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........................................ 11
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............................................ 12
1. APPOINTMENT OF MELLON................................................. 12
2. ADMINISTRATION SERVICES............................................... 12
3. SUPERVISION OF SERVICE PROVIDERS...................................... 13
ARTICLE V - ACCOUNTING SERVICES................................................. 13
1. APPOINTMENT OF MELLON................................................. 13
2. ACCOUNTING SERVICES................................................... 13
3. INTEREST PRICE........................................................ 14
ARTICLE VI - GENERAL MATTERS.................................................... 15
1. STANDARD OF CARE; SCOPE OF RESPONSIBILITIES........................... 15
2. INSOLVENCY OF FOREIGN CUSTODIANS...................................... 16
3. LIABILITY FOR DEPOSITORIES............................................ 17
4. DAMAGES............................................................... 17
5. INDEMNIFICATION; LIABILITY OF A PORTFOLIO............................. 17
6. FORCE MAJEURE......................................................... 18
7. COMMUNICATIONS........................................................ 19
8. COMPENSATION AND EXPENSES............................................. 19
9. TERM AND TERMINATION.................................................. 20
10. INSPECTION OF BOOKS AND RECORDS....................................... 20
11. SERVICE LEVEL AGREEMENTS.............................................. 20
12. MISCELLANEOUS......................................................... 21
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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 Master Portfolio (the "Trust"), a business trust
organized under the laws of the State of New York having its principal office
and place of business at Xxx Xxxxxx Xxxxx, Xxxxxx, XX 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 "Portfolio" and, collectively, as
the "Portfolios");
WHEREAS, the Trust and Mellon desire to set forth their agreement with
respect to the custody of the Portfolios' 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 Portfolio 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 Portfolio, any of the Portfolio'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 Portfolio'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 Portfolio 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
Portfolio 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 Portfolio.
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. "Interests": beneficial interest of each Portfolio, however designated.
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14. "NASD": National Association of Securities Dealers, Inc.
15. "Primary Custodian": the meaning set forth in Rule 17f-7(b)(2).
16. "Prospectus": a Portfolio's current prospectus and statement of additional
information relating to the registration of the Interests under the Act.
17. "Risk Analysis": the analysis required under Rule 17f-7(a)(1)(i)(A).
18. "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.
19. "Securities Act": the Securities Act of 1933 and the rules and regulations
thereunder, all as amended from time to time.
20. "Securities Depository": a system for the central handling of securities as
defined in Rule 17f-4(c)(6).
21. "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 Portfolio.
22. "Selected Countries": the jurisdictions listed on Appendix B as such may be
amended from time to time in accordance with Article II.
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 Portfolio.
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 Portfolio during the period of this Agreement.
2. Custody of Cash and Securities.
a. Receipt and Holding of Assets. Each Portfolio 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 Portfolio with any domestic subcustodian, or Securities Depository, and
Foreign Custodians or Eligible Securities Depositories in the
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Selected Countries as provided in Article II. Assets of each Portfolio 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 Portfolio shall be solely responsible to assure that Instructions are in
accord with any limitations or restrictions applicable to the Portfolio.
(i) In payment for Securities purchased for such Portfolio;
(ii) In payment of dividends or distributions with respect to
Interests of such Portfolio;
(iii) In payment for Interests of such Portfolio that have been
redeemed by such Portfolio;
(iv) In payment of taxes of such Portfolio;
(v) When Securities of such Portfolio are sold, called, redeemed,
retired, or otherwise become payable;
(vi) In exchange for or upon conversion into other securities of such
Portfolio alone or other securities and cash pursuant to any plan of merger,
consolidation, reorganization, recapitalization or readjustment;
(vii) Upon conversion of Securities of such Portfolio pursuant to
their terms into other securities;
(viii) Upon exercise of subscription, purchase or other similar rights
represented by Securities of such Portfolio;
(ix) For the payment of interest, management or supervisory fees,
distributions or operating expenses of such Portfolio;
(x) In payment of fees and in reimbursement of the expenses and
liabilities of Mellon attributable to such Portfolio;
(xi) In connection with any borrowings by such Portfolio or short
sales of securities requiring a pledge of Securities of such Portfolio, 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 Portfolio;
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(xiii) For the purpose of redeeming Interests of such Portfolio and
the delivery to, or the crediting to the account of, Mellon such Interests to be
purchased or redeemed;
(xiv) For the purpose of redeeming in kind Interests of such Portfolio
against delivery to Mellon or its subcustodian (solely in its or their capacity
as such) of such Interests to be so redeemed;
(xv) For delivery in accordance with the provisions of any agreement
among the Trust with respect to such Portfolio, 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
Portfolio. Mellon will act only in accordance with Instructions in the delivery
of Securities of such Portfolio 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 Portfolio 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 Portfolio, 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 Portfolio 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 Portfolio;
(ii) Present for payment and collect the amount payable upon all
Securities of each Portfolio, which may mature or be called, redeemed, retired
or otherwise become payable. Notwithstanding the foregoing, Mellon shall have no
responsibility to a Portfolio for monitoring or ascertaining any call,
redemption or retirement dates with respect to put bonds or similar instruments
that are owned by such Portfolio 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 Portfolio for any loss by such
Portfolio for any missed payments or other defaults resulting therefrom, unless
Mellon received timely notification from such Portfolio specifying the time,
place and manner for the presentment of any such put bond owned by such
Portfolio 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
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party and duly furnishes the information contained in such notification to a
Portfolio with respect to put bonds or similar instruments;
(iii) Surrender Securities of a Portfolio in temporary form for
definitive Securities;
(iv) Hold directly, or through a Securities Depository with respect to
Securities therein deposited, for the account of each Portfolio all rights and
similar securities issued with respect to any Securities held by Mellon
hereunder for that Portfolio;
(v) Submit or cause to be submitted to each Portfolio or its
investment adviser as designated by the Trust information actually received by
Mellon regarding ownership rights pertaining to property held for such
Portfolio;
(vi) Deliver or cause to be delivered any Securities held for each
Portfolio 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
Portfolio 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 Portfolio 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 Portfolio;
(ix) Deliver Securities of each Portfolio upon the receipt of payment
in connection with any repurchase agreement related to such Securities entered
into by such Portfolio;
(x) Deliver Securities owned by each Portfolio 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 Portfolio for monitoring or
ascertaining any call, redemption or retirement dates with respect to the put
bonds or similar instruments that are owned by such Portfolio 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 Portfolio for
any loss by such Portfolio for any missed payment or other default resulting
therefrom unless Mellon received timely notification from such Portfolio
specifying the time, place and manner for the presentment of any such put bond
owned by such Portfolio and held by Mellon or its nominee. Mellon shall not be
responsible and assumes no liability to a Portfolio for the accuracy or
completeness of any notification Mellon may receive
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from a third party and duly furnishes the information contained in such
notification to such Portfolio 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 Portfolio; 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.
d. Confirmation and Statements. Promptly after the close of business on
each day, Mellon shall furnish each Portfolio with confirmations and a summary
of all transfers to and from the account of such Portfolio during the day. Where
Securities purchased by a Portfolio 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 Portfolio. At least
monthly, Mellon shall furnish each Portfolio with a detailed statement of the
Assets held for the Portfolio under this Agreement.
e. Registration of Securities. Mellon is authorized to hold all Securities,
Assets, or other property of each Portfolio in nominee name, in bearer form or
in book-entry form. Mellon may register any Securities, Assets or other property
of each Portfolio in the name of the Trust or such Portfolio, 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 Portfolio 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 Portfolio and that may
from time to time be registered in the name of the Trust or such Portfolio.
f. Segregated Accounts. Upon receipt of Instructions, Mellon will from time
to time establish segregated accounts on behalf of each Portfolio 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 Portfolio
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
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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 Portfolio, 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.
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 Portfolio in
accordance with the terms and conditions of a separate securities lending
agreement approved by the Trust on behalf of such Portfolio.
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 Portfolio's investment adviser,
of any sub-investment adviser of the Trust or of a Portfolio, or of Mellon
acting in its capacity as the Trust's or a Portfolio's administrator, shall have
physical access to the Assets of a Portfolio held by Mellon or be authorized or
permitted to withdraw any investments of such Portfolio, nor shall Mellon
deliver any Assets of such Portfolio to any such person. No officer, director,
employee or agent of Mellon who holds any similar position with the Trust's or a
Portfolio's investment adviser, with any sub-investment adviser of the Trust or
a Portfolio or with the Trust's or a Portfolio's administrator shall have access
to the Assets of the Portfolio.
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 Portfolio or of a Portfolio'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 Portfolio 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 Portfolio. The appointment of any such domestic
subcustodian shall not relieve Mellon of its responsibilities or liabilities
hereunder, except where a Portfolio 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
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to the Portfolio. Where a Portfolio has selected a domestic subcustodian to hold
Assets at any time owned by a Portfolio, Mellon shall have no liability to a
Portfolio or any other person by reason of any act or omission of any
subcustodian and a Portfolio 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 Portfolio.
Mellon also is hereby authorized when acting pursuant to Instructions to: (1)
place assets of a Portfolio 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 Portfolio with a
broker or other agent as subcustodian in connection with futures, options, short
selling or other transactions. When 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 Portfolio 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 Portfolio, Mellon may, in
its sole discretion, provide an overdraft (an "Overdraft") to such Portfolio 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 Portfolio and Mellon; and (b) shall accrue
interest from the date of the Overdraft to the date of payment in full by such
Portfolio at a rate agreed upon from time to time, by Mellon and such Portfolio
or, in the absence of specific agreement, at such rate as charged to other
customers of Mellon under procedures uniformly applied. Mellon and each
Portfolio 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
Portfolio expenses. Mellon shall promptly notify the appropriate Portfolio (an
"Overdraft Notice") of any Overdraft. To secure payment of any Overdraft, each
Portfolio hereby grants to Mellon a continuing security interest in and right of
setoff against the Securities and cash in the Portfolio's account from time to
time in the full amount of such Overdraft. Should a Portfolio fail to pay
promptly any amounts owed hereunder, Mellon shall be entitled to use available
cash in such Portfolio's account and to liquidate Securities in the account as
necessary to meet such Portfolio'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 Portfolio, 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 Portfolio 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 Interests of a Portfolio; and
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c. Information. Mellon shall provide to a Portfolio such information
received by Mellon that could, in Mellon's reasonable belief, assist such
Portfolio in the submission of any reports or returns with respect to Tax
Obligations. Each Portfolio 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
Portfolio 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 Portfolio by any
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 Portfolio, 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 Portfolio, 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 Portfolio'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 Portfolio and
Mellon, but Mellon reserves the right to delete jurisdictions upon reasonable
notice to the Portfolio.
3. Reports to Board. Mellon shall provide written reports notifying the Board of
the placement of Assets of a Portfolio with a particular Foreign Custodian and
of any material change in such Portfolio'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 Portfolio 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).
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6. Use of Securities Depositories. In exercising its delegated authority, Mellon
may assume, unless instructed in writing by an Authorized Person of a Portfolio
to the contrary, that such Portfolio and its investment adviser have determined,
pursuant to Rule 17f-7, that the depository provides reasonable safeguards
against custody risks if such Portfolio decides to place and maintain foreign
assets with any Securities Depository as to which Mellon has provided the Trust
on behalf of such Portfolio with a Risk Analysis.
ARTICLE III. - INFORMATION SERVICES
1. Risk Analysis. Mellon will provide the Trust on behalf of each Portfolio 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 Portfolio. If a new Securities Depository commences operation in
one of the Appendix B countries, Mellon will provide the Trust on behalf of the
Portfolio 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 Portfolio 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 Portfolio with a Risk Analysis as
required under Rule 17f-7. Mellon will promptly notify the Trust on behalf of
each Portfolio 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.
11
ARTICLE IV. - ADMINISTRATION SERVICES
1. Appointment of Mellon. The Board appoints Mellon to provide administration
services to each Portfolio 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. Offshore Activities. At the direction of the Trust, Mellon shall
maintain, or cause its affiliate to maintain, on behalf of the Trust corporate
records and books of account, including the following, at the offices of Mellon
or its affiliate located in Dublin, Ireland (the "Dublin Office"):
(i) Organization documents for the Trust, such as Declaration of
Trust, By-laws and any amendments thereto;
(ii) Corporate minutes books for meetings of the Board;
(iii) Significant contracts, such as for advisory and custody,
administration and accounting services, to which the Trust is a party;
(iv) Current registration statement (Parts A and B) under the Act for
the Trust;
(v) General ledgers for the Trust reflecting all asset, liability,
reserve, capital, income and expense accounts; and
(vi) Separate ledgers for each Portfolio showing each interest holder
of record of the Portfolio or any series thereof and the percentage interest
held by each interest holder.
Mellon acknowledges that the Board considers the corporate records and
books of account identified in subsections (i) through (vi) of this Section 2.a
to be the principal corporate records and books of account for the Trust
(collectively, the "Principal Books and Records"). As directed, or as it shall
maintain such information under this Agreement, Mellon shall update, or cause
its affiliate to update, the Principal Books and Records on no less frequently
than a monthly basis. At no time shall the Principal Books and Records be
maintained at a location other than at the Dublin Office, unless the Trust has
so directed or consented in writing and in advance to the maintenance of the
Principal Books and Records at such other location. Mellon also shall permit, or
cause its affiliate to permit, the Trust to establish and maintain its principal
place of business at the Dublin Office (or at such other location where the
Principal Books and Records are being maintained). In that regard, Mellon shall
notify, or cause its affiliate to notify, the Trust to the extent it receives
any correspondence addressed to the Trust at its principal executive offices.
b. Financial Reporting. Mellon will (i) prepare the trial balance and
supporting documents for a Portfolio's semi-annual reports; (ii) coordinate the
preparation, typesetting and distribution of a Portfolio's financial statements;
(iii) make available and provide to a Portfolio financial information required
by a Portfolio in the preparation of its registration statements and financial
reports required by federal securities laws; (iv) coordinate with a Portfolio's
12
independent auditors; and (v) oversee the preparation and distribution of a
Portfolio's semi-annual and annual reports.
c. Regulated Investment Company Compliance. Mellon will monitor and prepare
regular compliance reports as agreed upon by a Portfolio and Mellon from time to
time relating to a Portfolio's status as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended.
d. 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.
e. Tax Reporting. Mellon will (i) prepare trial balances and tax
adjustments in connection with the preparation of a Portfolio's federal tax
returns; (ii) review tax disclosure in a Portfolio's annual reports to interest
holders; (iii) monitor and report on capital gain distributions; (iv) monitor
and report on capital loss carryforwards; (v) prepare year-end interest holder
tax information; and (vi) prepare year-end Form 1099 Miscellaneous.
3. Supervision of Service Providers. Mellon shall serve as liaison between the
Trust and its services providers as agreed upon from time to time by the Trust
and Mellon.
ARTICLE V. - ACCOUNTING SERVICES
1. Appointment of Mellon. The Board appoints Mellon to provide accounting
services to each Portfolio 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
Portfolio:
a. Valuation of Assets. Valuing such Portfolio's Assets, maintaining
general Portfolio ledgers and calculating the price per interest of the Assets
of such Portfolio in accordance with the rules for valuation and procedures for
the performance of services set forth hereunder.
b. Other Accounting Services. Providing such Portfolio with such other
accounting services and reports as may be reasonably requested by such Portfolio
and agreed to by Mellon in writing, provided that such Portfolio supplies all
necessary information enabling Mellon to supply such services.
c. Maintenance of Books and Records. Mellon will keep and maintain on
behalf of such Portfolio such books and records as such Portfolio and Mellon may
agree upon from time to time.
d. Property of Client. Mellon agrees that all records which it maintains
for such Portfolio shall be considered the property of such Portfolio and
further agrees to surrender promptly to such Portfolio copies of any of such
records upon such Portfolio's request; provided,
13
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 Portfolio a statement with respect to the accounting services or
reports provided, such Portfolio 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 Portfolio (or
its designee) shall have the right at its own expense to inspect Mellon's books
and records directly relating to such Portfolio during Mellon's normal business
hours.
3. Interest Price.
a. Trust Valuation. Mellon agrees to provide to the Trust, its service
providers or its agents for each Valuation Date a valuation service for each
Portfolio. The total net assets ("TNA") of a Portfolio on a Valuation Date shall
equal the aggregate value of the assets of such Portfolio less the value of the
accrued liabilities of such Portfolio. The TNA of a Portfolio shall be
determined in accordance with that Portfolio'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 Portfolio or
a person authorized to provide such information as set forth in the Portfolio'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. Valuation of Interests. The price per Interest ("PPI") shall be
determined by dividing the TNA of a Portfolio by the number of outstanding
Interests of such Portfolio on a Valuation Date as determined by Mellon or as
reported to Mellon by such Portfolio, its service providers or its agents.
Provided that the TNA of a Portfolio on a Valuation Date and the total value of
each interest holder's interest in a Portfolio on such Valuation Date remain the
same, such Portfolio may direct Mellon to increase or decrease the total number
of outstanding Interests of a Portfolio with a corresponding change in the PPI
of such Portfolio.
c. Reconciliation; Transmission of PPI.
(i) Each Portfolio shall assist, and shall cause its investment
advisers, service providers and agents to assist, with the reconciliation of
such Portfolio's investment transactions and asset positions. If Mellon receives
information from a Portfolio, 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
14
limited to, underlying investment values and information concerning purchases
and sales or other information necessary for Mellon to determine any such
Portfolio's TNA or PPI).
(ii) Mellon shall transmit to a Portfolio or agent on each Valuation
Date (or promptly following TNA or PPI reconciliation, if later) a file
identifying the PPI of such Portfolio, and the Interests outstanding (as
applicable), as of the Valuation Date.
d. Restatement of PPI.
(i) If there has been a misstatement of PPI of a Portfolio on any
Valuation Date, Mellon shall restate such Portfolio's PPI and/or reconcile
participating interest holder 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 Interests of a Portfolio by an
interest holder associated with a misstated PPI and in the event that
participating interest holder accounts are to be corrected pursuant to the
procedures described in subsection e(1) above, each affected interest holder's
account shall be corrected by effecting a purchase or sale of Interests, as
appropriate, of the relevant Portfolio using the corrected PPI and the dollar
amount equal to the dollar amount associated with the purchase or sale of
shares, as appropriate, at the misstated PPI. If there are insufficient
Interests of such Portfolio for a participating interest holder to enable any
such corrected sale transaction to be effected, the Portfolio shall cause the
participating interest holder to repay to such Portfolio any such amount
distributed to or otherwise transferred for the benefit of each affected
participating interest holder in excess of the amount to which the participating
interest holder was entitled had the sale proceeds been determined at the
corrected PPI.
(iii) The cost of making corrections to the PPI of a Portfolio and/or
interest holder 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.
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 Portfolio or of its
own counsel, at the expense of the Trust or the appropriate Portfolio after
consultation with the Trust or Portfolio, and shall be
15
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 Portfolio or its investment adviser including,
but not limited to, any broker-dealer or other entity to hold any Securities or
other property of such Portfolio as collateral or otherwise pursuant to any
investment strategy.
(ii) The validity of the issue of any Securities purchased by a
Portfolio, 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 Portfolio or the
propriety of the amount for which the same are sold;
(iv) The legality of the issue or sale of any Interests of a
Portfolio, or the sufficiency of the amount to be received therefor;
(v) The legality of the redemption of any Interests of a Portfolio, or
the propriety of the amount to be paid therefore;
(vi) The legality of the declaration or payment of any distribution of
a Portfolio; 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 Portfolio until Mellon actually receives and collects such money.
d. 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.
e. 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 Portfolio are such as may properly be held by the Portfolio 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 Portfolio arising as a result of the insolvency of a
Foreign Custodian only to the
16
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 Portfolio 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 Portfolio.
a. Indemnification of Mellon. The Trust on behalf of each Portfolio 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 Portfolio and from the Assets of
the relevant Portfolio 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 Portfolio 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. In addition to the foregoing
and solely with respect to Mellon's obligations pursuant to Article IV, Section
2 herein regarding the maintenance of the Principal Books and Records and the
establishment of a principal place of business, the Trust, on behalf of each
Portfolio, shall indemnify and hold each 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 any claim or action that Mellon or its affiliate has violated any federal or
state securities or tax laws, by maintaining the Principal Books and Records
outside of the United States or providing a principal place of business outside
of the United States. 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.
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.
17
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. Portfolio 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 Portfolio or its agents
("Portfolio Data"), which Portfolio 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 Portfolio shall be solely
responsible for the accuracy, completeness and timeliness of all Portfolio Data
provided to Mellon and Mellon shall be entitled to rely fully upon such
Portfolio 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 Portfolio
or its underlying interest holders or any other third party arising from or
relating to, inaccurate, incorrect, untimely or duplicative Portfolio 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
Portfolio 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
Interests of any Portfolio.
g. Obligations of the Trust. The Trust and Mellon agree that the
obligations of a Portfolio under this Agreement shall not be binding upon any of
the trustees, interest holders, nominees, officers, employees or agents, whether
past, present or future, of the Trust or such Portfolio, individually, but are
binding only upon the assets and property of such Portfolio. Any responsibility
or liability of the Trust or a particular Portfolio under any provision of this
Agreement shall be satisfied solely from the Assets of the Trust or the
particular Portfolio, and in no event shall Mellon or its agents have any
recourse against any one Portfolio for the obligation of any other Portfolio.
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 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
Portfolio's property; or the
18
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 Portfolio or an
Authorized Person acting on behalf of the Trust or a Portfolio. 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 Portfolio. Where Mellon is issued
Instructions orally, the appropriate Portfolio acknowledge that, if written
confirmation is requested, the validity of the transactions or enforceability of
the transactions authorized by such Portfolio 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 Portfolio 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 Portfolio 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 Portfolio 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 Portfolio 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 Portfolio 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 Portfolio, Mellon may charge against assets held on behalf of such
Portfolio compensation and any 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 Portfolio the amount of any loss, damage, liability or
expense incurred with respect to such Portfolio, including legal fees, for which
Mellon shall be entitled to reimbursement under the provisions of this
Agreement. The
19
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 Portfolio
at least 180 days' notice in writing, specifying the date of such termination. A
Portfolio 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 Portfolio, on at least sixty (60)
days' notice in writing to Mellon that specifies the date of such termination,
if such Portfolio 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 Portfolio, 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 Portfolio.
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 Portfolio, 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 Portfolio, 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 Portfolio.
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.
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 Xxxxx
00
Xxxxxxxxxx"). Xxxxxxxx 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.
To Mellon:
Mellon Bank, N.A.
Xxx Xxxxxx Xxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
For Custody Matters: Attn: Xxxxx Xxxxxx
21
For Accounting and Administrative Matters: Attn: Xxx Xxxxxxxx
To the Trust:
Mellon Institutional Funds Master Portfolio
c/o Mellon Fund Administration (Dublin) Ltd.
The Xxxxxxxx Xxxxxxxx
Xxxxxxxx Xxxxxx
Xxxxxx 0
with a duplicate copy to:
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 Portfolio'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.
22
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.
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 MASTER PORTFOLIO
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
23
APPENDIX A
LIST OF FUNDS
Xxxxxxxx Mellon Fixed Income Portfolio
Xxxxxxxx Mellon Global Fixed Income Portfolio
Xxxxxxxx Xxxxxx High Yield Bond Portfolio
Xxxxxxxx Mellon Short-Term Asset Reserve Portfolio
The Boston Company International Core Equity Portfolio
The Boston Company International Small Cap Portfolio
The Boston Company Large Cap Core Portfolio
The Boston Company Small Cap Growth Portfolio
The Boston Company Small Cap Value Portfolio
A-1
APPENDIX B
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 & Tobago
Costa Rica Mauritius Tunisia
Croatia Mexico Turkey
Czech Republic Morocco Uganda
Denmark Namibia Ukraine
Ecuador The Netherlands United Kingdom
Egypt New Zealand Uruguay
Estonia Norway Venezuela
Euroclear Oman Vietnam
Finland Pakistan Zambia
France Panama
Germany Peru
Ghana The Philippines
B-1
APPENDIX C
AUTHORIZED PERSONS
I, _______________________________, the Secretary of Mellon Institutional
Funds Master Portfolio, a business trust organized under the laws of the State
of New York (the "Trust"), do hereby certify that:
The following individuals have been duly authorized as Authorized Persons
to give Instructions on behalf of the Trust and each Portfolio thereof and the
specimen signatures set forth opposite their respective names are their true and
correct signatures:
Name Signature
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
By: ----------------------------------
Secretary
Dated: ----------------------------------
C-1
APPENDIX D
TRUST OFFICERS
I, Xxxxxxx X. Xxxxxxxx, the Secretary of Mellon Institutional Funds Master
Portfolio, a business trust organized under the laws of the State of New York
(the "Trust"), do hereby certify that:
The following individuals serve in the following positions with the
Portfolio and each individual has been duly elected or appointed to each such
position and qualified therefor in conformity with the Trust's governing
instrument 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
-----------------------
Secretary
Dated: 10-21-03
D-1
APPENDIX E
FEES AND EXPENSES
Each Portfolio 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:
1. Custody Fees.
[To come.]
2. Administration Fees.
[To come.]
3. Accounting Fees.
[To come.]
4. Expense Reimbursement.
[To come.]
E-1
APPENDIX F
SERVICE LEVEL AGREEMENTS
F-1
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 Portfolio 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 Portfolio
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 Portfolio'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 Portfolio 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 Portfolio shall comply with the
requirements of Rule 17f-2(f) with regard to examination by an independent
public accountant.
Acknowledged:
/s/ XXXXXXX X. XXXXXXXX /s/ XXXXXXXXXXX XXXXX
----------------------- ---------------------
Trust Mellon
Date: 10/17/03 Date: 10/17/03
G-1
