement such certificates of deposit, interim receipts
or other instruments or documents as may be issued to it to evidence such
delivery;
(viii) Make or cause to be made such transfers or exchanges of the
assets specifically allocated to each Fund and take such other steps as shall be
stated in Instructions for the purpose of effectuating any duly authorized plan
of liquidation, reorganization, merger, consolidation or recapitalization of
each Fund;
(ix) Deliver Securities of each Fund upon the receipt of payment in
connection with any repurchase agreement related to such Securities entered into
by such Fund;
(x) Deliver Securities owned by each Fund to the issuer thereof or
its agent when such Securities are called, redeemed, retired or otherwise become
payable; provided, however, that in any such case the cash or other
consideration is to be delivered to Mellon. Notwithstanding the foregoing,
Mellon shall have no responsibility to a Fund for monitoring or ascertaining any
call, redemption or retirement dates with respect to the put bonds or similar
instruments that are owned by such Fund and held by Mellon or its nominee where
such dates are not published in sources routinely used by Mellon. Nor shall
Mellon have any responsibility or liability to a Fund for any loss by such Fund
for any missed payment or other default resulting therefrom unless Mellon
received timely notification from such Fund specifying the time, place and
manner for the presentment of any such put bond owned by such Fund and held by
Mellon or its nominee. Mellon shall not be responsible and assumes no liability
to a Fund for the accuracy or completeness of any notification Mellon may
receive from a third party and duly furnishes the information contained in such
notification to such Fund with respect to put bonds or similar investments;
(xi) Endorse and collect all checks, drafts or other orders for the
payment of money received by Mellon for the account of each Fund; and
(xii) Execute any and all documents, agreements or other instruments
as may be necessary or desirable for the accomplishment of the purposes of this
Agreement.
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d. Confirmation and Statements. Promptly after the close of business on
each day, Mellon shall furnish each Fund with confirmations and a summary of all
transfers to and from the account of such Fund during the day. Where Securities
purchased by a Fund are in a fungible bulk of securities registered in the name
of Mellon (or its nominee) or shown on Mellon's account on the books of a
Securities Depository, Mellon shall by book-entry or otherwise identify the
quantity of those Securities belonging to that Fund. At least monthly, Mellon
shall furnish each Fund with a detailed statement of the Assets held for the
Fund under this Agreement.
e. Registration of Securities. Mellon is authorized to hold all
Securities, Assets, or other property of each Fund in nominee name, in bearer
form or in book-entry form. Mellon may register any Securities, Assets or other
property of each Fund in the name of the Trust or such Fund, in the name of
Mellon, any domestic subcustodian, or Foreign Custodian, in the name of any duly
appointed registered nominee of such entity, or in the name of a Securities
Depository or its successor or successors, or its nominee or nominees. The Trust
on behalf of each Fund agrees to furnish to Mellon appropriate instruments to
enable Mellon to hold or deliver in proper form for transfer, or to register in
the name of its registered nominee or in the name of a Securities Depository,
any Securities that it may hold for the account of such Fund and that may from
time to time be registered in the name of the Trust or such Fund.
f. Segregated Accounts. Upon receipt of Instructions, Mellon will from
time to time establish segregated accounts on behalf of each Fund to hold and
deal with specified Assets as shall be directed.
g. Reports. Mellon shall provide promptly, upon request by the Trust or
the Trust's independent public accountants, such reports as are available
concerning Mellon's internal accounting controls and financial strength and,
upon request, will provide the Trust and the Trust's independent public
accountants access to books and records relating to the Trust and Mellon's
internal controls.
3. Settlement of Transactions.
a. Customary Practices. Settlement of transactions may be effected in
accordance with trading and processing practices customary in the jurisdiction
or market where the transaction occurs. The Trust on behalf of each Fund
acknowledges that this may, in certain circumstances, require the delivery of
cash or Securities (or other property) without the concurrent receipt of
Securities (or other property) or cash. In such circumstances, Mellon shall have
no responsibility for nonreceipt of payments (or late payment) or nondelivery of
Securities or other property (or late delivery) by the counterparty.
b. Contractual Income. Unless the parties agree to the contrary, Mellon
shall credit the applicable Fund, in accordance with Mellon's standard operating
procedure, with income and maturity proceeds on Securities on the contractual
payment date net of any taxes or upon actual receipt. To the extent Mellon
credits income on the contractual payment date, Mellon may reverse such
accounting entries with back value to the contractual payment date if Mellon
reasonably believes that such amount will not be received.
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c. Contractual Settlement. Unless the parties agree to the contrary,
Mellon will attend to the settlement of securities transactions in accordance
with Mellon's standard operating procedure, on the basis of either contractual
settlement date accounting or actual settlement date accounting. To the extent
Mellon settles certain securities transactions on the basis of contractual
settlement date accounting, Mellon may reverse with back value to the
contractual settlement date any entry relating to such contractual settlement if
Mellon reasonably believes that such amount will not be received.
4. Lending of Securities. Mellon may lend the assets of a Fund in accordance
with the terms and conditions of a separate securities lending agreement
approved by the Trust on behalf of such Fund.
5. Persons Having Access to Assets.
a. Access and Withdrawal. No trustee or agent of the Trust, and no
officer, director, employee or agent of the Trust's or a Fund's investment
adviser, of any sub-investment adviser of the Trust or of a Fund, or of Mellon
acting in its capacity as the Trust's or a Fund's administrator, shall have
physical access to the Assets of a Fund held by Mellon or be authorized or
permitted to withdraw any investments of such Fund, nor shall Mellon deliver any
Assets of such Fund to any such person. No officer, director, employee or agent
of Mellon who holds any similar position with the Trust's or a Fund's investment
adviser, with any sub-investment adviser of the Trust or a Fund or with the
Trust's or a Fund's administrator shall have access to the Assets of the Fund.
b. Providing Instructions. Nothing in this Section 5 shall prohibit any
duly authorized officer, employee or agent of the Trust, or any duly authorized
officer, director, employee or agent of the investment adviser, of any
sub-investment adviser of a Fund or of a Fund's administrator, from giving
Instructions to Mellon or executing a Certificate so long as it does not result
in delivery of or access to Assets of such Fund prohibited by paragraph (a) of
this Section 5.
6. Appointment of Subcustodians. Mellon is hereby authorized to appoint one or
more domestic subcustodians (which may be an affiliate of Mellon) to hold Assets
at any time owned by a Fund. The appointment of any such domestic subcustodian
shall not relieve Mellon of its responsibilities or liabilities hereunder,
except where a Fund has selected the domestic subcustodian. Mellon shall have no
more or less responsibility or liability on account of the acts or omissions of
any domestic subcustodian it selected and employed hereunder than Mellon has to
the Fund. Where a Fund has selected a domestic subcustodian to hold Assets at
any time owned by a Fund, Mellon shall have no liability to a Fund or any other
person by reason of any act or omission of any subcustodian and a Fund shall
indemnify Mellon and hold it harmless from and against any and all actions,
suits and claims, arising directly or indirectly out of the performance of any
subcustodian selected by a Fund. Mellon also is hereby authorized when acting
pursuant to Instructions to: (1) place assets of a Fund with any Foreign
Custodian located in a jurisdiction that is not a Selected Country and with
Euroclear, Clearstream, Banc One or any other transnational depository; and (2)
place assets of a Fund with a broker or other agent as subcustodian in
connection with futures, options, short selling or other transactions. When
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acting pursuant to, and in accordance with, such Instructions, Mellon shall not
be liable for the acts or omissions of any subcustodian so appointed.
7. Overdraft Facility and Security for Payment. If Mellon receives Instructions
to make payments or transfers of monies on behalf of a Fund for which there
would be, at the close of business on the date of such payment or transfer,
insufficient monies held by Mellon on behalf of such Fund, Mellon may, in its
sole discretion, provide an overdraft (an "Overdraft") to such Fund in an amount
sufficient to allow the completion of such payment or transfer. Any Overdraft
provided hereunder: (a) shall be payable on the next Business Day, unless
otherwise agreed by such Fund and Mellon; and (b) shall accrue interest from the
date of the Overdraft to the date of payment in full by such Fund at a rate
agreed upon from time to time, by Mellon and such Fund or, in the absence of
specific agreement, at such rate as charged to other customers of Mellon under
procedures uniformly applied. Mellon and each Fund acknowledge that the purpose
of such Overdraft is to temporarily finance the purchase of Securities for
prompt delivery in accordance with the terms hereof, to meet unanticipated or
unusual redemptions, to allow the settlement of foreign exchange contracts or to
meet other unanticipated Fund expenses. Mellon shall promptly notify the
appropriate Fund (an "Overdraft Notice") of any Overdraft. To secure payment of
any Overdraft, each Fund hereby grants to Mellon a continuing security interest
in and right of setoff against the Securities and cash in the Fund's account
from time to time in the full amount of such Overdraft. Should a Fund fail to
pay promptly any amounts owed hereunder, Mellon shall be entitled to use
available cash in such Fund's account and to liquidate Securities in the account
as necessary to meet such Fund's obligations under the Overdraft. In any such
case, and without limiting the foregoing, Mellon shall be entitled to take such
other actions(s) or exercise such other options, powers and rights as Mellon now
or hereafter has as a secured creditor under the Pennsylvania Uniform Commercial
Code or any other applicable law.
8. Tax Obligations. Unless Mellon has notified the Trust that Mellon has not
received relevant and necessary information with respect to a Fund, Mellon shall
perform the following services with respect to Tax Obligations:
a. Claims. Mellon shall file claims for exemptions or refunds with respect
to withheld foreign (non-U.S.) taxes of a Fund in instances in which such claims
are appropriate;
b. Withholdings. Mellon shall withhold appropriate amounts, as required by
U.S. tax laws, with respect to amounts received on behalf of nonresident aliens
who hold Shares of a Fund; and
c. Information. Mellon shall provide to a Fund such information received
by Mellon that could, in Mellon's reasonable belief, assist such Fund in the
submission of any reports or returns with respect to Tax Obligations. Each Fund
shall inform Mellon in writing as to which party or parties shall receive
information from Mellon.
Mellon shall provide such other services with respect to Tax Obligations,
including preparation and filing of tax returns and reports and payment of
amounts due (to the extent funded), as requested by the Trust on behalf of a
Fund and agreed to by Mellon in writing. Mellon shall have no independent
obligation to determine the existence of any information with respect to, or the
extent of, any Tax Obligations now or hereafter imposed on a Fund by any
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taxing authority. Except as specifically provided herein or agreed to in writing
by Mellon, Mellon shall have no obligations or liability with respect to Tax
Obligations of the Trust or any Fund, including, without limitation, any
obligation to file or submit returns or reports with any taxing authorities.
In making payments to service providers pursuant to Instructions, the
Trust, on behalf of each Fund, acknowledges that Mellon is acting as a paying
agent and not as the payor, for tax information reporting and withholding
purposes.
ARTICLE II. - FOREIGN CUSTODY MANAGER SERVICES
1. Delegation. The Board delegates to Mellon, and Mellon hereby agrees to
accept, responsibility as each Fund's Foreign Custody Manager for selecting,
contracting with and monitoring Foreign Custodians in Selected Countries set
forth in Appendix B in accordance with Rule 17f-5(c).
2. Changes to Appendix B. Appendix B may be amended by written agreement from
time to time to add or delete jurisdictions by written agreement signed by an
Authorized Person of the Trust on behalf of the appropriate Fund and Mellon, but
Mellon reserves the right to delete jurisdictions upon reasonable notice to the
Fund.
3. Reports to Board. Mellon shall provide written reports notifying the Board of
the placement of Assets of a Fund with a particular Foreign Custodian and of any
material change in such Fund's foreign custody arrangements. Such reports shall
be provided to the Board quarterly, except as otherwise agreed by Mellon and the
Trust.
4. Monitoring System. In each case in which Mellon has exercised delegated
authority to place Assets of a Fund with a Foreign Custodian, Mellon shall
establish a system, to re-assess or re-evaluate selected Foreign Custodians, at
least annually in accordance with Rule 17f-5(c)(3).
5. Standard of Care. In exercising the delegated authority under this Article II
of the Agreement, Mellon agrees to exercise reasonable care, prudence and
diligence such as a person having responsibility for the safekeeping of the
Assets would exercise in like circumstances. Contracts with Foreign Custodians
shall provide for reasonable care for Assets based on the standards applicable
to Foreign Custodians in the Selected Country. In making this determination,
Mellon shall consider the provisions of Rule 17f-5(c)(2).
6. Use of Securities Depositories. In exercising its delegated authority, Mellon
may assume, unless instructed in writing by an Authorized Person of a Fund to
the contrary, that such Fund and its investment adviser have determined,
pursuant to Rule 17f-7, that the depository provides reasonable safeguards
against custody risks if such Fund decides to place and maintain foreign assets
with any Securities Depository as to which Mellon has provided the Trust on
behalf of such Fund with a Risk Analysis.
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ARTICLE III. - INFORMATION SERVICES
1. Risk Analysis. Mellon will provide the Trust on behalf of each Fund with a
Risk Analysis with respect to Securities Depositories operating in the countries
listed in Appendix B. If Mellon is unable to provide a Risk Analysis with
respect to a particular Securities Depository, it will notify the Trust on
behalf of each Fund. If a new Securities Depository commences operation in one
of the Appendix B countries, Mellon will provide the Trust on behalf of the Fund
with a Risk Analysis in a reasonably practicable time after such Securities
Depository becomes operational. If a new country is added to Appendix B, Mellon
will provide the Trust on behalf of each Fund with a Risk Analysis with respect
to each Securities Depository in that country within a reasonably practicable
time after the addition of the country to Appendix B.
2. Monitoring of Securities Depositories. Mellon will monitor the custody risks
associated with maintaining Assets with each Securities Depository for which it
has provided the Trust on behalf of each Fund with a Risk Analysis as required
under Rule 17f-7. Mellon will promptly notify the Trust on behalf of each Fund
or its investment adviser of any material change in these risks.
3. Use of Agents. Mellon may employ agents, including, but not limited to,
Foreign Custodians, to perform its responsibilities under Sections 1 and 2
above.
4. Exercise of Reasonable Care. Mellon will exercise reasonable care, prudence,
and diligence in performing its responsibilities under this Article III. With
respect to the Risk Analyses provided or monitoring performed by an agent,
Mellon will exercise reasonable care in the selection of such agent, and shall
be entitled to rely upon information provided by agents so selected in the
performance of its duties and responsibilities under this Article III.
5. Liabilities and Warranties. While Mellon will take reasonable precautions to
ensure that information provided is accurate, Mellon shall have no liability
with respect to information provided to it by third parties other than Mellon's
affiliates. Due to the nature and source of information, and the necessity of
relying on various information sources, most of which are external to Mellon,
Mellon shall have no liability for direct or indirect use of such information
from third parties other than Mellon's affiliates.
ARTICLE IV. - ADMINISTRATION SERVICES
1. Appointment of Mellon. The Board appoints Mellon to provide administration
services to each Fund for the period and on terms as set forth in this
Agreement. Mellon accepts such appointment and agrees to furnish such services
during the period of this Agreement.
2. Administration Services.
a. Financial Reporting. Mellon will (i) prepare the trial balance and
supporting documents for a Fund's semi-annual reports; (ii) coordinate the
preparation, typesetting and distribution of a Fund's financial statements;
(iii) make available and provide to a Fund financial
11
information required by a Fund in the preparation of its registration statements
and financial reports required by federal securities laws; (iv) coordinate with
a Fund's independent auditors; and (v) oversee the preparation and distribution
of a Fund's semi-annual and annual reports.
b. Regulated Investment Company Compliance. Mellon will monitor and
prepare regular compliance reports as agreed upon by a Fund and Mellon from time
to time relating to a Fund's status as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended.
c. Board Reporting. Mellon will prepare financial and administrative
reports to the Trust's Board as requested by the Trust and prepare such other
reports and information as agreed upon by the Trust and Mellon from time to
time.
d. Tax Reporting. Mellon will (i) prepare trial balances and tax
adjustments in connection with the preparation of a Fund's federal tax returns;
(ii) review tax disclosure in a Fund's annual reports to shareholders; (iii)
monitor and report on capital gain distributions; (iv) monitor and report on
capital loss carryforwards; (v) prepare year-end shareholder tax information;
and (vi) prepare year-end Form 1099 Miscellaneous.
3. Supervision of Transfer Agent and Other Service Providers. Mellon shall
oversee the provision of transfer agent services to each Fund by Dreyfus
Transfer, Inc. ("DTI") pursuant a Transfer Agency Agreement dated as of October
1, 2003 between DTI and the Trust on behalf of each Fund, as such agreement may
be amended from time to time. Mellon also shall serve as liaison between the
Trust and its other services providers as agreed upon from time to time by the
Trust and Mellon. As part of its oversight obligations, Mellon shall be
responsible for monitoring and reporting to each Fund the performance of service
levels agreed upon by the Trust and DTI. In addition, Mellon shall seek to
ensure that DTI adheres to the service levels agreed upon by the Trust and DTI.
ARTICLE V. - ACCOUNTING SERVICES
1. Appointment of Mellon. The Board appoints Mellon to provide accounting
services to each Fund for the period and on terms as set forth in this
Agreement. Mellon accepts such appointment and agrees to furnish such services
during the period of this Agreement.
2. Accounting Services. Subject to the supervision and direction of the Trust,
Mellon undertakes to provide the following services with respect to each Fund:
a. Valuation of Assets. Valuing such Fund's Assets, maintaining general
Fund ledgers and calculating the net asset value of the Assets of such Fund in
accordance with the rules for valuation and procedures for the performance of
services set forth hereunder.
b. Other Accounting Services. Providing such Fund with such other
accounting services and reports as may be reasonably requested by such Fund and
agreed to by Mellon in writing, provided that such Fund supplies all necessary
information enabling Mellon to supply such services.
12
c. Maintenance of Books and Records. Mellon will keep and maintain on
behalf of such Fund such books and records as such Fund and Mellon may agree
upon from time to time.
d. Property of Client. Mellon agrees that all records which it maintains
for such Fund shall be considered the property of such Fund and further agrees
to surrender promptly to such Fund copies of any of such records upon such
Fund's request; provided, however, that Mellon is hereby authorized to retain
any such records as may be required by applicable law or Mellon's policies and
procedures.
e. Accounting Services Statement. If, within ninety (90) days after Mellon
sends such Fund a statement with respect to the accounting services or reports
provided, such Fund has not given Mellon written notice of any exception or
objection thereto, such statement shall be deemed to have been approved, and in
such case, Mellon shall not be liable for any matters in such statements. Mellon
reserves the right to claim the benefit of the common law doctrine latches as
the same may apply to errors which should have reasonably been discovered sooner
by a reasonable review of a statement. Such Fund (or its designee) shall have
the right at its own expense to inspect Mellon's books and records directly
relating to such Fund during Mellon's normal business hours.
3. Net Asset Value Service.
a. Trust Valuation. Mellon agrees to provide to the Trust, its service
providers or its agents for each Valuation Date a net asset value calculation
service for each Fund. The total net assets ("TNA") of a Fund on a Valuation
Date shall equal the aggregate value of the assets of such Fund less the value
of the accrued liabilities of such Fund. The TNA of a Fund shall be determined
in accordance with that Fund's pricing and valuation procedures, a true and
correct copy of which shall be provided to Mellon. Mellon is authorized to
obtain and rely upon prices and quotes from independent pricing services or from
the Trust, an investment adviser to the Trust or a Fund or a person authorized
to provide such information as set forth in the Fund's pricing and valuation
procedures. Mellon shall be without liability or responsibility for any loss
occasioned by such reliance. When prices from independent pricing services
utilized by Mellon are not readily available or the Trust, an investment adviser
or such authorized person believes such prices are inaccurate or unreliable, the
Trust shall direct, or cause its investment advisers or such authorized person
to direct, Mellon as to a price or quote to be used; and Mellon shall be fully
protected in relying upon and acting in accordance with such direction in
determining the price or quote.
b. Net Asset Valuation. The net asset value per Share ("NAV") shall be
determined by dividing the TNA of a Fund by the number of outstanding Shares of
such Fund on a Valuation Date as determined by Mellon or as reported to Mellon
by such Fund, its service providers or its agents. Provided that the TNA of a
Fund on a Valuation Date and the total value of each shareholder's interest in a
Fund on such Valuation Date remain the same, such Fund may direct Mellon to
increase or decrease the total number of outstanding Shares of a Fund with a
corresponding change in the NAV of such Fund.
c. Multiple Classes. To the extent a Fund offers multiple classes of
shares, Mellon shall provide the same net asset value service to each Fund on a
per class basis as Mellon
13
provides to the Trust on a per Fund basis pursuant to this Agreement for such
compensation and reimbursement of expenses as set forth in Article VI, Section 8
below.
d. Reconciliation; Transmission of NAV.
(i) Each Fund shall assist, and shall cause its investment advisers,
service providers and agents to assist, with the reconciliation of such Fund's
investment transactions and asset positions. If Mellon receives information from
a Fund, its investment adviser, service providers or agents, Mellon shall be
entitled to rely upon, and shall be fully protected when relying upon and acting
in accordance with, any such information (including, but not limited to,
underlying investment values and information concerning purchases and sales or
other information necessary for Mellon to determine any such Fund's TNA or NAV).
(ii) Mellon shall transmit to a Fund or agent on each Valuation Date
(or promptly following TNA or NAV reconciliation, if later) a file identifying
the NAV of such Fund, and the Shares outstanding (as applicable), as of the
Valuation Date.
e. Restatement of NAV.
(i) If there has been a misstatement of NAV of a Fund on any
Valuation Date, Mellon shall restate such Fund's NAV and/or reconcile
participating shareholder accounts in accordance with the Trust's procedures for
correcting fund pricing errors, a true and correct copy of which has been
provided to Mellon. Such procedures may be amended from time to time as agreed
upon by Mellon and the Trust.
(ii) In the event of a purchase of Shares of a Fund by a shareholder
associated with a misstated NAV and in the event that participating shareholder
accounts are to be corrected pursuant to the procedures described in subsection
e(1) above, each affected shareholder's account shall be corrected by effecting
a purchase or sale of Shares, as appropriate, of the relevant Fund using the
corrected NAV and the dollar amount equal to the dollar amount associated with
the purchase or sale of shares, as appropriate, at the misstated NAV. If there
are insufficient Shares of such Fund for a participating shareholder to enable
any such corrected sale transaction to be effected, the Fund shall cause the
participating shareholder to repay to such Fund any such amount distributed to
or otherwise transferred for the benefit of each affected participating
shareholder in excess of the amount to which the participating shareholder was
entitled had the sale proceeds been determined at the corrected NAV.
(iii) The cost of making corrections to the NAV of a Fund and/or
shareholder accounts shall not be borne by Mellon except to the extent that
Mellon has been negligent in the performance of its duties under this Agreement.
ARTICLE VI. - GENERAL MATTERS
1. Standard of Care; Scope of Responsibilities.
14
a. Standard of Care. Mellon shall be required to exercise reasonable care
with respect to its duties under Articles I, II, III, IV and V of this Agreement
unless otherwise specifically provided herein.
(i) Notwithstanding any other provision of this Agreement, Mellon
shall not be liable for any loss, cost, expense, claim, or damage, including
reasonable legal fees, resulting from its action or omission to act or
otherwise, except for any such loss or damage arising out of the negligence or
willful misconduct of Mellon.
(ii) Mellon may, with respect to questions of law, apply for and
obtain the advice and opinion of counsel to the Trust or a Fund or of its own
counsel, at the expense of the Trust or the appropriate Fund after consultation
with the Trust or Fund, and shall be fully protected with respect to anything
done or omitted by it in good faith in conformity with such advice or opinion.
b. Scope of Duties. Without limiting the generality of the foregoing,
Mellon shall be under no duty or obligation to inquire into, and shall not be
liable for:
(i) The acts or omissions of any agent appointed pursuant to
Instructions of the Trust or a Fund or its investment adviser including, but not
limited to, any broker-dealer or other entity to hold any Securities or other
property of such Fund as collateral or otherwise pursuant to any investment
strategy.
(ii) The validity of the issue of any Securities purchased by a
Fund, the legality of the purchase thereof, or the propriety of the amount paid
therefor;
(iii) The legality of the sale of any Securities by a Fund or the
propriety of the amount for which the same are sold;
(iv) The legality of the issue or sale of any Shares of a Fund, or
the sufficiency of the amount to be received therefor;
(v) The legality of the redemption of any Shares of a Fund, or the
propriety of the amount to be paid therefore;
(vi) The legality of the declaration or payment of any distribution
of a Fund; or
(vii) The legality of any borrowing for temporary administrative or
emergency purposes.
c. No Liability Until Receipt. Mellon shall not be liable for, or
considered to be custodian of, any money, whether or not represented by any
check, draft, or other instrument for the payment of money, received by it on
behalf of the Fund until Mellon actually receives and collects such money.
d. Amounts Due from Transfer Agent. Mellon shall use reasonable efforts to
effect the collection of any amount due to the Fund from DTI and to cause
payment or distribution by DTI of any amount paid by Mellon to DTI.
15
e. Collection Where Payment Refused. Mellon shall not be required to take
action to effect collection of any amount, if the Securities upon which such
amount is payable are in default, or if payment is refused after due demand or
presentation, unless and until it shall be directed to take such action and it
shall be assured to its satisfaction of reimbursement of its related costs and
expenses.
f. No Duty to Ascertain Authority. Mellon shall not be under any duty or
obligation to ascertain whether any Securities at any time delivered to or held
by it for the Fund are such as may properly be held by the Fund under the
provisions of its governing instruments or Prospectus.
2. Insolvency of Foreign Custodians. Mellon shall be responsible for losses or
damages suffered by a Fund arising as a result of the insolvency of a Foreign
Custodian only to the extent that Mellon failed to comply with the standard of
care set forth in Article II with respect to the selection and monitoring of
such Foreign Custodian.
3. Liability for Depositories. Mellon shall not be responsible for any losses
resulting from the deposit or maintenance of Securities, Assets or other
property of a Fund with a Securities Depository.
4. Damages. Under no circumstances shall Mellon be liable for any indirect,
consequential or special damages with respect to its role as Foreign Custody
Manager or information vendor or with respect to the provision of any other
services under this Agreement.
5. Indemnification; Liability of a Fund.
a. Indemnification of Mellon. The Trust on behalf of each Fund shall
indemnify and hold Mellon, its directors, officers, employees, shareholders and
agents (each, an "Indemnified Party") harmless from all liability, including any
loss, cost, expense, claim or damage, including reasonable legal fees, suffered
or incurred by an Indemnified Party arising out of the performance of its
obligations under this Agreement except to the extent Mellon or any of its
officers, employees or agents have not met the standard of care applicable to
such obligations under this Agreement. Each Indemnified Party shall be
indemnified and held harmless by the relevant Fund and from the Assets of the
relevant Fund from and against any such loss, cost, expense, claim, damage or
liability (including reasonable legal expenses) which an Indemnified Party may
sustain or incur or which may be asserted against an Indemnified Party by any
person by reason of, or as a result of (i) any action taken or omitted by Mellon
or its officers, employees or agents in good faith hereunder, (ii) reliance upon
any instrument, certificate, order, or other document reasonably believed by
Mellon or its officers, employees or agents to be genuine and to be signed,
countersigned or executed by any duly authorized person, (iii) reliance upon
written instructions or oral instructions reasonably believed to be issued by a
Fund or Authorized Person or upon the opinion of legal counsel for the Trust or
counsel for Mellon, or (iv) any act or failure to act by Mellon or its officers,
employees or agents in good faith reliance upon any law, act, regulation or
interpretation of the same even though the same may thereafter have been
altered, changed, amended or repealed. Indemnification herein shall not apply to
acts or failure to act by Mellon or its officers, employees or agents in cases
of its or their own negligence or willful misconduct in the performance of its
or their own duties hereunder.
16
b. Damages. An Indemnified Party shall not be liable for any act or
omission of any other person in carrying out any responsibility imposed upon
such person and under no circumstances shall an Indemnified Party be liable for
any indirect, consequential, or special damages with respect to the services
provided under this Agreement.
c. Indemnification of Trust. Mellon shall indemnify and hold the Trust,
its trustees, officers, employees and agents (each, a "Trust Indemnified Party")
from all liability, including any loss, cost, expense, claim or damage,
including reasonable legal fees, suffered or incurred by a Trust Indemnified
Party arising out of or attributable to Mellon's negligence or willful
misconduct in the performance of its duties under this Agreement.
d. Reliance on Information and Third Parties. In performing its services
under this Agreement, Mellon may rely upon prices, holdings and other
information provided by the Trust, Authorized Persons and any services or
sources authorized by the Trust or that are customarily used by Mellon for such
information; and Mellon shall be without liability or responsibility for any
loss occasioned by such reliance.
e. Fund Data. The Trust acknowledges that Mellon will be receiving,
analyzing, relying and acting upon certain accounting information and other data
maintained and/or provided by the Trust on behalf of a Fund or its agents ("Fund
Data"), which Fund Data is necessary for Mellon to use in meeting its
obligations under this Agreement. Notwithstanding anything in this Agreement to
the contrary, the Trust on behalf of a Fund shall be solely responsible for the
accuracy, completeness and timeliness of all Fund Data provided to Mellon and
Mellon shall be entitled to rely fully upon such Fund Data without liability or
responsibility for any loss occasioned by such reliance. Mellon shall have no
liability for and shall be indemnified to the extent provided in this Article VI
against, any losses, claims, liabilities, fees, damages, costs or expenses
incurred by the Trust on behalf of a Fund or its underlying shareholders or any
other third party arising from or relating to, inaccurate, incorrect, untimely
or duplicative Fund Data.
f. Compliance with Securities Laws. Except to the extent of Mellon's
obligations as set forth in this Agreement, the Trust on behalf of each Fund
assumes full responsibility for compliance with all applicable requirements of
the Securities Act, the Act, and any other laws, rules and regulations of
governmental authorities having jurisdiction. Mellon shall have no obligation to
take cognizance of any laws relating to the sale of the Shares of any Fund.
g. Obligations of the Trust. The Trust and Mellon agree that the
obligations of a Fund under this Agreement shall not be binding upon any of the
trustees, shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Trust or such Fund, individually, but are binding only
upon the assets and property of such Fund. Any responsibility or liability of
the Trust or a particular Fund under any provision of this Agreement shall be
satisfied solely from the Assets of the Trust or the particular Fund, and in no
event shall Mellon or its agents have any recourse against any one Fund for the
obligation of any other Fund.
6. Force Majeure. Notwithstanding anything in this Agreement to the contrary,
Mellon shall not be liable for any losses resulting from or caused by events or
circumstances beyond its
17
reasonable control, including, but not limited to, losses resulting from
nationalization, strikes, expropriation, devaluation, revaluation, confiscation,
seizure, cancellation, destruction or similar action by any governmental
authority, de facto or de jure; or enactment, promulgation, imposition or
enforcement by any such governmental authority of currency restrictions,
exchange controls, taxes, levies or other charges affecting a Fund's property;
or the breakdown, failure or malfunction of any utilities or telecommunications
systems; or any order or regulation of any banking or securities industry
including changes in market rules and market conditions affecting the execution
or settlement of transactions; or acts of war, terrorism, insurrection or
revolution; or any other similar event.
7. Communications.
a. Instructions. In performing the services under this Agreement, Mellon
shall act in accordance with the Instructions of the Trust, a Fund or an
Authorized Person acting on behalf of the Trust or a Fund. Instructions by
letter or facsimile must be signed, or purport to be signed, by an Authorized
Person.
b. Reliance on Instructions. Mellon shall be entitled to rely upon any
Instruction, notice or other instrument in writing received by Mellon and
reasonably believed by Mellon to be genuine and to be signed by an officer or
Authorized Person of the appropriate Fund. Where Mellon is issued Instructions
orally, the appropriate Fund acknowledge that, if written confirmation is
requested, the validity of the transactions or enforceability of the
transactions authorized by such Fund shall not be affected if such confirmation
is not received or is contrary to oral Instructions given. Mellon shall be under
no duty to question any direction of an Authorized Person, to review any
property held in the account, to make any suggestions with respect to the
investment of the assets in the account, or to evaluate or question the
performance of any Authorized Person. Mellon shall not be responsible or liable
for any diminution of value of any securities or other property held by Mellon,
unless such diminution of value would not have been incurred or suffered by the
relevant Fund but for Mellon's negligence or willful misconduct in the
performance of its duties under this Agreement.
8. Compensation and Expenses.
a. Appendix E. The Trust on behalf of each Fund will compensate Mellon for
its services rendered under this Agreement, and reimburse Mellon for its
expenses, in accordance with Appendix E, which appendix may be modified in
writing upon mutual agreement of the Trust and Mellon from time to time.
b. Payment. Mellon will xxxx each Fund as soon as practicable after the
end of each calendar month for the amount of its compensation and reimbursable
expenses. The Trust on behalf of each Fund will promptly pay, or cause to be
paid, to Mellon the amount of such billing.
c. Payment upon Termination. Upon termination of this Agreement with
respect to a Fund before the end of the month, Mellon's compensation for such
period shall be prorated according to the proportion that such period bears to
the full month period.
d. Late and Non-Payments. If not paid directly or timely by the Trust on
behalf of a Fund, Mellon may charge against assets held on behalf of such Fund
compensation and any
18
expenses incurred by Mellon in the performance of its duties pursuant to this
Agreement. Mellon shall also be entitled to charge against assets of each Fund
the amount of any loss, damage, liability or expense incurred with respect to
such Fund, including legal fees, for which Mellon shall be entitled to
reimbursement under the provisions of this Agreement. The expenses that Mellon
may charge include, but are not limited to, the expenses of domestic
subcustodians and Foreign Custodians incurred in settling transactions.
9. Term and Termination.
a. Effective Date. This Agreement shall be effective on the date first set
forth above and shall remain in force until terminated pursuant to subsection
(b) of this Section.
b. Termination. Mellon may terminate this Agreement by giving a Fund at
least 180 days' notice in writing, specifying the date of such termination. A
Fund may terminate this Agreement by giving Mellon at least sixty (60) days'
notice in writing, specifying the date of such termination. The Trust may
terminate this Agreement with respect to a Fund, on at least sixty (60) days'
notice in writing to Mellon that specifies the date of such termination, if such
Fund is dissolved, liquidated or merged with or consolidated into another
entity. If notice is given by the Trust, it shall be accompanied by a
Certificate evidencing the vote of the Trust's Board to terminate this Agreement
and designating a successor.
c. Successor. If notice of termination is given by Mellon, the Trust
shall, on or before the termination date, deliver to Mellon a Certificate
evidencing the vote of the Board designating a successor service provider. In
the absence of such designation, Mellon may designate a successor service
provider, which shall be a person qualified to so act under the Act. If the
Trust fails to designate a successor service provider, the Trust shall, upon the
date specified in the notice of termination, and upon the delivery by Mellon of
all Assets then owned by a Fund, be deemed to be its own service provider, and
Mellon shall thereby be relieved of all duties and responsibilities under this
Agreement other than the duty with respect to Securities held in the Book-Entry
System, that cannot be delivered to the Fund.
d. Coordination with Successor. Upon termination of the Agreement, Mellon
shall, upon receipt of a notice of acceptance by the successor service provider,
deliver to the successor all Securities and monies then held by Mellon on behalf
of each Fund, after deducting all fees, expenses and other amounts owed.
e. Survival of Provisions. In the event of a dispute following the
termination of this Agreement with respect to a Fund, the provisions of Sections
6 and 7 of Article I, Section 5 of Article III, and Sections 1, 2, 3, 4, 5, 6,
7, 8, 9 and 11 of Article VI shall be deemed to continue to apply to the
obligations and liabilities of the parties with respect to that Fund.
10. Inspection of Books and Records. The books and records of Mellon shall be
open to inspection and audit at reasonable times by officers and auditors
employed by the Trust at the Trust's own expense and with prior written notice
to Mellon, and by the appropriate employees of any regulatory entity with
jurisdiction over the Trust, including, but not limited to, the Securities and
Exchange Commission, the Commodity Futures Trading Commission, the National
Futures Association and the National Association of Securities Dealers.
19
11. Service Level Agreements. The operations personnel of Mellon and the Trust
shall agree from time to time to establish service level agreements that set
forth the procedures and guidelines to be followed generally by Mellon and the
Trust in connection with the custody, administration and accounting services to
be provided under this Agreement ("Service Level Agreements"). Appendix F hereto
sets forth the form of such Service Level Agreements as of the date of this
Agreement. In the event a conflict arises between a Service Level Agreement and
this Agreement, this Agreement shall control. It is the intent of Mellon and the
Trust that the Service Level Agreements guide Mellon and the Trust on the scope
and nature of their responsibilities and their general performance objectives
under this Agreement so as to minimize the potential for operational problems.
Accordingly, the Service Level Agreements do not constitute separately
enforceable agreements between Mellon and the Trust. Mellon and the Trust
acknowledge the importance of the Service Level Agreements to the provision of
custody, administration and accounting services to the Trust and further
acknowledge that they represent the understanding and expectation of the parties
as to the provision of such services. However, the failure to perform tasks
strictly in accord with a Service Level Agreement would not necessarily
constitute a breach of this Agreement. Both Mellon and the Trust understand
that, to the extent that provisions of a Service Level Agreement reflect
Mellon's policies and procedures in place for its customers generally, Mellon
reserves the right to alter such provisions and will provide the Trust with
reasonable notice of any such changes. Provisions of a Service Level Agreement
that have resulted from negotiation between Mellon and the Trust may only be
changed by mutual consent, which consent may not be unreasonably withheld. In
such instances and to the extent any deviation from the explicit provisions of
the Service Level Agreements is not material to the provision of custody,
administration and accounting services to the Trust, the actual procedures and
practices of Mellon and the Trust shall control over the provisions in Appendix
F.
12. Miscellaneous.
a. Appendix C is a Certificate signed by the Secretary of the Trust
setting forth the names and the signatures of Authorized Persons. The Trust
shall furnish a new Certificate when the list of Authorized Persons is changed
in any way. Until a new certification is received, Mellon shall be fully
protected in acting upon Instructions from Authorized Persons as set forth in
the last delivered Certificate.
b. Appendix D is a Certificate signed by the Secretary of the Trust
setting forth the names and the signatures of the present officers of the Trust.
The Trust agrees to furnish to Mellon a new Certificate when any changes are
made. Until a new Certificate is received, Mellon shall be fully protected in
relying upon the last delivered Certificate.
c. Notice. Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Trust or Mellon shall be sufficiently
given if addressed to that party and received by it at its offices as set forth
below or at such other place as the parties may from time to time designate to
the other in writing.
20
To Mellon:
Mellon Bank, N.A.
Xxx Xxxxxx Xxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
For Custody Matters: Attn: Xxxxx Xxxxxx
For Accounting and Administrative Matters: Attn: Xxx Xxxxxxxx
To the Trust:
Xxxxxxxx Xxxxxx Asset Management Company LLC
Xxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
d. Amendments. This Agreement may not be amended or modified except by a
written agreement executed by Mellon and the Trust.
e. Assignment. This Agreement shall extend to and shall be binding upon
the parties hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Trust without the
written consent of Mellon, or by Mellon without the written consent of the Trust
authorized or approved by a vote of the Board; provided, however, that Mellon
may assign the Agreement or any function thereof to any corporation or entity
that directly or indirectly is controlled by, or is under common control with,
Mellon and any other attempted assignment without written consent shall be null
and void.
f. Third-Party Rights. Nothing in this Agreement shall give or be
construed to give or confer upon any third party any rights hereunder.
g. U.S. Bank. Mellon represents that it is a U.S. Bank within the meaning
of paragraph (a)(7) of Rule 17f-5.
h. Maintenance of Assets. The Trust acknowledges and agrees that, except
as expressly set forth in this Agreement, the Trust is solely responsible to
assure that the maintenance of each Fund's Securities and cash hereunder
complies with applicable laws and regulations, including without limitation the
Act. The Trust represents that it has determined that it is reasonable to rely
on Mellon to perform the responsibilities delegated pursuant to this Agreement.
i. Choice of Law. This Agreement shall be construed in accordance with the
laws of the Commonwealth of Pennsylvania without regard to its conflict of laws
provisions. To the extent that the applicable laws of the Commonwealth of
Pennsylvania, or any of the provisions herein, conflict with the applicable
provisions of the Act, the latter shall control, and nothing herein shall be
construed in a manner inconsistent with the Act or any rule or order of the
Securities and Exchange Commission thereunder.
j. Captions. The captions of the 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.
21
k. Authorizations. Each party represents to the other that it has all
necessary power and authority, and has obtained any consent or approval
necessary to permit it, to enter into and perform this Agreement and that this
Agreement does not violate, give rise to a default or right of termination under
or otherwise conflict with any applicable law, regulation, ruling, decree or
other governmental authorization or any contract to which it is a party or by
which any of its Assets is bound.
l. Privacy. Mellon acknowledges and agrees that certain information made
available to it hereunder may be deemed non-public personal information under
the Xxxxx-Xxxxx-Xxxxxx Act, other federal or state privacy laws (as amended),
and the rules and regulations promulgated thereunder (collectively, "Privacy
Laws"). Mellon hereby agrees (i) not to disclose or use such information except
as required to carry out its duties under this Agreement or as otherwise
permitted by law in its ordinary course of business, (ii) to establish and
maintain procedures reasonably designed to assure the security and privacy of
all such information, and (iii) to cooperate with the Trust and provide
reasonable assistance in ensuring compliance with such Privacy Laws to the
extent applicable to Mellon.
m. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective representatives duly authorized as of the day and
year first above written.
MELLON INSTITUTIONAL FUNDS INVESTMENT TRUST
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
MELLON BANK, N.A.
By: /s/ Xxxxxxxxxxx Xxxxx
---------------------
Name: Xxxxxxxxxxx Xxxxx
Title: First Vice President
22
APPENDIX A
LIST OF FUNDS
The Boston Company International Core Equity Fund
The Boston Company International Small Cap Fund
The Boston Company Large Cap Core Fund
The Boston Company Small Cap Growth Fund
The Boston Company Small Capitalization Equity Fund
The Boston Company Small Cap Value Fund
The Boston Company Tax Sensitive Small Cap Equity Fund
Xxxxxxxx Xxxxxx Intermediate Tax Exempt Bond Fund
Xxxxxxxx Mellon International Fixed Income Fund
Xxxxxxxx Xxxxxx International Fixed Income Fund II
Xxxxxxxx Mellon Investment Grade Bond Fund
Xxxxxxxx Xxxxxx Fixed Income Fund
Xxxxxxxx Mellon Global Fixed Income Fund
Xxxxxxxx Xxxxxx High Yield Bond Fund
Xxxxxxxx Mellon Opportunistic Emerging Market Debt Fund
Xxxxxxxx Xxxxxx Opportunistic High Yield Fund
Xxxxxxxx Mellon Massachusetts Intermediate Tax Exempt Bond Fund
Xxxxxxxx Xxxxxx Short-Term Asset Reserve Fund
Xxxxxxxx Mellon Short-Term Fixed Income Fund
X-0
XXXXXXXX X
SELECTED COUNTRIES
Argentina Greece Poland
Australia Hong Kong Portugal
Austria Hungary Romania
Bahrain Iceland Russia
Bangladesh India Singapore
Belgium Indonesia Slovakia
Bermuda Ireland Slovenia
Bolivia Israel South Africa
Botswana Italy South Korea
Brazil Japan Spain
Canada Jordan Sri Lanka
Chile Kazakhstan Sweden
China/Shenzhen Kenya Switzerland
China/Shanghai Lebanon Taiwan
Clearstream Luxembourg Thailand
Colombia Malaysia Trinidad &
Costa Rica Mauritius Tobago
Croatia Mexico Tunisia
Czech Republic Morocco Turkey
Denmark Namibia Uganda
Ecuador The Netherlands Ukraine
Egypt New Zealand United
Estonia Norway Kingdom
Euroclear Oman Uruguay
Finland Pakistan Venezuela
France Panama Vietnam
Germany Peru Zambia
Ghana The Philippines
B-1
APPENDIX C
AUTHORIZED PERSONS
I, Xxxxxxx X. Xxxxxxxx, the Secretary of Mellon Institutional Funds
Investment Trust, a business trust organized under the laws of the Commonwealth
of Massachusetts, and the Mellon Institutional Funds Master Portfolio, a
business trust organized under the laws of the State of New York (the Mellon
Institutional Funds Investment Trust and Mellon Institutional Funds Master
Portfolio collectively, the "Trusts"), do hereby certify that:
The following individuals have been duly authorized as Authorized Persons
to give Instructions on behalf of the Trusts and each Fund or Portfolio and the
specimen signatures set forth opposite their respective names are their true and
correct signatures:
For the Trusts and all Funds and Portfolios:
Portfolio Accounting
Xxxxxx Xxxxxxxx /s/ Xxxxxx Xxxxxxxx
------------------------------
Xxxxxxx Xxxxxxxxx /s/ Xxxxxxx Xxxxxxxxx
------------------------------
Xxxxxxx Xxxxx /s/ Xxxxxxx Xxxxx
------------------------------
Xxxxxxx X. Xxxx /s/ Xxxxxxx X. Xxxx
------------------------------
Xxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx Xxxxxx /s/ Xxxxx Xxxxxx
------------------------------
Xxxxx X. Xxxxxxxxx /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Xxxxxxxxxxx Xxxxxxx /s/ Xxxxxxxxxxx Xxxxxxx
------------------------------
C-1
Xxxxx Xxxxxxxx /s/ Xxxxx Xxxxxxxx
------------------------------
Mutual Fund Operations
Xxxxxx Xxxx /s/ Xxxxxx Xxxx
------------------------------
Xxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Xxxx Xxxxxxxx /s/ Xxxx Xxxxxxxx
------------------------------
Treasury
Xxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
------------------------------
For all "Xxxxxxxx Xxxxxx" named Funds and Portfolios
Name Signature
Trade Processing/Pricing
Xxxxxxxx Xxxxxxxx /s/ Xxxxxxxx Xxxxxxxx
------------------------------
Xxxxxx X. Xxxxxxxxx /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxxxxxxx X. Belleville /s/ Xxxxxxxxxxx X. Belleville
------------------------------
Xxx Xxxxxxxx /s/ Xxx Xxxxxxxx
------------------------------
Xxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxx
------------------------------
Xxxxx Xxxxxxxxxx /s/ Xxxxx Xxxxxxxxxx
------------------------------
C-2
Xxxxx X. Xxxxx /s/ Xxxxx X. Xxxxx
------------------------------
Xxxxx Xxxxxxxxxx /s/ Xxxxx Xxxxxxxxxx
------------------------------
Xxxx Xxxx /s/ Xxxx Xxxx
------------------------------
Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx Xxxxxxx /s/ Xxxxxx Xxxxxxx
------------------------------
Xxxxxxxx Xxxxxxx /s/ Xxxxxxxx Xxxxxxx
------------------------------
Xxxxxxxx X. Xxxx /s/ Xxxxxxxx X. Xxxx
------------------------------
Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxxx /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxxx Xxxxxxx* /s/ Xxxxxxx Xxxxxxx
------------------------------
Xxxxxx Xxxxxxx* /s/ Xxxxxx Xxxxxxx
------------------------------
Xxxx Xxxxxxxx* /s/ Xxxx Xxxxxxxx
------------------------------
* Authorized beginning October 7, 2003.
C-3
For all "The Boston Company" named Funds and Portfolios
Name Signature
Xxxxx X. Xxxxxxxxxx /s/ Xxxxx X. Xxxxxxxxxx
------------------------------
Xxxxx X. Xxxxxxxx /s/ Xxxxx X. Xxxxxxxx
------------------------------
Xxxxxx Xxxxxxx /s/ Xxxxxx Xxxxxxx
------------------------------
Xxxxx Xxxxxx /s/ Xxxxx Xxxxxx
------------------------------
Xxxx Xxxxx /s/ Xxxx Xxxxx
------------------------------
Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx Xxxxxx /s/ Xxxxxx Xxxxxx
------------------------------
Xxxx Xxxxxxxxx /s/ Xxxx Xxxxxxxxx
------------------------------
Xxxxx Xxxxxxxxx /s/ Xxxxx Xxxxxxxxx
------------------------------
Xxxxxx Xxxxx /s/ Xxxxxx Xxxxx
------------------------------
Xxxxx Xxxxxx* /s/ Xxxxx Xxxxxx
------------------------------
* Authorized beginning October 7, 2003.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
Secretary
Dated: October 7, 2003
C-4
APPENDIX D
TRUST OFFICERS
I, Xxxxxxx X. Xxxxxxxx, the Secretary of Mellon Institutional Funds
Investment Trust, a business trust organized under the laws of the Commonwealth
of Massachusetts, and the Mellon Institutional Funds Master Portfolio, a
business trust organized under the laws of the State of New York (the Mellon
Institutional Funds Investment Trust and Mellon Institutional Funds Master
Portfolio collectively, the "Trusts"), do hereby certify that:
The following individuals serve in the following positions with each Trust
and each individual has been duly elected or appointed to each such position and
qualified therefor in conformity with the Trusts' governing instruments and the
specimen signatures set forth opposite their respective names are their true and
correct signatures:
Name Position Signature
---- -------- ---------
Xxxxxxx X. Xxxxxxxx President and Chief Executive /s/ Xxxxxxx X. Xxxxxxxx
Officer -------------------------
Xxxxxxx X. Xxxxxxxx Vice President and Secretary /s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Xxxxxx X. Xxxxxxxx Vice President and Treasurer /s/ Xxxxxx X. Xxxxxxxx
-------------------------
Xxxxxx X. Xxxxxxxx Assistant Vice President /s/ Xxxxxx X. Xxxxxxxx
-------------------------
Xxxx Xxxx Assistant Vice President /s/ Xxxx Xxxx
-------------------------
Xxxx X. Xxxxxxxx Assistant Vice President /s/ Xxxx X. Xxxxxxxx
-------------------------
Xxxxx X. Xxxxxxx Assistant Vice President /s/ Xxxxx X. Xxxxxxx
-------------------------
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxxx
Secretary
Dated: October 7, 2003
D-1
APPENDIX E
FEES AND EXPENSES
Each Fund shall pay Mellon the following fees and reimburse Mellon for the
following expenses for the provision of custody, administration and accounting
services under the Agreement:
E-1
Mellon GSS, acting as service provider for the Mellon Institutional Funds (which
include the Mellon Institutional Funds Investment Trust and the Mellon
Institutional Funds Master Portfolio), would base its compensation according to
the schedule that follows. Core custody services include domestic and global
safekeeping of assets, transaction settlement, income collection, cash
availability/forecasting, corporate action processing and basic on-line inquiry.
Core fund accounting services include maintaining investment ledgers,
maintaining general ledger and capital stock accounts, calculating daily net
asset value and distributing NAVs to third parties as directed. Mellon GSS will
commit to the enclosed fees for a period of three years.
Investment related fees include, but are not limited to, wire charges, courier
expenses, registration fees, stamp duties, etc. Clients are responsible for
communications hardware, and software to support data transmissions to/from
Mellon GSS.
This schedule also assumes participation in Mellon's Global Securities Lending.
Revenue from a securities lending program would be shared between the Mellon
Institutional Funds and Mellon GSS at a split of 70% to the Mellon Institutional
Funds and 30% to Mellon GSS.
This schedule is meant to provide the Mellon Institutional Funds with a good
faith estimate of fees and is based on our understanding of your requirements to
this point for the 19 active mutual funds. Should the nature of the account
change dramatically, Mellon GSS reserves the right to re-negotiate its
compensation based on the situation that exists in the account at such time. If
non-standard or special services are requested, Mellon GSS may negotiate
additional compensation accordingly.
Mellon GSS agrees to pay conversion costs passed from DST Systems, Inc. for the
purpose of establishing the Mellon Institutional Funds on the TA platform. Other
Transfer Agent services available to the Mellon Institutional Funds, but not
contemplated in this fee schedule, include use of VISION, FAN MAIL and TA 2000
VOICE.
E-2
ARTICLE VII. Our Custody Services Include:
--------------------------------------------------------------------------------
* Safekeeping of Assets * Settlement of Transactions
--------------------------------------------------------------------------------
* Corporate Action Processing * Income Collection
--------------------------------------------------------------------------------
* On-Line Reporting * Tax Reclamation Services
--------------------------------------------------------------------------------
* Daily Cash Availability/Forecasting * Proxy Services
--------------------------------------------------------------------------------
* Foreign Exchange * Conversion of Assets
--------------------------------------------------------------------------------
North American Fee Schedule (US and Canada)
--------------------------------------------------------------------------------
Annual Asset Based Fee Per Fund Per Year:
3.5 basis points (0.00035) first $100 million
2.0 basis points (0.00020) next $100 million
1.0 basis points thereafter
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Transaction Fees:
$ 10.00 per Depository Eligible Transaction
$ 10.00 per FED Eligible Transaction
$ 25.00 per Physical Transaction
$ 5.00 per Paydown
$ 5.00 per Fed Funds Wire Received or Delivered
$ 20.00 per Futures Transaction
$ 20.00 per Forward Contract
--------------------------------------------------------------------------------
Class Action Processing:
Mellon GSS will file class actions on behalf of Mellon Institutional Funds. An
amount equal to 2% of the proceeds will be charged against each participating
fund at the time the proceeds are credited
E-3
Our Fund Accounting Services Include:
--------------------------------------------------------------------------------
* Maintaining Investment Ledgers * Maintaining Fund General Ledger
--------------------------------------------------------------------------------
* Processing Fund Transactions * Processing Accrual and Amortization
Daily
--------------------------------------------------------------------------------
* Preparing Trial Balance * Accruing for Fund Expenses
--------------------------------------------------------------------------------
* Maintaining Capital Stock Activity * Calculating and Distribute Fund NAV
--------------------------------------------------------------------------------
Fund Accounting Services
--------------------------------------------------------------------------------
Annual Fee Per Fund Per Year:
$30,000 per Domestic Fund per Year
$45,000 per Global Fund per Year
$18,000 per Fund less than $25 million per Year
$ 3,000 per Each Additional Class of Shares per Year
--------------------------------------------------------------------------------
Our Fund Administration Services Include:
--------------------------------------------------------------------------------
* Audit Coordination * Financial Reporting
--------------------------------------------------------------------------------
* IRS Compliance * Board Reporting
--------------------------------------------------------------------------------
Fund Administration Services (Complex)
--------------------------------------------------------------------------------
$15,000 per Fund per Year
$ 3,000 per Each Additional Class of Shares
--------------------------------------------------------------------------------
E-4
Institutional Transfer Agency Services Include:
Fee assumes that Mellon Institutional Funds will maintain phones for shareholder
inquiries. Account set-up, and shareholder recordkeeping for approximately 2000
shareholder accounts. The following fees are indicative until exact deliverables
are determined through further conversation between Mellon Institutional Funds
and Mellon GSS.
Institutional Transfer Agency
--------------------------------------------------------------------------------
$6,000 base fee per Fund or Class
$19.06 per Open Shareholder Account in a daily dividend fund
$12.84 per Open Shareholder Account in a quarterly/annual dividend fund
$ 1.20 per Closed Shareholder Account
$10.00 Custodial Fee per XXX/Xxxxxx account ($25.00 maximum per participant)
--------------------------------------------------------------------------------
Global Fee Schedule:
Network Based Charges:
--------------------------------------------------------------------------------
1. Category 1 3.5 basis points
--------------------------------------------------------------------------------
2. Category 2 8.0 basis points
--------------------------------------------------------------------------------
3. Category 3 10.0 basis points
--------------------------------------------------------------------------------
4. Category 4 15.0 basis points
--------------------------------------------------------------------------------
5. Category 5 25.0 basis points
--------------------------------------------------------------------------------
6. Category 6 45.0 basis points
--------------------------------------------------------------------------------
E-5
Transaction Fees:
----------------------------------------------------------------------------------------------------------------------------
7. Category 0 Xxxxxxxxx, Xxxxxx, Xxxxxxx, Xxxxx, Japan, Netherlands, New Zealand, Spain, Sweden, $20.00
Switzerland, United Kingdom, CEDEL
----------------------------------------------------------------------------------------------------------------------------
Category 2 Austria, Australia, Belgium, Denmark, Finland, Ireland, Luxembourg, Mexico, Norway, $50.00
South Africa
----------------------------------------------------------------------------------------------------------------------------
Category 0 Xxxxxxxxx, Xxxxxx, Xxxx Xxxx, Xxxxxxxx, Portugal, Singapore, South Korea, Sri Lanka, $60.00
Thailand, Turkey
----------------------------------------------------------------------------------------------------------------------------
Category 4 Czech Republic, Greece, Hungary, Indonesia, Israel, Peru, Taiwan, Zimbabwe $60.00
----------------------------------------------------------------------------------------------------------------------------
Category 0 Xxxxxxxxxx, Xxxxxxx, Xxxxxxxx, Xxxxx, Xxxxx, Xxxxxxxxx, Xxxxxxxx, Philippines, Poland, $70.00
Uruguay
----------------------------------------------------------------------------------------------------------------------------
Category 6 Bolivia, Chile, China - Shanghai, China - Shenzhen, Colombia, Cyprus, Ecuador, Egypt, $85.00
Xxxxxxx, Xxxxx, Xxxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx, Xxxxxx, Xxxxxx Xxxxxxxx, Venezuela,
Zambia
----------------------------------------------------------------------------------------------------------------------------
E-6
ARTICLE VIII. Out of Pocket Expenses:
Mellon GSS will pass-through to the Mellon Institutional Funds expenses for
actual out of pocket expenses incurred by Mellon GSS in association with
servicing the Mellon Institutional Funds. Some out of pocket expenses include:
---------------------------------------------------------------------------------------------------------------
* Pricing and Verification Services * Subcustodian Expenses / Stamp Duties
---------------------------------------------------------------------------------------------------------------
* Printing, Delivery and Postage * Forms and Supplies
---------------------------------------------------------------------------------------------------------------
* Telecommunication * Custom Report Development
---------------------------------------------------------------------------------------------------------------
* Legal Costs * Custom System Development
---------------------------------------------------------------------------------------------------------------
* NSCC Charges * Transfer Agent Out-of-Pocket Expenses
---------------------------------------------------------------------------------------------------------------
* Microfiche Charges * Transfer Agent Cash Management
---------------------------------------------------------------------------------------------------------------
* Third-party Fees Related to Fund Servicing
---------------------------------------------------------------------------------------------------------------
Mellon Institutional Funds Investment Trust Mellon Bank, X.X.
Xxxxxx Institutional Funds Master Portfolio
Signed by: __________________________ Signed by: ____________________
Title: _____________________________ Title: _______________________
Date: _______________________________ Date: _________________________
X-0
XXXXXXXX X
XXXXXXX XXXXX XXXXXXXXXX
X-0
--------------------------------------------------------------------------------
Mellon Global Securities Services
Custody Services for
Mellon Institutional Funds
--------------------------------------------------------------------------------
GSS Custody Services
--------------------------------------------------------------------------------
Account Opening Foreign Exchange Corporate Actions
Processing
--------------------------------------------------------------------------------
Trade Processing Cash Processing Income Collections
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
General
Description:
GSS will provide custody safekeeping services for the Xxxxxxxx Xxxxxx Funds.
GSS will utilize the Custody Management System (CMS) for all transaction
processing, income collection and corporate action processing. GSS manages a
global network of sub-custodians for global custody and provides all services to
comply with Foreign Custody Manager Services under Rule 17 (f) 5.
GSS will provide reporting utilizing Workbench, a web-based client reporting
system.
--------------------------------------------------------------------------------
GSS= Mellon Global Securities Services
GSS Custody= Xxxxxxx-based Mutual Fund Custody Dept.
The Advisor=Any Mellon Institutional Fund Advisor
SMAM= Xxxxxxxx Xxxxxx Asset Management
TBCAM=The Boston Company Asset Management
1
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Mellon Global Securities Services
Custody Services for
Mellon Institutional Funds
--------------------------------------------------------------------------------
1.1 Account Opening
Description: GSS Custody will open new accounts upon requests from authorized
individuals of the advisor for proprietary accounts. The GSS
Custody CSO will communicate the requirements for establishing a
new account. Once these requirements are in place, GSS Custody
will open an account on the Custody systems and assign a unique,
eleven character portfolio number. Arrangements will be made to
open accounts at various subcustodians where the advisor have
indicated trading. The advisor will include the portfolio number
when providing securities delivery and/ or payment instructions
to counterparties.
Commence servicing of account by the later of
i. Start date indicated on New Account Form; or
ii. 24 hours of receipt of form;
iii. or within 24 hours of account approval by the advisor.
Global Market Openings: When the advisor decides to trade in a
new market, it is important to communicate this intention with
your GSS Custody CSO as soon as possible. The GSS Custody CSO
will communicate the requirements, if any, that must be met prior
to trading and settlement activity occuring. Some markets will
require documentation from the beneficial owner of assets prior
to market entrance. The advisor will not execute a trade in the
new market until the GSS Custody CSO has verified that all
requirements have been met, including that the necessary sub
custodian accounts have been opened.
Parameters: Timing requirements:
o New Account Forms received and approved at GSS Custody by
10:00 AM EST will be completed within 24 hours, using
commercially best efforts, provided the account has been
approved for activation by customer or within 24 hours after
receipt of Customer approval.
2
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Mellon Global Securities Services
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1.2 Trade Processing Xxxxxxxx Xxxxxx Asset Management (SMAM) Boston
Description: SMAM will send complete and accurate trade settlement
instructions within the GSS Custody notification deadlines (see
deadlines in attached file which is also available via
Workbench). GSS Custody will receive security transactions
executed by SMAM and route them into GSS's Custody Management
System. Trades will be received from SMAM in the following way:
o Multiple, daily automated electronic transmissions (FTP)
sent directly to Mellon by SMAM in a format acceptable to
GSS (standard SWIFT ISO 15022 format).
o Hard-copy trade tickets for manual processing with the
appropriate authorization either via overnight courier or
via facsimile transmission. Any facsimile instruction sent
to GSS Custody will contain two authorized signatures. GSS
Custody will contact SMAM if two signatures are not
provided.
o Trade detail discrepancies that are not SWIFT network
related will be the responsibility of SMAM and GSS Custody
to rectify through direct interaction.
Parameters: Timing requirements:
o SMAM will send trade files five times daily at scheduled
times to be agreed upon in writing between GSS and SMAM
prior to sending such trade files.
o GSS will forward custody holdings MT535 and cash statements
MT950 to SMAM. They will be sent in a nightly batch cycle
between the hours of 12 midnight and 5 AM.
3
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1.2 Trade Processing Xxxxxxxx Xxxxxx Asset Management (SMAM) Boston (continued)
o GSS will forward custody settlement confirmations. The
messages are transmitted when a trade is settled or has a
fail reason applied to it.
-----------------------------------------------------------
MT544 Settlement of Receive Free
-----------------------------------------------------------
MT545 Settlement of Receive vs. Payment
-----------------------------------------------------------
MT546 Settlement of Deliver Free
-----------------------------------------------------------
MT547 Settlement of Deliver vs. Payment
-----------------------------------------------------------
MT548 Notice of Settlement Problem
-----------------------------------------------------------
For the MT54x messages there are qualifiers. The NEWM qualifier
denotes a new message. The CANC qualifier denotes a cancel
message.
Notification requirements:
o GSS will use commercially reasonable efforts to notify SMAM
of receipt of each file transmission within 15 minutes of
receipt. If GSS does not receive file transmission within
thirty (30) minutes after scheduled time for receipt, GSS
will notify SMAM via email of non-receipt by GSS of such
transmission.
4
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Mellon Global Securities Services
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1.2 Trade Processing The Boston Company Asset Management (TBCAM)
Description: TBCAM will send complete and accurate trade settlement
instructions within the GSS Custody notification deadlines (See
deadlines in attached file which is also available via
Workbench). GSS Custody will receive security transactions
executed by TBCAM and route them into GSS's Custody Management
System. Trades will be received from TBCAM in the following way:
o DTC ID System: TBCAM will affirm through the DTC ID System
all DTC equity eligible securities per the Ad Hoc Standard
Letter of Agreement.
o Hard-copy trade tickets for manual processing with the
appropriate authorization via facsimile transmission. This
would include: unaffirmed trades, foreign trades, IPO trades
(T+0), short settlement trades, Futures, Foreign Exchange
Contracts. Any facsimile instruction sent to GSS will
contain two authorized signatures. GSS Custody will contact
TBCAM if two signatures are not provided.
o Trade detail discrepancies will be the responsibility of
TBCAM and GSS to rectify through direct interaction.
Parameters: Timing requirements:
o TBCAM will send via fax a blotter on T+1 by 9:00 all trade
activity.
o TBCAM will send a system generated trade recap daily at 3:00
PM and 5:00 PM via FTP for trades that are faxed over to
GSS. GSS will tie out the trades to ensure that all of them
have been received and will contact TBCAM with any
discrepancies.
o TBCAM will reconcile Custody Holdings daily.
5
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1.3 Foreign Exchange Processing
Description: Affiliated Funds Support
Foreign Exchange Contracts will be executed through the following methods:
1) The advisor will execute a Foreign Exchange Contract with an external
broker. The advisor will send complete and accurate Foreign Exchange
Instructions within the GSS Custody notification deadlines (see deadlines
in attached file which is also available via Workbench). GSS Custody will
receive foreign exchange transactions by the advisor and route them into
GSS's Custody Management System.
2) The advisor will direct GSS Custody, as Custodian to execute a Foreign
Exchange Contract for repatriation of dividends and income for the Funds.
GSS Custody has made arrangements with the Bank of New York to facilitate
foreign exchange contracts for affiliated mutual funds. GSS Custody will
in turn arrange for execution and settlement with BONY.
3) The advisor will direct, GSS Custody as Custodian to execute a Foreign
Exchange Contract with Mellon Bank, NA's Subcustodian on behalf of the
Funds in markets where Third party exchange is an acceptable practice.
Mellon Internal FX Capability
--------------------------------------------------------------
Argentina Bahrain Bangladesh
--------------------------------------------------------------
Bermuda Bolivia Botswana
--------------------------------------------------------------
Chili Colombia Croatia
--------------------------------------------------------------
Ecuador Egypt Estonia
--------------------------------------------------------------
Ghana India Indonesia
--------------------------------------------------------------
Jordan Kenya Lebanon
--------------------------------------------------------------
Malaysia Mauritius Morocco
--------------------------------------------------------------
Namibia Pakistan S. Korea
--------------------------------------------------------------
Xxxxxx Xxxxxxxx Xxxxxxxx Xxx Xxxxx
--------------------------------------------------------------
Taiwan Trinidad Uruguay
--------------------------------------------------------------
Venezuela Vietnam Zambia
* Countries are subject to change and revisions to SLA will be made upon change.
GSS will notify the advisor of exchange rate and currency amount on TD by 4 PM
EST.
11/25/2003 6
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Mellon Global Securities Services
Custody Services for
Mellon Institutional Funds
--------------------------------------------------------------------------------
Parameters: Timing requirements:
The advisor will issue a letter of standing instruction to
execute foreign exchange of dividend and income currency.
Accounts will be added to BONY existing account structure.
7
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Mellon Global Securities Services
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1.4 Cash Processing
Description: GSS will provide detailed cash projection information via web
based real time Internet product Workbench
(xxx.xxxxxxxxx.xxxxxx.xxx) each morning by 2 a.m. EST. Reports
include; Cash Balances, Cash Ledger Balances, 5 day cash
forecast, Cash Statement, Custody Holdings. The advisor will
report Cash to Portfolio managers and reconcile to GSS Custody.
GSS Custody will reconcile prior day activity and will monitor
cash balances continuously throughout the day to avoid potential
overdrafts and failed trades.
Cash/Currency availability reports are also produced by GSS
Custody upon receipt of sub/red activity from the transfer agent.
Final deadline 10:00 a.m. EST. The advisor will view the reports
via Workbench. GSS Custody will e-mail final cash availability to
TBCAM by 10:00 a.m.
GSS Custody will invest/uninvest cash upon standing instruction
in sweep vehicle as directed by the advisor.
Parameters: Timing requirements -The advisor will require cash figures by 10
a.m. EST. GSS Custody will fax reports as a back up procedure in
the event the Internet site is unavailable.
Workbench Profiles
SMAM Boston- CRWBSMA
SMAM Pittsburgh- CRWBMBD
TBCAM- CRWBTBC
8
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Mellon Global Securities Services
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1.5 Corporate Actions
Description: Notifications
o Method of Communication
GSS will send corporate action notices that are received via
our network via fax and will advise of the corporate action
details, entitled position, the market and GSS cut off time
for the reply.
Parameter: Full Notifications (All Markets) - For all issues
GSS will transmit full details of the Corporate Action within the following
guidelines:
o For ex date driven events, GSS will use reasonable efforts to deliver
notification 48 hours from receipt of notice from
subcustodian/depository/agent.
o Re notification generation on ex date if position change (Only for
voluntary actions).
o Re notification of any changes or updates to the details relating to a
corporate event within 48 hours of confirmation.
o For expiration date driven events GSS will use reasonable efforts to
deliver full notification within 48 hours of GSS's receipt of notice.
o Where a Corporate Action entitlement is rounded up and such notice is
provided by the subcustodian/depository/agent, this will be clearly stated
on the Notification.
o For all non-mandatory Corporate Actions, GSS will aim to set instruction
deadlines for the advisor that are within 48 hours of the deadline imposed
on GSS by its sub-Mellon or intermediary entity.
o The advisor should make reasonable efforts to provide GSS with election
decision instructions on or before GSS's response deadline date. The steps
that GSS will take to help ensure a valid instruction is received and
executed are: 1) GSS will on a best efforts basis prompt you for your
response by placing a follow-up courtesy call on the established response
deadline date to the advisor contact party on file 2) Any events for which
an instruction is not received from the advisor are subject to the default
action detailed on the corporate action notification.
9
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1.5 Corporate Actions (continued)
o The advisor must contact a Corporate Action Specialist listed on the
particular Corporate Action Notice in GSS's Global Corporate Action Dept. via
phone when they are sending a corporate action instruction after the set
deadlines. GSS will undertake reasonable efforts to process corporate action
instructions received after the set deadlines. GSS will keep the advisor
informed of the status of instructions transmitted after set deadlines.
Instructions:
o The advisor will transmit all responses by to a specified Corporate Action by
fax for the attention of Corporate Actions. GSS policy is to not accept oral
instructions; however in situations of extreme emergency, GSS may decide to
accept oral instructions via recorded line with 1) two GSS individuals or 2)
one GSS individual and telephone confirmation back from a different GSS
individual 3) GSS requires that the advisor immediately follow up with a
hard-copy response.
o The advisor must provide complete corporate action documentation as required.
Any necessary documentation (e.g. sophisticated investor letters) will be
faxed to the contact provided by GSS on the notification unless advised to
the contrary GSS will ensure, on a reasonable efforts basis, that any
corporate action documentation required to execute the advisor's corporate
action instructions has been received. Many markets certificate of original
SIL is required as instructed on the notice by GSS.
Postings:
o Cash Entries: GSS will make reasonable efforts to post cash entitlements to
the accounts within 24 hours of receipt and reconciliation, not including
class actions.
o Security Entries: GSS will make reasonable efforts to post security
entitlements to custody records within 24 hours of receipt and
reconciliation, not including Class Action.
10
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1.5 Corporate Actions (continued)
o GSS will identify all claim entitlements due to the advisor. GSS will
promptly follow up all entitlement not received. Any entitlement on
outstanding positions will be claimed from the market (where this is local
market practice), and will be handled on a reasonable efforts basis.
o Inquiries: For all inquiries related to the communication and instructions
on corporate action events, the advisor's Corporate Action Team should
direct inquiries to the GSS Corporate Action Notification and Response
Team. All other corporate action inquiries should be directed to the
Corporate Action Inquiry Team. GSS and the advisor's Corporate Action
Teams will respond to each other's inquiries within 24 hours.
Non-resolutions to be escalated through management see appendix for
organization chart (updated quarterly). GSS will respond to urgent
inquiries regarding corporate actions same day.
11
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Mellon Global Securities Services
Custody Services for
Mellon Institutional Funds
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1.6 Income Collection
Description: GSS's systems automatically accrue dividend and Interest income
as of ex-date based on the trade date position of clients' equity
securities holdings and as of record date for debt issues.
Parameter:
o Income and dividends are posted to client accounts either on
payable date in most major markets according to the
guidelines listed in the Contractual Income Settlement
Policy (See appendix), or on the date received. Online
Currency Forecast Reports project multicurrency cash
balances for a specified number of days (from one day to
three days) based on pending income items.
o For non-standard or private placement securities income is
accrued by GSS based on the information received from the
advisor's Corporate Action Team or other appropriate source.
(E.g. paying agent, transfer agents, written notification
directly from partnerships). Income payments will be posted
to client accounts on the date received. In the event an
income payment is anticipated but not received GSS will
initiate an inquiry with the appropriate party within 30
days of the expected pay date. If necessary, GSS may request
assistance from the advisor for claiming income on private
placement securities.
12
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Mellon Global Securities Services
Custody Services for
Mellon Institutional Funds
--------------------------------------------------------------------------------
1.6 Income Collection (continued)
o Market Claims: When income is past due or received by the
prior holder of record, GSS will initiate the collection
process. GSS will pursue outstanding market claims until
funds are received or detailed explanation of
non-entitlement is received, according to market practice
and regulation. GSS may request the assistance of the
advisor in contacting a counter party in an effort to
expedite the claiming process, providing details of the
collection efforts taken by GSS and its agents. Market
claims are paid contractually in markets where GSS offers
contractual settlement. GSS reserves the right to reverse,
at its discretion, a contractually settled transaction which
is directly or indirectly failing due to circumstances
outside the control of GSS or its settlement agents.
o When the advisor has instructed not to re-register shares,
GSS does not accept liability for non-receipt of income. GSS
will, however, upon request from the advisor, subject to
market practices and regulations, provide assistance to the
advisor in its attempts to claim non-receipt of income.
13
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Mellon Global Securities Services
Custody Services for
Mellon Institutional Funds
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Fund Accounting Services
--------------------------------------------------------------------------------
Mutual Fund Accounting Reconciliations NAV Determination
--------------------------------------------------------------------------------
Master/Feeder Processing Expense Processing Distributions/Yields
--------------------------------------------------------------------------------
Trade Processing Income Processing Reporting
--------------------------------------------------------------------------------
Capital Share Processing Pricing
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
General
Description:
GSS will provide all accounting and recordkeeping services necessary and
appropriate for the Mellon Institutional Funds.
GSS will perform accounting in accordance with SEC regulations, GAAP and MIF
policies. All policies and procedures will be in accordance with written
procedures approved by GSS and MIF prior to conversion
GSS shall keep accounts and records current as is required by the 1940 Act, GAAP
and to support all filings under Federal law.
--------------------------------------------------------------------------------
MIF= Mellon Institutional Funds
Advisor= Any Advisor of a Mellon Institutional Fund
GSS= Mellon Global Securities Services
GSS Fund Accounting= NY-based Mutual Fund Accounting Dept.
GSS Custody= Xxxxxxx-based Mutual Fund Custody Dept.
BFDS= Boston Financial Data Services (transfer agent)
14
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Mellon Global Securities Services
Mutual Fund Accounting Services for
Mellon Institutional Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Mutual Fund Accounting
Description:
GSS will utilize the State Street Portfolio Accounting System (PAS) to maintain
books and records for Mellon Institutional Funds. PAS is a widely-used real-time
mutual fund accounting system with full mutual fund processing features.
GSS will provide staffing sufficient to complete and verify all processing,
calculate and disseminate Net Asset Values.
--------------------------------------------------------------------------------
GSS Fund Accounting will support multi-currency accounting for Mellon
Institutional Funds and process all transactions necessary for daily valuation.
--------------------------------------------------------------------------------
GSS Fund Accounting will maintain investment ledgers for all positions
--------------------------------------------------------------------------------
GSS Fund Accounting will support international transactions in both base and
local currency.
--------------------------------------------------------------------------------
GSS Fund Accounting will maintain historical tax lots for each security.
--------------------------------------------------------------------------------
GSS Fund Accounting will maintain ledgers and post all activity daily.
--------------------------------------------------------------------------------
GSS Fund Accounting will verify all system postings and accruals
--------------------------------------------------------------------------------
GSS Fund Accounting shall keep accounts and records current as is required by
the 1940 Act, GAAP and to support all filings under Federal law. Records will
include:
o Cash Receipts and Disbursements journals
o Purchase and Sales Journals
o Subscription and Redemptioon Journals
o Security Ledgers
o Income Journals
o Trial Balance and Ledgers
o Holdings Reports
o Expense Reports
o Dividend Paid Reports
--------------------------------------------------------------------------------
15
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Mellon Global Securities Services
Mutual Fund Accounting Services for
Mellon Institutional Funds
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--------------------------------------------------------------------------------
Master/Feeder Processing
Description: Master/Feeder Processing includes all daily and annual functions to
support the master/feeder structure of the Mellon Institutional Funds. GSS will
utilize the State Street Portfolio Accounting System (PAS) to calculate the
daily NAV's and provide ledger records of all allocations and all required
recordkeeping.
GSS will utilize the Deloitte & Touche Master/Feeder Allocation system to record
all tax adjustments and process partnership allocations.
MIF will approve account mapping prior to conversion. GSS will test allocations
and run parallel to IBT prior to conversion.
PWC will be responsible for preparation of tax returns and Schedule K-1's based
on final partnership allocations from GSS.
--------------------------------------------------------------------------------
GSS Fund Accounting will maintain records for all current active Mellon
Institutional master/feeder funds upon conversion.
--------------------------------------------------------------------------------
MIF will provide GSS Fund Accounting at least 30 days notice of any new
feeders/classes.
--------------------------------------------------------------------------------
GSS Fund Accounting will support daily allocations, accounting and net asset
value determination for Xxxxxxxx master/feeder Funds on Portfolio Accounting
System (PAS) in accordance with SEC regulations and GAAP.
--------------------------------------------------------------------------------
GSS Fund Accounting will allocate income, expenses, realized and unrealized
gain(loss) for each feeder in accordance with current Treasury regulations
(aggregate method).
--------------------------------------------------------------------------------
GSS Fund Accounting will maintain and adjust allocations percentages based daily
shareholder activity in feeder funds.
--------------------------------------------------------------------------------
GSS Fund Accounting will maintain daily records to support allocations.
--------------------------------------------------------------------------------
GSS Fund Accounting will accumulate all book-to-tax adjustments for tax
allocations.
--------------------------------------------------------------------------------
GSS Fund Accounting will process partnership allocations on Deloitte & Touche
Master/Feeder Allocation system.
--------------------------------------------------------------------------------
GSS Fund Accounting will submit final partnership allocations to MIF (PWC) by
45th day following fiscal year-end of master fund.
--------------------------------------------------------------------------------
16
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Mellon Global Securities Services
Mutual Fund Accounting Services for
Mellon Institutional Funds
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--------------------------------------------------------------------------------
Trade Processing
Description: Trade processing will include all portfolio purchase/sale
transactions executed by Advisors on behalf of the Mellon Institutional Funds.
GSS will coordinate receipt of trades from MIF and process trades into Custody
System for settlement and PAS for valuation.
--------------------------------------------------------------------------------
MIF will confirm income/amortization policies of Mellon Institutional Funds
prior to conversion.
--------------------------------------------------------------------------------
GSS Fund Accounting /MIF will agree on source/methodology for all security
master fields prior to conversion.
--------------------------------------------------------------------------------
GSS Fund Accounting will establish security reference data for all new positions
based on agreed-upon procedures.
--------------------------------------------------------------------------------
GSS Fund Accounting will verify that all trades have been reconciled to Custody
by 12:00 PM EST on Trade Date + 1.
--------------------------------------------------------------------------------
GSS Fund Accounting will review verification of trade and interest calculations
on all trades processed.
--------------------------------------------------------------------------------
GSS Fund Accounting will verify that all trades have settled through Custody
statements.
--------------------------------------------------------------------------------
GSS Fund Accounting will confirm that all transactions are reflected accurately
on pricing reports prior to NAV determination.
--------------------------------------------------------------------------------
17
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Mellon Global Securities Services
Mutual Fund Accounting Services for
Mellon Institutional Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Capital Share Processing
Description: Capital Share Processing represents updating fund records for all
subscriptions and redemptions of Fund shares. Also includes processing of
additional shares issued as a result of dividends reinvested.
BFDS will act as transfer agent for Mellon Institutional Funds. GSS will
interface with BFDS to process capital share activity reported by BFDS.
GSS will be responsible for ensuring that all capital share activity reported to
MIF is accurate and timely.
--------------------------------------------------------------------------------
GSS Fund Accounting will process all shareholder activity as reported by BFDS on
trade date +1.
--------------------------------------------------------------------------------
All shareholder activity from BFDS will be uploaded directly into PAS utilizing
existing interface.
--------------------------------------------------------------------------------
GSS Fund Accounting will process all shareholder activity received from Transfer
Agent data by 2:00 PM EST daily. GSS will update fund records for all revisions
reported by BFDS.
--------------------------------------------------------------------------------
GSS Fund Accounting will verify settlement of shareholder activity received from
Transfer Agent through Custody statement.
--------------------------------------------------------------------------------
GSS Fund Accounting will ensure that all cash reports reflect most current
capital share activity as reported by BFDS.
--------------------------------------------------------------------------------
GSS Fund Accounting will notify MIF of all significant shareholder transactions
processed "as-of" and net asset value impact of "as-of" trades.
--------------------------------------------------------------------------------
GSS Fund Accounting will monitor net asset value impact of as-of transactions of
Transfer Agent based on reports from Transfer Agent.
--------------------------------------------------------------------------------
GSS Fund Accounting will reconcile Fund shares outstanding daily and dividend
payable with Transfer Agent monthly.
--------------------------------------------------------------------------------
GSS Fund Accounting will monitor unsettled shareholder activity daily.
GSS Fund Accounting will notify MIF weekly of any unsettled shareholder orders
past standard.
--------------------------------------------------------------------------------
GSS Fund Accounting will provide to MIF periodic reports summarizing shareholder
activity
--------------------------------------------------------------------------------
18
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Mellon Global Securities Services
Mutual Fund Accounting Services for
Mellon Institutional Funds
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--------------------------------------------------------------------------------
Reconciliations
Description: Reconciliations represent procedures to ensure that:
1. Fund Accounting cash/positions reconcile to Custodian records.
2. Fund Accounting positions reconcile to Portfolio Management records.
3. Custodian cash activity reconcile to Portfolio Management records.
Security positions for each fund will be reconciled daily.
Cash activity between Fund Accounting and Custodian will be reconciled daily.
GSS will be responsible for researching all differences and reporting all items
past standard to MIF.
GSS will be responsible for maintaining aging of all items and provide periodic
reporting to MIF.
--------------------------------------------------------------------------------
GSS Fund Accounting will process all activity from Custodian cash statement
daily by 10:00 AM EST.
--------------------------------------------------------------------------------
GSS Fund Accounting will complete daily cash statement reconciliation by 12:00
PM EST.
--------------------------------------------------------------------------------
MIF will reconcile cash activity to AS400 daily and notify GSS Custody of any
cash item that does not reconcile.
--------------------------------------------------------------------------------
GSS Fund Accounting will reconcile positions to MIF positions daily at close of
business (including all trade activity) and submit reconciliation report to MIF
by 12:00 PM EST next business day summarizing all discrepancies.
--------------------------------------------------------------------------------
19
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Mellon Global Securities Services
Mutual Fund Accounting Services for
Mellon Institutional Funds
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--------------------------------------------------------------------------------
Expense Processing
Description: Expense processing represents procedures to accrue fund expenses
for each Mellon Institutional Fund to ensure accurate net asset values and
distributions to shareholders.
GSS will utilize functionality of PAS to accrue expenses by type and at Master,
Feeder and Class levels.
--------------------------------------------------------------------------------
GSS Fund Accounting will calculate and accrue asset-based fees in accordance
with Fund's prospectus.
--------------------------------------------------------------------------------
GSS Fund Accounting will calculate and accrue any fee waivers based on
instructions from MIF.
--------------------------------------------------------------------------------
GSS Fund Accounting will accrue all other expenses based on instructions from
MIF.
MIF will update expense estimates for non asset-based expense accruals
quarterly.
--------------------------------------------------------------------------------
GSS Fund Accounting will ensure that daily expense accruals are accurate and
reconcile daily expense accruals between masters and feeders.
--------------------------------------------------------------------------------
GSS Fund Accounting will analyze and report to MIF any significant expense
variances based on instructions from MIF.
--------------------------------------------------------------------------------
GSS Fund Accounting will post expense payments daily from cash statement.
--------------------------------------------------------------------------------
GSS Fund Accounting will make expense accrual adjustments based on written
instructions from MIF received by 12:00 PM EST.
--------------------------------------------------------------------------------
GSS Fund Accounting will provide detailed monthly expense reports to Xxxxxxxx
including expense accruals, payments and balances by type for master, feeder and
class levels.
--------------------------------------------------------------------------------
20
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Mellon Global Securities Services
Mutual Fund Accounting Services for
Mellon Institutional Funds
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--------------------------------------------------------------------------------
Income Processing
Description: Income processing represents procedures to accrue fund income for
each Mellon Institutional Fund to ensure accurate net asset values and
distributions to shareholders.
GSS will utilize functionality of PAS to automatically accrue income based on
security positions, security master data, and income/amortization policies
approved by MIF.
--------------------------------------------------------------------------------
GSS Fund Accounting will calculate and accrue security income based on security
master data.
--------------------------------------------------------------------------------
GSS Fund Accounting will calculate and accrue cash dividends based on corporate
action notices from GSS Corporate Action Notification.
GSS Fund Accounting will confirm all cash dividends to secondary source.
--------------------------------------------------------------------------------
GSS Fund Accounting will calculate and accrue book amortization based on GAAP
policies.
--------------------------------------------------------------------------------
GSS Fund Accounting will calculate and accrue tax amortization based on MIF
policies.
--------------------------------------------------------------------------------
GSS Fund Accounting will estimate and accrue all other income based on
instructions from MIF.
--------------------------------------------------------------------------------
GSS Fund Accounting will process all rate change adjustments.
--------------------------------------------------------------------------------
GSS Fund Accounting will process all paydowns.
--------------------------------------------------------------------------------
GSS Fund Accounting will reconcile daily income accruals.
--------------------------------------------------------------------------------
GSS Fund Accounting will analyze and report any significant income variances to
MIF.
--------------------------------------------------------------------------------
GSS Fund Accounting will analyze and report any past-due income payments to MIF.
--------------------------------------------------------------------------------
21
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Mellon Global Securities Services
Mutual Fund Accounting Services for
Mellon Institutional Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Pricing
Description: Pricing represents procedures to value all positions for each
Mellon Institutional Fund to ensure accurate net asset values.
GSS will value holdings in Mellon Institutional funds in accordance with
board-approved pricing procedures.
All price sources will be designated by MIF.
GSS Fund Accounting performs daily procedures and controls to validate the
accuracy of the prices and communicates exceptional variances to MIF for review.
GSS Fund Accounting will perform price comparisons to ensure that price
variances beyond standard tolerances are reported to MIF.
--------------------------------------------------------------------------------
MIF will provide GSS Fund Accounting written pricing procedures approved by
Board of Trustees and minutes evidencing approval.
MIF will provide GSS Fund Accounting any amendments to pricing procedures after
approval by Board of Trustees and minutes evidencing approval.
--------------------------------------------------------------------------------
GSS Fund Accounting will override approved price source per pricing procedures
based on written instructions from authorized MIF NAV Committee member.
--------------------------------------------------------------------------------
GSS Fund Accounting will change approved price source per pricing procedures
based on written instructions from authorized MIF NAV Committee member.
--------------------------------------------------------------------------------
GSS Fund Accounting apply "fair value" prices based on instructions from MIF NAV
Committee approved by Board of Trustees.
--------------------------------------------------------------------------------
GSS Fund Accounting will monitor timely receipt of all prices from all sources.
--------------------------------------------------------------------------------
GSS Fund Accounting will notify MIF of any price source not available by agreed
upon time.
--------------------------------------------------------------------------------
GSS Fund Accounting will apply secondary source based on MIF pricing policy or
written instructions from MIF.
--------------------------------------------------------------------------------
GSS Fund Accounting will validate valuations based on agreed upon procedures.
--------------------------------------------------------------------------------
GSS Fund Accounting will review security prices and verify all daily variances
beyond standard to secondary sources approved by MIF.
--------------------------------------------------------------------------------
22
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Mellon Global Securities Services
Mutual Fund Accounting Services for
Mellon Institutional Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Pricing (continued)
--------------------------------------------------------------------------------
GSS Fund Accounting will report all significant security price variances to MIF
and act based on written instructions from MIF.
MIF will respond to price variance notifications within agreed-upon standard.
GSS Fund Accounting will not finalize valuations until all open variances are
resolved.
--------------------------------------------------------------------------------
GSS Fund Accounting will confirm accuracy of all security prices that are
ex-dividend.
--------------------------------------------------------------------------------
GSS Fund Accounting will confirm accuracy of all security prices that have no
volume.
--------------------------------------------------------------------------------
GSS Fund Accounting will monitor stale prices beyond standard and report any
discrepancies to MIF.
--------------------------------------------------------------------------------
GSS Fund Accounting will perform comparisons of market prices to transaction
prices of executed trades and report any discrepancies to MIF.
--------------------------------------------------------------------------------
23
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Mellon Global Securities Services
Mutual Fund Accounting Services for
Mellon Institutional Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NAV Determination
Description: NAV Determination represents procedures to calculate net asset
value for each Mellon Institutional Funds.
GSS will determine NAV in accordance with SEC guidelines and report NAV errors
to MIF in accordance with MIF NAV error Policy.
GSS will submit NAV's to NASDAQ and Transfer Agent timely and report NAV's to
parties designated by MIF.
--------------------------------------------------------------------------------
GSS Fund Accounting will calculate net asset value (NAV) of individual classes
of multi-class funds daily in accordance with SEC guidelines and MIF policy.
--------------------------------------------------------------------------------
GSS Fund Accounting will calculate net asset value (NAV) of individual feeders
of Master/feeder funds daily in accordance with SEC guidelines and MIF policy.
--------------------------------------------------------------------------------
GSS Fund Accounting will perform daily procedures and controls to validate the
accuracy of the NAV and communicate exceptional variances to the MIF for review.
--------------------------------------------------------------------------------
GSS Fund Accounting will report NAV/dividend factors to MIF by 6:30 PM EST
daily.
GSS Fund Accounting will maintain service level report to track performance to
standard and reasons for late reports.
--------------------------------------------------------------------------------
GSS Fund Accounting will report NAV/dividend factors to Transfer Agent by 6:30
PM EST daily.
GSS Fund Accounting will maintain service level report to track performance to
standard and reasons for late reports.
--------------------------------------------------------------------------------
GSS Fund Accounting will report NAVs to NASDAQ by 5:55 PM EST daily.
GSS Fund Accounting will maintain service level report to track performance to
standard and reasons for late reports.
--------------------------------------------------------------------------------
GSS Fund Accounting will report all NAV errors to MIF and reimburse Funds in
accordance with agreed-upon Xxxxxxxx NAV Error policy.
--------------------------------------------------------------------------------
24
--------------------------------------------------------------------------------
Mellon Global Securities Services
Mutual Fund Accounting Services for
Mellon Institutional Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distributions/Yields
Description: Represents procedures to calculate fund distributions and yields
for each Mellon Institutional Fund.
GSS will determine distributions based on distribution policy of each Fund and
determine yields in accordance with SEC guidelines.
--------------------------------------------------------------------------------
GSS Fund Accounting will calculate net income and dividend factor for each daily
dividend fund by 6:30 PM EST.
--------------------------------------------------------------------------------
GSS Fund Accounting will compute 1 day and 30 day SEC yield for daily dividend
funds and report to MIF.
--------------------------------------------------------------------------------
GSS Fund Accounting will calculate net income available for distribution for all
periodic distribution funds in accordance with MIF instructions.
--------------------------------------------------------------------------------
MIF will determine distribution rates for periodic distribution funds and submit
to GSS Fund Accounting rates, designation and payable date by 12:00 PM EST on
ex-date.
--------------------------------------------------------------------------------
GSS Fund Accounting will report all distribution information to Transfer Agent
on ex-date.
--------------------------------------------------------------------------------
GSS Fund Accounting will reconcile declared distributions to amounts paid by
Transfer Agent and report any variances (other than breakage) to MIF.
--------------------------------------------------------------------------------
GSS Fund Accounting will provide reports summarizing dividend and distribution
information to MIF.
--------------------------------------------------------------------------------
25
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Mellon Global Securities Services
Mutual Fund Accounting Services for
Mellon Institutional Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Reporting
Description: GSS will provide MIF all required Reports based on agreed
procedures and standards.
--------------------------------------------------------------------------------
GSS Fund Accounting will provide daily reports to MIF including, but not
limited to:
o Pricing Reports
o Price Variance Reports
o NAV Determination Reports
o Transaction Journals
o Position Reports
o Fund Profile Reports
o General Ledger
o Dividend/Yield determination Report
o Others (to be determined)
--------------------------------------------------------------------------------
GSS Fund Accounting will provide monthly reports to MIF including, but not
limited to:
o Expense Forecasts
o Income Analysis
o Transaction Summaries
o Position Reports
o Fund Profile Reports
o Others (to be determined)
--------------------------------------------------------------------------------
GSS Fund Accounting will provide fiscal YTD reports to MIF and PWC including,
but not limited to:
o Trial Balance
o Audit Reports
o Transaction Summaries
o Position Reports
o Others (to be determined)
--------------------------------------------------------------------------------
26
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Mellon Global Securities Services
Mutual Fund Administration Services for
Mellon Institutional Funds
--------------------------------------------------------------------------------
Mutual Fund Administrative Services
-----------------------------------------------
Financial Reporting Board Reporting
-----------------------------------------------
RIC Compliance Tax Reporting
-----------------------------------------------
--------------------------------------------------------------------------------
Mutual Fund Administration
Description: GSS will perform certain mutual fund administrative functions for
Mellon Institutional Funds.
GSS will provide staffing sufficient to adequately support the services
specified.
GSS will perform services in accordance with SEC regulations, GAAP and MIF
policies. All policies and procedures will be in accordance with written
procedures approved by GSS and MIF prior to conversion.
MIF will be responsible for all SEC filings.
MIF has overall responsibility to ensure that each Fund satisfies all SEC
reporting guidelines and compliance to all 1940 Act regulations.
MIF has overall responsibility for compliance and adherence to fund investment
restrictions and policies.
MIF has overall responsibility for content and completeness of board reports.
MIF has overall responsibility for tax compliance and adherence to all tax
regulations.
--------------------------------------------------------------------------------
MIF= Mellon Institutional Funds
GSS= Mellon Global Securities Services
GSS Fund Accounting= NY-based Mutual Fund Accounting Dept.
GSS Custody= Xxxxxxx-based Mutual Fund Custody Dept.
PWC= Price Waterhouse Coopers (Independent Auditors)
27
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Mellon Global Securities Services
Mutual Fund Administration Services for
Mellon Institutional Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial Reporting
Description: Represents all services relating to SEC-required reports and
filings.
--------------------------------------------------------------------------------
GSS Fund Administration staff will prepare Trial Balance and supporting
documents for semi-annual reports.
--------------------------------------------------------------------------------
GSS Fund Administration staff will coordinate preparation of Schedule of
Investments in accordance with SEC requirements and MIF-specified format.
--------------------------------------------------------------------------------
GSS Fund Administration staff will coordinate preparation of financial
statements in accordance with generally accepted accounting policies and SEC
requirements.
--------------------------------------------------------------------------------
GSS Fund Administration staff will coordinate annual audits with Independent
Auditors and attend weekly status meetings during audits.
--------------------------------------------------------------------------------
GSS Fund Administration staff will coordinate typesetting of shareholder reports
with print vendor.
--------------------------------------------------------------------------------
GSS Fund Administration staff will coordinate distribution of drafts and
coordination of revisions of shareholder reports.
--------------------------------------------------------------------------------
GSS Fund Administration staff will coordinate Independent Auditor approval.
--------------------------------------------------------------------------------
GSS Fund Administration staff will provide oversight of report process to ensure
that production and mailing will be completed by Xxxxxxxx deadlines and SEC
requirements.
--------------------------------------------------------------------------------
GSS Fund Administration staff will provide financial information for N-1A
filings based on instructions from MIF.
--------------------------------------------------------------------------------
GSS Fund Administration staff will provide financial information for 24f filings
based on instructions from MIF.
--------------------------------------------------------------------------------
GSS Fund Administration staff will provide financial information for N-SAR
filings and file form with SEC.
--------------------------------------------------------------------------------
28
--------------------------------------------------------------------------------
Mellon Global Securities Services
Mutual Fund Administration Services for
Mellon Institutional Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
RIC Compliance
Description: Represents all services relating to RIC compliance.
--------------------------------------------------------------------------------
GSS Fund Administration staff will prepare RIC compliance analysis for each
Mellon Institutional Fund in accordance with IRC regulations and MIF
instructions.
--------------------------------------------------------------------------------
GSS Fund Administration staff will prepare monthly RIC compliance summary for
each Mellon Institutional Fund and submit to MIF by 5th business day of each
month.
--------------------------------------------------------------------------------
GSS Fund Administration staff will prepare pre-month end RIC compliance summary
for each Mellon Institutional Fund approaching a fiscal quarter (based on agreed
upon criteria) and submit to MIF 5 business days before month-end.
--------------------------------------------------------------------------------
GSS Fund Administration staff will prepare full year RIC compliance summary for
each Mellon Institutional Fund and submit to MIF and PWC by 10th business day
following fiscal year-end.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Board Reporting
Description: Represents all services relating to supporting board booklet
preparation.
--------------------------------------------------------------------------------
GSS Fund Administration will prepare supporting documents for Mellon
Institutional Fund board booklets based on instructions from MIF.
--------------------------------------------------------------------------------
GSS Fund Administration will prepare all board supporting documents for Mellon
Institutional Fund board booklets currently provided by IBT.
--------------------------------------------------------------------------------
29
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Mellon Global Securities Services
Mutual Fund Administration Services for
Mellon Institutional Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Tax Reporting
Description: Represents all services relating to supporting required tax
filings.
--------------------------------------------------------------------------------
GSS Fund Administration will prepare all book-to-tax adjustments.
--------------------------------------------------------------------------------
GSS Fund Administration will prepare tax basis trial balance for preparation of
Federal tax returns.
--------------------------------------------------------------------------------
GSS Fund Administration will submit all trial balances and tax adjustments to
MIF and PWC by 45th day following fiscal year-end.
--------------------------------------------------------------------------------
GSS Fund Administration will review all tax disclosure in Annual Reports.
--------------------------------------------------------------------------------
GSS Fund Administration will monitor capital gain distributions and report to
Xxxxxxxx estimated amounts available for distribution.
--------------------------------------------------------------------------------
GSS Fund Administration will monitor capital loss carryovers and report to
Xxxxxxxx of pending expirations.
--------------------------------------------------------------------------------
GSS Fund Administration will prepare year-end shareholder tax information:
1. US Government %
2. AMT %
3. Income by State %
4. Foreign Tax Credit %
5. Corporate Dividends Received Deduction %
--------------------------------------------------------------------------------
GSS Fund Administration will prepare year-end 1099-MISC forms.
--------------------------------------------------------------------------------
30
APPENDIX G
SELF CUSTODY RIDER
Notwithstanding any other provisions of this Agreement to the contrary, the
following provisions shall apply to this Agreement as being subject to Rule
17f-2 under the Act.
1. Physical Separations of Securities. Except as permitted by Rule 17f-2 or Rule
00x-0, Xxxxxx shall hold all Securities of a Fund deposited with Mellon
physically segregated at all times from those of any other person.
2. Access to Securities. Except as otherwise provided by law, no person shall be
authorized or permitted to have access to the Securities of a Fund deposited
with Mellon except pursuant to a Board resolution. Each such resolution shall
designate not more than five persons who shall be either officers or responsible
employees of the Trust and shall provide that access to such investments shall
be only by two or more such persons jointly, at least one of whom shall be an
officer; except that access to such investments shall be permitted (1) to
properly authorized officers and employees of Mellon and (2) to the Trust's or a
Fund's independent public accountant jointly with any two persons so designated
or with such officer or employee of Mellon.
3. Deposits and Withdrawals. Each person, when depositing such securities or
similar investments of a Fund in or withdrawing them from a Securities
Depository or when ordering their withdrawal and delivery from the safekeeping
of Mellon, shall comply with the requirements of Rule 17f-2(e).
4. Examination. The Trust on behalf of each Fund shall comply with the
requirements of Rule 17f-2(f) with regard to examination by an independent
public accountant.
Acknowledged:
---------------------------- ---------------------------
Trust Mellon
Date: Date:
----------------------- ----------------------
G-1
